An extract from The Asset Tracing and Recovery Review, 8th Edition

Seizure and evidence

i Securing assets and proceedsCivil proceedings

There are no special provisions concerning securing assets in cases of civil fraud. Instead, the general provisions for securing assets apply. Before the start of a lawsuit and during litigation, it is possible to apply for interim injunctions in the form of either a security restraining order, which aims to secure pecuniary claims, or an official order, which deals with any claims other than those of a pecuniary nature.

The option chosen depends on the nature of the claim. Primarily, both injunctions temporarily maintain the state of affairs prevailing at that time (e.g., to freeze the assets that are subject to litigation). In this context, the execution measures are limited to the custody and administration of chattels; the prohibition of alienation and pledging; and in the case of claims, the prohibition of payment and collection.

Criminal proceedings

According to Section 97a of the STPO, there are several ways in which to seize or secure assets on request by the public prosecutor. The court can, for example, order the seizure, administration and depositing of movable assets, including cash, or prohibit the seizure or the disposal of movable assets. The most important instrument in securing assets, however, is the freezing of bank accounts. If a bank account is frozen, a potential fraudster has no way to drain the assets of the bank account. The problem is often that the bank account has to be known to the public prosecutor or to the private participant of the investigation.

The freezing of bank accounts also plays a very important role in international matters. In cases of applications for mutual assistance from abroad, the public prosecutor or the foreign authority often requests that the Liechtenstein court freeze bank accounts according to Section 97a of the STPO.

ii Obtaining evidenceCivil proceedings

A Liechtenstein judge is confined to appraising the facts pleaded by the parties. There are five different types of evidence mentioned in the Liechtenstein Civil Procedure Act (ZPO), dated 10 December 1912: documentary evidence, hearing of witnesses, evidence by experts, evidence by inspection of the court and evidence by party interrogation. None of these means has greater weight than the others. Under Liechtenstein civil procedure law, a judge is free to weigh and consider the evidence submitted by the parties according to the conviction he or she has acquired during the proceedings. The court has the power to draw its conclusions from witness statements, regardless of the number of witnesses presented by one side, relying on the credibility, clarity and sureness of a witness statement, as well as any correspondence between different pieces of evidence and witness statements.

For persons familiar with US litigation, it may be difficult to accept that there is no comparable provision for compulsory pretrial discovery under Liechtenstein law. In the course of a civil procedure it is, however, possible to obtain an order that forces a defendant to produce certain types of documents. Notably, the same may also be obtained from the plaintiff or other parties to a trial.

The order will be limited to cases where documents are in the possession of a party who refers to them previously before the court, or where the party under the burden of proof is entitled by law to inspect a document. The order also applies where a document has been prepared for the benefit of the moving party, or where a document sought will serve as evidence for the legal relationship between the parties or serves to demonstrate factors underlying that relationship.

If a party fears that the evidence in question may be difficult to obtain in the future, an order for the preservation of evidence is possible (inspection of perishable goods, deposition of a witness who is about to die, etc.). A party may at any time file a petition for preliminary proceedings to take evidence on facts that the party intends to bring into evidence in pending or future court proceedings.

Criminal proceedings

In criminal investigations and proceedings, the investigating judge has the duty to obtain evidence on request by the public prosecutor and subsequently to hand over the results to the public prosecutor. The investigating judge has several options to obtain evidence with.

In matters of fraud, house searches and the seizure of documents and other objects are very important. In the case of bank documents, Liechtenstein has always had very robust banking secrecy laws (similar to Switzerland), but in criminal investigations banking secrecy is no longer protected by law, and so bank documents can be seized. Certain legally privileged documents, such as correspondence between a lawyer and an accused party, cannot, however, be sequestrated.