Liechtenstein - a miniature country in the heart of Europe and known as the " peppermint of assets" of the super-rich - is facing an unprecedented crisis due to sanctions on Russia.
Hundreds of trust funds are in a legal deadlock, frozen after a wave of massive resignations by asset managers to avoid spreading from US sanctions on Russia.
The crisis stems from increased US sanctions imposed since 2024, which target entities related to Russian citizens.
Although most of the owners are not on the sanctions list - many of whom live in France, Italy or the UAE - the simultaneous resignation of lawyers, trustaires and executives has turned a series of funds into "zombie trust" - legal funds but could not operate.
Johannes Gasser, a lawyer in the capital Vaduz of Liechtenstein, revealed: We are talking about billion-dollar biological funds, and there is still no way out. I have never seen anything like that.
This situation does not stop at a few dozen individual cases. At least 350 funds have fallen into a state of " drop-off", with 85 funds completely without managers, according to Liechtenstein financial officials. This figure could increase to 800 funds if the current trend continues.
Under pressure from the US to impose secondary sanctions - meaning punishing organizations not directly involved in Russia but having transactions with Russia - Liechtenstein was forced to choose to "cut off contact" with customers considered risky, according to the country's financial management agency's official recommendation in September 2024.
As a result, a series of valuable assets, from yachts, private jets, villas to family offices, were frozen in the middle, unable to be traded, and no one was held legally responsible. The Liechtenstein government has set up a task force to handle the crisis, but the Ministry of Justice admits that finding a replacement for the executive board and handling assets is extremely difficult.
Another worrying factor is pressure from both sides. Not only the US, but also Liechtenstein is now facing underground pressure from Russia an unprecedented double risk from both superpowers that could have serious consequences, warned Johannes Gasser.
Russia called the sanctions illegal and warned that retaliatory measures could negatively affect the Western economy itself. Meanwhile, the banking and legal world Liechtenstein is concerned that the trust fund crisis could spread to the banking sector, weakening the country's global position in the asset management industry, which is known for its reliability and immunity to geopolitical fluctuations.
This is becoming a serious problem for the Liechtenstein financial center, a lawmaker warned.
