G20 china_web

ADVOCACY
standards in tax matters. Since then, Liechtenstein
has signed more than 45 OECD-compliant tax
conventions, including 18 new double taxation
agreements and two special agreements with the UK
and Austria to ensure tax compliance.
Early adopter and reliable partner
The government declaration issued four years
later in 2013 was a second key milestone, in which
the firm commitment to automatic exchange of
information was anchored. That year and 2009
can certainly be characterised as critical years in
moving Liechtenstein forward. Just a week or so
after the government declaration, Liechtenstein
signed the Convention on Mutual Administrative
Assistance in Tax Matters. On 29 October 2014,
Liechtenstein was an 'early adopter' in signing
the Multilateral Competent Authority Agreement
(MCAA) on automatic exchange of information
with 50 other countries. Joining the early adopters
group and signing the MCAA was the logical next
step in executing the country's formally adopted
tax compliance strategy, which banks had already
promoted by adopting uniform minimum due
diligence obligations to ensure tax compliance on the
part of their clients. Liechtenstein thus demonstrated
its predictability, and again in 2015, by unsurprisingly
signing the Agreement on Automatic Exchange of
Information with the EU.
International bodies confirm
credible implementation
Words were followed by deeds, as in 2015
Liechtenstein conducted its first automatic exchange
of financial data with the US on the basis of the
Intergovernmental Agreement (IGA) signed in May
2014. The Global Forum likewise published its
report on phase 2 of the audit of implementation
and application of OECD standards in Liechtenstein
in 2015. The report confirmed that Liechtenstein is
adopting the OECD standards as law and pro-actively
and effectively enforcing these in actual practice.
The report found that Liechtenstein is "largely
compliant", underscoring the country's credibility as
a reliable partner. On 1 January 2016 a comprehensive
legislative package came into force including the
national law on automatic exchange of information,
the corresponding ordinance as well as the legal
foundation for expanding mutual administrative
assistance in tax matters to permit group requests,
along with implementation of requirements to
treat serious tax offences as a predicate offence
to money laundering.
Stability as the greatest asset
Despite these many regulations and international
obligations – involving many legislative change and
political processes – today Liechtenstein's banking
industry is more stable and solid than ever before.
Banks have systematically pursued targeted strategies
of internationalisation and service development.
Today,
Liechtenstein
is a successful
and respected
IFC. This
was not
accomplished
without
major steps
Liechtenstein
Bankers Association
Austrasse 46
LI-9490 Vaduz
info@bankenverband.li
www.bankenverband.li
The results for the financial year 2015 were entirely
satisfactory, even though conditions remain difficult.
Operating results have again improved and costs
have been further reduced, significantly optimising
the cost-income ratio overall. Banks recorded solid
new money inflows in growth and domestic markets
and also improved their capitalisation. The average
Tier One ratio for all banks on a consolidated basis
was 21.3 per cent. Given the current political and
economic uncertainties, a high equity ratio represents
a valuable asset not to be underestimated for the
attractiveness of Liechtenstein as a banking centre.
Prudent business strategy
Liechtenstein is a small but unquestionably attractive
and stable financial centre in the heart of Europe. The
country's positioning between two separate economic
areas is without parallel worldwide. Thanks to
Liechtenstein’s membership in the European single
market, Liechtenstein banks enjoy full service
freedom in all the EEA states with more than 500
million customers. Stability is one of the chief
advantages Liechtenstein has to offer. On July 29,
2016 rating agency Standard & Poor's affirmed again
its top AAA sovereign rating with a stable outlook.
That makes Liechtenstein one of only 12 countries
worldwide to enjoy this top rating. Another important
reason for the stability of the banks is the prudent
business strategy pursued for decades. Under S&Ps
Banking Industry Country Risk Assessment (BICRA),
Liechtenstein provides one of the lowest country risks
being assigned to risk group two. Liechtenstein is a
small and specialised financial centre with more than
150 years of experience in its core competency private
banking and with representations in more than 20
different locations worldwide. Professional advice
and high-quality services are the traditional strengths
of Liechtenstein's banks, and have driven their
success. High risk investment and credit business
was not entered into down the decades.
Ongoing challenges and constant change
Although we look forward with optimism, there
is clearly still a great deal to be done. The flood of
regulation will not be ebbing any time soon. And
the next momentous changes are already underway.
Banks have to deal with constant change, including
continuously shifting client needs. Sustainabilityoriented
investment policies are becoming
increasingly important. And digitalization, which
will open up entirely new channels for settlement,
communication and distribution and will break up
existing value chains, holds great potential as well.
Liechtenstein’s financial market players have been
working on those two issues for some time already.
Sustainability has in fact joined quality and stability
as a key pillar of the Roadmap 2020 – the recently
issued strategy for the future of the banking centre.
The LIFE Climate Foundation Liechtenstein is one
such sustainability initiative the banking industry
is involved in.