Duty of care

Liechtenstein brought a new law into force on 1 January 2001 concerning the professional duties of care with financial transactions. These efforts have been officially recognised by the Financial Action Task Force (FATF) of the Organisation for Economic Co-operation and Development (OECD). It has classified Liechtenstein as a state which supports the international combating of money laundering. Investors see this once more as clear proof that the basic conditions for financial services in Liechtenstein meet international standards for quality and safety.

Fight against money laundering:

The new law governing the duties of care (SPG) explicitly concerns the combating of money laundering. Money laundering is liable to prosecution in many countries. The legislator in Liechtenstein issued a corresponding criminal law norm in 1996 already and anchored the combating of money laundering and organised crime as well as terrorism as explicit targets in the law governing the duties of care (SPG).

Revision of the law and the regulations:

A completely revised law and corresponding revised regulations were issued as of 1 February 2005. The aim was to retain the standard, to create harmonisation with the rival financial centre Switzerland as well as to implement the relevant EU directives.

Comprehensive duty of care:

All companies and persons (also referred to as financial intermediaries), who accept and store third party assets or assist in investing or transferring such assets for professional reasons, are subject to the new SPG. These are subject (under certain conditions) to the following duties (of care):

Identification of the contractual partner:

The whole group of persons who are subject to the law governing the duty of care is obliged, apart from just a few exceptions, to identify the contractual partners when commencing business relations based on a valid document (as a rule a passport or personal identity card).
The regulations which pertain to the law specify that with natural persons the name, first name, date of birth, address of domicile, state of domicile and nationality are to be recorded in the files.

If the contractual partner concerns a legal entity then an excerpt from the public register or an equivalent document that may not be older than twelve months is to be submitted to the financial intermediary. Deemed as equivalent are among others official confirmation of the domestic country, statutes, incorporation files or the incorporation contract, a confirmation of the auditing company or an official approval to perform the activity, however also excerpts from Internet databases.
To be recorded in the documentation of the business relationship besides the corporate name, are the address of the registered seat, state of the registered seat, incorporation date as well as place and date of the entry in the public register.

Although the regulations principally assume that the identification is ensured through the personal appearance of the customer it also allows the possibility to establish a business relationship by means of correspondence. In this case so-called "copies with the authenticity confirmed" are required.
Such a confirmation of authenticity can be issued by a branch of a party which is liable to the duty of care, another institutional party which is liable to the duty of care, a lawyer, a trustee, an auditor or asset manager in addition to a notary public or another public person who is entitled to issue documents (or official department). The pre-requisite is that these persons or authorities (with the exception of the official persons who are entitled to issue documents) are subject to a regulation which is equivalent to the SPG or the EU directive. This can as a rule be assumed with such persons within Europe.

Determination of the financial beneficiary:

In case the financial beneficiary for the contributed assets is not identical with the contractual partner he must submit a declaration concerning the financial beneficiary whereby name, first name, date of birth, address of domicile, state of domicile and nationality are also to be recorded.
Such a declaration is to be requested in any case if a business relationship is established by means of correspondence or if the contractual partner is an offshore company.