Liechtenstein

People

While it appears that a human trafficking market exists within Liechtenstein, the market is small and not consolidated. There is some evidence of local demand within sectors such as nightlife outlets, but it is primarily a transnational crime carried out by foreign actors and is a minimal problem within the country. However, the COVID-19 pandemic may increase the number of people vulnerable to modern slavery and human trafficking. Due to an effective state strategy against trafficking and smuggling, there is no evidence to suggest a market for human smuggling in Liechtenstein. Its size and location are a natural barrier to criminal activity and migration predominantly occurs through legal channels.

Trade

There is no evidence of an active arms trafficking market in Liechtenstein, and the country has regulations to control the import, export and transit of arms.

Environment

There is no evidence of an established illicit flora market in Liechtenstein, and few cases have been reported. However, in 2018, Nordsudtimber, a European company based in Liechtenstein, was found to have been involved in a large-scale illegal timber harvesting in the Democratic Republic of Congo and is thought to have laundered its illicit profits through Liechtenstein’s financial institutions. Although there is no evidence of illegal fauna trading into or out of Liechtenstein, there have been incidents of poaching in the country’s forests. But these have been minimal and carried out by individuals rather than criminal organizations. As Liechtenstein has very few natural resources, non-renewable resource crime is not an issue in the country.

Drugs

Cannabis is the most consumed drug in Liechtenstein and its popularity is highest among youths and students, with its overall use and availability being higher than the EU average. Most cannabis convictions are for personal consumption, with only a cases relating to trafficking. Online purchases are becoming the most common way to purchase the drug and the market is being fuelled by domestic demand. While there is no well-established marked for cocaine, it is growing, and the price of a gram has dropped by two thirds over the past two years. Local demand for cocaine is rising, especially among the youth and foreign students, and online purchases are becoming more commonplace. While the drug is not produced in Liechtenstein, the primary concern with this market is its potential for using Liechtenstein’s offshore financial services sector to launder drug money.

There is no well-established criminal market for heroin in Liechtenstein. It is not commonly consumed locally nor traded internationally. While the country’s geostrategic position on transit routes into Europe may leave it vulnerable to infiltration by criminal organisations, the heroin market at present is negligible. The market for synthetic drugs is not well-established and their use is not widespread, while the perceived availability of these drugs is similar to European averages.

Criminal Actors

Violence levels have reached a record low in recent years, and there is no evidence of mafia-style groups or criminal networks operating in Liechtenstein. Likewise, there is no evidence to suggest state-embedded actors facilitate or engage in crime. The democratic process is free from any external and criminal influence. Insofar as organized criminal actors exist in the microstate, they are usual foreign criminal actors. Due to its proximity to Austria and Switzerland, there are concerns that the Italian mafia-style syndicate ‘Ndrangheta could move into Liechtenstein. The capital, Vaduz, where the finance and banking system is concentrated, may be vulnerable to money laundering driven by foreign criminal actors.

Leadership and governance

Although organized crime is not a significant issue in Liechtenstein, the government has taken a strong stand against it, given that its geographic location in the heart of Europe and its reputation as a tax haven, could make it attractive to foreign criminal actors. Most illicit activity is international, rather than domestic, and requires intensive and effective international law enforcement cooperation. In this regard, the government has signed a cooperation agreement with Europol. Liechtenstein is largely free of corruption at all levels of the state and economy. The government publishes budgets, procurement contracts and other relevant information. Despite this, however, the country's legal framework for providing access to information has been assessed as being extremely poor. Through its membership of various Anti-Money Laundering, Combating the Financing of Terrorism and anti-corruption groups, Liechtenstein holds itself accountable and ensures compliance with international regulatory frameworks. The country has many preventative and educational measures to combat corruption, which appear to be effective, and it has made large strides in improving transparency and banking reform.

Liechtenstein actively participates in international cooperation efforts with the UN and Europol against organized crime and is committed to furthering international justice and law. It is involved in intelligence sharing treaties and extradition agreements and participates internationally in efforts to prevent crime. The country not only has laws in place to prosecute organized crime but also to prevent membership of criminal networks. Legislation to combat organized crime has an appropriate focus on money-laundering, given that it is a country that attracts legal and illegal business from all over the world.

Criminal justice and security

Liechtenstein’s judicial system is efficient and transparent, and courts can effectively investigate and prosecute criminal cases. It has only one prison, which is well equipped and meets international standards. However, due to the lack of capacity, individuals with sentences of more than two years carry out their terms in Austrian prisons.

Despite its potentially strategic position in Europe for criminal networks, Liechtenstein has robust territorial integrity. The strong cooperation in border control it has with Austria and Switzerland make its borders resilient. However, as part of the Schengen area, cross-border illicit activity is more difficult to detect due to the extent of movement across its borders. The Liechtenstein National Police is the country’s single police force and has many law enforcement units specifically focused on corruption and money laundering. Notably, INTERPOL has a National Central Bureau in Vaduz, which, due to the high number of international criminal cases, gives it a key role in safeguarding national and regional security. Law enforcement agencies actively cooperate with international intelligence-sharing mechanisms.

Economic and financial environment

As Liechtenstein is a leading offshore tax haven and traditionally has tight bank secrecy laws, money laundering is a major concern for the government, which has made efforts to increase banking transparency. The country has a special analytics unit to detect money laundering, in addition to its participation in European anti-money laundering measures. The close relationships between these authorities mean effective management of the problems, although financial secrecy does have an impact on the exchange of information. Liechtenstein faced international pressure to improve its banking transparency in the past and has since enacted anti-money laundering measures focused on banks, investment firms and businesses such as casinos and insurance companies. It has also signed tax information exchange agreements with countries such as the US.

Alongside its low tax rates, Liechtenstein is an easy place to establish new businesses and its economy attracts a lot of business and investment. The business environment offers opportunities for legitimate businesses to expand as economic regulations are not restrictive. Although this does also attract unwanted interest from criminals, Liechtenstein’s financial controls help to offset this. The government has a balancing act in lightening the settlement process for financial services while also intensifying the state's security controls.

Civil society and social protection

The government of Liechtenstein has legislation and training mechanisms in place to provide effective treatment to victims of all types of crime, with a particular emphasis on sex-related crimes. The country has created a public-private sector initiative – the Financial Sector Commission on Modern Slavery and Human Trafficking - as it believes the financial sector can help to end these practices by excluding the proceeds of trafficking from the financial system. The Criminal Procedural Code enshrines victim and witness protection, and the government is very engaged in programmes to support drug users. Liechtenstein believes strongly in prevention and has many strategies in place to this end, including early education campaigns and drug-use prevention programmes. The government also created a Working Group for the Prevention of Corruption and the PROTEGE Working Group, which educate and train public officials and local authorities. Furthermore, any private person can report corruption directly to the Anti-Corruption Police Unit via a dedicated hotline. All of these measures have been evaluated as being effective.

Because of the lack of organized crime groups in Liechtenstein, and the government’s success in prevention, civil society groups focus more on sport and culture than crime prevention. In the media environment, free speech is protected and there is no evidence of attacks on journalists by the state or criminal groups. However, the two main media groups are owned by the two leading political parties and the only TV and radio channels are state-owned.