Case studies

The best way to get to know our way of working is through real cases. Make a first impression. Then we should talk.

CRR / CRD and the Liechtenstein Constitution

The exact application of CRR and CRD in all detail has often raised and still does raise questions. One of our client banks was fined by the Liechtenstein Financial Market Authority for breach of CRR and CRD provisions relating to capital requirements. We challenged the FMA decision as to our understanding, CRR and CRD had been fully complied with. In the broader picture, the question arose whether CRR and CRD were applicable in Liechtenstein at all as the provisions had not been transposed into national law, rather, the Liechtenstein Banking Act simply referred to CRR and CRD wherever of relevance. We questioned whether such “publication by reference” was in line with the Liechtenstein Constitution. Whilst the FMA Appeals Commission followed our approach and considered the publication by reference to be unconstitutional, the Liechtenstein Constitutional Court protected this practice and confirmed publication by reference of EC provisions in Liechtenstein.

Disappeared soccer player’s fees

An international soccer-pro had to learn one day that the income from merchandising activities which he worked on over years and which was always paid, upon recommendation of his former manager, to Liechtenstein, had actually “disappeared“. The manager, who was intended to hold and manage the assets within a Liechtenstein trust structure, had indeed done the opposite and had used the bulk of the assets for his own purposes. It turned out that a foreign soccer-club was in the process of paying a substantial amount due to our client the Liechtenstein structure, which was under the control of the manager. We obtained a freezing order which obliged the soccer-club not to make the payment and at the same time obliged the Liechtenstein trustees not to accept the assets. The case was finally settled and the soccer club paid directly to our client who therefore got at least part of the assets he worked for over several years.

Security Token Offering

We advise and support several companies that do publicly offer Security Tokens, i.e. tokens which, due to their design and investor rights linked to them, qualify as securities in the meaning of European financial markets regulation, specifically the EC Prospectus Directive.

In order to be allowed to offer a security token in Liechtenstein, in the EEA and, as a general rule, also in countries outside the EEA, certain formal requirements have to be met. Within the EEA, a securities prospectus in compliance with the Prospectus Directive has to be drawn up and filed for approval with the Liechtenstein Financial Markets Authority (FMA).

We advise and support companies on an ongoing basis with regard to the preparation of such securities prospectuses until their final approval by the FMA. In particular, we had the pleasure to draft the first securities prospectus on the public offer of Security Token that has been approved by the FMA in Liechtenstein in August 2018. As far as we can see this was not only the first Security Token Prospectus formally approved in Liechtenstein but the first Security Token Prospectus approved by a financial markets authority european-wide.

Crypto Exchange

We advise and support a Liechtenstein based start-up company, which is implementing a “Crypto Exchange” in Liechtenstein. The exchange is intended to not only allow trading with crypto currencies and utility token but will also offer options for trades with security tokens. In this context, complex questions as to the legal classification and qualification of such an exchange (MTF, OTF) from a point of view of regulation on a European level and the corresponding national implementation acts do arise. The technical design of service solutions always has repercussions on the legal qualification of the business moddl and vice versa so that details of both components need to be developed and advanced in close coordination.

Restructuring and transfer of seat of an insurance entity

Since 2015, we are accompanying a foreign insurance entity in an overall restructuring exercise including the transfer of the seat to Liechtenstein. The restructuring included several cross-border and national (Liechtenstein) mergers and legal transformations (Societas Europaea).

Is the payment of taxes a „damage“ ?

“Data thefts” still find their ways into the headlines. From time to time, sometimes still CD’s with data stolen from banks or financial services providers specifically Switzerland or Liechtenstein appear and are offered to and bought by (specifically) German tax authorities. Regularly, this leads to massive tax payments and potential penalty payments due to the client. However, the question whether the bank or the financial services provider whose data has been stolen can be held liable by the client has in the meantime been solved by Liechtenstein court precedents. The Liechtenstein Courts have found in a number of cases that the payment of taxes and the obligation to do so does, in general, not constitute a reimbursable “damage” in the sense of the law. A different view might then be taken if the bank or financial services provider knew of a data theft, was obliged to inform its clients but failed to timely inform clients.