FINANCIAL SERVICES: LIECHTENSTEIN ABOLISHES ANONYMOUS BANK ACCOUNTS.

In its annual report published on 22 June, the Financial Action Task Force on Money-Laundering (FATF) accused Liechtenstein and fourteen other countries of not co-operating in the international fight against money laundering (see European Report No 2512). In addition the FATF, which holds its secretariat in the Organisation for Economic Co-operation and Development (OECD), threatened to expel Austria from FATF unless they phased out their anonymous bank accounts. In response, Austria introduced legislation in June, which will require from 31 October 2000 all new account holders to be identified.The amount of funds currently managed by the Liechtenstein Banking Association totals Euro 73 billion. A third of this is in the form of anonymous accounts, which were opened by financial advisors or lawyers acting on behalf of their clients. Liechtenstein law, as it currently stands, allows anyone to go to a recognised intermediary (either a financial advisor or lawyer) and ask them to open up an account under a code name. While the intermediary, in principle, knows the name of the client, the bank does not.Under the new system, announced on 19 July, banks will henceforth insist that all new accounts opened by recognised intermediaries must bear the real name of the holder. For existing accounts, the banks will give a one to two-year "grace" delay for applying this rule. A spokesman for the banking association was quoted as saying: "Our system was not bad in principle by allowing the client to maintain its anonymity, but it has been abused, and is longer acceptable."Liechtenstein regularly features in fraud and embezzlement scandals. The Government launched its "clean hands" operation at the end of 1999 and a judicial enquiry was lead by an Austrian special prosecutor. The police interrogated numerous people and raided several banks, including the LTG (Liechtenstein Global Trust) owned by the ruling royal family.At the end of June, funds belonging to the ex-dictator of Nigeria, Sani Abache, and deposited in anonymous accounts in Liechtenstein, were blocked. According to lawyers from the new Nigerian Government, these funds total about Euro 73 billion. The Elf scandal, which has rocked the French political and business establishments, is also connected with Liechtenstein. According to Andre Tarallo, the Elf official formerly in charge of its African branch, the oil giant keeps a secret bank account in Liechtenstein, which pays the managers of the...