FMA Communication 2024/2 - Risk management regarding foreign sanctions law

The FMA notice states that foreign sanctions must be taken into account as part of risk management - this applies in particular to OFAC sanctions.

Foreign sanctions are not directly applicable in Liechtenstein. Non-compliance with foreign sanctions entails serious reputational, operational and legal risks for the respective supervised entity and all those who have a business relationship with it. In particular, this includes the risk of a supervised entity itself being sanctioned, which restricts its access to payment transactions and subsequently threatens its continued economic existence. The sanctions regulations of the Office of Foreign Assets Control (OFAC) of the US Treasury Department are of particular importance in this context, not least due to the central role of the USA in the global financial market infrastructure. Ultimately, any sanctions with a connection to Liechtenstein also represent a risk for the entire financial market and the country of Liechtenstein.

In the communication, the FMA defines how foreign sanctions law is to be taken into account as part of risk management. In the case of business relationships that have points of reference to OFAC sanctions, the risk management requirements are also specified. Due to the particularly high operational and legal risks in these cases, the FMA considers the immediate termination of such business relationships to be the only suitable means of appropriately limiting risk.

On the occasion of the publication of this notice, the FMA once again expressly refers to the importance of the information on sanction risks contained in the relevant OFAC guidelines. Risk management measures must continue to focus in particular on this guidance (see Guidance for Foreign Financial Institutions on OFAC Sanctions Authorities Targeting Support to Russia's Military-Industrial Base)

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