As a member of the European Economic Area (EEA), Liechtenstein autonomously transposes the sanctions imposed by the Council of the EU into its national legal order. The sanctions have continued to expand over the last 12 months due to the numerous new EU sanctions packages in the context of the war in Ukraine (the 16th, 17th, 18th, 19th and 20th sanctions packages). Energy-related sanctions have been expanded, particularly targeting liquefied natural gas (LNG), and hundreds of new Russian and Belarusian individuals and entities have been listed under amended or newly introduced criteria.

In the field of sanctions, Liechtenstein has experienced a marked intensification of regulatory activity over the past 12 months. The continuous expansion of Russia-related sanctions in response to the ongoing war in Ukraine has led to increased compliance demands on financial intermediaries, fiduciaries and legal advisers. The Liechtenstein government and the Financial Market Authority (FMA) have stepped up their supervisory activities, in particular with regard to the identification of sanctioned persons and the reporting of frozen assets. Compared to the previous year, the number of enquiries received by the FMA as well as the number of frozen accounts and assets has increased significantly. It should be noted, however, that the majority of cases in Liechtenstein do not involve the direct freezing of bank accounts held by listed individuals, but rather affect legal entities and structures – such as foundations, establishments and trusts – in which a sanctioned person holds a beneficial interest or exercises control. In such constellations, the assets are frozen indirectly, as the relevant legal vehicle becomes ownerless or unmanageable in practice, rendering any disposition over the underlying assets legally impermissible. At the same time, the growing complexity of the sanction’s regimes — in particular through the broadening of anti-circumvention provisions and the introduction of new sectoral sanctions – has substantially increased the demand for professional advice in practice.

In particular, recent listing criteria introduced under the Russian sanctions regime, which Liechtenstein has also transposed into national law through its autonomous adoption process, now allow for restrictive measures against:

• persons who own, control, manage or operate vessels transporting crude oil or petroleum products originating in or exported from Russia (since 24 February 2025) (Article 3(k) of Council Regulation (EU) No 269/2014);
• persons involved in, supporting or benefitting from Russia’s military-industrial complex (since 24 February 2025) (Article 3(l) of Council Regulation (EU) No 269/2014); and
• persons who have facilitated transfers of ownership, control or economic benefits for sanctioned businesses, especially those linked to individuals designated under criterion (g) (Article 3(m) of Council Regulation (EU) No 269/2014, since 13 May 2025).

Regarding ancillary sanctions obligations, reporting requirements for financial intermediaries and fiduciaries have become stricter. In addition, the phenomenon of so-called “orphaned legal entities” – triggered by the extraterritorial effect of US OFAC sanctions, which has caused numerous Liechtenstein fiduciaries to resign from mandates with Russian connections – has posed structural challenges to the Liechtenstein financial centre that remain unresolved to this day. According to the Liechtenstein government, several hundred foundations and establishments are currently blocked without functioning governing bodies; they can neither be continued nor wound up. The government is currently examining various legislative and supervisory measures to address this situation.

Over the past 12 months, Liechtenstein’s sanctions landscape has been shaped by a notable expansion and intensification of implementation and compliance activity. The key developments in this period include:

• intensified adoption of EU sanctions packages against Russia and Belarus, which Liechtenstein transposes autonomously by virtue of its close economic and legal ties to the EU and the EEA;
• heightened supervisory activity by the FMA, including targeted reviews of sanctions compliance at regulated institutions;
• increased awareness of the risk of sanctions circumvention, in particular through third country connections;
• strengthened international co-operation within the framework of FATF and the Egmont Group; and
• growing demand for specialised compliance services and training in the field of sanctions law.

In addition, the phenomenon of so-called “orphaned legal entities” – triggered by the extraterritorial effect of US OFAC sanctions, which has led numerous Liechtenstein fiduciaries to resign from mandates with Russian connections – has emerged as one of the most pressing structural challenges for the Liechtenstein financial centre. The aim of the measures currently under discussion is to restore the legal capacity of affected foundations and establishments and to ensure that asset management structures can be properly continued or wound up in full compliance with applicable sanctions law.

Sectors in Liechtenstein particularly affected by sanctions regulations include:

• the financial sector (banks, insurance companies, fund companies and asset managers);
• the fiduciary sector (trustees, foundations and establishments);
• the legal and advisory sector (lawyers, tax advisers and auditors); and
• the export sector – in particular companies with supply chains or customer relationships in sanctioned countries or with sanctioned persons.

Sectors in which sanctioned individuals are – or were previously – active are equally affected, as third-party actors such as fiduciaries, banks and legal advisers refuse to engage with any natural or legal person even remotely connected to them, regardless of whether that connection is purely historical or indirect in nature.

The fiduciary sector has been hit hardest by the tightening sanctions regime. Trustees face direct regulatory and liability pressure from both the Liechtenstein Chamber of Professional Trustees (THK) and the FMA. Resignations from mandates with Russian connections have frequently been driven by regulatory considerations rather than by an actual sanctions risk on the client’s part. Each case requires individual analysis and a legally sound path to resolution.

Even where trustees resigned under regulatory pressure or as a precautionary measure, the affected foundations and establishments often continue to hold substantial assets yet are no longer able to act. This has created an increased need for legal intervention and a growing volume of mandate requests. While the process of restoring the legal capacity of such entities – or winding them up in an orderly manner – can be complex, a well-established practice has developed in Liechtenstein in recent months that allows these situations to be handled efficiently and in full compliance with applicable sanctions law.

The primary regulators for sanctions activity in Liechtenstein are:

• the Financial Market Authority (FMA);
• the Office of Foreign Affairs;
• the Financial Intelligence Unit (FIU); and
• the Government of the Principality of Liechtenstein.

Within this framework, each authority handles distinct aspects of sanctions implementation and enforcement:

• the FMA acts as the primary supervisory authority for the financial sector, monitoring sanctions compliance at regulated institutions including banks, insurance companies, fund management companies and trustees, and may impose administrative measures such as fines and licence revocations;
• the Office of Foreign Affairs shares responsibility at government level for the co-ordinated implementation of international sanctions measures;
• the FIU is responsible for receiving and processing suspicious transaction reports and corresponding sanctions reports, and disseminates relevant financial intelligence to competent authorities; and
• the government of the Principality of Liechtenstein, acting through the Ministry of Foreign Affairs, issues the sanctions ordinances through which UN and EU restrictive measures are transposed into national law.

As such, these authorities are the competent bodies for enforcing sanctions and granting derogations and serve as the primary interlocutors for all sanctions-related issues in Liechtenstein.

Reporting obligations in connection with sanctions in Liechtenstein arise from several complementary provisions of the ISG and the relevant implementing ordinances.

As a general matter, Article 2b ISG establishes a duty to provide information: any person directly or indirectly affected by measures under the ISG must, upon request, provide the competent enforcement authorities and the due diligence supervisory authorities with all information required for the performance of their duties, and must transmit relevant documents and copies accordingly. Any reporting obligations set out in the relevant ordinances must furthermore be complied with promptly and in writing.

With regard to frozen funds and economic resources specifically, all persons and institutions that hold or manage funds, or that have knowledge of economic resources presumed to fall within the scope of a freeze, must report this to the FIU without delay. Such reports must include the names of the beneficiaries as well as the subject matter and value of the frozen funds and economic resources – an obligation closely mirroring the reporting requirements imposed at EU level under Articles 8 and 9 of Council Regulation (EU) No 269/2014, which similarly require sanctioned persons and central securities depositories to supply information on frozen assets to the competent national authority.

Further periodic reporting obligations exist in the context of the Ukraine sanctions regime. An existing obligation under the Ukraine Ordinance covers the reporting of all deposits held by Russian nationals or by natural or legal persons resident or established in Russia in excess of CHF100,000, as well as deposits held by persons in possession of so-called golden passports or golden visas. In addition, with effect from 14 February 2025, the government adopted an amendment to the Ordinance on Measures in connection with the situation in Ukraine, autonomously implementing the quarterly transaction reporting obligation introduced at EU level. This obligation applies to all legal persons, organisations and entities established in Liechtenstein that are over 40% directly or indirectly held by a legal person, organisation or entity established in the Russian Federation, a Russian national or a natural person resident in the Russian Federation – tracking closely the corresponding provision of Council Regulation (EU) No 833/2014, which requires entities in the Union with more than 40% Russian ownership to report quarterly any transfer of funds exceeding EUR100,000 out of the Union.

Finally, Article 2c ISG imposes special review and reporting obligations on persons subject to due diligence within the meaning of the Due Diligence Act. Those persons who are affected by measures under the ISG must, in the area of capital and payment transactions, subject customer- and transaction-related documents to appropriate review, having particular regard to the contractual partner, the beneficial owner and the effective contributor, the distribution recipient of discretionarily structured legal entities, the business profile and the transactions concerned.

As no published court decisions on sanctions matters have been issued in Liechtenstein over the past three years, the most significant developments during this period have taken place at the regulatory and legislative level.

• FMA guidance of September 2024 and the “orphaned entities” crisis – following US OFAC sanctions targeting Liechtenstein-based trustees and fiduciaries with Russian connections, the FMA declared in September 2024 that severing ties with exposed clients was the only appropriate means of mitigating the associated risk. This triggered mass resignations by trustees, leaving up to several hundred foundations and establishments effectively paralysed – without functioning governing bodies and unable either to continue operations or to be wound up. The government established an emergency inter-agency task force in response. The legal significance of this development lies in the fact that the FMA effectively incorporated US secondary sanctions into Liechtenstein supervisory practice without any express statutory basis for doing so, raising fundamental questions about the boundaries of the FMA’s supervisory mandate and the extraterritorial reach of foreign sanctions regimes.
• Intensification of FIU proceedings and first ISG-based FMA fines (2022–2025) – sanctions-related cases reported to the FIU rose sharply, from 23 cases in 2021 to 222 cases in 2024. In parallel, the FMA began actively enforcing ISG-specific compliance obligations, imposing fines of up to CHF100,000 on legal persons for violations of the screening and review obligations under Article 2c in conjunction with Article 11(1a) ISG. This marks the transition from a largely passive to an actively enforced sanctions compliance regime in Liechtenstein, and represents the first systematic use of the ISG’s administrative penalty provisions by the FMA as a supervisory tool.
• Directive (EU) 2024/1226 and its relevance for Liechtenstein – Directive (EU) 2024/1226, adopted in April 2024, criminalised the violation and circumvention of EU sanctions at the EU level. As an EEA member state, Liechtenstein is required to transpose this Directive into national law within the prescribed implementation period. This represents a significant development for the Liechtenstein sanctions framework, as it will require the ISG to be reviewed and, where necessary, amended to ensure full alignment with the EU’s minimum criminal law standards in the sanctions field.
• Total revision of the FIU Act (2025–2026) – the ongoing total revision of the FIU Act represents the most significant institutional restructuring of Liechtenstein’s sanctions enforcement framework since the ISG was enacted in 2009. The revision clearly separates the FIU’s dual functions as both a financial intelligence unit and an ISG enforcement authority, expands its powers to suspend transactions and impose asset freezes, and establishes a framework for public-private partnerships for the exchange of sanctions-related typologies and red flags. Once enacted, this reform will materially alter the institutional architecture of sanctions enforcement in Liechtenstein.

The 20th EU sanctions package against Russia was adopted on 23 April 2026, and Liechtenstein transposed the first part of this package into national law on 28 April 2026. Additional sanctions packages are expected to follow in the coming months, as they have been released on a regular basis for the past four years. Liechtenstein is expected to continue its practice of autonomous and timely transposition of each successive package.

At the national level, several further developments are anticipated:

• the ongoing adaptation of national law to new EU sanctions packages, in particular in the Russia and Belarus context, will continue to require regular amendments to the Ukraine Ordinance and related instruments;
• a continuing tightening of compliance requirements for financial intermediaries is expected, in particular in the areas of sanctions screening and transaction monitoring, driven both by FMA supervisory practice and by the transposition of Directive (EU) 2024/1226;
• legislative revisions currently in progress are aimed at strengthening the FMA’s powers to withdraw licences from regulated fiduciaries in the sanctions context – in particular through amendments to the Trustees Act (TrHG) – and these reforms are expected to be enacted in the near term; and
• increasing regulation of the cryptocurrency and digital asset sector with regard to sanctions compliance is anticipated, in line with the entry into force of the EEA MiCA implementation framework and corresponding supervisory guidance from the FMA.

On the institutional side, the total revision of the FIU Act – currently progressing through the legislative procedure – is expected to produce the most significant restructuring of Liechtenstein’s sanctions enforcement architecture in over a decade, with material implications for the powers of the FIU and the obligations of reporting entities.

The legal remedies available to sanctioned persons in Liechtenstein vary depending on the source of the measure.

• Domestic Liechtenstein measures – while Liechtenstein formally publishes its own national sanctions list under the ISG, this list constitutes in practice a verbatim transposition of the EU list, without autonomous listings or independent screening. Domestic remedies against measures appearing exclusively on the Liechtenstein national list are therefore of limited practical relevance.
• EU-level listings (the most practically significant case) – since Liechtenstein adopts EU sanctions autonomously rather than as a matter of binding EU law, a two-track approach is required. At the EU level, an action for annulment may be brought directly before the Court of Justice of the European Union (CJEU) – specifically the General Court – challenging the EU listing decision itself. At the national Liechtenstein level, an application may be made to the government under Article 8a ISG, seeking in particular the non-application of the adopted EU measure in the individual case. In practice, this avenue is difficult to pursue, as Liechtenstein is unlikely to declare an autonomously adopted EU measure inapplicable on a unilateral basis.
• UN-level listings – where a person is listed on a UN sanctions list, the available remedy at the international level depends on the relevant regime. For general UN Security Council sanctions, an application may be made to the Focal Point for Delisting established by the Security Council. For sanctions imposed in connection with ISIL/Al-Qaeda, the competent authority is the Office of the Ombudsperson. At the national level, the same three-stage domestic appeal procedure applies as described above, although the scope for national review of UN-mandated measures is limited by Liechtenstein’s obligations under the UN Charter.

As a preliminary observation, it should be noted that the question of available remedies is largely of hypothetical relevance in the Liechtenstein context with respect to purely domestic listings. While Liechtenstein formally publishes its own national sanctions list under the ISG, this list constitutes in practice a verbatim transposition of the EU list, without autonomous listings or independent screening. Accordingly, the domestic procedure described below is most likely to be invoked not to challenge a Liechtenstein-specific listing, but to seek the non-application of an autonomously adopted EU measure in an individual case – an avenue that is in practice difficult to pursue, as Liechtenstein is unlikely to declare such a measure inapplicable on a unilateral basis.

In procedural terms, Article 8a of the International Sanctions Act (ISG) provides that natural and legal persons, groups, companies and organisations may at any time – without being bound by any time limit – submit a reasoned application to the government seeking removal of their name from the annex of an ordinance based on the ISG. The government then examines whether the conditions for the coercive measure continue to be met and issues a reasoned decision in accordance with the provisions of general administrative law.

What may be achieved through such a procedure depends on the outcome of that examination. In the most favourable case, a full delisting is granted, with the consequence that all coercive measures – in particular asset freezes, transaction prohibitions and entry bans – cease to apply in their entirety. Alternatively, an application may be made for the coercive measure not to be applied in a specific individual case; this remedy is of particular relevance for indirectly affected parties, such as legal entities in which a listed person holds a beneficial interest and thereby exercises indirect control.

Insofar as damages are concerned, no such claims against the Liechtenstein state are provided for under the ISG. In theory, the general rules on state liability could apply; however, such a claim would in practice be very difficult to enforce, since the listing is based on a lawful act of public authority and the claimant would bear the burden of demonstrating unlawful conduct on the part of the authorities.       

As a preliminary observation, the practical relevance of purely domestic remedies in the Liechtenstein context is limited. While Liechtenstein formally publishes its own national sanctions list under the ISG, this list constitutes in practice a verbatim transposition of the EU list, without autonomous listings or independent screening. A purely domestic listing – one that would not simultaneously reflect an EU or UN measure – is therefore unlikely to occur. The domestic framework described below is accordingly most relevant not as a remedy against a Liechtenstein-specific listing, but as a potential avenue for seeking the non-application of an autonomously adopted EU measure in an individual case.

For the domestic legal avenue, a person wishing to obtain their delisting may submit a reasoned application to the government at any time under Article 8a ISG, without being subject to any time limit. The government then examines whether the conditions for the coercive measure continue to be met and issues a reasoned decision. Should that decision prove unfavourable, the applicant may subsequently appeal to the Administrative Court (Verwaltungsgerichtshof, VGH). Taking into account both stages of this procedure, a total timeframe of between six months and two years is realistic in complex and contested cases.

For the international legal avenue – that is, in respect of EU- or UN-based listings adopted by Liechtenstein by virtue of its international obligations – the applicable time limits are those of the originating legal order. At the EU level, for instance, a sanctioned person has two months from the publication or personal notification of the listing decision to bring an action before the Court of Justice of the European Union, whereas no time limit applies to a request for administrative reconsideration before the Council of the EU. In practice, delistings before both the court and the Council have taken around two years. This timeframe is structurally longer and falls entirely outside the sphere of influence of the Liechtenstein authorities.

Economic sanctions against Russia include a broad prohibition on providing, directly or indirectly, certain advisory and other services to the Russian government and to legal persons, entities and bodies established in Russia, as provided by Council Decision 2014/512/CFSP and Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine. The prohibited services include, among others, accounting and auditing services (including statutory audit, bookkeeping and tax consulting), business and management consulting, public relations services and IT consulting services.

In addition, the sanctions regime prohibits the provision of technical assistance, brokering or financing services in connection with sanctioned goods and technologies, as well as the transfer of intellectual property rights or trade secrets relating to such goods and technologies. Further restrictions apply to software for business management, industrial design and manufacturing, as well as software intended for use in the banking and financial sector.

Under the ISG as the national implementing statute, and by virtue of Liechtenstein’s membership of the EEA and its customs union with Switzerland, the regulatory framework governing goods prohibitions derives from two principal sources: EU sanctions law as incorporated through the EEA, and Swiss economic sanctions measures applied by virtue of the customs union. Liechtenstein implements UN sanctions as a matter of international obligation and, as an EEA member, voluntarily adopts EU restrictive measures in addition.

While Liechtenstein does not maintain an autonomous export control system in the strict sense, it implements a comprehensive goods embargo regime that meets international standards through three legislative instruments:

• the International Sanctions Act (ISG);
• the War Materials Act (Kriegsmaterialgesetz, KMG); and
• the Nuclear and Dual-Use Goods Control Act (Kernenergiegesetz und Güterkontrollgesetz, KEGKG).

Prohibited goods subject to this regime include, in line with the corresponding EU measures, items such as dual-use goods and technology for military use, war materials and nuclear-related goods and technologies.

Under Liechtenstein law, the courts have not yet developed any express case law on sanctions as a bar to the performance of contractual obligations, at least in published decisions.

Nevertheless, the close alignment of Liechtenstein with EU sanctions law and Swiss practice suggests that Liechtenstein courts would in principle recognise sanctions-related refusals to perform as lawful and as excluding contractual liability. This approach finds support in the clear legislative policy decision expressed in Article 2a ISG, which reflects the underlying public-interest rationale of the sanctions regime. Much as the French Cour de cassation declined in 2020 to allow sanctioned persons to invoke asset freezes as a case of force majeure – on the ground that doing so would have enabled debtors to rely on restrictive measures to justify non-compliance with their obligations, thereby undermining the legitimacy of the sanctions – Liechtenstein courts would similarly be unlikely to permit the sanctions regime to be instrumentalised in favour of the very persons it targets.

For Liechtenstein economic actors, it is accordingly recommended that contractual arrangements include a clause expressly foreseeing the possible imposition of sanctions on either contracting party and providing for a solution should such a scenario occur, thereby avoiding legal uncertainty as to the consequences of non-performance in a sanction’s context.

No specific Liechtenstein court decisions addressing the enforcement of foreign judgments in circumstances where sanctions issues arise have been published to date. In the absence of express case law, the general framework applicable in Liechtenstein would nonetheless lead to a comparable outcome to that reached in other jurisdictions.

Unlike certain other jurisdictions – such as the United States, where designation decisions are taken by the Office of Foreign Assets Control (OFAC) – the European Union, where the Council of the EU decides which natural and legal persons to subject to restrictive measures, or the United Kingdom, where the Office of Financial Sanctions Implementation (OFSI) plays a comparable role – Liechtenstein does not as a rule make autonomous designation decisions and does not maintain its own public sanctions list.

The designation process in Liechtenstein is accordingly not political in the domestic sense. Rather, designation decisions are made at the international or supranational level, and Liechtenstein subsequently implements them at the national level through the ISG and the relevant implementing ordinances. Concretely, Liechtenstein implements UN sanctions as a matter of international obligation and, as an EEA member, voluntarily adopts EU restrictive measures. In addition, by virtue of its customs union with Switzerland, Liechtenstein takes into account Swiss economic sanctions. The process is therefore, in each case, driven by the originating international or European body – whether the UN Security Council, the Council of the EU, or the Swiss authorities – rather than by any autonomous Liechtenstein decision-making procedure.

The principle of indirect capture of legal entities that are owned or controlled by a designated person is recognised and applicable in Liechtenstein, deriving from two complementary sources of law.

First, as an EEA member state, Liechtenstein adopts EU restrictive measures directly. Under the applicable EU framework, operators are prohibited from dealing with funds and economic resources that are owned, held or controlled by designated persons. The sanctions extend not only to directly listed persons but also to legal entities owned or controlled by such persons, as well as to those acting on their behalf or at their direction. Since Liechtenstein adopts EU sanctions law in full, the guidelines of the European Commission and the EU Best Practices are directly applicable in the Liechtenstein context.

Second, at the national level, the ISG serves as the domestic implementing statute for international sanctions. The legislative materials accompanying the ISG reform expressly acknowledge that financial intermediaries may conclude that a listed person indirectly controls assets entrusted to them and that those assets must consequently be frozen. A liability exemption for intermediaries acting in good faith was introduced for this purpose through Article 4a ISG.

Regarding ownership, Liechtenstein applies, through its adoption of EU sanctions law, a rule analogous to that found in other major sanctions regimes: sanctions extend to any legal entity in which a designated person holds more than 50% of the proprietary rights or a majority interest. The aggregated holding is relevant in this context, meaning that the interests of multiple designated persons may be combined to determine whether the threshold is met – a position consistent with the EU Best Practices definition of ownership as the possession of 50% or more of the proprietary rights of an entity or the holding of a majority interest in it.

Regarding control, the assessment is factual in nature and conducted on a case-by-case basis, having regard to a non-exhaustive set of criteria. Relevant indicators include, among others, the power to appoint or remove the majority of board members, or the sharing of a common business address or other indicia suggesting that two entities form part of the same undertaking de facto. Once any one criterion is met, control is deemed to be established, and the assets of the controlled entity must be frozen without delay.

Practical guidance for financial intermediaries is provided by FMA Guidance 2018/7, which contains a dedicated section on the obligations of persons subject to due diligence requirements in the field of international sanctions and sets out in concrete terms how those intermediaries are to fulfil their review obligations under the ISG.