Legislation and supervisory authorities in Liechtenstein

In Liecht­en­stein, the ac­tiv­i­ties of VP Bank are sub­ject pri­mar­ily to the Act on Banks and Fi­nance Com­pa­nies (Bank­ing Act, BankA) of 21 Oc­to­ber 1992 as well as the Or­di­nance on Banks and Fi­nance Com­pa­nies (Bank­ing Or­di­nance, FL-BankO) of 22 Feb­ru­ary 1994. The Bank­ing Act lays down the frame­work for the su­per­vi­sory ac­tiv­i­ties of the FMA. The lat­ter – to­gether with the ex­ter­nal bank­ing-law au­di­tors, who must pos­sess a li­cence from the FMA and are sub­ject to its su­per­vi­sion – con­sti­tutes the main pil­lar of the Liecht­en­stein sys­tem of su­per­vi­sion.

Un­der the Bank­ing Act, banks and se­cu­ri­ties firms in Liecht­en­stein can of­fer a com­pre­hen­sive ar­ray of fi­nan­cial ser­vices. The Law on Pro­fes­sional Due Dili­gence to Com­bat Money Laun­der­ing, Or­gan­ised Crime and Ter­ror­ist Fi­nanc­ing (Due Dili­gence Act, DDA) of 11 De­cem­ber 2008 and its re­lated Or­di­nance (Due Dili­gence Or­di­nance, DDO) of 17 Feb­ru­ary 2009 – in con­junc­tion with the ar­ti­cle on money-laun­der­ing con­tained in Art. 165 of the Liecht­en­stein Pe­nal Code – con­sti­tute the rel­e­vant le­gal foun­da­tion for the en­tire fi­nan­cial ser­vices sec­tor in Liecht­en­stein. These have been re­vised on re­peated oc­ca­sions and cor­re­spond to in­ter­na­tional de­mands and stan­dards. 

Within the scope of its busi­ness ac­tiv­i­ties and the fi­nan­cial ser­vices of­fered by it, VP Bank must, in par­tic­u­lar, ob­serve the fol­low­ing laws and re­lated or­di­nances:

• Pay­ment Ser­vices Act (PSA)
• Law on Cer­tain Un­der­tak­ings for Col­lec­tive In­vest­ments in Trans­fer­able Se­cu­ri­ties (UCITSA)
• Law on In­vest­ment Un­der­tak­ings for Other As­sets or Real Es­tate (In­vest­ment Un­der­tak­ings Act, IUA)
• Law on Al­ter­na­tive In­vest­ment Fund Man­agers (AIFMA)
• Law Gov­ern­ing Sup­ple­men­tal Su­per­vi­sion of Com­pa­nies of a Fi­nan­cial Con­glom­er­ate (Fi­nan­cial Con­glom­er­ate Act, FCA)
• Law Gov­ern­ing the Dis­clo­sure of In­for­ma­tion Re­lat­ing to Is­suers of Se­cu­ri­ties (Dis­clo­sure Act, DA)
• Se­cu­ri­ties Prospec­tus Act (SPA)
• Law Against Mar­ket Abuse in the Trad­ing of Fi­nan­cial In­stru­ments (Mar­ket Abuse Act, MAA)
• Law Gov­ern­ing Takeover Of­fers (Takeover Act, TOA)
• Per­sons and Com­pa­nies Act (PCA)

The fol­low­ing sec­tion dis­cusses a num­ber of de­vel­op­ments rel­e­vant for fi­nan­cial mar­ket reg­u­la­tion and ap­plic­a­ble le­gal prin­ci­ples which have been re­vised or put into ef­fect dur­ing the past fi­nan­cial year or are likely to be of rel­e­vance in the fu­ture.

With its an­nounce­ment of 12 March 2009, Liecht­en­stein un­der­took to im­ple­ment the global stan­dards on trans­- ­parency and the ex­change of in­for­ma­tion in mat­ters of tax­a­tion in ac­cor­dance with the OECD stan­dard. Since then, Liech­ten­stein has con­cluded nu­mer­ous in­ter­na­tional tax­a­tion treaties, in­clud­ing both dou­ble-tax­a­tion agree­ments (DTAs) as well as Tax In­for­ma­tion Ex­change Agree­ments (TIEA) pur­suant to the OECD model. 

Liecht­en­stein is seek­ing, in par­tic­u­lar, to re­vise the par­tial agree­ment be­tween the Prin­ci­pal­ity of Liecht­en­stein and the Swiss Con­fed­er­a­tion on var­i­ous tax is­sues dat­ing back to 17 De­cem­ber 1996 and to agree upon a DTA which con­forms to the OECD model. The re­lated ne­go­ti­a­tions be­tween Liecht­en­stein and Switzer­land were com­pleted in Febru­ary 2015 and the DTA is ex­pected to en­ter into force by 1 Jan­u­ary 2017.

Fur­ther­more, the agree­ment with Aus­tria signed on 29 Jan­u­ary 2013 on co­op­er­a­tion in the area of tax­a­tion as well as the pro­to­col on the amend­ment of the ex­ist­ing DTA en­tered into force on 1 Jan­u­ary 2014. On the ba­sis of the tax­a­tion agree­ment, all as­sets held by per­sons res­i­dent in Aus­tria were sub­ject to an ad­di­tional tax as­sess­ment on the ba­sis of an anony­mous one-off pay­ment or dis­clo­sure of the bank­ing re­la­tion­ship as of 31 May 2014 or 30 June 2014. Since 1 Jan­u­ary 2014, the cur­rent tax­a­tion of in­come from cap­i­tal in the ac­counts / se­cu­rity de­posit ac­counts in­volved has been levied us­ing a lump-sum tax rate of 25 per cent or on the ba­sis of vol­un­tary dis­clo­sure. 

With the gov­ern­ment de­c­la­ra­tion of 14 No­vem­ber 2013 and draw­ing on the pre­vi­ous fi­nan­cial cen­tre strat­egy, Liecht­en­stein again reaf­firmed its com­mit­ment to the ap­plic­a­ble OECD stan­dards. Liecht­en­stein thus signed the Mul­ti­lat­eral Con­ven­tion of Mu­tual Ad­min­is­tra­tive As­sis­tance in Tax Mat­ters on 21 No­vem­ber 2013, which reg­u­lates the var­i­ous forms of co­op­er­a­tion in the field of tax­a­tion (in par­tic­u­lar, the ex­change of in­for­ma­tion). In ad­di­tion, the ef­forts in the area of tax trans­parency on an in­ter­na­tional level were ac­cel­er­ated dur­ing 2014. A mul­ti­tude of bi­lat­eral and multi­lat­eral agree­ments are due to be re­placed in fu­ture by a uni­form stan­dard for the au­to­matic ex­change of in­for­ma­tion. The frame­work con­di­tions for this global so­lu­tion were laid down in mid-2014 by the Or­gan­i­sa­tion for Eco­nomic Co- Op­er­a­tion and De­vel­op­ment (OECD) in its set of reg­u­la­tions es­tab­lish­ing uni­form re­port­ing stan­dards. 

The stan­dard has two com­po­nent parts: The first part con­- sists of a so-called Com­pe­tent Au­thor­ity Agree­ment (CAA), a model agree­ment form­ing the ba­sis for the ex­change of in­for­ma­tion and which con­tains the scope of in­for­ma­tion, the mode of trans­mis­sion and the rules of co­op­er­a­tion. The sec­ond part of the stan­dard con­tains a Com­mon Re­port­ing Stan­dard (CRS) in­clud­ing a com­men­tary re­gard­ing ap­pli­ca­tion. This lat­ter lays down the re­port­ing and pro­ce­dural rules, de­tails as to the iden­ti­fi­ca­tion of clients, the fi­nan­cial in­for­ma­tion to be re­ported and the fi­nan­cial in­ter­me­di­aries in­volved. De­tails of the new stan­dard are still open. Both within the EU as well as other coun­tries, in­clud­ing Liecht­en­stein, which have un­der­taken as “early adopters” to im­ple­ment the OECD di­rec­tives in the quick­est pos­si­ble man­ner (joint state­ments of 19 March 2014 and 1 Au­gust 2014), the new stan­dard will ap­ply from 2016 on­wards. On 29 Oc­to­ber 2014, Liecht­en­stein agreed to this to­gether with 50 other coun­tries within the frame­work of the first mul­ti­lat­eral agree­ment on the au­to­matic ex­change of in­for­ma­tion. In ac­cor­dance with this agree­ment, fi­nan­cial in­for­ma­tion for the tax year be­gin­ning on 1 Jan­u­ary 2016 shall be rel­e­vant and the first ef­fec­tive ex­change of data will en­sue in 2017. 

Var­i­ous other coun­tries, in­clud­ing Switzer­land and Sin­ga­pore, have an­nounced that the im­ple­men­ta­tion of the OECD stan­dard in their coun­tries will be de­layed by one year (un­til 2018). Over­all, it must be as­sumed that the au­to­matic ex­change of data will be im­ple­mented in­ter­na­tion­ally by 2018 at the lat­est. The stan­dard will ob­lig­ate banks, in a man­ner to that re­quired by FATCA, to un­der­take a com­pre­hen­sive re­view of and to take mea­sures to iden­tify ex­ist­ing client re­la­tion­ships and re­port­ing du­ties with all part­ner coun­tries par­tic­i­pat­ing in the ex­change of in­for­ma­tion. 

With the di­rec­tive of 1 Sep­tem­ber 2013, Liecht­en­stein banks have agreed on uni­form min­i­mum stan­dards to be ap­plied in re­la­tion to the due dili­gence re­quire­ments con­cern­ing tax com­pli­ance. The re­lated prin­ci­ples con­tinue to ap­ply and ob­lig­ate banks to clar­ify the ori­gin of as­sets and to re­view com­pli­ance with tax laws us­ing a risk-based ap­proach prior to the com­mence­ment of busi­ness re­la­tion­ships and the ac­cep­tance of new as­sets.

The di­rec­tive also in­cludes re­stric­tions in the case of cash trans­ac­tions. As cash trans­ac­tions are po­ten­tially suit­able for pro­mot­ing tax eva­sion, tax fraud and other tax of­fenses, the pro­vi­sions re­gard­ing cash with­drawals will be tight­ened across the board. Cash with­drawals ex­ceed­ing CHF 100,000 will thus only be per­mit­ted in cases in which, in­ter alia, it is plau­si­ble that this will not fa­cil­i­tate the com­mit­tal or con­tin­u­a­tion of a tax of­fense. Banks are also ob­lig­ated to en­sure par­tic­u­lar con­trol mech­a­nisms for such cash with­drawals in their in­ter­nal busi­ness rules. 

The Tax Act, which en­tered into force on 1 Jan­u­ary 2011, was par­tially re­vised dur­ing 2014. In ad­di­tion to var­i­ous spec­i­fi­ca­tions made, new rules were in­tro­duced, in par­tic­u­lar as re­gards the tax­a­tion of per­sons with re­stricted tax li­a­bil­ity as well as the de­ductibil­ity of cap­i­tal con­tri­bu­tions made to oc­cu­pa­tional pen­sion schemes. 

In ad­di­tion, the changes now pro­vide for an ad­di­tional lump-sum de­duc­tion of 6 per cent of to­tal as­sets in cal­cu­lat­ing mod­i­fied eq­uity (ex­clud­ing amounts al­ready de­ducted such as own shares, share­hold­ings). Fi­nally, the re­vised Tax Act con­tains statu­tory reg­u­la­tions for le­gal en­ti­ties re­gard­ing the tax­a­tion of re­alised gains of ac­cu­mu­lat­ing in­vest­ment funds which are treated as hav­ing been dis­trib­uted and paid out an­nu­ally. They are thereby treated the same as di­rect in­vest­ments. Ac­cord­ingly, the re­turn aris­ing from eq­uity pa­per re­mains tax-ex­empt; in­vest­ment in­come and gains on the sale of other cap­i­tal in­vest­ments are tax­able. De­tails, in par­tic­u­lar re­gard­ing the ap­pli­ca­tion of sub­stan­tive tax ex­emp­tions in the case of mixed funds, are set out in a bul­letin is­sued by the Liecht­en­stein Tax Ad­min­is­tra­tion. In ad­di­tion, rules were is­sued for write-downs or val­u­a­tion al­lowances on share­hold­ings in do­mes­tic and for­eign le­gal en­ti­ties, the off­set­ting of losses from a for­eign branch as well as, pur­suant to Art. 9 para. 3 of the Tax Act, an op­tion for tax­ing the tax ad­van­tages re­ceived with the wealth tax on a sub­sti­tu­tion ba­sis in the case of an ir­rev­o­ca­ble foun­da­tion, spe­cial ded­i­ca­tions of as­sets or foun­da­tion-like es­tab­lish­ments.

The new le­gal rules are to be ap­plied retroac­tively to the tax as­sess­ment for the 2014 tax year. 

In ad­di­tion, in its Re­port and Pe­ti­tion No. 89/​2013 of 22 Oc­to­ber 2013, the gov­ern­ment has pro­posed a sec­ond tax amnesty which is due to be avail­able to Liecht­en­stein clients with un­de­clared as­sets dur­ing the pe­riod from 1 Jan­u­ary 2014 to 31 De­cem­ber 2014. Dur­ing the in­tro­- duc­tory de­bate in the Liecht­en­stein Par­lia­ment (“Land­tag”), con­cerns were ex­pressed in some cases re­gard­ing a fur­ther amnesty. 

With its Re­port and Pe­ti­tion No. 5/​2014 of 28 Jan­u­ary 2014 and with the aim of avoid­ing an ac­cu­mu­la­tion of amnesties, the gov­ern­ment has pro­posed the in­tro­duc­tion of a one-time non-pun­ish­able vol­un­tary dis­clo­sure along the lines of the Swiss model. In ac­cor­dance with this, those in­di­vid­u­als who re­port a pun­ish­able of­fence com­mit­ted by them­selves pur­suant to the pro­vi­sions of the Tax Act for the first time af­ter 1 Jan­u­ary 2011, pro­vided this is not be­cause they are in im­mi­nent dan­ger of be­ing dis­cov­ered, shall only have to pay the sup­ple­men­tary tax to­gether with in­ter­est on ar­rears for the pre­ced­ing five years. Nei­ther fines nor sur­charges as pro­vided for un­der Art. 142 of the Tax Act will be levied. Dur­ing a tran­si­tional pe­riod un­til the end of 2014, in­di­vid­u­als who are sub­ject to taxes on net worth and per­sonal in­come will ben­e­fit from a sim­pli­fied pro­ce­dure for the sup­ple­men­tary de­clar­ation. On re­quest, the sup­ple­men­tary tax to be levied will be cal­cu­lated by ap­ply­ing a lump-sum tax rate to all un­de­clared as­sets as of 1 Jan­u­ary 2013. This lump-sum tax rate is 2.5 per cent plus the ad­di­tional mu­nic­i­pal tax rate. In the event that a tax­payer makes a fur­ther vol­un­tary dis­clo­sure, a fine equal to one-fifth of the tax evaded will be levied. These amend­ments were adopted by the Land­tag on 13 March 2014. They take ef­fect retroac­tively as of 1 Jan­u­ary 2014. 

On 16 Feb­ru­ary 2012, the Fi­nan­cial Ac­tion Task Force (FATF) is­sued its re­vised rec­om­men­da­tions for com­bat­ing money laun­der­ing, the fi­nanc­ing of ter­ror­ism and the proli­fer­a­tion of weapons of mass de­struc­tion. The re­vised rec­om­men­da­tions also pro­vide, amongst other changes, for an ex­ten­sion of the list of pred­i­cate of­fences to in­clude se­vere tax of­fences.

This means that banks, in­sur­ance com­pa­nies and other fi­nan­cial in­ter­me­di­aries must in fu­ture in­form the na­tional money laun­der­ing re­port­ing of­fice – in Liecht­en­stein, the Fi­nan­cial In­tel­li­gence Unit (FIU) – in the case of sus­pi­cion. The lat­ter in turn is ob­lig­ated, if need be, to for­ward the in­for­ma­tion to for­eign re­port­ing of­fices. 

Af­ter the pub­li­ca­tion of the new rec­om­men­da­tions of the FATF, the Eu­ro­pean Com­mis­sion an­nounced that the EU le­gal frame­work will be up­dated and the nec­es­sary amend­ments will be made with­out de­lay. 

A draft of the 4th EU Money Laun­der­ing Di­rec­tive has been avail­able since Feb­ru­ary 2013. In Feb­ru­ary 2014, the com­pe­tent spe­cial­ist com­mit­tees of the Eu­ro­pean Par­lia­ment gave their con­sent to the draft guide­lines sub­mit­ted by the EU Com­mis­sion and in the sec­ond half of 2014 de­lib­er­a­tions were held with the EU Com­mis­sion and the Coun­cil of Min­is­ters. The im­ple­men­ta­tion of the 4th EU Money Laun­der­ing Di­rec­tive is not ex­pected be­fore 2016. In Liecht­en­stein, the gov­ern­ment, the Fi­nan­cial Mar­ket Au­thor­ity, the Bankers As­so­ci­a­tion and the FIU are fol­low­ing de­vel­op­ments very closely and re­view­ing whether and in which form there might en­sue a need for ac­tion for the Liecht­en­stein fi­nan­cial mar­ket. With the de­ci­sion of the gov­ern­ment of Liecht­en­stein of 30 Sep­tem­ber 2014, a work­ing group has been com­mis­sioned to sub­mit a con­sul­ta­tive doc­u­ment by 1 De­cem­ber 2014 to im­ple­ment the new stan­dards re­lat­ing to tax of­fenses as a pred­i­cate of­fense to money laun­der­ing. In par­tic­u­lar, this shall in­cor­po­rate the fol­low­ing changes:

• Wider-rang­ing di­rec­tives for the ap­pli­ca­tion of the risk-based ap­proach
• Broad­en­ing of the pro­vi­sions con­cern­ing po­lit­i­cally ex­posed in­di­vid­u­als (so-called PEPs) which in fu­ture will also ex­tend to do­mes­tic PEPs as well as in­di­vid­u­als who hold an im­por­tant of­fice in an in­ter­na­tional or­gan­i­sa­tion

In its Peer Re­view re­port of Sep­tem­ber 2011 as well as in the Sup­ple­men­tary Re­port of Oc­to­ber 2012, the Global Fo­rum on Trans­parency and Ex­change of In­for­ma­tion for Tax Pur­poses rec­om­mended to Liecht­en­stein that it pro­vides for ex­cep­tions in cer­tain cases as re­gards the prior no­ti­fi­ca­tion of the per­sons in­volved in mu­tual as­sis­tance pro­ce­dures (so-called se­cret pro­ceed­ings). In the Re­port and Pe­ti­tion No. 54/​2014 of 6 May 2014, the re­lated pro­pos­als for the amend­ment of the Tax Ad­min­is­tra­tive As­sis­tance Act (TAAA) and Tax Ad­min­is­tra­tive As­sis­tance Act with the United States of Amer­ica (TAAA-USA) were pre­sented.

The Liecht­en­stein TAAA and TAAA-USA guar­an­tee the com­pre­hen­sive in­volve­ment of the per­sons con­cerned in the pro­ceed­ings. As un­der the cur­rent Liecht­en­stein pro­ceed­ings for mu­tual ad­min­is­tra­tive as­sis­tance in tax mat­ters, the in­spec­tion of files must be granted no later than the mo­ment that the Tax Ad­min­is­tra­tion’s fi­nal de­cree is con­- tested – it is cur­rently not pos­si­ble to trans­mit tax in­for­ma­tion to for­eign tax­a­tion au­thor­i­ties in ex­cep­tional cases with­out the prior no­ti­fi­ca­tion of the per­sons con­cerned. With the pro­posed amend­ments, an ex­cep­tion to the prior no­ti­fi­ca­tion of these in­di­vid­u­als is pro­vided for. This is re­stricted to those re­quests for mu­tual ad­min­is­tra­tive as­sis­tance in which the no­ti­fi­ca­tion of the per­sons con­cerned would clearly thwart the suc­cess of the for­eign in­ves­ti­ga­tory pro­ceed­ings.

The ful­fil­ment of the pre­con­di­tions is to be jus­ti­fied by the for­eign au­thor­ity on a case-by-case ba­sis. Should the Tax Ad­min­is­tra­tion come to the con­clu­sion that these are met, it shall for­ward the re­quest with­out de­lay to the com­pe­tent sin­gle judge of the Ad­min­is­tra­tive Court and ap­ply for au­tho­ri­sa­tion of the en­force­ment of the re­quest for ad­min­is­tra­tive as­sis­tance while main­tain­ing a ban on in­for­ma­tion.

Even within the frame­work of ex­cep­tional pro­ceed­ings, the in­ter­na­tional prin­ci­ple shall con­tinue to pre­vail, ac­cord­- ing to which the com­pe­tent for­eign au­thor­i­ties must first and fore­most ex­haust all ap­pro­pri­ate means avail­able in their ter­ri­tory to pro­cure the in­for­ma­tion prior to em­bark­ing on a re­quest for mu­tual ad­min­is­tra­tive as­sis­tance (so-called prin­ci­ple of sub­sidiar­ity). Fur­ther­more, de­tails as re­gards the re­lease of in­for­ma­tion by the in­for­ma­tion holder, the rights of the per­sons con­cerned and the lift­ing of the ban on in­for­ma­tion are also reg­u­lated. 

The amend­ment above to the TAAA and the TAAA-USA was dis­cussed on 5 June 2014 in the Land­tag at first read­ing. 

The For­eign Ac­count Tax Com­pli­ance Act (FATCA) is­sued by the USA con­trac­tu­ally ob­lig­ates for­eign fi­nan­cial in­sti­tu­tions (FFIs) to iden­tify those clients of theirs who are li­able to un­re­stricted tax in the US and dis­close the as­sets and in­come of the clients to the US tax au­thor­i­ties (In­ter­nal Rev­enue Ser­vice, IRS).

The dis­clo­sure and re­port­ing oblig­a­tions re­sult­ing from this Act are pri­mar­ily as­sured through bi­lat­eral agree­ments be­tween the US and the re­spec­tive tar­get state, which, at the same time, rep­re­sent, to­gether with re­lated na­tional leg­is­la­tion, the le­gal ba­sis for the afore­men­tioned oblig­a­tions. The Liecht­en­stein FATCA Act was pub­lished on 22 Jan­u­ary 2015. At pre­sent, two dif­fer­ent mod­els are em­ployed world-wide which are des­ig­nated as in­ter­gov­ern­men­tal agree­ments (IGA). Both mod­els dif­fer prin­ci­pally in that un­der Model 1, the FFIs dis­charge their re­port­ing oblig­a­tions to the re­spec­tive na­tional tax au­thor­ity, which then passes on the data to the IRS, whereas un­der Model 2, the re­port­ing oblig­a­tions are dis­charged di­rectly to the IRS. Liecht­en­stein has opted for IGA 1, whereas Switzer­land has taken the path of IGA 2. Through FATCA, the US is at­tempt­ing to in­tro­duce a seam­less sys­tem for the global ex­change of in­for­ma­tion on in­di­vid­u­als who are li­able to un­re­stricted tax in the US (US per­sons), while at the same time at­tain­ing a high de­gree of tax trans­parency. To en­sure this, FATCA pro­vides for the in­tro­duc­tion of a 30 per cent with­hold­ing tax on all US pay­ment flows (div­i­dends, in­ter­est, pro­ceeds from sales of US se­cu­ri­ties, etc.). The levy­ing of this tax is waived, how­ever, in­so­far as the re­lated fi­nan­cial in­sti­tu­tions ful­fil their oblig­a­tions re­sult­ing from the FATCA leg­is­la­tion. In or­der to at­tain the sta­tus of a so-called Par­tic­i­pat­ing FFI (PFFI or Re­port­ing Model 1/​2 FFI) un­der the FATCA regime, the FFI must reg­is­ter with the IRS in or­der to re­ceive a Global In­ter­me­di­ary Iden­ti­fi­ca­tion Num­ber (GIIN). 

With this GIIN, which is pub­lished in a cen­tral IRS reg­is­ter, the PFFI iden­ti­fies it­self in fu­ture in busi­ness trans­ac­tions as a FATCA par­tic­i­pant, thereby avoid­ing, in par­tic­u­lar, the re­quire­ment to with­hold 30 per cent with­hold­ing tax on all in­com­ing US pay­ment flows.

The GIIN is fur­ther re­quired in or­der to meet the re­port­ing oblig­a­tions (FATCA re­port­ing) and to com­plete and sub­mit the nec­es­sary US re­port­ing forms (e.g. forms 8966/​1042/­ ​1042-S) in an or­derly man­ner. FATCA re­port­ing is per­formed an­nu­ally. It will com­mence with the 2014 cal­en­dar year as the re­port­ing pe­riod, mean­ing that the first FATCA re­ports will be made in 2015 for the 2014 re­port­ing year.

A Par­tic­i­pat­ing/​Re­port­ing FFI shall re­view and, as part of this re­view, iden­tify and doc­u­ment all ac­counts held, di­rectly or in­di­rectly, by US per­sons. 

Where in­di­vid­u­als are the ac­count holder, a dis­tinc­tion is to be made be­tween three client cat­e­gories:

• US re­portable ac­counts: These re­fer to those client re­la­tion­ships with US per­sons that have al­ready been dis­closed as such un­der the Qual­i­fied In­ter­me­di­ary (QI) rules or can be clearly clas­si­fied as US per­sons (US cit­i­zen­ship, US res­i­dence) or can qual­ify as US per­sons on the ba­sis of data avail­able to the fi­nan­cial in­sti­tu­tions or of un­re­futed US in­dices (e.g. place of birth in the US).
• Non-US ac­counts: These are client re­la­tion­ships with per­sons who, on the ba­sis of the re­view, are not des­ig­nated as US per­sons as these are not li­able to un­re­stricted tax­ation in the US.
• Re­cal­ci­trant ac­counts: These re­fer to re­la­tion­ships with clients who are clas­si­fied as US re­portable ac­counts on the ba­sis of the avail­able facts or in­dices but for which the ac­count holder/​con­tract­ing party has not sub­mit­ted the re­quired doc­u­ments. As, on the ba­sis of the Liecht­en­stein FATCA, all fi­nan­cial in­sti­tu­tions are ex­empted from the re­spec­tive se­crecy oblig­a­tions in re­la­tion to FATCA re­port­ing, no re­cal­ci­trant ac­counts are main­tained in Liecht­en­stein.

In ad­di­tion, in the case of ac­count hold­ers which are com­pa­nies and le­gal en­ti­ties, VP Bank will have their FATCA sta­tus con­firmed by the ac­count hold­ers. In this client cat­e­gory, VP Bank Ltd must only re­port in ac­cor­dance with FATCA in those cases where the com­pany or le­gal en­tity is iden­ti­fied as be­ing a so-called “pas­sive NFFE with US con­trol­ling per­sons”.

In the case of all other FATCA sta­tuses, the re­port­ing and on­go­ing iden­ti­fi­ca­tion and doc­u­ment du­ties in con­nec­tion with the ben­e­fi­cia­ries/​mem­bers/​part­ners re­main with the re­spec­tive com­pany or le­gal en­ti­ties them­selves. 

VP Bank and all Group com­pa­nies are reg­is­tered with the IRS and pos­sess a cor­re­spond­ing GIIN.

As of 22 De­cem­ber 2014, 45 coun­tries had con­cluded a Model 1 IGA with the US and seven coun­tries a Model 2 IGA.

A fur­ther 53 coun­tries have reached an ad­vanced stage in ne­go­ti­a­tions with the US re­gard­ing a Model 1 IGA and seven coun­tries a sim­i­lar stage re­gard­ing a Model 2 IGA.

Mi­FID II shall be ap­plic­a­ble in Liecht­en­stein from 3 Janu­- ary 2017 on­wards. The mo­ti­va­tion to re­vise Mi­FID is the ex­pe­ri­ence gained in the fi­nan­cial cri­sis of 2007/​2008. The re­vised ver­sion of the Mi­FID Di­rec­tive 2014/​65/​EU as well as the di­rectly ap­plic­a­ble Or­di­nance No. 600/​2014 (Mi­FIR) are de­signed to ren­der fi­nan­cial mar­kets more ef­fi­cient, more re­silient and more trans­par­ent, re­in­force in­vestor pro­tec­tion, en­hance the su­per­vi­sion of less well reg­u­lated mar­kets and tackle the prob­lem of ex­ces­sive price volatil­ity on com­mod­ity mar­kets. Mi­FID II now en­com­passes the whole chain of added value from the dis­tri­b­u­tion of to trad­ing in fi­nan­cial in­stru­ments. The Eu­ro­pean Se­cu­ri­ties and Mar­kets Au­thor­ity (ESMA) has been given the au­thor­ity to is­sue im­ple­ment­ing or­di­nances for Mi­FID II to which great im­por­tance is at­tached but which most prob­a­bly will only be­come avail­able in the sec­ond half of 2015.

Mi­FID II in­tro­duces the fol­low­ing cen­tral changes, the im­ple­men­ta­tion of which will set new strate­gic di­rec­tions as a con­se­quence: 

• De­pen­dent/​in­de­pen­dent in­vest­ment ad­vi­sory ser­vices: Banks must de­cide whether they wish to ap­pear as de­pen­dent or in­de­pen­dent in­vest­ment ad­vi­sors on the mar­ket. As in­de­pen­dent in­vest­ment ad­vi­sors, banks may no longer ac­cept retro­ces­sions or sim­i­lar ben­e­fits from third par­ties. In elab­o­rat­ing in­vest­ment recom­men­da­tions, in­de­pen­dent in­vest­ment ad­vi­sors must take into con­sid­er­a­tion a suf­fi­cient num­ber of fi­nan­cial in­stru­ments of­fered on the mar­ket (di­ver­si­fied in terms of prod­uct type and is­suer). In this re­spect and more par­tic­u­larly, they may not only re­strict them­selves to fi­nan­cial in­stru­ments of is­suers or prod­uct providers which are closely re­lated to the ad­vi­sory bank (e.g. through dis­tri­b­u­tion con­tracts).
• Suit­abil­ity re­port: More strin­gent doc­u­men­ta­tion and dis­clo­sure du­ties shall ap­ply to both de­pen­dent and in­de­pen­dent in­vest­ment ad­vi­sors. In par­tic­u­lar, client must be in­formed as to the ex­tent to which the ad­vice was aligned with their pref­er­ences, ob­jec­tives and other at­trib­utes. 
• Port­fo­lio man­age­ment: In port­fo­lio man­age­ment, the ac­cep­tance of retro­ces­sions or sim­i­lar ben­e­fits from third par­ties is for­bid­den across the board. In pe­ri­odic suit­abil­ity re­ports, the client must be in­formed as to the ex­tent the in­vest­ment guide­lines have been com­plied with and if not, of the rea­sons why not. 
• Prod­uct gov­er­nance: Banks must en­sure ac­tual prod­uct gov­er­nance. They must iden­tify the risks as­so­ci­ated with the fi­nan­cial in­stru­ments of­fered, de­ter­mine the client base whose re­quire­ments cor­re­spond to the fi­nan­cial in­stru­ment and en­sure that the lat­ter is only dis­trib­uted to the de­fined tar­get groups. The analy­sis of the fi­nan­cial in­stru­ments must be re­peated pe­ri­od­i­cally. 
• Di­ver­sity: Man­age­ment and su­per­vi­sory bod­ies of fi­nan­cial in­sti­tu­tions must take into ac­count the prin­ci­ple of di­ver­sity, i.e. that the re­spec­tive bod­ies should be com­posed of a di­ver­si­fied num­ber of in­di­vid­u­als ac­cord­ing to age, sex, ed­u­ca­tion, pro­fes­sion and ori­gin. 
• Duty to main­tain records: Ad­di­tional record­ing du­ties are es­tab­lished for tele­phone con­ver­sa­tions or other forms of elec­tronic com­mu­ni­ca­tion which deal with the area of in­vest­ment ad­vi­sory ser­vices and the is­suance of or­ders in con­nec­tion with fi­nan­cial in­stru­ments. Pri­vate means of com­mu­ni­ca­tion (e.g. pri­vate mo­bile phones) in prin­ci­ple may not be used for con­tact with the clients. 
• Rules per­tain­ing to third coun­tries: There is a uni­form regime for the ser­vices of el­i­gi­ble counter­par­ties and pro­fes­sional clients (e.g. in­sur­ance com­pa­nies, in­vest­ment-fund com­pa­nies) re­gard­ing the cross-bor­der ac­tiv­ity of fi­nan­cial in­sti­tu­tions from third coun­tries (coun­tries out­side the EU/​EEA, e.g. Switzer­land). In these cases, only reg­is­tra­tion with the ESMA is re­quired which, how­ever, de­pends on whether the rules ap­plic­a­ble to the fi­nan­cial in­sti­tu­tion in the re­spec­tive third coun­try were recog­nised by a de­ci­sion of the EU Com­mis­sion as be­ing equiv­a­lent. 

Af­ter reg­is­tra­tion is com­pleted, fi­nan­cial in­sti­tu­tions will be able to ser­vice clients EU-wide from the third coun­try con­cerned. The na­tional reg­u­la­tions cur­rently in force may still be ap­plied dur­ing a tran­si­tional pe­riod of three years from the date of the de­ci­sion on equiv­a­lence. In the case of con­tact­ing pri­vate clients on a cross-bor­der ba­sis, there is only a par­tially uni­form regime avail­able. Each EU/​EEA mem­ber state con­tin­ues to be free to pre­vent the serv­ing of pri­vate clients in a cross-bor­der re­la­tion­ship and to pre­scribe the manda­tory es­tab­lish­ment of a branch. If this should be the case, how­ever, the same re­quire­ments for the es­tab­lish­ment of a branch shall ap­ply EU/​EEA-wide. The pro­vi­sion of bank­ing ser­vices on a cross-bor­der ba­sis con­tin­ues to be pos­si­ble upon the sole ini­tia­tive of the client (pas­sive free­dom to pro­vide ser­vices). 

As al­ready men­tioned, the im­ple­men­ta­tion of Mi­FID II will re­quire strate­gic de­ci­sions to be taken by fi­nan­cial in­sti­tu­tions, in par­tic­u­lar as re­gards the man­ner in which in­vest­ment ad­vi­sory ser­vices are or­gan­ised. In ad­di­tion, there will be the ad­di­tional chal­lenge in that the im­ple­ment­ing reg­u­la­tions of ESMA are sure to have a sig­nif­i­cant in­flu­ence on the en­force­ment of Mi­FID II and the re­lated free­dom of ac­tion of fi­nan­cial in­sti­tu­tions to or­gan­ise their ac­tiv­i­ties, on the one hand, and on the other, the fact they will most prob­a­bly not be avail­able prior to the sec­ond half of 2015. 

The EU is­sued the so-called CRD IV pack­age as a re­ac­tion to the 2008 fi­nan­cial mar­ket cri­sis; this com­prises the Cap­i­tal Re­quire­ments Reg­u­la­tion (CRR IV) in ad­di­tion to the Cap­i­tal Re­quire­ments Di­rec­tive (CRD IV). These Eu­ro­pean guide­lines were im­ple­mented through a re­vi­sion to the Bank­ing Act and var­i­ous other nor­ma­tive texts and adopted in the leg­is­la­tion of Liecht­en­stein. In par­tic­u­lar, the sys­tem of in­vestor com­pen­sa­tion was also ex­panded. 

In­cluded therein are pro­vi­sions on im­prov­ing and tight­en­ing cap­i­tal-ad­e­quacy and liq­uid­ity re­quire­ments (eq­uity buffer) and thus the banks’ in­ter­nal poli­cies on man­ag­ing eq­uity re­sources, on risk man­age­ment, on cor­po­rate gov­er­nance (stricter re­quire­ments for su­per­vi­sory and man­age­ment bod­ies), on the EU-wide har­mon­i­sa­tion of the sanc­tions frame­work and co­op­er­a­tion be­tween su­per­vi­sory au­thor­i­ties. In ad­di­tion to banks, se­cu­ri­ties firms, as­set man­agers, man­age­ment com­pa­nies and AIFM are now ob­lig­ated to join a sys­tem of in­vestor pro­tec­tion and su­per­vi­sory co­op­er­a­tion. The Liecht­en­stein Bankers As­so­ci­a­tion has re­solved in this re­gard to open its in­vestor pro­tec­tion sys­tem to other fi­nan­cial in­ter­me­di­aries. 

As re­gards se­cu­ri­ties-based in­vest­ment funds, the Liecht­en­stein Land­tag had al­ready is­sued the Act on Cer­tain Un­der­tak­ings for Col­lec­tive In­vest­ments in Trans­fer­able Se­cu­ri­ties (UCITSA) on 28 June 2011 in im­ple­ment­ing the so-called UCITS IV Di­rec­tive of the EU. 

In con­trast, two laws ex­ist cur­rently as re­gards non-se­cu­ri­ties-based in­vest­ment funds:

• The Act on Al­ter­na­tive In­vest­ment Fund Man­agers (AIFMA) which en­tered into force on 22 July 2013 and was is­sued to im­ple­ment the AIFM Di­rec­tive of the EU.
• The pre­vi­ously ex­ist­ing Act on In­vest­ment Un­der­tak­ings for Other As­sets or Real Es­tate (IUA).

The AIFMA and the IUA will re­main in ef­fect in par­al­lel for the time be­ing as the AIFM Di­rec­tive of the EU has yet to be adopted un­der EEA law and ac­cord­ingly, Liecht­en­stein has not yet re­ceived the EU pass­port for al­ter­na­tive in­vest­ment funds (AIF).

The rea­son for the ab­sence of the EU pass­port for al­ter­na­tive in­vest­ments in ac­cor­dance with the AIFM Di­rec­tive is that var­i­ous EU Acts, in­clud­ing the AIFM Di­rec­tive, have not yet been adopted un­der EEA law be­cause of con­cerns about un­con­sti­tu­tion­al­ity raised by Ice­land and Nor­way in re­la­tion to the new Eu­ro­pean Fi­nan­cial Su­per­vi­sory Au­thor­i­ties. On the oc­ca­sion of a meet­ing of the EFTA fi­nance min­is­ters with the Coun­cil of Eu­rope on 14 Oc­to­ber 2014, how­ever, it was made known that the EU and EEA/​EFTA coun­tries were able to find a so­lu­tion for the adop­tion in the EEA Agree­ment of the leg­is­la­tion con­cern­ing the new Eu­ro­pean Fi­nan­cial Su­per­vi­sory Au­thor­i­ties, thereby in­clud­ing, in­ter alia, the adop­tion of the AIFM Di­rec­tive.

The tech­ni­cal EEA pro­ce­dural steps nec­es­sary for adop­tion will, how­ever, still re­quire some time. Cur­rently, it is es­ti­mated that the adop­tion of the AIFM Di­rec­tive un­der EEA law, with the en­su­ing re­ceipt of the EU pass­port for AIF, will take place dur­ing 2015. 

Fol­low­ing the afore­men­tioned adop­tion of the AIFM Di­rec­tive un­der EEA law, the ma­jor­ity of Liecht­en­stein leg­is­la­tion per­tain­ing to in­vest­ment funds (UCITS, i.e. se­cu­ri­ties and al­tern­ative in­vest­ment funds) is bound by Eu­ro­pean di­rec­tives (UCITS and AIFM Di­rec­tive). Ac­cord­ingly, there re­mains lit­tle room for purely na­tional leg­is­la­tion for in­vest­ment funds.

In au­tumn 2013, the Steer­ing Com­mit­tee of the Liecht­en­stein in­vest­ment fund mar­ket­place com­mis­sioned a pro­ject group com­pris­ing ex­perts from Liecht­en­stein fi­nan­cial cen­tre as­so­ci­a­tions to un­der­take a de­tailed re­view aimed at speed­ing up the cre­ation of a spe­cial law on in­vest­ment funds. The pro­ject team is cur­rently work­ing on the elab­o­ra­tion of a pro­posal for such a purely na­tional law on in­vest­ment funds for sin­gle in­vestor, fam­ily and in­ter­est group funds.

The adop­tion of the so-called UCITS IV Di­rec­tive in the Liecht­en­stein UCITSA led to a state of over-reg­u­la­tion, which in prac­tice proved to be very un­favourable and a com­pet­i­tive dis­ad­van­tage for the Liecht­en­stein mar­ket­place for in­vest­ment funds. 

Very ex­pen­sive pro­vi­sions ex­ist for the merger of UCITS in­vest­ment funds and costs are in­curred which can­not be charged to the funds. The pre­vi­ous Art. 49 of the Liecht­en­stein UCITSA also pre­scribed the ap­plic­a­bil­ity of these oner­ous merger pro­vi­sions of the UCITS Di­rec­tive for other “struc­tural mea­sures” (such as change of man­age­ment com­pany or de­posi­tary), al­though this is not fore­seen in the UCITS Di­rec­tive it­self. Ac­cord­ingly, the other struc­tural changes should be viewed, as in other Eu­ro­pean coun­tries, as a mod­i­fi­ca­tion of the con­stituent doc­u­ments (Art. 11 UCITSA), for which a sim­pler pro­ce­dure ap­plies. 

On 27 Jan­u­ary 2015, the gov­ern­ment of Liecht­en­stein is­sued a Re­port and Pe­ti­tion on this mat­ter which is de­signed to elim­i­nate the afore­men­tioned ex­ces­sive reg­u­la­tion (con­sul­tation pe­riod end­ing on 16 Jan­u­ary 2015). 

The rel­e­vant EU or­di­nances which form the ba­sis for regu­lat­ing the pow­ers of au­thor­ity of the Eu­ro­pean Bank­ing Au­thor­ity (EBA) and the Eu­ro­pean Se­cu­ri­ties and Mar­kets Au­thor­ity (ESMA) re­gard­ing the is­suance of guide­lines has still not been adopted in the legis­la­tion of the EEA. The back­ground to this de­lay re­lates to the en­force­ment of li­a­bil­ity, from a su­per­vi­sory law per­spec­tive, of these au­thor­i­ties on the in­di­vid­ual fi­nan­cial in­sti­tu­tions in EEA/​EFTA coun­tries which goes hand in hand with the cre­ation of the Eu­ro­pean Sys­tem of Fi­nan­cial Su­per­vi­sion (ESFS) but which poses is­sues of un­con­sti­tu­tion­al­ity in the case of Nor­way and Ice­land. The im­ple­men­ta­tion of these or­di­nances in the EEA/​EFTA zone is ac­corded the high­est pri­or­ity. 

As a tran­si­tional mea­sure, the Liecht­en­stein leg­is­la­tor has sub­jected the FMA Act to a par­tial re­vi­sion: since 1 Jan­u­ary 2014, the FMA has had the op­tion to ap­ply the guide­lines of the afore­men­tioned au­thor­i­ties in­so­far as no jus­ti­fied grounds ex­ist to de­part from these. 

In this re­spect and within the scope of the re­view for their adop­tion, nu­mer­ous guide­lines were sub­mit­ted by the FMA via the LBA dur­ing the year to Liecht­en­stein banks re­quest­ing their opin­ion. The guide­lines re­quir­ing as­sess­ment deal, in­ter alia, with the fol­low­ing sub­jects:

• Han­dling of com­plaints for se­cu­ri­ties trad­ing and bank­ing
• Sur­vey of re­mu­ner­a­tion fig­ures for the prepa­ra­tion of bench­mark­ing data re­gard­ing the re­mu­ner­a­tion pol­icy of fi­nan­cial in­sti­tu­tions by the EBA
• Trans­fer of sig­nif­i­cant credit risks in con­nec­tion with se­cu­ri­ti­sa­tion trans­ac­tions
• Draw­ing up of re­struc­tur­ing plans
• Han­dling of re­cap­i­tal­i­sa­tions fi­nanced by pub­lic in­sti­tu­tions

These and other guide­lines pub­lished by the EBA and ESMA in 2014 fo­cused on the ar­eas of fi­nan­cial state­ment re­port­ing and risk man­age­ment. 

Mon­ey­val, the Com­mit­tee of Ex­perts of the Coun­cil of Eu­rope on the Eval­u­a­tion of Anti-Money Laun­der­ing Mea­sures and the Fi­nanc­ing of Ter­ror­ism, vis­ited Liecht­en­stein in 2013 within the scope of its fourth eval­u­a­tion round and con­ducted an as­sess­ment of the fi­nan­cial cen­tre as well as of the le­gal bases and im­ple­men­ta­tion of the stan­dards aimed at com­bat­ing money laun­der­ing and the fi­nanc­ing of ter­ror­ism. Mon­ey­val pe­ri­od­i­cally as­sesses com­pli­ance with all rel­e­vant stan­dards aimed at com­bat­ing money laun­der­ing and the fi­nanc­ing of ter­ror­ism by mem­ber states and aims to guar­an­tee that mem­ber states have ef­fec­tive sys­tems in place for pre­vent­ing these of­fences. 

The re­sult­ing re­port of the fourth eval­u­a­tion round was pub­lished on 3 July 2014 and con­tained a pos­i­tive as­sess­ment for Liecht­en­stein. In par­tic­u­lar, Liecht­en­stein has made signi­fi­cant progress since the last as­sess­ment in 2007. It was noted that its le­gal bases meet the global stan­dard in the field of com­bat­ing money laun­der­ing and the fi­nanc­ing of ter­ror­ism. It was also noted, how­ever, that fur­ther ac­tion was re­quired par­tic­u­larly re­gard­ing the ef­fec­tive­ness of crim­i­nal pros­e­cu­tion and pre­ven­tive mea­sures, the right to in­for­ma­tion on the part of the au­thor­i­ties as well as in the trans­parency of com­pa­nies and cor­po­rate en­ti­ties. A progress re­port to Mon­ey­val will need to be pre­pared by April 2016 as part of the im­ple­men­tation of the rec­om­men­da­tions which Liecht­en­stein has ap­proached in a con­sis­tent man­ner.

The re­port can be viewed on the web­site of the Com­mit­tee of the Ex­perts of the Coun­cil of Eu­rope (https://vp­bank.org/​JXrjr).

On 9 De­cem­ber 2014, the gov­ern­ment of Liecht­en­stein is­sued a con­sul­ta­tive re­port con­cern­ing an amend­ment to the Act on the Fi­nan­cial In­tel­li­gence Unit (“FIUA”) as well as other laws. 

Fol­low­ing the mod­i­fi­ca­tions made to the stan­dards of the Fi­nan­cial Ac­tion Task Force (FATF) in 2003 and 2013 regu­lat­ing the com­bat­ing of money laun­der­ing and the fi­nanc­ing of ter­ror­ism as well as af­ter the Mon­ey­val coun­try as­sess­ments of 2008 and 2014 which were based thereon, it was the view of the Liecht­en­stein gov­ern­ment that the FIUA dat­ing from 2002 re­quired a fun­da­men­tal over­haul. 

The most sig­nif­i­cant mod­i­fi­ca­tions con­cern the fol­low­ing points: 

• The cre­ation of a clear le­gal ba­sis for the FI­U’s right to in­for­ma­tion as well as a clar­i­fi­ca­tion that this right may not be op­posed by pro­fes­sional or of­fi­cial se­crecy in­sti­tuted un­der spe­cial laws
• The cre­ation of sanc­tion norms in cases in which the right to in­for­ma­tion is de­nied
• The re­place­ment of the rigidly for­mu­lated freez­ing of as­sets as pre­scribed cur­rently un­der Art. 18 para. 2 of the Due Dili­gence Act (max­i­mum five work­ing days) in favour of a more flex­i­ble regime
• The ex­ten­sion of the ban on in­for­ma­tion un­til the time of fil­ing a sus­pi­cious ac­tiv­ity re­port and re­quest for in­for­ma­tion by the FIU
• The cre­ation of the bases for the ap­pro­pri­ate dele­tion of amassed data re­lat­ing to in­di­vid­u­als
• The im­proved pro­tec­tion of en­ti­ties sub­ject to due dili­gence oblig­a­tions which re­ports to the FIU, while the re­port it­self in fu­ture is no longer to be for­warded to the pros­e­cut­ing au­thor­i­ties

In the same vein, the gov­ern­ment of Liecht­en­stein pro­poses to amend the Due Dili­gence Act, the Act on Mar­ket Abuse, the Bank­ing Act as well as fur­ther leg­is­la­tion in or­der to make the changes re­gard­ing the tasks of the FIU ren­dered nec­es­sary as a re­sult of the com­plete over­haul of the FIUA. The con­sul­ta­tion pe­riod ended on 18 Feb­ru­ary 2015.

On 16 Sep­tem­ber 2014, the gov­ern­ment of Liecht­en­stein is­sued a con­sul­ta­tive re­port con­cern­ing a re­vi­sion to the Pe­nal Code, the Code on Crim­i­nal Pro­ce­dures, the Tax Law and other laws un­der­stood un­der the term “Re­vi­sion of the Pe­nal Law on Cor­rup­tion”.

With this pro­posal, the Liecht­en­stein pe­nal law on cor­rup­tion is de­signed to be aligned with in­ter­na­tional stan­dards (United Na­tions Con­ven­tion on Cor­rup­tion, UN­CAC).

An es­sen­tial el­e­ment of these two en­act­ments of pub­lic in­ter­na­tional law is the sanc­tion­ing of ac­tive and pas­sive bribery in the pri­vate sec­tor.

With the in­tro­duc­tion of the new pro­vi­sions on ac­tive and pas­sive cor­rup­tion in busi­ness re­la­tion­ships (Art. 309 of the Pe­nal Code), the over­haul of the ex­ist­ing crim­i­nal cor­rup­tion of­fences (Arts. 304 to 308 of the Pe­nal Code) as well as the new le­gal de­f­i­n­i­tion of the of­fice holder (Art. 74 para. 1 point 4a lit. a to c of the Pe­nal Code), these in­ter­na­tional im­ple­men­ta­tion oblig­a­tions are now com­plied with.

A fur­ther fo­cus of the pro­pos­als is the re­vi­sion of the sys­tem of de­crees re­lat­ing to prop­erty rights which had given rise to crit­i­cism in the re­cent past in the Mon­ey­val/​IMF as­sess­ment of Liecht­en­stein. In ad­di­tion to the in­tro­duc­tion of a pro­vi­sion on con­fis­ca­tion in Art. 19a of the Pe­nal Code, the dis­con­tin­u­a­tion of the pre­scrip­tions con­cern­ing as­set re­cov­ery and the in­tro­duc­tion of new pro­vi­sions on for­fei­ture as well a re­form of the ex­ist­ing pre­scrip­tions on for­fei­ture (Arts. 20 et seq. of the Pe­nal Code) are the most sig­nif­i­cant amend­ments of note

The orig­i­nal con­sul­ta­tion pe­riod (un­til 16 De­cem­ber 2014) was ex­tended to 4 May 2015 upon ap­pli­ca­tion by two as­soci­ations. 

In No­vem­ber 2014, the Land­tag adopted the new pro­vi­sions con­cern­ing the so-called “pro­tected cell com­pany”, which took ef­fect on 1 Jan­u­ary 2015 (Art. 243 to 243g of the PCA). This term does not re­fer to a new le­gal form but all le­gal en­ti­ties un­der the PCA re­quired to be en­tered into the pub­lic reg­is­ter, or which have reg­is­tered vol­un­tar­ily, may be es­tab­lished as a pro­tected cell com­pany or adopt this sta­tus sub­se­quently as a re­sult of con­ver­sion.

Pro­tected cell com­pa­nies are re­quired to com­prise two or­gan­i­sa­tional parts: a core and one or more seg­ments which are seg­re­gated from each other. The par­tic­u­lar at­tribute of the pro­tected cell com­pany is that the as­sets of the in­di­vid­ual seg­ments are seg­re­gated from each other and from the as­sets of the core. How­ever, only the pro­tected cell com­pany it­self ac­quires le­gal per­son­al­ity, not the in­di­vid­ual seg­ments. 

Pro­tected cell com­pa­nies may only be seg­mented when they ex­clu­sively pur­sue one or more of the fol­low­ing ob­jects:

• Phil­an­thropic or char­i­ta­ble pur­poses within the mean­ing of Art. 107 para. 4a of the PCA 
• The ac­qui­si­tion and ex­ploita­tion of in­vest­ments in other com­pa­nies (sub­sidiaries)
• The ex­ploita­tion of in­tel­lec­tual prop­erty rights
• The es­tab­lish­ment of de­posit guar­an­tee and in­vestor pro­tec­tion sys­tems in com­pli­ance with ap­plic­a­ble EEA le­gal pre­scrip­tions

The com­pany or name of the pro­tected cell com­pany must be fol­lowed by a cor­re­spond­ing ad­den­dum (Pro­tected Cell Com­pany or PCC; Seg­men­tierte Ver­bandsper­son or SV in Ger­man). The pro­tected cell com­pany shall in­form in writ­ing all third par­ties with whom it has le­gal re­la­tion­ships about its sta­tus as a pro­tected com­pany and shall des­ig­nate the seg­ment, or if ap­plic­a­ble, the core with whose as­sets it bears li­a­bil­ity for the le­gal re­la­tion­ship con­cerned. Bank­ruptcy pro­ceed­ings can be ini­ti­ated by the pro­tected cell com­pany it­self as well as in re­spect of each of the in­di­vid­ual seg­ment as­sets.

In Sep­tem­ber 2009, the G20 coun­tries agreed that all stan­dard­ised OTC de­riv­a­tives con­tracts are to be processed via a cen­tral coun­ter­party and OTC de­riv­a­tives con­tracts are to be recorded in a trans­ac­tion reg­is­ter.

The EU Com­mis­sion gave recog­ni­tion to this mat­ter by is­su­ing Or­di­nance (EU) No. 648/​2012 of 4 July 2012 per­tain­ing to OTC de­riv­a­tives, cen­tral coun­ter­par­ties and a trans­ac­tion reg­is­ter (“Eu­ro­pean Mar­ket In­fra­struc­ture Reg­u­la­tion – EMIR”). The EMIR oblig­a­tions on the agree­ment of risk mit­i­ga­tion tech­niques and the re­port­ing of OTC de­riv­a­tive con­tracts to a trans­ac­tion reg­is­ter are al­ready in force in the EU. De­pend­ing on the cat­e­gori­sa­tion of mar­ket par­tic­i­pants, a step-by-step in­tro­duc­tion of OTC de­riv­a­tive con­tracts which must be processed over cen­tral coun­ter­par­ties will start in 2015. 

It is thus es­ti­mated that EMIR will in all prob­a­bil­ity be adopted in the EEA Agree­ment dur­ing the course of 2015, af­ter which the EMIR oblig­a­tions will also ap­ply in Liecht­en­stein.