"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 commented following the presentation of the report in Vaduz, the result of an IMF assessment which took place in 2007

Martin Frick, who accompanied the assessment procedure on behalf of the Liechtenstein Government, noted that the IMF's evaluation also emphasized the developments in the jurisdiction's banking and securities supervision, particularly the progress made in implementing the Basel Core Principles and the IOSCO Principles.

"The hard work of the FMA team over the past years has paid off. Our high and rapid implementation rate of the IMF recommendations made during the first IMF assessment procedure in 2002 is remarkable," Frick stated.

The IMF report indeed acknowledged that the authorities in Liechtenstein have made "significant progress" in moving towards compliance with the Financial Action Task Force (FATF) Recommendations since being removed from its blacklist in 2001 "as evidenced by the subsequent major legislative amendments and institutional restructuring".

However the Fund qualified its praise somewhat with the observation that approximately 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," the IMF cautioned.

"Minimizing 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 report added.

Nonetheless, Hasler maintained that the overall assessment was positive for Liechtenstein, and that the authorities are already working to assuage the IMF's remaining concerns.

"We are grateful to the IMF for these recommendations," he stated.

"Most of the IMF's recommendations will be taken up in our implementation of the Third EU Money Laundering Directive, which is imminent. The preparatory work is already far advanced," Hasler concluded.