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Europe's tax havens have historically been prone to abuse. The FATF report said that Liechtenstein's system for reporting suspicious transactions had long been inadequate, that there were no laws for exchanging information with international authorities about money laundering and that the resources devoted to tackling the problem were paltry. The country's laxity was underscored earlier this year during major political scandals in Germany. Investigators found that German politicians used Liechtenstein bank accounts to receive bribe money paid by the French oil giant Elf Aquitaine.
FATF was not the first group to home in on Liechtenstein's peccadillos. Last May the nation of 32,000 people was shaken to learn that Austrian police called in by the government had detained four men on suspicion of fraud, misuse of funds and money laundering. The four, who were subsequently released from jail uncharged, included Gabriel Marxer, a legislator in the 25-member parliament, and Rudolf Ritter, brother of Deputy Prime Minister Michael Ritter. Legislators agreed to lift Marxer's parliamentary immunity to allow him to be detained. In a separate action, police searched and carted away documents from two banks, the Hypo Investment Bank and the Liechtenstein Global Trust, which is controlled by Liechtenstein's ruler, Prince Hans-Adam II, and his family. Police did not disclose why they searched the banks. A spokeswoman for the government said the Prince had supported a thorough investigation of laundering activities.
Monaco offers an even more complex case for French authorities looking to clean up international financial dealings. The tiny country, ruled by the Grimaldi family, has a government and civil service filled with officials seconded from Paris. With 49 banks and 70 financial institutions for about 32,035 inhabitants, the principality attracts some of the world's wealthiest celebrities by levying no taxes on income, capital gains or dividends. This has long made Monaco a playground for the fabulously wealthy, of whatever background. The recent French report charged that offshore companies and trusts have bountiful opportunities to move funds for individuals whose identities remain hidden. Monagasque Minister of State Patrick Leclercq accused the French of presenting a "clearly biased overall view of the principality of Monaco," reaffirmed Monaco's desire to participate in international efforts to stamp out laundering and noted that the country was not included among those named as "noncooperating" by the FATF.