Liechtenstein companies for the first time would have to disclose the identities of their ultimate owners under a proposal to come in line with European anti-money laundering recommendations.
But in the Liechtenstein tradition, practitioners say, that information wouldn’t be publicly accessible.
The 193-page consultation, released for comment July 12, proposes to require all financial intermediaries who enter a business relationship to identify the contractual parties, the beneficiaries and the origin of the assets and submit this information to the principality’s Financial Intelligence Unit. It also proposes creation of the principality’s first beneficial ownership registry.
Changes would come in amendments to jurisdiction’s 2008 Due Diligence Act.
The proposed changes aim to implement into Liechtenstein law the Fourth EU
Anti-Money Laundering Directive (EU 2015/849), which requires EU member countries to track the beneficial ownership of various financial vehicles to prevent funds from being used for terrorism and various financial crimes.
Liechtenstein isn’t a European Union member country, but as a member of the European Economic Area it is required to transpose this directive into its national legislation.
The changes are also aimed at implementing recommendations from the International Monetary Fund, which assessed the extent to which Liechtenstein met the global standards against money laundering and terrorist financing set out by the Financial Action Task Force intergovernmental body in 2014.
The 2014 IMF report said Liechtenstein’s financial sector heavily focuses on private banking, wealth management and non-resident business, which it said put the country at “high risk” for money laundering. The IMF recommended a review of all financial secrecy provisions and advised Liechtenstein authorities to require enhanced due diligence from trust and company services providers.
Martin Meyer, tax director at PwC in Liechtenstein, told Bloomberg BNA July 15 that both the amendments to the Due Diligence Act and the draft law establishing a beneficial ownership registry fall squarely within the “Liechtenstein tradition.”
Noting that Liechtenstein’s role as a financial hub and its extensive private wealth sector, he said successive administrations have always put the protection of clients’ information first.
He said the proposal doesn’t provide public access to the beneficial ownership registry. “It only grants access if a real interest in knowing or receiving such information exist, for instance in case suspicion of money laundering or financing of terrorism exists,” he said.
“Liechtenstein wants to protect the information of the individual to the extent possible, but also comply with all global standards,” Meyer said. “As a member of the European Economic Area, they have to implement EU law to comply with EU standards.”
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