Liechtenstein is examining tightening control of scores of Russian-linked trusts abandoned by their managers under pressure from Washington, according to several people familiar with the matter.
The country, one of the world’s smallest and richest, is home to thousands of low-tax trusts, hundreds of which have links to Russians, two of the people with direct knowledge of the matter said, putting it in the crosshairs of Western efforts to sanction Moscow.
Since Russia’s invasion of Ukraine, the US Treasury has sanctioned several individuals and trusts in Liechtenstein it said were linked to Russian oligarchs, including Vladimir Potanin, and a long-time ally of Russian President Vladimir Putin, Gennady Timchenko.
The US Treasury had no immediate comment. Potanin’s Interros holding company did not respond to a request for comment, while Timchenko could not be reached.
That sanctioning has prompted other directors fearing such punishment to quit hundreds of Russian-linked trusts, according to several people familiar with the matter, exposing a far wider problem with Russian money in the tiny country with a population of about 40,000.Their suspension puts that property beyond reach, a further potential lever over Russia, amid attempts by U.S. President Donald Trump to strike a peace deal.
Reuters has spoken to several people with direct knowledge of these events, who asked not to be identified because of the sensitivity of the matter.
They outlined how a push by Washington had led scores of directors to quit trusts with links to Russia and how the government was scrambling to resolve the crisis.
Liechtenstein’s newly elected government is seeking to fix the issue, according to people familiar with the matter, underscoring the continued pressure from Washington over Russia sanctions, despite U.S. President Donald Trump’s earlier suggestions he could ease them.
Liechtenstein also sees its handling of sanctions enforcement as something that could influence its government’s efforts to lower newly imposed US tariffs on exports, said one person with direct knowledge of the discussions.
A Liechtenstein government official said 475 trusts were affected by the defections, although added that not all were linked to Russians or sanctioned individuals. Banks are particularly vulnerable because the United States has the power to throttle them by cutting off their access to the dollar, threatening a wider crisis.
The episode has confronted the country with its biggest crisis since 2008, when leaked customer data at LGT Bank, owned by the country’s princely family, exposed widespread tax evasion.
The government is now examining options to centralise the management of the deserted trusts under its watch and tightening supervision of trusts.
The Liechtenstein official also said the country’s authorities were in contact with their international counterparts and that no trust assets would be released to sanctioned individuals.
Liechtenstein, sandwiched between Switzerland and Austria, is dominated by its royal family, whose castle towers over the parliament. It is tied closely to Switzerland, using its franc currency, but also enjoys freedom to do business in the European Union’s single market.
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