Liechtenstein has been a big focus of efforts to clamp down on money laundering and over recent months has had its fair share of scandal. Under heavy international pressure, the small principality said this week that it will stop allowing anonymous bank accounts.
The move comes after the small Alpine state was thrust into the spotlight over allegations that its banks are being used to launder money for organised crime and drug traffickers. The situation was compounded for Liechtenstein in June when it was included on the Financial Action Task Force (FATF) blacklist of 15 nations accused of failing to cooperate in the fight against money laundering.
Benno Beuchel, president of the Liechtenstein Bankers Association said of the decision to ban anonymous accounts: 'By extending our own customer identification checks to all customer relationships, we are expressing our determination to keep dirty money out of Liechtenstein.' He added that members of the association already know the identities of their customers, but that there have been "a number of weak points" for accounts that come via agents.
Under the new system, known as "Know Your Customer,'' the banks will require lawyers and other intermediaries to disclose the names of depositors they represent. The banks will then check out the identities themselves. However, it is not obligatory, at least not yet. The rule will initially be voluntary but is expected to eventually become part of Liechtenstein banking law.
Adolf E Real, chairman of the Verwaltungs- und Privat-Bank, said the change would affect about one-third of the customers of the 10 banks in the bankers association. In addition, there are six Liechtenstein banks which are not in the association, but it is hoped that they will also adopt the new rules. Nonetheless, Liechtenstein's bankers are keen to point out that legitimate users of the banking system have nothing to fear as there will be no real change in banking secrecy. The bankers association said in a statement: 'Liechtenstein banking secrecy remains completely intact despite this general application of the KYC rule.' However, Buechel said some clients, such as foundations, still might choose to withdraw their funds rather than disclose their identities.
Earlier this month a Liechtenstein court froze bank accounts believed to hold around US$3 billion placed there by the late Nigerian dictator Sani Abacha, his family and associates. One of the Liechtenstein banks involved in the Abacha case is reportedly the Liechtenstein Global Trust (LGT), which belongs to a foundation of the family of ruling Prince Hans-Adam II. The monarch's younger brother, Prince Philipp, who is president of LGT, said the new rules "`are certainly an important step'' toward removing the principality from the FATF balcklist. He said 'self-critical conduct is the order of the day.'
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