Freedom in the World 2001 - Liechtenstein

2001 Scores

Status: Free
Freedom Rating: 1.0
Civil Liberties: 1
Political Rights: 1

Overview

Liechtenstein faced serious money-laundering allegations during the year. While an investigation largely exonerated the country's banking system, the principality nonetheless took steps to make its notoriously opaque banks more transparent. The political standoff between Prince Hans Adam II and the government continued in 2000, with the prince threatening to leave the country for Austria.

Liechtenstein was established in its present form in 1719 after being purchased by Austria's Liechtenstein family. Native residents of the state are primarily descendants of the Germanic Alemani tribe, and the local language is a German dialect.

From 1938 until 1997, the principality was governed by an FBPL-VU coalition. The FBPL was the senior partner for most of this period. Liechtenstein's constitution, adopted in 1921, has been amended several times.

One of the world's most secretive tax havens, Liechtenstein came under intense criticism that it was a money-laundering haven. In April France called the country the most dangerous tax and judiciary haven in Europe, alleging Liechtenstein's banks were replete with foreign political slush funds, organized crime syndicate accounts, and funds deposited by international terrorists. The Paris-based Financial Action Task Force, an international anti-laundering group, listed the country as "non-cooperative." In June the Organization for Economic Cooperation and Development (OECD) classified Liechtenstein as a "harmful" tax haven.

In September an Austrian prosecutor was called in to investigate allegations by the German secret service that the country's banks and several prominent lawyers had been involved in large-scale money laundering of funds belonging to Russian organized crime figures and Colombian drug cartels. The investigator found that the country did not exceed other states in terms of white-collar crime and stated that most laundered money in Liechtenstein had been "prewashed" in other countries. However, the principality still heeded western pressure and abandoned its policy of permitting anonymous accounts.

On the political front, Prince Hans Adam and the government remained in dispute over the degree of the royal family's powers. The prince, one of the only European monarchs whose powers are not largely ceremonial, pledged to devolve more powers to the citizenry. Prime Minister Mario Frick claimed that the prince in fact desires to centralize more authority in his own hands. The prince has threatened to arrange for a referendum on constitutional reform, saying he will relocate to Austria should he lose the vote. Such a move would raise the question of how Liechtenstein would be governed.

Prince Hans Adam faced a reprimand by the European Court of Human Rights in 1999 for abusing his subjects' freedom of speech. The court fined the prince for refusing to reappoint a judge he had dismissed for suggesting that the supreme court, and not the prince, should have the last word in constitutional matters. The prince, who has ruled the principality since 1989, has ignored the legislature on several occasions, most notably when he had the country join the European Economic Area (EEA) despite deputies' doubts.

Since 1997, the Patriotic Union (VU) led by Prime Minister Frick has held 13 seats in the 25-seat unicameral Landtag (legislature). The Progressive Citizens' Party (FBPL), which later voted to end its long-standing coalition with the VU, holds 10 parliamentary seats, and the Free Voters' List holds 2 seats.

Liechtenstein's economy is closely intertwined with Switzerland's. Its official currency is the Swiss franc. To reduce the country's economic dependence on Switzerland, Prince Hans Adam led the principality into membership not only in the EEA but also in the United Nations, the European Free Trade Association, the World Trade Organization, and the General Agreement on Tariffs and Trade.

Political Rights and Civil Liberties

Liechtensteiners can change their government democratically. The prince exercises legislative powers jointly with the Landtag. He appoints the prime minister from the Landtag's majority party or coalition, and the deputy chief of the five-member government from the minority. Parties with at least eight percent of the vote receive representation in the parliament, which is directly elected for four years on the basis of proportional representation. The sovereign possesses power to veto legislation and to dissolve the Landtag. Participation in elections and referenda is compulsory.

The government respects freedom of speech. Two daily newspapers are published, each representing the interests of one of the two major political parties, as is one weekly newsmagazine. There are two television stations, one owned by the state and one private. While there is only one private radio station, residents regularly receive radio and television broadcasts from neighboring countries.

In 1998 and 1999, Liechtenstein received a high number of asylum seekers who were given temporary protection. The number of asylum seekers reaches almost two percent of the total population of Liechtenstein. A strict policy prevents significant numbers of second- and third-generation residents from acquiring citizenship.

Although Roman Catholicism is the state religion, other faiths are practiced freely. Roman Catholic or Protestant religious education is compulsory in all schools, but exemptions are routinely granted.

Liechtensteiners enjoy freedom of association. The principality has one small trade union. Workers have the right to strike, but have not done so in more than 25 years. The prosperous economy includes private and state enterprises. Citizens enjoy a very high standard of living.

The independent judiciary, subject to the prince's appointment power, is headed by a supreme court that includes civil and criminal courts, as well as an administrative court of appeals and a state court to address questions of constitutionality.

Although only narrowly endorsed by male voters, the electoral enfranchisement of women at the national level was unanimously approved in the legislature in 1984 after defeats in referenda in 1971 and 1973. By 1986, universal adult suffrage at the local level had passed in all 11 communities. In the 1989 general elections, a woman won a Landtag seat for the first time. Three years later, a constitutional amendment guaranteed legal equality.