LIECHTENSTEIN Law and Practice Contributed by: Lukas-Florian Gilhofer and Mathias Bitschnau, Ospelt & Partner Attorneys at Law Ltd
2.2.6 Strict Liability Liechtenstein sanctions law does not provide for strict liability. Criminal liability under the International Sanctions Act (ISG) requires either intent or, in cer - tain cases, negligence, depending on the nature of the offence. The ISG draws a clear distinction between two cat - egories of sanctions-related offences. • Article 10 ISG (criminal offences/ Vergehen ) – a wilful violation of the provisions of an ordinance issued pursuant to Article 2 (2) ISG is punishable by a custodial sentence of up to three years or a monetary penalty of up to 360 daily rates. Where the offence is committed negligently, the maximum penalty is reduced by half. Negligent violations are therefore criminally punishable, but subject to a lower penalty ceiling. • Article 11 ISG (regulatory infractions/ Übertretungen ) – sanctions infractions under Article 11 – including the refusal to provide information to the competent enforcement authori - ties and breaches of provisions of ordinances classified as infractions – require wilful intent. Negligence does not suffice for liability under this provision. A significant additional protection is provided by Arti - cle 2a ISG, which expressly exempts from civil and criminal liability any person who, acting in good faith, takes steps in compliance with a coercive measure under the ISG. This good faith defence is of particu - lar practical relevance for financial intermediaries and fiduciaries who act on the basis of the applica - ble sanctions lists and internal screening processes, without knowledge of facts that would call their com - pliance into question. In the administrative sphere, the standard differs from the criminal law position. The FMA applies a heightened due diligence standard when supervis - ing regulated institutions for sanctions compliance. Administrative measures may be imposed in cases of negligent violations – that is, where an institution has failed to maintain adequate screening and monitor - ing processes, even without any deliberate intent to breach sanctions. In practice, this means that financial
to US OFAC secondary sanctions. Hundreds of legal entities were affected, and some remain in liquidation or without active management to this day. This mas - sive practical impact has, however, not yet resulted in any publicly known criminal judgments before the ordinary courts. The absence of published criminal case law therefore reflects the specific architecture of sanctions enforce - ment in Liechtenstein – one in which the FMA acts as the primary enforcement body through administrative proceedings, and where the criminal law dimension, while formally available and enforceable, has not yet produced a body of publicly accessible court deci - sions comparable to those of larger jurisdictions. 2.2.5 Mitigation Under Liechtenstein law, various mitigating factors are available to persons facing sanctions enforce - ment proceedings, whether before the FMA in an administrative context or before the ordinary courts in a criminal context: • voluntary self-disclosure – a person who reports a violation on their own initiative before the compe - tent authorities become aware of it can expect a significant reduction in the penalty imposed; • co-operation with the authorities – comprehensive co-operation with the FMA and the Public Prosecu - tor’s Office has a mitigating effect on the sanction imposed; • subsequent compliance measures – the implemen - tation of improved internal control systems follow - ing a violation may be taken into account favour - ably by the competent authority; • absence of intent – negligent violations are gener - ally subject to lesser penalties than intentional acts; and • limited harm – a restricted economic impact or a low transaction value may also operate as a miti - gating factor in the determination of the appropri - ate sanction. These mitigating factors reflect a graduated approach to sanctions enforcement that distinguishes between deliberate misconduct and deficient but good faith compliance and incentivises early disclosure and remediation.
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