LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Moritz Blasy and Nicolai Binkert, Schurti Partners Attorneys at Law Ltd
long-term development of the bank, a certain portion (at least 40%) of the remuneration must be deferred for a period of at least four to five years. In addition, banks and investment firms must implement clawback and malus arrange - ments of up to 100% of the variable remunera - tion, which allow the bank to withhold or claw back variable remuneration if the recipient’s performance deteriorates or if there are adverse developments such as misconduct, regulatory breaches or poor financial results that occur after payment. Liechtenstein’s anti-money laundering (AML) and counter-terrorist financing (CTF) laws com - ply with and implement international standards, particularly those set by the Financial Action Task Force (FATF) and the European Union. Giv - en Liechtenstein’s strong focus on international clients and business, often acting as a financial hub and gateway to the European Economic Area (EEA), Liechtenstein has implemented strin - gent AML/CTF measures to ensure that its bank - ing sector operates transparently and securely, minimising the risk of illicit activities. The afore - mentioned rules have been implemented in the Liechtenstein Due Diligence Act ( Sorgfaltsp- flichtgesetz SPG) and the Due Diligence Ordi - nance ( Sorgfaltspflichtverordnung SPV), which apply to banks and other financial institutions. Risk-Based Approach 5. AML/KYC 5.1 AML and CFT Requirements Liechtenstein’s AML/CTF regime follows a risk- based approach (RBA), which requires banks to identify, assess, and manage risks related to money laundering and terrorist financing. This approach is in line with the recommendations of the FATF and EU directives, in particular the EU
anti-money laundering directives. Banks must allocate resources and implement measures commensurate with the risk profile of their cus -
tomers, products and services. Customer Due Diligence (CDD)
Banks in Liechtenstein must carry out compre - hensive customer due diligence (CDD) at the start of a business relationship and on an ongo - ing basis throughout its duration. CDD require - ments include: • identification and verification of clients – ie, name, date of birth, address and nationality in the case of natural persons and corporate structure, legal form and persons authorised to represent the entity in the case of legal entities; • identification of ultimate beneficial owners, focusing on the prevention of the conceal - ment of funds through complex legal struc - tures; and • ongoing monitoring, which requires banks to monitor transactions on an ongoing basis to ensure that they are consistent with the customer’s profile and risk level. Enhanced due diligence requirements apply in relation to clients, transactions or situations that pose a higher risk, such as: • relationships with politically exposed persons (PEPs) – ie, individuals who hold prominent public positions and are more susceptible to corruption; • business relationships or transactions involv - ing high-risk countries, particularly those identified by the FATF as having strategic AML/CTF deficiencies; and • complex or unusually large transactions with no apparent economic or legal purpose.
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