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World : Europe : Liechtenstein

The Austrian Liechtenstein family acquired the fiefs of Vaduz and Schellenberg in 1699 and 1713 respectively, and they became an independent principality under the Holy Roman Empire in 1719 under the name Liechtenstein. The French under Napoleon occupied the country for a few years, but Liechtenstein regained its independence in 1815 within the new German Confederation. In 1868, after the Confederation dissolved, Liechtenstein disbanded its army of 80 men and declared its permanent neutrality, which was respected during both World Wars.

In 1919 Liechtenstein entrusted its external relations to neutral Switzerland. After World War II, Liechtenstein became increasingly important as a financial center, and the country became more prosperous. In 1989, Prince Hans Adam II succeeded his father to the throne, and in 1996 settled a long-running dispute with Russia over Liechtenstein family's archives, which had been confiscated during the Soviet occupation of Vienna in 1945 and later moved to Moscow. In 1978, Liechtenstein became a member of the Council of Europe, and then joined the UN in 1990, the European Free Trade Association (EFTA) in 1991, and both the European Economic Area (EEA) and the World Trade Organization in 1995.


Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and living standards on a par with its large European neighbors. The Liechtenstein economy is widely diversified with a large number of small businesses. Low business taxes - the maximum tax rate is 20% - and easy incorporation rules have induced many holding or so-called letter box companies to establish nominal offices in Liechtenstein, providing 30% of state revenues. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the EU) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe.

Since the signing of the Customs Treaty in 1924, Liechtenstein and Switzerland have represented one mutual economic area. Therefore, the borders between those states are open. The country also uses the Swiss franc as its national currency, and Swiss customs officers secure its border with Austria.

Liechtenstein is a member of EFTA, and joined the European Economic Area (EEA) in 1995 in order to benefit from the EU internal market. The liberal economy and tax system make Liechtenstein a safe, trustworthy, and success-oriented country for private and business purposes, especially with its highly modern, internationally laid-out infrastructure and nearby connections to the whole world.

The Principality of Liechtenstein has gone through economic and cultural development in the last 40 years like no other Western country. In this short period, Liechtenstein developed from a mainly agricultural state to one of the most highly industrialized countries in the world.

Besides its efficient industry, there also is as a strong services sector. Four out of ten employees work in the services sector, a relatively high proportion of whom are foreigners, including those who commute across the border from the neighboring states of Switzerland and Austria. Industrial exports doubled in 10 years from $1.4 billion (SFr. 2.2 billion) in 1990 to $2.9 billion (SFr. 4.6 billion) in 2000, but later dropped to $1.8 billion (SFr.2.8 billion) in 2002. Liechtenstein exports 12.7% of its goods to Switzerland, 42.1% to the EU, and 45.2% to the rest of the world. It imports more than 90% of its energy requirements. The industry sector contributes 40% of the country's GDP, followed by banking and finance (30%), services (25%), and agriculture (5%).

In 2002, the United States was Liechtenstein's the third most important trading partner, with $334 million (SFr. 518 million) worth of imports and SFr.44.5 million exports. Germany is the most important, with total trade worth $747 million (SFr. 1.1 billion,) and Austria second with $454 million (SFr. 705 million). Although Switzerland is an important trading partner, trade statistics are unavailable because both countries share a customs union. Some 5% of the country's revenues are invested in research and development, one of the driving forces behind Liechtenstein's successful economy. Total research and development spending in 2000 rose by 20.7% to about $149 million (233 million francs).

The Principality of Liechtenstein also is known as an important financial center, primarily because it specializes in financial services for foreign entities. The country's low tax rate, loose incorporation, and corporate governance rules and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders. The same factors made the country attractive and vulnerable to money launderers, although late 2000 legislation has strengthened regulatory oversight of illicit funds transfers.

Liechtenstein has chartered 17 banks, three non-bank financial companies, and 71 public investment companies, as well as insurance and reinsurance companies. Its 270 licensed fiduciary companies and 81 lawyers serve as nominees for, or manage, more than 75,000 entities (primarily corporations, institutions, or trusts), most for non-Liechtenstein residents. About one-third of these entities hold the controlling interest in other entities, chartered in countries other than Liechtenstein. The Principality's laws permit the corporations it charters to issue bearer shares. Until recently, the Principality's banking laws permitted banks to issue numbered accounts, but new regulations require strict know-your-customer practices for all accounts.

The law provides that all workers, including foreigners, are free to associate, join unions of their choice, and select their own union representatives, and workers exercised these rights in practice. Due to the country's small size and population, there was only one trade union, which represented approximately 13 percent of the work force; however, the union protected the interests of nonmembers as well.

The law encourages the formation of unions but does not prohibit antiunion discrimination. Instead it states that antiunion discrimination should be avoided.

Unions were free to form or join confederations and were allowed to affiliate with international bodies. The only union was a member of the World Confederation of Labor but was represented on an ad hoc basis by a Swiss union.

The law provides for the right of workers to organize and bargain collectively. However, collective bargaining agreements usually were adapted from those negotiated by Swiss employers and unions. In accordance with EEA guidelines, domestic labor law requires that employers consult with unions in cases of projected mass dismissals and submit employment contracts in written form.

Workers have the right to strike except in certain essential services. No strikes were reported during the year. The law does not provide specific protections for strikers. Employers were allowed to dismiss employees for serious offenses or for breach of contract, such as having a complaisant medical certificate.

There were no export processing zones.

There is no minimum wage.  In 2001 a total of 59 households depended on public welfare, to obtain a yearly minimal income--set at $12,200 (17,720 Swiss francs) for a 1-person household--and were considered working poor.  A total of 474 households received public assistance in 2001.

The law sets the maximum workweek at 45 hours for white-collar workers and employees of industrial firms and sales personnel, and 48 hours for all other workers. The law provides for mandatory rest periods, and with few exceptions, Sunday work was not allowed. Workers over the age of 20 received at least 4 weeks of vacation; younger workers received at least 5 weeks.

The law sets occupational health and safety standards, and the Department for Worker Safety of the Office of the National Economy generally enforced these provisions. The law provides for a hearing in cases in which workers removed themselves from dangerous situations. The law provides for the right of workers to remove themselves from work situations that endanger health or safety without jeopardy to their continued employment.


The Constitution provides for freedom of religion, and the Government generally respects this right in practice. The Roman Catholic Church is the official state church.

There was no change in the status of respect for religious freedom during the period covered by this report, and government policy continued to contribute to the generally free practice of religion.

The generally amicable relationship among religions in society contributed to religious freedom.

The U.S. Government discusses religious freedom issues with the Government in the context of its overall dialog and policy of promoting human rights.

The country has a total land area of 61.7 square miles (160 square kilometers) and a total population of 32,883 (as of June 30, 2002, according to the Office of the National Economy). There are 25,676 Roman Catholics, 2,348 Protestants, 1,347 Muslims, 254 Eastern Orthodox, 70 Buddhists, 32 members of Jehovah's Witnesses, 13 Anglicans, 17 Jews, 14 Baha'is, 8 New Apostolics, 8 members of other religions, and 3,569 persons who were undecided.

There are no significant foreign missionary groups in the country.

The Constitution provides for freedom of creed and conscience, and the Government generally respects this right in practice. The Government at all levels strives to protect this right in full, and does not tolerate its abuse, either by governmental or private actors. The Criminal Code prohibits any form of discrimination, or debasement of any religion or any of its adherents. The Constitution provides for the Catholic Church as the established church of the country and as such it enjoys the full protection of the State.

Church funding comes from the general budget, as decided by Parliament, and is not a direct "tithe" paid by the citizens. The Government gives money not only to the Catholic Church but also to other denominations. The budget is allocated proportionately according to membership numbers. The Roman Catholic Church’s finances are integrated directly into the budgets of the national and local governments. The Catholic Church receives approximately $190,000 (300,000 Swiss francs) per year, plus additional sums from the 11 communes. The relationship between the State and the Roman Catholic Church is being redefined. Under an interim regulation of December 1998, the state contributions to the Catholic Church temporarily had been paid into a blocked special account to be released when a new agreement was reached. The 1998 regulation expired on January 1, 2002, before a consensus had been reached. Therefore, the Church again is entitled to the State's annual contributions under the terms of a 1987 law. The Government missed its self-imposed 2002 deadline because it wanted to allow additional time to find the widest possible consensus on the redefinition of the relationship between the State and the Catholic Church. The State's financial contributions for 1999, 2000, and 2001 have been paid out to the Church. All religious groups enjoy tax-exempt status.

There are no significant foreign missionary groups in the country. In order to receive a religious-worker visa, an applicant must demonstrate that the host organization is important for the entire country. An applicant must have completed theological studies and be accredited with an acknowledged order. Visa requests normally are not denied and are processed in the same manner as requests from other individuals or workers.

In the course of the on-going discussion on the redefinition of the relationship between the State and the Catholic Church, a new agreement with the Catholic Church has been created for religious education in schools. According to this agreement, pupils at secondary schools may choose between traditional confessional religious education (provided for by the Catholic or the Protestant Church) or non-confessional classes on "Ethics and Culture." In the past, confessional religious classes were compulsory unless parents explicitly requested that the school board exempt their child from religious classes. Under the new agreement, parents automatically have a choice. In February the Government briefed parents of the pupils concerned about the changes and requested that they return a form to the school board to express their preference for the religious education for their children. Denominations other than the Catholic and the Protestant Church are free to regulate their own religious education.

The Government collaborates with religious institutions by supporting interfaith dialogs and providing adult education courses in religion, as well as other subjects.

Government policy and practice contributed to the generally free practice of religion.

There were no reports of religious prisoners or detainees.

There were no reports of forced religious conversion, including of minor U.S. citizens who had been abducted or illegally removed from the United States, or of the refusal to allow such citizens to be returned to the United States.

There are amicable relations between the religious communities. Catholics, Protestants, and members of other faiths work well together on an ecumenical basis. Differences among religious faiths are not a significant source of tension in society.

The U.S. Embassy discusses religious freedom issues with the Government in the context of its overall dialog and policy of promoting human rights.


The crime rate in Liechtenstein is low compared to other industrialized countries. An analysis was done using INTERPOL data for Liechtenstein. For purpose of comparison, data were drawn for the seven offenses used to compute the United States FBI's index of crime. Index offenses include murder, forcible rape, robbery, aggravated assault, burglary, larceny, and motor vehicle theft. The combined total of these offenses constitutes the Index used for trend calculation purposes. Liechtenstein will be compared with Japan (country with a low crime rate) and USA (country with a high crime rate). There were no murders in Liechtenstein in year 2002. For rape, the rate in 2002 was 2.95 for Liechtenstein, compared with 1.78 for Japan and 32.05 for USA. For robbery, the rate in 2002 was 2.95 for Liechtenstein, 4.08 for Japan, and 144.92 for USA. For aggravated assault, the rate in 2002 was 2.95 for Liechtenstein, 23.78 for Japan, and 323.62 for USA. For burglary, the rate in 2002 was 256.64 for Liechtenstein, 233.60 for Japan, and 728.42 for USA. The rate for motor vehicle theft in 2002 was 11.80 for Liechtenstein, compared with 44.28 for Japan and 414.17 for USA. The rate for all index offenses combined was 277.29 for Liechtenstein, compared with 1709.88 for Japan and 4123.97 for USA. (Note that the rate for all index offenses combined does not include murder and larceny.)


There was one murder in Liechtenstein in year 2000; thus, there was a decline from one to zero murders between year 2000 and year 2002. Between 2000 and 2002, according to INTERPOL data, the rate for rape decreased from 6.06 to 2.95, a decrease of 51%. The rate of robbery decreased from 6.06 to 2.95, a decrease of 51%. The rate for aggravated assault decreased from 127.27 to 2.95, a decrease of 98%. The rate for burglary decreased from 287.88 to 256.64, a decrease of 11%. The rate of motor vehicle theft decreased from 12.12 to 11.80, a decrease of 3%. The rate of total index offenses decreased from 439.39 to 277.29, a decrease of 37%.


The Interior Ministry maintained effective control of the regular and auxiliary police forces, which were responsible for internal and external security. There was no standing military force. There were no reports that security forces committed human rights abuses.

There were no reports of the arbitrary or unlawful deprivation of life committed by the Government or its agents.

There were no reports of politically motivated disappearances.


The law prohibits arbitrary arrest and detention, and the Government generally observed these prohibitions. Within 24 hours of arrest, the police must bring suspects before an examining magistrate who must either file formal charges or order release. The law grants suspects the right to legal counsel of their own choosing and counsel was provided at government expense to indigent persons. Release on personal recognizance or bail is permitted unless the examining magistrate has reason to believe that the suspects are a danger to society or would not appear for trial. Neither the law nor the Constitution prohibits forced exile, but the Government did not employ it.


The Constitution provides for an independent judiciary, and the Government generally respected this provision in practice.

The judicial system has three tiers: A lower court, appellate court, and supreme court. The court of first instance is the National Court (Landgericht). In addition, an Administrative Court hears appeals against government decisions. The State Court (Staatsgerichtshof) protects the rights accorded by the Constitution, decides conflicts of jurisdiction between the law courts and the administrative authorities, and acts as a disciplinary court for members of the Government.

The Constitution provides for the right to a fair public trial, and an independent judiciary generally enforced this right. Citizens had the right to counsel and the right to appeal, ultimately to the Highest Court (Oberster Gerichtshof). Trials involving minor offenses were heard by a single judge, more serious or complex cases by a panel of judges, and the most serious cases, including murder, by a public jury.


The Government generally respected the human rights of its citizens, and the law and judiciary provided effective means of dealing with individual instances of abuse. There were instances of violence against women. The Government continued to work to eliminate societal discrimination against women. Liechtenstein was invited by the Community of Democracies' (CD) Convening Group to attend the November 2002 second CD Ministerial Meeting in Seoul, Republic of Korea, as a participant.

The law prohibits all forms of domestic violence, and the Government generally enforces the law. According to the police, there were 12 reported cases of violence against women during the year, of which 8 male aggressors were prevented from reentering the family home for 10 days, and 4 for a further period of 3 months. The Protection from Domestic Violence law entered into force in February 2001. The State may file charges without a complaint from the victim. Frauenhaus stated that one out of five women was a victim of domestic violence.

A women's shelter provided refuge for 27 women and 39 children during the year. The shelter provides refuge for noncitizens as well. Annual government financing for the shelter was approximately $165,000 (240,000 Swiss francs). NGOs believed that, as in neighboring countries, trafficking in women occurred; however, no specific cases were documented during the year (see Section 6.f.).

Societal discrimination continued to limit opportunities for women in fields traditionally dominated by men. Men earned more than women and women generally did not receive equal pay for equal work. The Constitution provides for women's rights, and includes a significant number of laws to provide for equality of treatment among men and women to eliminate discrimination and sexual harassment and to create conditions that allow both men and women to combine work and family. A new law entered into force in January 2001 that mandates the division of retirement benefit claims in the case of divorce, under which the benefit claims accrued during the time of marriage are split between the parties, whether they worked outside the home or not. No case of gender discrimination had been brought to court by year's end.

Each Spring the Government adopts an action plan to promote equal opportunity for both women and men, and each Autumn the Government's Bureau for the Promotion of Equal Rights for Women and Men publishes a progress report. The 2002 action plan concentrated on women and politics, family and income, and violence against women. These themes were discussed during the second Women's Congress of Liechtenstein that began in October. The Government also started a project with both Swiss and Austrian neighboring regions to promote prevention and assistance to victims of domestic violence. The joint project is scheduled to end in March 2004.

In 1999 the Government signed the optional protocol to the U.N. Convention on the Elimination of All Discrimination Against Women. The protocol took effect on January 24.

Three women's rights groups were active. Frauenhaus Liechtenstein, Fruehstueckstreffen fuer Frauen, and Infra (Informations-und Kontaktstelle fuer Frauen) worked in areas of public affairs, information, legal counseling, lobbying, and other political activities.

There were 3 women in the 25-seat Parliament, and 1 in the Cabinet, the Minister for Education, Transport and Communication, and Justice, who has served since February 2001. A growing number of women were active in politics. Women served on the executive committees of the major parties.

In 2001 the Government took several steps to promote greater participation by women in politics. Prior to the February 2001 parliamentary elections, the Government conducted two billboard campaigns to promote female candidates, one encouraging women to run for office, and another calling on voters to support female candidates. In addition, the Government organized a series of workshops for female parliamentary candidates.


The Government was strongly committed to children's rights and welfare and funded a system of public education and health care. The Government provided compulsory, free, and universal primary school education for children of both sexes for 9 years, normally until the age of 16. It provided free health care for children under the age of 16.

The Government supported programs to protect the rights of children and matched contributions made to the three NGOs that monitor children's rights. The Office for Social Services oversaw the implementation of government-supported programs for children and youth.

There were some reports of abuse of children, although there was no societal pattern of such abuse. During the year, three persons were convicted of child abuse by the first instance court but none of these rulings is yet final. The Commission for the Coordination of Professionals in Cases of Sexual Offenses Against Children consists of experts from different backgrounds and focuses on assisting professionals (counselors, therapists, and physicians) who deal with sexual offenses against children. The Commission has undertaken public awareness-raising campaigns. During the year, it was contacted in 12 cases of suspected sexual abuse, the same number as in 2002.

Possession of child pornographic material is a statutory offense. The Government also extended the statute of limitation for sexual offenses against children. A special police unit on computer crime continued to monitor child pornography on the Internet; however, no investigations were opened during the year.


The law prohibits trafficking in persons, and there were no reports that persons were trafficked to, from, or within the country. However, some NGOs believed that, as in neighboring countries, trafficking in women occurred but was not reported.

Any person leading another into prostitution faces up to 6 months in prison and/or heavy fines and up to 3 years in prison if the victim was under 18. Independent prostitutes were tolerated as long as they were confined to special salons, cabarets, or other private apartments. The police undertook regular controls on prostitutes' working conditions and salaries but acknowledged that many Swiss middlemen employed women working in the country.


Internet research assisted by Iran Garcia and Josh Berke

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