The government of Liechtenstein said its efforts at combating money laundering and financial crime had been recognised by the International Monetary Fund, but the praise was not without caution.
The IMF, which recognised significant legislative amendments and institutional restructuring in moving towards compliance with the Financial Action Task Force recommendations since being removed from its blacklist in 2001.
But the IMF noted that about 90% of Liechtenstein's financial services business is provided to non-residents, 'many attracted to Liechtenstein by the availability of discreet and flexible legal structures, strict bank secrecy, and favourable tax arrangements, within a stable and well-regulated environment'.
'By its nature, Liechtenstein’s financial sector business creates a particular money laundering risk.
'Minimising the risk of abuse of corporate vehicles and related financial services products presents an ongoing challenge, as does the identification of the natural persons who are the beneficial owners of the underlying assets or legal persons or arrangements. Therefore, Liechtenstein is vulnerable mainly in the layering phase of money laundering,' the IMF cautioned.
The prime minister however remained delighted with the IMF's assessment of its efforts at overcoming financial crime, Taxnews.com reported.
'The praise by the IMF shows that we are on a successful path of reform. We have consistently followed this path so far and will continue to do so,' prime minister Otmar Hasler.
Martin Frick, who observed the assessment procedure on behalf of the government, said its work over the past years had paid off.
'Our high and rapid implementation rate of the IMF recommendations made during the first IMF assessment procedure in 2002 is remarkable,' Frick said.
Further reading:
UK backs European tax haven offensive
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