In recent years, Liechtenstein has made great efforts in combating money laundering and the financing of terrorism, strengthened its national defensive measures, and expanded international cooperation. For the first time, the Egmont Group – the worldwide association of national Financial Intelligence Units (FIUs) – held a working meeting in Liechtenstein at the beginning of March. At the end of March, the International Monetary Fund (IMF) will conduct its second assessment of the Liechtenstein financial center.
After tightening its due diligence legislation and the penal provisions for receiving criminal assets, expanding its courts, restructuring its economic crimes police unit, and modernizing mutual legal assistance, Liechtenstein is now in a consolidation phase, preparing for further expansion. The Government has launched the project "Futuro" - The Future of the Liechtenstein Financial and Industrial Center".
Two indicators show the economic importance of the financial center: With a share of 15% of employed persons, the financial center generates about 30% of the country's gross domestic product (GDP). The industrial and goods-producing sector generates 39% of GDP, with a share of 47% of employed persons. The financial center is also very important for industry and small and medium-sized business, since income from the financial services sector makes an important contribution to the attractive tax level for businesses.
Prime Minister Otmar Hasler, who recently introduced the FUTURO-Project, still sees opportunities for expanding the financial center: "The globalized economy is an opportunity particularly for small States, since it links the world together both for the financial center and for industry. Since 2001, we have brought the financial center up to an internationally recognized standard with respect to supervision, due diligence, and combating terrorism. Now Liechtenstein is moving forward on a second track: The State is resolutely creating the legal prerequisites so that the financial industry can make use of the opportunities in an integrated Europe, such as the EU passport for investment undertakings and the location for pension insurers."
In this context, the Government also attaches great importance to the meeting in Liechtenstein of the Egmont Group, which currently comprises 101 Financial Intelligence Units (FIUs) worldwide. According to Prime Minister Otmar Hasler, the meeting was positive for the Principality: "The working meeting of the Egmont Group is not only a confirmation of the path taken by Liechtenstein, but is also a sign of Liechtenstein's international rootedness and its willingness to make an active contribution to the fight against money laundering and terrorist financing." For Prime Minister Hasler, international cooperation constitutes a key element in the fight against crime. For this reason, Liechtenstein has paid special attention to international networking since establishing its own FIU. This was done in the knowledge that it is difficult to uncover and avert potential criminal offenses without reliable partners. Prime Minister Otmar Hasler stated before the FIU delegates that Liechtenstein intends to continue steadfastly along this path.
Liechtenstein attaches equal importance to the assessment of the International Monetary Fund (IMF), which will take place from 20 March to 4 April. The basis of the second IMF assessment will be the revised 40 Recommendations and 9 Special Recommendations of the Financial Action Task Force (FATF) of the OECD. The first IMF assessment in 2002 certified that Liechtenstein has high-quality and modern legislation governing the financial center. In the fight against money laundering, organized crime, and terrorist financing, Liechtenstein was found to have a "high level of compliance" with international standards. At the time of the announcement of the IMF findings, Prime Minister Otmar Hasler stated: "Of course, this does not mean that we can now rest on our laurels; on the contrary: Especially in the course of globalization, every State is called upon to continuously review the efficiency of its financial market regulation and, where necessary, to carry out adjustments."
At the time, the IMF experts criticized the understaffing and the lack of independence of the banking and insurance supervision authorities. In the meantime, Liechtenstein has implemented these recommendations with the creation of an independent integrated Financial Market Authority in 2005. The Financial Market Authority has the form of an independent establishment under public law and has been outsourced from the National Administration in order to guarantee its independence. Thus, the goal of implementing international standards in the supervision of the financial center has been achieved.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
