Already 200 million francs frozen: what Liechtenstein does better in search of oligarch funds

In Liechtenstein, they themselves do not want to believe it. A representative of Liechtenstein officials says the times are “challenging”, so praise should be approached with caution. The local banking association is also reacting cautiously. “I think we’re doing our job and trying to do it as well as possible,” says Managing Director Simon Tribelhorn.

Faster, more collaborative

So far, Liechtenstein has frozen about 200 million Swiss francs in Russian assets. Regarding the size of the financial centre, that’s actually not much: the country’s three largest banks alone manage more than 400 billion. However, criticism was left out. “Handelzeitung” spoke to more than half a dozen people in Liechtenstein, Switzerland and other countries to find out: What does the Principality do better when it comes to Russian sanctions and why?

First, there is the previously mentioned FIU. The Authority is the Liechtenstein equivalent of Fedpol’s Money Laundering Reporting Office (Mros). But unlike Switzerland, where the MROS only processes reports of questionable activity, but the sanctions are at the State Secretariat for Economic Affairs (Seco), the FIU in Liechtenstein is also concerned with sanctions: one authority instead of two, more experience and less bureaucracy. A sanction engineering powerhouse.

“This is a huge advantage because the FIU is proficient at analyzing and weeding out suspicious activity reports and can better cross-compare,” says Mark van Thiel, compliance expert for Mros and various countries and organizations that helped establish Mros. Financial Intelligence Units in the fight against money laundering and terrorist financing.

Liechtenstein is more digital

Also Liechtenstein is more digital and uses Goaml software. This app was developed by the UN to report suspicious activity reports and process them under the Money Laundering Act. Banks and financial intermediaries can send messages using the software, data flows can be made centrally, and financial intelligence units in other countries can access this software. Although the Swiss money laundering agency Mros also has this system, Seco, which is responsible for the sanctions, is not and works with its own database solution. If Mros and Seco want to compare data, a request for administrative assistance is required. And this takes time.

Also, the FIU in Liechtenstein brings together all the key players. It is the cornerstone of several initiatives: for example, for a public-private partnership that Mros also wants to promote this year. With the outbreak of war, the FIU established a task force that included, among others, the Financial Market Authority (FMA), the Communications Office, the Immigration and Passport Office, the National Police, and the Liechtenstein Tax Administration. Initially, those involved exchanged information almost daily. Liechtenstein may be small. However, he actively sought to shrink the official channels even further.

Secondly, many questions did not arise for the government in Vaduz: for example, should sanctions against Russia be followed at all – and to what extent. As a member of the European Economic Area (EEA), Liechtenstein has adopted economic penalties quickly and consistently. In addition, while EEA members must comply with certain international standards when dealing with money laundering, Switzerland may follow a controversial special course: lawyers and notaries in this country are exempt from the Money Laundering Act.

He clearly positioned himself at war

Beyond the legal issues, there are many different things in Vaduz and its important financial center than in Switzerland. Most importantly, some independent observers say it’s the mindset. Liechtenstein relied on international cooperation from the very beginning and took a very clear stance on the war.

Foreign Minister Dominique Hasler, who is praised for her attitude and communication abroad, is also seen as a driving force. “Stop the war,” the politician tweeted shortly after Putin’s invasion of Ukraine. Friendly, willing to cooperate and eager to learn: this is how Liechtenstein is perceived on the international scene. Among other things, the country is joining the EU task force in search of oligarch money.

Unlike the Swiss, the Liechtensteins have yet to receive an invitation to the G7 and Australia’s repo task force – but joining the Principality probably wouldn’t be as absurd as in Bern.

Liechtenstein wants to prevent as much as possible from extending sanctions beyond its national borders: if Putin’s network was able to channel large-scale cash flows through it, the risk of secondary sanctions seems too great and the possible damage to its own reputation is too great. principality.

The only remaining question is: has Liechtenstein already frozen enough? Or had he only discovered the tip of the iceberg so far, as the US specifically blames Switzerland?

It’s a difficult question. When asked, none of the interviewees wanted to make a guess or make a guess. The blind spots are huge: the large number of spouses and business partners of the sanctioned, complex real estate and property structures.

An expert investigating the fortunes of the oligarch in an interview says that one can only improve if he admits his mistakes. Daniel Risch recently demonstrated this. Liechtenstein’s head of government said in an interview with the German “Handelsblatt”: “Anyone who claims to be sure he has found all the hidden assets only shows that he does not understand what is at stake.”