Expansion of the Service Ban Related to Russia

Introduction

The government has decided to expand financial and service sanctions. The revised “Ordinance on Measures Related to the Situation in Ukraine” now explicitly extends the existing service ban for trusts to foundations and similar legal entities. Affected business relationships must be terminated by March 28, 2025.

Additionally, a quarterly reporting requirement has been introduced for money transfers exceeding EUR 100,000 (or the equivalent in Swiss francs) made by Liechtenstein legal entities to countries outside the European Economic Area (EEA), provided that these entities have ties to Russia.

Expansion of the Service Ban

Previously, it was prohibited to provide trust-related services (such as formation, administration, or representation) to individuals who, as settlors or beneficiaries, had ties to Russia. Such ties could arise in the following ways:

• R, a Russian national, is the majority shareholder of A through multiple intermediary companies.
• A, in turn, can exercise control over the legal entity B.
• B then instructs lawyer L to manage transferred assets, which are ultimately placed into a Liechtenstein trust.

Since all involved parties have connections to Russia, the prohibition on related services applies. Until now, this restriction applied only to trusts or similar legal structures. To eliminate any uncertainties arising from this, the ban has been explicitly extended to foundations, foundation-like establishments, and foundation-like trust enterprises.

However, if the termination of the mandate is initiated by March 28, 2025, only services necessary for the termination are provided, and individuals with the specified Russian ties are economically cut off from the legal entity, the extended ban does not apply. Nonetheless, an FIU (Financial Intelligence Unit) report must be submitted immediately.

Since the term “beneficiary” covers a broad scope of individuals and typically only the respective teams have a comprehensive overview of their business relationships, they are requested to immediately report mandates with known Russian ties.

Money Transfers

New regulations now require quarterly reporting of money transfers exceeding EUR 100,000 (or the equivalent in Swiss francs) to the Financial Intelligence Unit (FIU), starting in Q1/2025. This applies to all legal entities based in Liechtenstein that are more than 40% owned by:

• a legal entity established in Russia
• a Russian national
• a natural person residing in Russia

The first report must be submitted by June 1, 2025.