LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Nicolai Binkert and Alexander Appel, Schurti Partners Attorneys at Law Ltd
1.5 Banking and Finance Techniques The Liechtenstein loan market for corporate clients is in the hands of foreign banks. The trends and therefore the documentation of financing are strongly influenced by international trends whereby the documentation of the Loan Market Association remains the gold stand- ard for commercial financing in Liechtenstein. 1.6 ESG/Sustainability-Linked Lending Liechtenstein, which ratified the Paris Agreement on climate change on 9 June 2017, has identified and declared climate risks as a core risk for the financial sector. As a member of the EEA, Liechtenstein is par- ticipating in the EU-wide transformation of the finan- cial sector towards a more long-term thinking and sustainable industry. This trend can also be found in Liechtenstein financing, where ESG-related margin grids or reporting and compliance obligations linked to environmental, social and/or governance (ESG) indicators and metrics are commonly used. The main pillars of the remodelling process are the following EU regulations, which have been approved by the Joint EEA Committee and are therefore directly applicable in Liechtenstein. Regulation (EU) 2019/876 (ESG Disclosure) This amends the Capital Requirement Regulation (Regulation (EU) No 575/2013) and introduces an obli- gation to disclose ESG risks applicable to large finan- cial institutions that have issued securities admitted to trading on a regulated market in the EEA. Regulation (EU) 2019/2088 (Sustainability-Related Disclosures) This regulation establishes rules as to how market participants and advisers have to integrate and con- sider ESG risk factors in their decision-making and investment-advice processes. It also foresees addi- tional disclosure requirements for financial advisers with a view to company-related – as well as product- related – information, and with a special emphasis on sustainability risks and adverse effects of investment decisions in that regard. Regulation (EU) 2019/2089 (ESG Benchmarks) This regulation requires all providers of benchmarks or indices used to measure the performance of financial
equivalence – and therefore stronger alignment – with applicable EU regulations (in particular, the Capital Requirements Directive (CRD), the Capital Require- ments Regulation (CRR) and the Markets in Financial Instruments Directive (MiFID)). This revision entered into force on 1 February 2025. The accessibility of the Liechtenstein loan market, coupled with the hands-on approach of the Liech- tenstein Financial Market Authority (FMA), which is committed to further strengthening the financial ser- vices market as one of Liechtenstein’s key industries, facilitates and fosters an active debt market. When it comes to market participants on the lender’s site, it must be noted that the Liechtenstein loan mar- ket is largely in the hands of international banks, as the financial sector in Liechtenstein, and in particular the Liechtenstein banks, is/are more focused on private In line with the EU sanctions, Liechtenstein has adopt- ed national legislation to sanction certain industries, companies and persons with close ties to or otherwise associated with the Russian Federation and Iran. In view of the fact that Liechtenstein (unlike other mem- ber states of the EEA) has not hosted any (branches of) Russian banks, and considering that no party to the conflicts in Ukraine and/or the Middle East is included among Liechtenstein’s main trading partners, the debt market in Liechtenstein has remained largely unaffected by these conflicts. However, the Ukraine war and the Middle East conflict have had, and continue to have, a significant impact on the private wealth and asset management sector, where efforts are ongoing to combat and prevent the circumvention of EU sanctions on Liechtenstein soil. 1.3 The High-Yield Market Liechtenstein does not have a regulated market, and therefore has no active high-yield market. 1.4 Alternative Credit Providers Alternative credit providers are not regularly seen as lenders in transactions. banking and wealth management. 1.2 Impact of Global Conflicts
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