U.S.-Liechtenstein Mutual Assistance in Criminal Matters Treaty Almost in Effect

IMPORTANT: The full content of this page is available to premium users only.

Tuesday, July 1, 2003
Bruce Zagaris
The proposed Mutual Assistance in Criminal Matters Treaty (MLAT) between the United States and Liechtenstein, which was signed at Vaduz on July 8, 2002, is becoming close to taking effect. On September 5, 2002, President George W. Bush referred the treaty to the Senate Committee on Foreign Relations. The proposed MLAT is a modern MLAT that follows many provisions similar to the recent MLATs concluded by the U.S. However, in recognition of Liechtnstein’s status as a low-tax jurisdiction, the proposed MLAT’s coverage of tax offenses is more limited than other U.S. MLATs. The scope of the proposed MLAT includes not only assistance provided in connection with the investigation, prosecution, and prevention of criminal offenses, but also in related forfeiture proceedings. During the negotiations the U.S. delegation presented to the Liechtenstein delegation a series of hypothetical cases arising under U.S. tax law for which assistance from Liechtenstein should be provided. On the basis of the replies Liechtenstein provided, the U.S. Government determined that Article 1(4) and the rela5ted exchange of notes established a sufficiently broad scope for coverage of criminal tax matters. An important ramification for Liechtenstein is whether the conclusion of the proposed MLAT will enable Liechtenstein to obtain positive results in terms of its ability to attract business. For instance, Liechtenstein remains on the OECD harmful tax practices black list. The decision to conclude an MLAT with the U.S. will certainly help Liechtenstein in its efforts to improve its image.