Offshore Investment Mag

The Liechtenstein government has launched a project to examine the future of the jurisdiction's financial centre, which aims to make a long-term contribution to establishing conformity with international standards.

The government's announcement follows its first ever working meeting with the Egmont Group, the worldwide association of national Financial Intelligence Units (FIUs), at the beginning of March.

Liechtenstein says that it has made "great efforts" in combating money laundering and the financing of terrorism, strengthening national defensive measures, and expanding international cooperation. However, 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, the government says that Liechtenstein is now in a "consolidation phase".

According to Prime Minister Otmar Hasler, the meeting with the Egmont Group 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," he said.

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 Hasler stated before the FIU delegates that Liechtenstein intends to continue steadfastly along this path.

The government also says that it 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 centre. In the fight against money laundering, organized crime, and terrorist financing, Liechtenstein was also found to have a "high level of compliance" with international standards.

At the time of the announcement of the IMF findings, 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.

"Since 2001, we have steadily brought the financial centre up to an internationally recognized level with respect to supervision, due diligence, and terrorist financing," Hasler said in a recent interview with the Liechtensteiner Volksblatt.

"Now the Government is working on a second track so that the financial industry can make use of the opportunities afforded by an integrated Europe: for instance the EU passport for investment funds and building up Liechtenstein as a new location for pension funds. The project on "The Future of the Liechtenstein Financial Centre", which will take the industrial location and Liechtenstein as an entire business location into account as well, has now been launched," he concluded.

The first results of the study are expected for the end of 2007.