Corruption in Liechtenstein has been described as relatively low compared to other nations. This has been achieved by the small European principality through a strong and stringent legal framework and effective implementation mechanisms.
Corruption in Liechtenstein has been described as relatively low compared to other nations. This has been achieved by the small European principality through a strong and stringent legal framework and effective implementation mechanisms.
The backbone of Liechtenstein's anti-corruption legal framework is its Penal Code. In particular, the code's Section 307 penalizes bribery (including foreign bribery) with up to ten years of imprisonment. Liechtenstein also has mechanisms to support the Penal Code, as part of its commitments to the international treaties it has ratified, such as the United Nations Convention against Corruption (UNCAC). In 2010, Liechtenstein also became a member of the Council of Europe’s Group of States against Corruption (GRECO), which is one of the Council of Europe's monitoring bodies in its goal to protect democracy and the rule of law. For its commitment to GRECO, Liechtenstein has appointed specialists for policymaking and to investigate various forms of corruption. [1]
By 2020, Liechtenstein had implemented 17 out of the 20 GRECO recommendations according to the agency's evaluation. [1] Thus the country is meeting its commitment to align its anti-corruption efforts with international standards. [2] The country also revised the Law on the Payment of Contributions to Political Parties, improving on the statute to provide a clearer framework that enhances transparency of political party and campaign finance. [3]
A code of conduct was also established for the judiciary, along with specific measures such as the refinement of the criteria for assessing a prosecutor's integrity. These measures led to a strengthened overall anti-corruption framework. [2]
Despite the robust legal framework that leads to a low incidence of corruption, there are still challenges that could hamper anti-corruption efforts. According to a GRECO compliance report, for instance, Liechtenstein still has no code of conduct in place for members of its legislature. [4] This has a bearing on transparency because members of the parliament are not – as of 2020 – required to declare their assets or conflicts of interest. [4] GRECO has previously stated in the early stages of Liechtenstein's anti-corruption reform that mechanisms do not take into account broad forms of bribery such as those that are not material bribes, such as gratuities and favors. [1]
Liechtenstein faces difficulties in implementing anti-money laundering measures. The Financial Market Authority (FMA) is charged with enforcing related regulations; but problems arise from the complexity of financial transactions and the sophisticated methods used to launder money. [5] [6] Furthermore, about 90% of the country's financial services are provided to non-residents. [7] These difficulties have been demonstrated in several corruption scandals involving the financial sector.
Notable corruption scandals in Liechtenstein have mostly been in the private sector, particularly the country's banking industry. In 2008, several of the principality's banks and trusts were cited in a corruption scandal called the Liechtenstein Tax Affair, which involved several countries. Governments had investigated and prosecuted high-profile individuals and corporations that used Liechtenstein's financial institutions to hide assets and evade taxes. There were cases, for instance, of German citizens found to have stashed millions of euros in LGT Bank and other banks in Liechtenstein to evade taxes in Germany. [8] There were also German financial institutions that established foundations in Liechtenstein. The companies advised their clients to put their money in these foundations to avoid paying taxes at home. [9]
In 2013, a similar scandal broke which involved the Liechtensteinische Landesbank (LLB), the oldest bank in the country. It was accused and was proven to have helped foreign clients conceal their assets and avoid tax obligations. The bank settled to pay the United States, for instance, $23.8 million after it admitted to using secret accounts to help clients hide as much as $341 million from the United States IRS. [10]
Money laundering is the process of illegally concealing the origin of money obtained from illicit activities such as drug trafficking, underground sex work, terrorism, corruption, embezzlement, and gambling, and converting the funds into a seemingly legitimate source, usually through a front organization.
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain.
Bribery is the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty and to incline the individual to act contrary to their duty and the known rules of honesty and integrity. With regard to governmental operations, essentially, bribery is "Corrupt solicitation, acceptance, or transfer of value in exchange for official action."
Banking in Switzerland dates to the early 18th century through Switzerland's merchant trade and over the centuries has grown into a complex and regulated international industry. Banking is seen as emblematic of Switzerland and the country has been one of the largest offshore financial centers and tax havens in the world since the mid-20th century, with a long history of banking secrecy and client confidentiality reaching back to the early 1700s. Starting as a way to protect wealthy European banking interests, Swiss banking secrecy was codified in 1934 with the passage of a landmark federal law, the Federal Act on Banks and Savings Banks. These laws were used to protect assets of persons being persecuted by Nazi authorities but have also been used by people and institutions seeking to illegally evade taxes, hide assets, or to commit other financial crime.
An offshore bank is a bank that is operated and regulated under international banking license, which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and transparency, accounts with offshore banks were often used to hide undeclared income. Since the 1980s, jurisdictions that provide financial services to nonresidents on a big scale can be referred to as offshore financial centres. OFCs often also levy little or no corporation tax and/or personal income and high direct taxes such as duty, making the cost of living high.
Know your customer (KYC) guidelines and regulations in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship with a customer. The procedures fit within the broader scope of anti-money laundering (AML) and counter terrorism financing (CTF) regulations.
Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities like bribery, influence peddling, and embezzlement, as well as practices that are legal in many countries, such as lobbying. Political corruption occurs when an office-holder or other governmental employee acts in an official capacity for personal gain.
The chief compliance officer (CCO) is a corporate executive within the C-suite responsible for overseeing and managing regulatory compliance issues within an organization. The CCO typically reports to the chief executive officer or the chief legal officer.
The Group of States against Corruption is the Council of Europe's anti-corruption monitoring body with its headquarters in Strasbourg (France). It was established in 1999 as an enlarged partial agreement by 17 Council of Europe member states.
Financial crime is crime committed against property, involving the unlawful conversion of the ownership of property to one's own personal use and benefit. Financial crimes may involve fraud ; theft; scams or confidence tricks; tax evasion; bribery; sedition; embezzlement; identity theft; money laundering; and forgery and counterfeiting, including the production of counterfeit money and consumer goods.
In financial regulation, a politically exposed person (PEP) is one who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence they may hold. The terms "politically exposed person" and senior foreign political figure are often used interchangeably, particularly in international forums.
Corruption in India is an issue which affects economy of central, state, and local government agencies. Corruption is blamed for stunting the economy of India. A study conducted by Transparency International in 2005 recorded that more than 62% of Indians had at some point or another paid a bribe to a public official to get a job done. In 2008, another report showed that about 50% of Indians had first hand experience of paying bribes or using contacts to get services performed by public offices. In Transparency International's 2023 Corruption Perceptions Index, which scored 180 countries on a scale from 0 to 100, India scored 39. When ranked by score, India ranked 93rd among the 180 countries in the Index, where the country ranked first is perceived to have the most honest public sector. For comparison with worldwide scores, the best score was 90, the worst score was 11, and the average score was 43. For comparison with regional scores, the highest score among the countries of the Asia Pacific region was 85, the lowest score was 17, and the average score was 45. Various factors contribute to corruption, including officials siphoning money from government social welfare schemes. Examples include the Mahatma Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission. Other areas of corruption include India's trucking industry, which is forced to pay billions of rupees in bribes annually to numerous regulatory and police stops on interstate highways.
The 2008 Liechtenstein tax affair is a series of tax investigations in numerous countries whose governments suspect that some of their citizens may have evaded tax obligations by using banks and trusts in Liechtenstein; the affair broke open with the biggest complex of investigations ever initiated for tax evasion in the Federal Republic of Germany. It is seen also as an attempt to put pressure on Liechtenstein, one of the remaining uncooperative tax havens, as identified by the Financial Action Task Force (FATF) on money laundering of the Paris-based Organisation for Economic Co-operation and Development, along with Andorra and Monaco, in 2007.
Corruption in Canada is the use of political power for private gain by Canadian government officials.
Finland's overall corruption is relatively low, according to public opinion and global indexes and standards. The 2023 Corruption Perceptions Index released by Transparency International scored Finland at 87 on a scale from 0 to 100. When ranked by score, Finland ranked second among the 180 countries in the Index, where the country or countries ranked first are perceived to have the most honest public sector. Finland has ranked first, second or third every year since the current version of the Index was introduced in 2012. For comparison with 2023 worldwide scores, the best score was 90, the average score was 43, and the worst score was 11. For comparison with regional scores, the highest score among Western European and European Union countries was 90, the average score was 65 and the lowest score was 42.
Corruption in Switzerland describes the prevention and occurrence of corruption in Switzerland.
Corruption in Ecuador is a serious problem. In 2014, the U.S. Department of State cited Ecuador's corruption as a key human-rights problem. According to Freedom House, "Ecuador has long been racked by corruption", and the weak judicial oversight and investigative resources perpetuate a culture of impunity.
The Basel Institute on Governance is an independent, international non-profit organisation dedicated to preventing and combating corruption and other financial crimes and to strengthening governance around the world. The organisation was established in Basel, Switzerland in 2003 by Professor Mark Pieth.
Suisse Secrets was a February 2022 leak of details of more than CHF 100 billion held in nominee accounts linked to over 30,000 clients of Credit Suisse, the largest ever leak from a major Swiss bank. It revealed that autocrats, oligarchs, war criminals, human traffickers and drug dealers had accounts with Credit Suisse, a failure of the bank to apply due diligence. Swiss media was disallowed from publishing any investigatory work due to strict banking secrecy laws, which brought up their collective concern that such laws run contrary to freedom of the press.
Corruption in Monaco still exists despite the principality's affluence and image as a haven for the wealthy. Problematic areas include challenges in maintaining transparency and integrity in governance structures.
