LIECHTENSTEIN Law and Practice Contributed by: Lukas-Florian Gilhofer and Mathias Bitschnau, Ospelt & Partner Attorneys at Law Ltd
intermediaries must be able to demonstrate compre - hensive and documented due diligence and sanctions screening processes in order to exculpate themselves in the event of unintentional violations. The burden of proof in practice frequently lies with the regulated institution to show that adequate care was exercised. The overall framework therefore operates on a grad - uated basis: wilful violations attract criminal liability under Articles 10 and 11 ISG; negligent violations may give rise to criminal liability under Article 10 ISG at a reduced penalty level; and failures of due diligence, even absent intent or negligence in the strict criminal law sense, may attract administrative sanctions by the FMA. Liechtenstein applies the derogations provided by the relevant EU Decisions and Regulations in the context of its autonomous adoption of EU sanctions regimes. In addition, the Liechtenstein government may grant exceptions under national law on specific grounds set out in the applicable ordinances. 2.3 Licensing 2.3.1 Derogation Currently, most sanctions-related matters concern Russia. In this regard, the Ukraine Ordinance – through which Liechtenstein has transposed the EU’s restric - tive measures in view of Russia’s actions destabilising the situation in Ukraine – provides for several deroga - tions, including: • the release of frozen funds, the transfer of frozen assets and payments from frozen accounts for the purpose of avoiding hardship cases; • the fulfilment of obligations arising from existing contracts concluded prior to the imposition of the relevant sanctions measure; • the satisfaction of claims that are the subject of an existing decision of a court, administrative author - ity or arbitral tribunal rendered prior to the listing of the person concerned; • the payment of reasonable fees and reimburse - ment of costs reasonably incurred in connection with the provision of legal services; and • the safeguarding of Liechtenstein interests, in par - ticular where Liechtenstein-specific considerations
require a measured application of the restrictive measures. Such derogations must be applied for with the com - petent national authorities. In Liechtenstein, applica - tions for exceptions from sanctions measures under the Ukraine Ordinance must be submitted to the FIU, which serves as the procedural point of contact for the receipt of applications. The substantive decision-mak - ing power rests with the government of the Principality of Liechtenstein, which holds the power to grant indi - vidual authorisations under Article 2 (1) of the ISG and the applicable ordinances. In certain areas – in par - ticular with respect to goods and trade sanctions – the Swiss State Secretariat for Economic Affairs (SECO) may also have competence by virtue of the customs union treaty with Switzerland. The government may attach conditions to any authorisation granted, and retains discretion in each individual case. 2.3.2 Provision of Legal Services Unlike certain other jurisdictions, Liechtenstein does not provide for a general licence permitting the pro - vision of legal services to sanctioned persons. The general principle is that such services are permissible in principle, but subject to clear limits. A lawyer in Liechtenstein may advise and represent a sanctioned person; however, this is restricted to cer - tain categories of activity. • Criminal defence and representation in proceed - ings is permitted. The right to legal counsel and an effective defence is a fundamental right guar - anteed by the Liechtenstein constitution and by international human rights law, and a sanctioned person is equally entitled to representation in criminal and other court proceedings. The Ukraine Ordinance expressly provides for this, allowing the government to authorise exceptionally the release of funds from frozen accounts for the purpose of paying reasonable fees and reimbursing costs incurred in connection with the provision of legal services – an approach consistent with the dero - gation enshrined in Article 5n(5) of EU Regulation 833/2014, which permits services strictly neces - sary for the exercise of the right of defence in judicial proceedings.
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