Liechtenstein - Money
Liechtenstein has many advantages issuing from its use of the Swiss franc and from officially being part of the Swiss monetary system. It has a strong currency, a balanced budget with revenues of $424.2 million and expenditures of $414.1 million in 1998 (estimate), and a leading banking sector with solid private banks with a reputation for privacy, limited regulation, and the acceptance of foreign deposits with little oversight. Similarly to Switzerland in the late 1990s, however, these conditions have also led to some serious legal drawbacks.
Throughout 2000, Liechtenstein has been troubled by recurrent international allegations of domestic money laundering for transnational organized crime, an abuse of Swiss banking privacy policies. In 2000, the German press printed stunning details from a German federal intelligence agency report accusing Liechtenstein of acting as banker to Central American drug cartels and the Russian mafia. The report alleged that a former prime minister, Hans Brunhart, currently head of the Verwaltungsund Privat-Bank (VP Bank), had been laundering drug money. The report named Liechtenstein as the only European country on an International Financial Action Task Force (FATF) list of 15 nations accused of failing to cooperate against money laundering. Finally, the Organization for Economic Cooperation and Development (OECD), in another 2000 publication, listed the principality
|Exchange rates: Liechtenstein|
|Swiss francs, franken, or franchi (SFR) per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
among harmful offshore tax havens alongside Tonga, the Bahamas, and Barbados.
The allegations caused a storm of indignation in the country. Brunhart objected, and an independent investigator from Austria appointed by Liechtenstein did not support the case. The investigator found that Liechtenstein was not a hub of money laundering, although he criticized its preventive work against "hot money." In early 2001, the FATF confirmed that the country had made significant progress in connection with the fight against money laundering. The country was removed from the blacklist by the FATF in June of 2001.