Principality of Liechtenstein
Area: 61.7 sq. miles. (160 sq km.); about
the size of Washington, DC.
Cities: Capital - Vaduz.
Terrain: 66 % mountains, the remainder hills and
plateau situated next to the Rhine.
Climate: continental; cold, cloudy winters with
frequent snow or rain; cool to moderately warm,
cloudy, humid summers.
Nationality: Noun – Liechtensteiner(s),
adjective - Liechtenstein.
Population (2001): 33,525 of which 34.3 %
foreigners, mainly Swiss, Austrians and Germans.
Annual population growth rate: 2.1%.
Ethnic groups: Liechtensteiners, Swiss,
Austrians and Germans.
Religions: Roman Catholic 80.4%, Protestant
7.1%, Others 12.5%.
Languages: German (official), Alemannic dialect.
Type: Hereditary constitutional monarchy.
Independence: 23 January 1719 Imperial
Principality of Liechtenstein established; 12
July 1806 established independence from the Holy
Constitution: 5 October 1921.
Branches: Executive--chief of state:
Prince Hans Adam II (assumed executive
powers on 26 August 1984, acceded to the throne
on 13 November 1989); Heir Apparent Prince Alois,
son of the monarch, was born on June 11, 1968.
Alois was appointed the permanent representative
of the Prince on August 15, 2004. Head of
government: Otmar Hasler (since 5 April
2001). Cabinet: Five cabinet members. The
cabinet is elected by the Diet, and approved by
Legislative--Unicameral Diet or Landtag
(25 seats; members are elected by direct popular
vote under proportional representation to serve
Judicial--District Court (low), Superior
Court (medium), Supreme Court (high).
Administrative subdivisions: The country is
subdivided into 11 districts.
Political parties: Fatherland Union (VU),
Progressive Citizens' Party (FBP), and the Free
Currency: Swiss Franc.
National holiday: Assumption Day, August 15.
GDP (2003): USD 2.42 billion (2.8 billion
Annual growth rate: (2004) 6%.
Unemployment: (2004) 2.2%, (2002) 1.5%.
Avg. inflation rate (2004): 0.6%.
Agriculture: wheat, barley, corn, potatoes,
livestock, dairy products.
Industry: electronics, metal manufacturing,
textiles, ceramics, pharmaceuticals, food
products, precision instruments.
Services: financial, tourism.
Trade (2004): Exports - $1.8 billion, USD
3.77 billion (3.19 billion CHF) (+11% over 2003)
main products - small specialty
machinery, dental products, stamps, hardware,
pottery, major markets – U.S., Germany,
Switzerland, France, Italy, Taiwan, Japan,
Austria and Great Britain.
Imports - $877 million, main products
- machinery, metal goods, textiles, foodstuffs,
motor vehicles, major suppliers - EU
The Liechtenstein Family of Austria acquired
the fiefs of Vaduz and Schellenberg in 1699 and
1713 respectively, and gained the status of an
independent principality of 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 the 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 World Trade Organization (WTO) in
According to the Constitution, the
government is a collegial body and consists of
the head of government and four governmental
councilors. The head of government and ministers
are appointed by the Prince, following the
proposals of the Parliament.
Amendments to the constitution and new laws
have to be adopted by parliament, signed by both
the Prince and the Head of Government, and
published in the Principality's Law Gazette.
Prince Hans Adam II is the Head of State. He
is entitled to exercise his right to state
leadership in accordance with the provisions of
the constitution and of other laws.
On August 15, 2004 Prince
Hans-Adam II entrusted Hereditary Prince Alois
as his representative with the exercise of all
sovereign rights pertaining to him, in
accordance with the Liechtenstein Constitution.
He represents the state vis-à-vis foreign
states. He signs international treaties either
in person or delegates this function to a
plenipotentiary. In accordance with
international law, some treaties only become
valid when they have been ratified by
The Prince's involvement in legislation
includes the right to take initiatives in the
form of government bills and the right to veto
The Prince has the power to enact princely
decrees. Emergency princely decrees are possible
when the security and welfare of the country is
at stake. A countersignature by the Head of
Government is required.
The Prince has the right to convene and
adjourn parliament and, for serious reasons, to
adjourn it for three months or to dissolve it.
The Prince nominates the government, district
and high court judges, the judges of the Supreme
Court, and the presidents and their deputies of
the Constitutional Court and of the
Administrative Court of Appeal on the basis of
the names put forward by parliament.
The Prince's other authorities include
mitigating and commuting punishments that have
been imposed with legal force and the abolition
-- i.e. the dismissal -- of investigations that
have been initiated. All judgments are issued in
the name of the Prince.
Citizens elect the parliament directly under
a system of proportional representation. Until
1989, 15 members represented the population of
the two constituencies (6 for the lowland area
and 9 for the highland area). Since 1989 the
lowland constituency has been entitled to have
10 members and the highland area 15 members.
The Parliament's main task is to discuss and
adopt resolutions on constitutional proposals
and draft government bills. It has the
additional duties of giving its assent to
important international treaties, of electing
members of the government, judges and board
members of the Principality's institutions,
setting the annual budget and approving taxes
and other public charges, and supervising the
administration of the state.
The Parliament observes its rights and duties
in the course of sessions of the whole
parliament and through the parliamentary
commissions that it elects. All members of
parliament exercise their mandates in addition
to their normal professions or occupations. The
President of parliament and his deputy are both
elected at the opening meeting for the current
year. The President convenes the individual
meetings during the session, leads them and
represents parliament externally.
During the parliamentary recess -- normally
from January to February/March -- a "state
committee" assumes parliament's duties, and such
a committee must also be elected in the case of
any adjournment or dissolution of parliament. A
"state committee" consists of the President of
parliament and four other members.
The duties and working procedures of
parliament are laid down in the constitution and
in parliament's standing orders.
The government of Liechtenstein is based on
the principle of collegiality. The government
consists of the Head of Government and four
Councilors. The members of the government are
proposed by the parliament and are appointed by
the Prince. Only men or women born in
Liechtenstein, and who are eligible to be
elected to parliament, may be elected to the
government committee. The two electoral areas of
the country, the highlands and the lowlands, are
entitled to at least two members of the
government, and their respective deputies must
come from the same area.
The political parties are the moving forces
with regard to the composition of the government
and in the parliament. For the 2005 – 2009
legislature period of office one Councilor and
three deputies are women.
From 1938 to 1997 Liechtenstein had a
coalition government and there were only two
parties in parliament, the Fatherland Union and
the Progressive Citizen's Party. Liechtenstein's
distinctive form of coalition government came to
an end in April 1997. The Fatherland Union took
sole responsibility for the government during
the 1997 to 2001 parliament, with its members
filling all the positions on the government
committee. In 2001 the Progressive Citizen's
Party held the majority, and provided all the
members of the government. The minority parties,
as opposition parties, acted as a check on the
government in parliament and on parliamentary
In the March 2005 parliamentary election a new
political party, the Free List, earned enough
votes to gain three seats, preventing either of
the two larger parties from gaining an absolute
majority. A new Parliament was elected and a
grand coalition was formed; the two strongest
factions, the center-right Progressive Citizens’
Party and the center-left Fatherland Union,
holding 3 and 2 cabinet seats respectively.
There are 25 seats in the Landtag, divided as
follows: Progressive Citizen’s Party 12,
Fatherland Union 10, Free List 3. There are 6
women in the 25-seat Parliament and 1 in the
5-member Cabinet. Women first gained the right
to vote in Liecthenstein and a growing number of
women are active in politics. Women served on
the executive committees of the major parties.
In March 2003, the Liechtenstein electorate
endorsed with a decisive margin Prince Hans-Adam
II's proposal for a revision of the
Liechtenstein Constitution which granted him the
power to dissolve Parliament and appoint an
interim government, dismiss individual members
of Government, and veto any parliamentary
legislation by not signing the bill within six
months. Without the approval of the reigning
prince, no further constitutional amendments can
be adopted, except in the case of a referendum
abolishing the royal house. The Prince now also
has final approval on the appointment of judges,
and the State Court loses its key competence to
mediate between the Government and the Prince on
constitutional matters. In September 2005 an
ad-hoc committee of the Parliamentary Assembly
of the Council of Europe met with a delegation
of the Liechtenstein Parliament in Vaduz for a
first round of talks on this change to the
constitutional order. The talks are part of a
dialogue that the Parliamentary Assembly chose
as an alternative to a standard monitoring
procedure to assess the constitutional order
following the adoption in 2003 of a series of
amendments to the Liechtenstein Constitution. A
second round of talks in Strasburg and a final
report on the results of this dialogue are
scheduled for early 2006.
Principal Government Officials
Otmar Hasler (Head of the Government) –
Prime Minister, Government Executive, Finance,
Construction and Public Works
Klaus Tschuetscher – Deputy Prime Minister,
Economic Affairs, Justice, and Sports
Rita Kieber-Beck -- Foreign Affairs, Cultural
Affairs, Family and Equal Opportunity
Hugo Quaderer – Education, Social Affairs, Land
Use Planning, Agriculture and Forestry
Martin Meyer – Home Affairs, Public Health,
Transport and Telecommunications
Robert Walner -- Attorney General
Claudia Fritsche -- Liechtenstein's Ambassador
to the U.S. She is also accredited to the UN in
Christian Wenaweser -- Permanent Representative
to the UN.
Liechtenstein maintains an embassy in the
United States at 1300 Eye Street, NW,
Washington, DC 20005, Telephone (202) 216-0460.
Since the signing of the Customs Treaty in
1924, Liechtenstein and Switzerland have
represented one mutual economic area with open
borders between the two countries. Liechtenstein
also uses the Swiss franc as its national
currency, and Swiss customs officers secure the
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 place 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 of time Liechtenstein
developed from mainly an agricultural state to
one of the most highly industrialized countries
in the world.
Besides its efficient industry, there is also
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 ten 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. 12.7% of
Liechtenstein’s goods are exported to
Switzerland, 42.1% to the EU, and 45.2% to the
rest of the world. Liechtenstein imports more
than 90% of its energy requirements. The
Liechtenstein industry sector contributes to 40%
of the country's GDP, followed by banking and
finance (30%), services (25%), and agriculture
In 2002, the U.S. was the third most
important trading partner for Liechtenstein,
with approximately $334 million (SFr. 434
million) worth of imports and $35 million
(SFr.44.5 million) for exports. Germany was
first with a total trade value of $747 million
(SFr. 971 million) and Austria third with $454
million (SFr. 590 million). Although Switzerland
is an important trading partner, trade
statistics are unavailable because both
countries share a customs union.
Approximately 5% of the country’s revenue is
invested in research and development, one of the
driving forces of the success of Liechtenstein's
economy. Total R&D spending in 2000 rose by
20.7% to approximately $149 million (194 million
The Principality of Liechtenstein is also
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
Liechtenstein has chartered 17 banks, 3
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), mostly for non-Liechtenstein
residents. Approximately 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.
DEFENSE AND FOREIGN RELATIONS
Defense is the responsibility of
Switzerland. 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 World Trade
Organization (WTO) in 1995.
The relations between the two countries are
good. The two countries in 2002 signed a mutual
legal assistance treaty focused largely on
jointly combating money laundering and other
illegal banking activities.
The U.S. does not have an embassy in
Liechtenstein, but the U.S. Ambassador to
Switzerland is also accredited to Liechtenstein.
Principal U.S. Officials
Deputy Chief of Mission--Carol Urban
Embassy in Switzerland is at
Jubilaeumsstrasse 93, 3005 Bern, Switzerland,
telephone: (41) (31) 357-7011.