LIECHTENSTEIN Law and Practice Contributed by: Lukas-Florian Gilhofer and Mathias Bitschnau, Ospelt & Partner Attorneys at Law Ltd
recognised and applicable in Liechtenstein, deriving from two complementary sources of law. First, as an EEA member state, Liechtenstein adopts EU restrictive measures directly. Under the applicable EU framework, operators are prohibited from dealing with funds and economic resources that are owned, held or controlled by designated persons. The sanc - tions extend not only to directly listed persons but also to legal entities owned or controlled by such persons, as well as to those acting on their behalf or at their direction. Since Liechtenstein adopts EU sanctions law in full, the guidelines of the European Commission and the EU Best Practices are directly applicable in the Liechtenstein context. Second, at the national level, the ISG serves as the domestic implementing statute for international sanc - tions. The legislative materials accompanying the ISG reform expressly acknowledge that financial interme - diaries may conclude that a listed person indirectly controls assets entrusted to them and that those assets must consequently be frozen. A liability exemp - tion for intermediaries acting in good faith was intro - duced for this purpose through Article 4a ISG. Regarding ownership, Liechtenstein applies, through its adoption of EU sanctions law, a rule analogous to that found in other major sanctions regimes: sanctions extend to any legal entity in which a designated per - son holds more than 50% of the proprietary rights or a majority interest. The aggregated holding is relevant in this context, meaning that the interests of multiple designated persons may be combined to determine whether the threshold is met – a position consistent with the EU Best Practices definition of ownership as the possession of 50% or more of the proprietary rights of an entity or the holding of a majority interest in it. Regarding control, the assessment is factual in nature and conducted on a case-by-case basis, hav - ing regard to a non-exhaustive set of criteria. Rele - vant indicators include, among others, the power to appoint or remove the majority of board members, or the sharing of a common business address or other indicia suggesting that two entities form part of the same undertaking de facto. Once any one criterion
is met, control is deemed to be established, and the assets of the controlled entity must be frozen without delay. Practical guidance for financial intermediaries is pro - vided by FMA Guidance 2018/7, which contains a dedicated section on the obligations of persons sub - ject to due diligence requirements in the field of inter - national sanctions and sets out in concrete terms how those intermediaries are to fulfil their review obliga - The ISG forms the central legal basis in Liechtenstein for the implementation and enforcement of trade, financial and personal sanctions, obliging both com - panies and private individuals to comply with the pro - hibitions and restrictions laid down therein. Violations of these provisions, including circumvention, may be prosecuted as criminal offences; where a violation is committed negligently, the law provides for reduced penalties. The anti-circumvention framework arises from an interplay of general clauses in the ISG, specific sanc - tions ordinances and directly applicable EU sanctions law. The asset freeze covers funds and economic resources that are directly or indirectly owned or con - trolled by natural persons, legal entities and organisa - tions subject to the relevant ordinances. It is further prohibited to transfer funds to sanctioned persons, entities or organisations, or to make funds or eco - nomic resources available to them in any other way, whether directly or indirectly. The term “indirectly” is of particular significance in this context: any transaction that is formally routed through non-sanctioned third parties but economically benefits a sanctioned per - son falls within the scope of and is prohibited under the regime – a position analogous to the behaviours targeted at EU level by Directive 2024/1226, which since April 2024 criminalises the circumvention of EU sanctions, including the concealment of frozen assets and the provision of false or misleading information as to the ultimate beneficial owner of funds subject to a freeze. tions under the ISG. 7.3 Circumvention 7.3.1 Prohibiting Provisions
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