Liechtenstein

Introduction The Principality of Liechtenstein was established within the Holy Roman Empire in 1719. Occupied by both French and Russian troops during the Napoleanic wars, it became a sovereign state in 1806 and joined the Germanic Confederation in 1815. Liechtenstein became fully independent in 1866 when the Confederation dissolved. Until the end of World War I, it was closely tied to Austria, but the economic devastation caused by that conflict forced Liechtenstein to enter into a customs and monetary union with Switzerland. Since World War II (in which Liechtenstein remained neutral), the country's low taxes have spurred outstanding economic growth. In 2000, shortcomings in banking regulatory oversight resulted in concerns about the use of financial institutions for money laundering. However, Liechtenstein implemented anti-money-laundering legislation and a Mutual Legal Assistance Treaty with the US went into effect in 2003.
History

At one time, the territory of Liechtenstein formed a part of the ancient Roman province of Raetia. For centuries this territory, geographically removed from European strategic interests, had little impact on the tide of European history. Prior to the reign of its current dynasty, the region was enfeoffed to a line of the counts of Hohenems.

The Liechtenstein dynasty, from which the principality takes its name (rather than vice-versa), comes from Castle Liechtenstein in faraway Lower Austria, which the family possessed from at least 1140 to the thirteenth century, and from 1807 onward. Through the centuries, the dynasty acquired vast swathes of land, predominantly in Moravia, Lower Austria, Silesia, and Styria, though in all cases, these territories were held in fief under other more senior feudal lords, particularly under various lines of the Habsburg family, to whom several Liechtenstein princes served as close advisers. Thus, and without any territory held directly under the Imperial throne, the Liechtenstein dynasty was unable to meet a primary requirement to qualify for a seat in the Imperial diet, the Reichstag.

The family yearned for the added power a seat in the Imperial government would bring, and therefore sought to acquire lands that would be unmittelbar, or held without any feudal personage other than the Holy Roman Emperor himself having rights on the land. After some time, the family was able to arrange the purchase of the minuscule Herrschaft ("Lordship") of Schellenberg and countship of Vaduz (in 1699 and 1712 respectively) from the Hohenems. Tiny Schellenberg and Vaduz possessed exactly the political status required; no feudal lord other than their comital sovereign and the suzerain Emperor.

Thereby, on January 23, 1719, after purchase had been duly made, Charles VI, Holy Roman Emperor, decreed Vaduz and Schellenberg were united, and raised to the dignity of Fürstentum (principality) with the name "Liechtenstein" in honor of "[his] true servant, Anton Florian of Liechtenstein". It is on this date that Liechtenstein became a sovereign member state of the Holy Roman Empire. As a testament to the pure political expediency of the purchases, the Princes of Liechtenstein did not set foot in their new principality for over 120 years.

In 1806, most of the Holy Roman Empire was invaded by Napoleon I of the First French Empire. This event had broad consequences for Liechtenstein: imperial, legal and political mechanisms broke down, while Francis II, Holy Roman Emperor, abdicated the imperial throne and the Empire itself dissolved. As a result, Liechtenstein ceased to have any obligations to any feudal lord beyond its borders. Modern publications generally (although incorrectly) attribute Liechtenstein's sovereignty to these events. In reality, its prince merely became suzerain, as well as remaining sovereign lord. From 25 July 1806 when the Confederation of the Rhine was founded, the prince of Liechtenstein was a member, in fact a vassal of its hegemon, styled protector, French Emperor Napoleon I, until the dissolution of the Confederation on 19 October 1813.

Soon afterward, Liechtenstein joined the German Confederation (20 June 1815 – 24 August 1866, which was presided over by the Emperor of Austria).

Then, in 1818, Johann I granted a constitution, although it was limited in its nature. 1818 also saw the first visit of a member of the house of Liechtenstein, Prince Alois; however, the first visit by a sovereign prince would not occur until 1842.

Liechtenstein also had many advances in the nineteenth century, as in 1836, the first factory was opened, making ceramics. In 1861, the Savings and Loans Bank was founded, as was the first cotton-weaving mill. Two bridges over the Rhine were built in 1868, and in 1872 a railway line across Liechtenstein was constructed.

When the Austro-Prussian War broke out in 1866 new pressure was placed on Liechtenstein as, when peace was declared, Prussia accused Liechtenstein of being the cause of the war through a miscount of the votes for war with Prussia. This led to Liechtenstein refusing to sign a peace treaty with Prussia and remained at war although no actual conflict ever occurred. This was one of the arguments that were suggested to justify a possible invasion of Liechtenstein in the late 1930s.

Until the end of World War I, Liechtenstein first was closely tied to the Austrian Empire and later to Austria-Hungary; however, the economic devastation caused by WWI forced the country to conclude a customs and monetary union with its other neighbor Switzerland. Liechtenstein's Army was disbanded in 1868 for financial reasons. At the time of the dissolution of the Austro-Hungarian Empire, it was argued that Liechtenstein as a fief of the Holy Roman Empire was no longer bound to the emerging independent state Austria, since the latter did not consider itself as the legal successor to the Empire. This is partly contradicted by the coeval Liechtenstein perception that the dethroned Austro-Hungarian Emperor still maintained an abstract heritage of the Holy Roman Empire, which was dissolved in 1806.

In the spring of 1938, just after the annexation of Austria into Greater Germany, eighty-four year-old Prince Franz I abdicated, naming his thirty-one year-old third cousin, Prince Franz Joseph, as his successor. While Prince Franz I claimed that old age was his reason for abdicating, it is believed that he had no desire to be on the throne if Germany gobbled up its new neighbor, Liechtenstein. His wife, whom he married in 1929, was a wealthy Jewish woman from Vienna, and local Liechtenstein Nazis had already singled her out as their anti-Semitic "problem". Although Liechtenstein had no official Nazi party, a Nazi sympathy movement had been simmering for years within its National Union party. [2]

During World War II, Liechtenstein remained neutral, while family treasures within the war zone were brought to Liechtenstein (and London) for safekeeping. At the close of the conflict, Czechoslovakia and Poland, acting to seize what they considered to be German possessions, expropriated the entirety of the Liechtenstein dynasty's hereditary lands and possessions in Bohemia, Moravia, and Silesia — the princes of Liechtenstein lived in Vienna until the Anschluss of 1938. The expropriations (subject to modern legal dispute at the World Court) included over 1,600 km² (618 sq mi) of agricultural and forest land, also including several family castles and palaces. Citizens of Liechtenstein were also forbidden from entering Czechoslovakia during the Cold War. Liechtenstein gave asylum to approximately five hundred soldiers of the First Russian National Army (a collaborationist Russian force within the German Wehrmacht) at the close of World War II; this is commemorated by a monument at the border town of Hinterschellenberg which is marked on the country's tourist map. The act of granting asylum was no small matter as the country was poor and had difficulty feeding and caring for such a large group of refugees. Eventually, Argentina agreed to permanently resettle the asylum seekers. In contrast, the British repatriated the Russians who fought on the side of Germany to the USSR, and they all perished in the Gulag.

In dire financial straits following the war, the Liechtenstein dynasty often resorted to selling family artistic treasures, including for instance the priceless portrait "Ginevra de' Benci" by Leonardo da Vinci, which was purchased by the National Gallery of Art of the United States in 1967. Liechtenstein prospered, however, during the decades following, as its economy modernized with the advantage of low corporate tax rates which drew many companies to the country.

The Prince of Liechtenstein is the world's sixth wealthiest leader with an estimated wealth of USD $4 billion. The country's population enjoys one of the world's highest standards of living.

Geography Location: Central Europe, between Austria and Switzerland
Geographic coordinates: 47 16 N, 9 32 E
Map references: Europe
Area: total: 160 sq km
land: 160 sq km
water: 0 sq km
Area - comparative: about 0.9 times the size of Washington, DC
Land boundaries: total: 76 km
border countries: Austria 34.9 km, Switzerland 41.1 km
Coastline: 0 km (doubly landlocked)
Maritime claims: none (landlocked)
Climate: continental; cold, cloudy winters with frequent snow or rain; cool to moderately warm, cloudy, humid summers
Terrain: mostly mountainous (Alps) with Rhine Valley in western third
Elevation extremes: lowest point: Ruggeller Riet 430 m
highest point: Vorder-Grauspitz 2,599 m
Natural resources: hydroelectric potential, arable land
Land use: arable land: 25%
permanent crops: 0%
other: 75% (2005)
Irrigated land: NA
Natural hazards: NA
Environment - current issues: NA
Environment - international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Ozone Layer Protection, Wetlands
signed, but not ratified: Law of the Sea
Geography - note: along with Uzbekistan, one of only two doubly landlocked countries in the world; variety of microclimatic variations based on elevation
Politics

Liechtenstein's current constitution was adopted in October 1921. It established in Liechtenstein a constitutional monarchy ruled by the reigning prince of the Princely House of Liechtenstein. It also established a parliamentary system, although the reigning prince retained substantial political authority.

The reigning prince of the Princely House of Liechtenstein is the head of state and, as such, represents Liechtenstein in its international relations (although Switzerland has taken responsibility for much of Liechtenstein's diplomatic relations). The prince may veto laws adopted by the parliament. The prince can call referendums, propose new legislation, and dissolve the parliament, although dissolution of parliament may be subjected to a referendum.

Executive authority is vested in a collegial government (government) comprising the head of government (prime minister) and four government councilors (ministers). The head of government and the other ministers are appointed by the prince upon the proposal and concurrence of the parliament, thus reflecting the partisan balance of the parliament. The constitution stipulates that at least two members of the government be chosen from each of the two regions. The members of the government are collectively and individually responsible to the parliament; the parliament may ask the prince to remove an individual minister or the entire government.

Legislative authority is vested in the unicameral "Landtag" (parliament) made up of 25 members elected for maximum four-year terms according to a proportional representation formula. Fifteen members are elected from the "Oberland" (Upper Country or region) and ten members are elected from the "Unterland" (Lower Country or region). Parties must receive at least eight percent of the national vote to win seats in the parliament. The parliament proposes and approves a government, which is formally appointed by the prince. The parliament may also pass votes of no confidence against the entire government or against individual members. Additionally, the parliament elects from among its members a "Landesausschuss" (National Committee) made up of the president of the parliament and four additional members. The National Committee is charged with performing parliamentary oversight functions. The parliament can call for referendums on proposed legislation. The parliament shares the authority to propose new legislation with the prince and with the requisite number of citizens required for an initiative referendum.

Judicial authority is vested in the Regional Court at Vaduz, the Princely High Court of Appeal at Vaduz, the Princely Supreme Court, the Administrative Court, and the State Court. The State Court rules on the conformity of laws with the constitution. The State Court has five members elected by the parliament.

In March 2003, the results of a national referendum showed that nearly two-thirds of Liechtenstein's electorate agreed to vote in support of Hans-Adam II's proposal of a renewed constitution which replaced the version of 1921. The implications of the referendum, the actual changes to the governance of Liechtenstein, and the repercussions of the vote in the wider context of Europe, are yet unknown.

On 1 July 2007, the Liechtenstein Ruling Prince, H.S.H Hans-Adam II, and Liechtenstein Prime Minister, Otmar Hasler, appointed Dr. Bruce S. Allen and Mr. Leodis C. Matthews, ESQ., both in the United States of America, as the first two Honorary Consuls in history for the Principality of Liechtenstein.

People Population: 34,498 (July 2008 est.)
Age structure: 0-14 years: 16.9% (male 2,892/female 2,927)
15-64 years: 69.8% (male 11,905/female 12,180)
65 years and over: 13.3% (male 1,964/female 2,630) (2008 est.)
Median age: total: 40.5 years
male: 40 years
female: 41 years (2008 est.)
Population growth rate: 0.713% (2008 est.)
Birth rate: 9.86 births/1,000 population (2008 est.)
Death rate: 7.42 deaths/1,000 population (2008 est.)
Net migration rate: 4.7 migrant(s)/1,000 population (2008 est.)
Sex ratio: at birth: 1 male(s)/female
under 15 years: 0.99 male(s)/female
15-64 years: 0.98 male(s)/female
65 years and over: 0.75 male(s)/female
total population: 0.94 male(s)/female (2008 est.)
Infant mortality rate: total: 4.52 deaths/1,000 live births
male: 6.03 deaths/1,000 live births
female: 3 deaths/1,000 live births (2008 est.)
Life expectancy at birth: total population: 79.95 years
male: 76.38 years
female: 83.52 years (2008 est.)
Total fertility rate: 1.51 children born/woman (2008 est.)
HIV/AIDS - adult prevalence rate: NA
HIV/AIDS - people living with HIV/AIDS: NA
HIV/AIDS - deaths: NA
Nationality: noun: Liechtensteiner(s)
adjective: Liechtenstein
Ethnic groups: Alemannic 86%, Italian, Turkish, and other 14%
Religions: Roman Catholic 76.2%, Protestant 7%, unknown 10.6%, other 6.2% (June 2002)
Languages: German (official), Alemannic dialect
Literacy: definition: age 10 and over can read and write
total population: 100%
male: 100%
female: 100%
Government Country name: conventional long form: Principality of Liechtenstein
conventional short form: Liechtenstein
local long form: Fuerstentum Liechtenstein
local short form: Liechtenstein
Government type: constitutional monarchy
Capital: name: Vaduz
geographic coordinates: 47 08 N, 9 31 E
time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
Administrative divisions: 11 communes (Gemeinden, singular - Gemeinde); Balzers, Eschen, Gamprin, Mauren, Planken, Ruggell, Schaan, Schellenberg, Triesen, Triesenberg, Vaduz
Independence: 23 January 1719 (Principality of Liechtenstein established); 12 July 1806 (independence from the Holy Roman Empire)
National holiday: Assumption Day, 15 August
Constitution: 5 October 1921
Legal system: local civil and penal codes based on civil law system; accepts compulsory ICJ jurisdiction with reservations
Suffrage: 18 years of age; universal
Executive branch: chief of state: Prince HANS ADAM II (since 13 November 1989, assumed executive powers 26 August 1984); Heir Apparent Prince ALOIS, son of the monarch (born 11 June 1968); note - on 15 August 2004, HANS ADAM transferred the official duties of the ruling prince to ALOIS, but HANS ADAM retains status of chief of state
head of government: Head of Government Otmar HASLER (since 5 April 2001); Deputy Head of Government Klaus TSCHUETSCHER (since 21 April 2005)
cabinet: Cabinet elected by the Parliament, confirmed by the monarch
elections: the monarch is hereditary; following legislative elections, the leader of the majority party in the Landtag is usually appointed the head of government by the monarch and the leader of the largest minority party in the Landtag is usually appointed the deputy head of government by the monarch if there is a coalition government
Legislative branch: unicameral Parliament or Landtag (25 seats; members are elected by popular vote under proportional representation to serve four-year terms)
elections: last held 11 and 13 March 2005 (next to be held by 2009)
election results: percent of vote by party - FBP 48.7%, VU 38.2%, FL 13%; seats by party - FBP 12, VU 10, FL 3
Judicial branch: Supreme Court or Oberster Gerichtshof; Court of Appeal or Obergericht
Political parties and leaders: Patriotic Union or VU [Adolf HEEB] (was Fatherland Union); Progressive Citizens' Party or FBP [Marcus VOGT]; The Free List or FL [Claudia HEEB-FLECK and Egon MATT]
Political pressure groups and leaders: NA
International organization participation: CE, EBRD, EFTA, IAEA, ICCt, ICRM, IFRCS, Interpol, IOC, IPU, ITSO, ITU, OPCW, OSCE, PCA, UN, UNCTAD, UPU, WCL, WIPO, WTO
Diplomatic representation in the US: chief of mission: Ambassador Claudia FRITSCHE
chancery: 888 17th Street NW, Suite 1250, Washington, DC 20006
telephone: [1] (202) 331-0590
FAX: [1] (202) 331-3221
Diplomatic representation from the US: the US does not have an embassy in Liechtenstein; the US Ambassador to Switzerland is accredited to Liechtenstein
Flag description: two equal horizontal bands of blue (top) and red with a gold crown on the hoist side of the blue band
Culture

As a result of its small size Liechtenstein has been strongly affected by external cultural influences, most notably those originating in the southern German-speaking areas of Europe, including Austria, Bavaria, Switzerland, and Tyrol. The Historical Society of the Principality of Liechtenstein plays a role in preserving the culture and history of the country.

The largest museum is the Kunstmuseum Liechtenstein, an international museum of modern and contemporary art with an important international art collection. The building by the Swiss architects Morger, Degelo and Kerez is a landmark in Vaduz. It was completed in November 2000 and forms a “black box” of tinted concrete and black basalt stone. The museum collection is also the national art collection of Liechtenstein.

The other important museum is the Liechtenstein National Museum (Liechtensteinisches Landesmuseum) showing permanent exhibition on the cultural and natural history of Liechtenstein as well as special exhibitions. There are also a Stamp and a Ski Museum.

The most famous historical sites are Vaduz Castle, Gutenberg Castle, the Red House and the ruins of Schellenberg.

Music and theatre are an important part of the culture. There are numerous music organisations such as the Liechtenstein Musical Company, the annual Guitar Days and the International Josef Gabriel Rheinberger Society; and two main theatres.

The Private Art Collection of the Prince of Liechtenstein, one of the world's leading private art collections, is shown at the Liechtenstein Museum in Vienna.

Economy Economy - overview: 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.
GDP (purchasing power parity): $1.786 billion (2001 est.)
GDP (official exchange rate): $36.33 billion (2007 est.)
GDP - real growth rate: 11% (1999 est.)
GDP - per capita (PPP): $25,000 (1999 est.)
GDP - composition by sector: agriculture: 7%
industry: 42%
services: 51% (2005)
Labor force: 29,500 of whom 13,900 commute from Austria, Switzerland, and Germany to work each day (31 December 2001)
Labor force - by occupation: agriculture: 2.1%
industry: 43.9%
services: 54% (2005)
Unemployment rate: 1.3% (September 2002)
Population below poverty line: NA%
Household income or consumption by percentage share: lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 1% (2001)
Budget: revenues: $424.2 million
expenditures: $414.1 million (1998 est.)
Agriculture - products: wheat, barley, corn, potatoes; livestock, dairy products
Industries: electronics, metal manufacturing, dental products, ceramics, pharmaceuticals, food products, precision instruments, tourism, optical instruments
Industrial production growth rate: NA%
Exports: $2.47 billion (1996)
Exports - commodities: small specialty machinery, connectors for audio and video, parts for motor vehicles, dental products, hardware, prepared foodstuffs, electronic equipment, optical products
Exports - partners: EU 62.6% (Germany 24.3%, Austria 9.5%, France 8.9%, Italy 6.6%, UK 4.6%), US 18.9%, Switzerland 15.7% (2006)
Imports: $917.3 million (1996)
Imports - commodities: agricultural products, raw materials, energy products, machinery, metal goods, textiles, foodstuffs, motor vehicles
Imports - partners: EU, Switzerland (2006)
Debt - external: $0 (2001)
Market value of publicly traded shares: $NA
Currency (code): Swiss franc (CHF)
Currency code: CHF
Exchange rates: Swiss francs per US dollar - 1.1973 (2007), 1.2539 (2006), 1.2452 (2005), 1.2435 (2004), 1.3467 (2003)
Fiscal year: calendar year
Communications Telephones - main lines in use: 20,000 (2005)
Telephones - mobile cellular: 27,500 (2005)
Telephone system: general assessment: automatic telephone system
domestic: NA
international: country code - 423; linked to Swiss networks by cable and microwave radio relay
Radio broadcast stations: AM 0, FM 4, shortwave 0 (1998)
Radios: 21,000 (1997)
Television broadcast stations: NA (linked to Swiss networks) (1997)
Televisions: 12,000 (1997)
Internet country code: .li
Internet hosts: 4,753 (2007)
Internet Service Providers (ISPs): 44 (Liechtenstein and Switzerland) (2000)
Internet users: 22,000 (2006)
Transportation Pipelines: gas 20 km (2007)
Railways: 9 km 1.435-m gauge (electrified)
note: belongs to the Austrian Railway System connecting Austria and Switzerland (2006)
Roadways: total: 380 km
paved: 380 km (2006)
Waterways: 28 km (2006)
Military Military branches: no regular military forces (constitutionally prohibited)
Manpower available for military service: males age 18-49: 7,736 (2005 est.)
Manpower fit for military service: males age 18-49: 6,250 (2005 est.)
Manpower reaching military service age annually: males age 18-49: 208 (2005 est.)
Military - note: Liechtenstein has no military forces, but is interested in European security policy and is an active member of the Organization for Security and Cooperation in Europe (OSCE)
Transnational Issues Disputes - international: none
Illicit drugs: has strengthened money laundering controls, but money laundering remains a concern due to Liechtenstein's sophisticated offshore financial services sector