Liechtenstein on the brink of its biggest crisis since 2008 due to hundreds of trusts linked to Russia
Liechtenstein, one of the world's smallest and richest countries, has begun an investigation into hundreds of trust funds linked to Russian citizens, whose managers are massively refusing to manage them due to pressure from the United States, Reuters reported, citing informed sources.
This situation has put Liechtenstein in the grip of its biggest crisis since 2008, when a leak of LGT bank customer data exposed massive tax evasion by clients from abroad.
After the start of Russia's full-scale war against Ukraine, the US Treasury Department began to actively impose sanctions, including on trust funds in Liechtenstein.
This forced many fund managers, fearing sanctions, to resign en masse, which left the funds without management and froze assets, including luxury real estate and yachts.
In total, there are 475 foundations, of which dozens or even hundreds have ties to Russians.
Some of them belong to or are associated with oligarchs who are under sanctions, in particular Vladimir Potanin and Gennady Timchenko – close to Russian President Vladimir Putin .
It is noted that this situation indicates how deep and opaque Russia's business ties with Europe remain more than three years after the start of a full-scale war in Ukraine.
According to the agency's sources, the newly elected government of Liechtenstein is trying to solve this problem.
The country's Ministry of Justice plans to appoint new managers to 350 trusts. Another 40 such funds have been liquidated, and in 85 cases, new managers or liquidators could not be found.
The government is also considering centralizing fund management and strengthening state control over the sector. No assets will be transferred to individuals under sanctions, the government assures.
The financial sector, particularly trust funds, is the backbone of the economy of Liechtenstein, a country with a population of around 40,000 people.
In the past, it was known as a place where the world's wealthy hid their wealth. However, in recent years, Liechtenstein has been trying to change that image by joining the IMF and introducing more transparent financial rules.
- In early April, Ukraine signed an updated free trade agreement with the countries of the European Free Trade Association (EFTA) – Switzerland, Norway, Iceland, and Liechtenstein.
