Sebastian Beer, Maria Delgado Coelho, and Sebastien Leduc
We analyze the impact of exchange of information in tax matters in reducing international tax evasion between 1995 and 2018. Based on bilateral deposit data for 39 reporting countries and more than 200 counterparty jurisdictions, we find that recent automatic exchange of information frameworks reduced foreign-owned deposits in offshore jurisdictions by an average of 25 percent. This effect is statistically significant and, as expected, much larger than the effect of information exchange upon request, which is not significant. Furthermore, to test the sensitivity of our findings, we estimate countries’ offshore status and the impact of information exchange simultaneously using a finite mixture model. The results confirm that automatic (and not upon request) exchange of information impacts cross-border deposits in offshore jurisdictions, which are characterized by low income tax rates and strong financial secrecy.
This Technical Note evaluates the state of Anti-Money Laundering and Combating the Financing of Terrorism in Liechtenstein. Liechtenstein has made significant steps and achieved considerable progress since the last mutual evaluation, particularly in bringing its legal framework more closely in line with the Financial Action Task Force recommendations, consolidating an overall robust institutional framework for combating money laundering and terrorist financing and moving toward greater transparency. Domestic cooperation is robust, and key stakeholders enjoy the trust of the financial and nonfinancial sectors. However, effective implementation is uneven and not always optimal. Liechtenstein’s proactive use of the in rem regime of confiscation of criminal proceeds has proven to be quite effective.
St. Vincent and the Grenadines (SVG) is exposed to money laundering (ML) and financing of terrorism (FT) risk related to drug trafficking and international criminal groups. The financing of terrorism has also been criminalized and is largely in conformity with the Suppression of the Financing of Terrorism (SFT) Convention. The legal and institutional framework regarding the cross-border transportation of cash and bearer instruments is largely in place. The preventive measures regime covers most of the financial and designated nonfinancial businesses and professions (DNFBP) sectors as required under the Financial Action Task Force (FATF) Recommendations.
The financial sector in Liechtenstein provides primarily wealth-management services, including banking, trust, other fiduciary services, investment management, and life insurance. The establishment of the Financial Market Authority (FMA) as the unified, independent regulator in January 2005 is a huge step for the financial services industry. The FMA and other authorities have been successful in implementing most of the recommendations provided in the earlier 2002 IMF assessment. The authorities and the industry continue to make significant efforts to strengthen the antimoney laundering regime, though there is still work ahead.
Liechtenstein has a GDP of US$5.2 billion, of which 40 percent comes from industry and 30 percent from financial services. Currently, 15 banks operate in Liechtenstein (one additional bank is in the process of being wound down without loss to the depositors). The market is highly concentrated with the three largest banks accounting for 90 percent of the total banking balance sheet size; 86 percent of assets under management; 89 percent of operating profits before tax, and 63 percent of employment in the banking sector.
Liechtenstein’s financial sector business has created money laundering risks. The investigative powers of the law enforcement authorities are comprehensive enough to enable them to conduct serious investigations in an effective way. Money laundering is criminalized broadly in line with the international standard. Liechtenstein relies on its trust service providers to obtain, verify, and retain records of the beneficial ownership and control of legal persons. Liechtenstein should conduct a full review of its laws concerning non-profit organizations to assess their adequacy for combating the financing of terrorism.
This paper reviews Observance of Standards and Codes on the Financial Action Task Force (FATF) Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) for Switzerland. The paper discusses that The Federal Banking Commission (CFB) is the oversight body for banks, securities dealers, and fund managers in Switzerland. The intermediaries under its control may also join a self-regulatory organization that can set minimum standards. Nevertheless, the power to specify the rules for implementing the LBA (Loi sur le blanchiment d’argent) and to enforce those rules is essentially reserved to the oversight authority.
Globalization requires enhanced information flows among financial regulators. Standard-setting bodies for financial sector regulation provide extensive guidance, but financial sector assessments have often found that problems in cooperation and information exchange continue to constrain cross-border supervision and financial integrity oversight. In July 2004, the IMF organized a conference on cross-border cooperation for standard setters, financial intelligence units (FIUs), and financial regulatory agencies. This book brings together conference papers in which participants discuss: information exchange for an effective anti–money laundering/combating the financing of terrorism (AML/CFT) regime, in terms of both standards and practices; the standards for cooperation in the insurance sector; and the experiences of regulators from banking, securities, and unified regulatory agencies with international cooperation. The book also includes papers providing a general overview of international standards and their implementation and, on the basis of survey results, of practices among financial sector regulators and FIUs.
This report summarizes the assessment of Liechtenstein's compliance with internationally accepted standards for the regulatory and supervisory arrangements of the financial sector. It provides detailed assessments of Liechtenstein’s implementation of international supervisory and regulatory standards relative to the Basel Core Principles (BCP) for effective banking supervision, International Association of Insurance Supervisors (IAIS) core principles for insurance Supervision, the International Organization of Securities Commissions (IOSCO) Objectives and Principles of Securities Regulation, and Financial Action Task Force Recommendations for antimoney laundering and combating the financing of terrorism.