LIECHTENSTEIN

Principality of Liechtenstein

Fürstentum Liechtenstein

CAPITAL: Vaduz

FLAG: The national flag is divided into two horizontal rectangles, blue above red. On the blue rectangle, near the hoist, is the princely crown in gold.

ANTHEM: Oben am jungen Rhein (On the Banks of the Young Rhine).

MONETARY UNIT: The Swiss franc (SwFr) of 100 centimes, or rappen, has been in use since February 1921. There are coins of 1, 5, 10, 20, and 50 centimes and 1, 2, and 5 francs, and notes of 10, 20, 50, 100, 500, and 1,000 francs. SwFr1 = $0.80418 (or $1 = SwFr1.2435; as of 2004).

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; Epiphany, 6 January; Candlemas, 2 February; St. Joseph's Day, 19 March; Labor Day, 1 May; Assumption, 15 August; Nativity of Our Lady, 8 September; All Saints' Day, 1 November; Immaculate Conception, 8 December; Christmas, 25 December; St. Stephen's Day, 26 December. Movable religious holidays include Good Friday, Easter Monday, Ascension, Whitmonday, and Corpus Christi.

TIME: 1 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Liechtenstein, roughly triangular in shape, is a landlocked country situated in the Rhine River Valley. The fourth-smallest country in Europe, it is bordered by the Austrian province of Vorarlberg to the n and e, the Swiss canton of Graubünden to the s, and the Rhine River and the Swiss canton of St. Gallen to the w, with a total boundary length of 76 km (47 mi).

The principality has an area of 160 sq km (62 sq mi) and extends 24.5 km (15.2 mi) n–s and 9.4 km (5.8 mi) e–w. Comparatively, the area occupied by Liechtenstein is about 0.9 times the size of Washington, DC.

Liechtenstein's capital city, Vaduz, is located in the western part of the country.

TOPOGRAPHY

Liechtenstein is divided into a comparatively narrow area of level land bordering the right bank of the Rhine River and an upland and mountainous region occupying the remainder of the country; the level land occupies about two-fifths of the total surface area. The greatest elevation, Grauspitz (2,599 m/8,527 ft), is in the south, in a spur of the Rhaetian Alps.

CLIMATE

Climatic conditions in Liechtenstein are less severe than might be expected from its elevated terrain and inland situation; the mitigating factor is a warm south wind called the Föhn. The annual lowland temperature varies between -4.5°c (24°f) in January and 19.9°c (68°f) in July. Late frost and prolonged dry periods are rare. Average annual precipitation is 105 cm (41 in).

FLORA AND FAUNA

The natural plant and animal life of Liechtenstein displays a considerable variety because of the marked differences in altitude. A number of orchid species are able to grow because of the warmth carried by the Föhn. In the higher mountain reaches are such alpine plants as gentian, alpine rose, and edelweiss. Common trees include the red beech, sycamore, maple, alder, larch, and various conifers. Indigenous mammals include the deer, fox, badger, and chamois. Birds, including ravens and eagles, number about 120 species.

ENVIRONMENT

The Nature Conservation Act, adopted in 1933, was the nation's first major piece of environmental legislation; the Water Conservation Act dates from 1957, and air pollution laws were passed in 1973 and 1974. All wastewater is purified before being discharged into the Rhine. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included two types of mammals, one species of bird, and five species of invertebrates. Threatened species include the great horned owl, the Eurasian beaver, the hermit beetle, and the Apollo butterfly.

POPULATION

The population of Liechtenstein in 2005 was estimated by the United Nations (UN) at 35,000, which placed it at number 187 in population among the 193 nations of the world. In 2005, approximately 11% of the population was over 65 years of age, with another 18% of the population under 15 years of age. According to the UN, the annual population rate of change for 2005–10 was expected to be 0.4%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 40,000. The population density was 219 per sq km (567 per sq mi), with the population heavily concentrated in the Rhine Valley, in which the two largest communities, Vaduz and Schaan, are located.

The UN estimated that 21% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 1.51%. The capital city, Vaduz, had a population of 5,000 in that year.

MIGRATION

There were 12,000 foreign residents in Liechtenstein in 2000, comprising approximately one-third of the total population. Moreover, about 6,885 Austrians and Swiss commute to Liechtenstein daily. Several hundred Italian, Greek, and Spanish workers have migrated to the principality on a semipermanent basis. In 1998 and 1999, Liechtenstein accepted a high number of Kosovo Albanian asylum seekers, granting them temporary protection. The number of asylum seekers and people under temporary protection comprised nearly 2% of the overall population of Liechtenstein in 1999. In 2004 there were 149 refugees and 68 asylum seekers. The estimated net migration rate in 2005 was 4.8 migrants per 1,000 population. The government views the migration levels as satisfactory.

ETHNIC GROUPS

The indigenous population, accounting for 86% of the total population, is described as being chiefly of Alemannic stock, descendants of the German-speaking tribes that settled between the Main and Danube rivers. Italian, Turkish, and various other groups account for the remaining 14%.

LANGUAGES

German is the official language. The population speaks an Alemannic dialect.

RELIGIONS

The state religion is Roman Catholicism, to which about 78% of the population adhere; however, absolute freedom of worship prevails. About 0.07% of the population are Protestants and 0.04% are Muslims. The Eastern Orthodox Church has about 254 members. Buddhists, Jehovah's Witnesses, Anglicans, Jews, Baha'is and New Apostolics each have less than 80 members.

TRANSPORTATION

The line of the Arlberg express (Paris to Vienna) passes through Liechtenstein at Schaan-Vaduz, extending for 18.5 km (11.5 mi), but few international trains stop. The main center for reaching Liechtenstein is Buchs, Switzerland, about 8 km (5 mi) from Vaduz.

Postal buses are the chief means of public transportation both within the country and to Austria and Switzerland. A tunnel, 740 m (2,428 ft) in length, connects the Samina River Valley with the Rhine River Valley.

In 2002, there were some 250 km (155 mi) of paved roadways. A major highway runs through the principality, linking Austria and Switzerland.

The nearest airport is in Zürich, Switzerland. As of 2004, the country had 28 km (17 mi) of navigable waterways.

HISTORY

The territory now occupied by the Principality of Liechtenstein first acquired a political identity with the formation of the sub-country of Lower Rhaetia after the death of Charlemagne in 814. The County of Vaduz was formally established in 1342 and became a direct dependency of the Holy Roman Empire in 1396. The area (to which, in 1434, was added the Lordship of Schellenberg, in the north) was ruled in turn by various families, such as the counts of Montfort, von Brandis, van Sulz, and von Hohenems.

During the Thirty Years' War (1618–48), the area was invaded first by Austrian troops and then, in 1647, by the Swedes. After the von Hohenems line encountered financial difficulty, Prince Johann Adam of Liechtenstein purchased from them first Schellenberg (1699) and then Vaduz (1712). The Liechtenstein family thus added to its vast holdings in Austria and adjoining territories.

The Principality of Liechtenstein as such was created on 23 January 1719 by act of Holy Roman Emperor Charles VI, who made it a direct fief of the crown and confirmed the rule of Prince Anton-Florian, Johann Adam's successor, under the title of Prince von und zu Liechtenstein.

During the Napoleonic wars, Liechtenstein was invaded by both the French and the Russians. Following the Treaty of Pressburg (1805), Liechtenstein joined the Confederation of the Rhine, which made the principality a sovereign state. In 1815, following the downfall of Napoleon, Liechtenstein joined the newly formed Germanic Confederation.

With Prussia's victory over Austria in the Seven Weeks' War (1866), the Confederation was dissolved and the constitutional ties of Liechtenstein to other German states came to an end. In the war, Liechtenstein had furnished Austria-Hungary with 80 soldiers; two years later, the principality disbanded its military force for all time.

From 1852, when the first treaty establishing a customs union was signed, until the end of World War I, Liechtenstein was closely tied economically to Austria. After the war, the collapse of the Austrian currency and economy inclined the principality to seek economic partnership with its other neighbor, Switzerland. A treaty concluded with Switzerland in 1923 provided for a customs union and the use of Swiss currency.

Liechtenstein (like Switzerland) remained neutral in World War II, as it had in World War I. After Germany was defeated in 1945, Nazi sympathizers in Liechtenstein who had supported incorporation of the principality into Hitler's Third Reich were prosecuted and sentenced. The postwar decades have been marked by political stability and outstanding economic growth.

Prince Franz Josef II, who succeeded his granduncle, Franz I, in 1938, was the first reigning monarch actually to reside in Liechtenstein. On 26 August 1984, Franz Josef II handed over executive authority to his eldest son and heir, Crown Prince Hans-Adam. Hans-Adam II has been ruling prince since 13 November 1989, after Franz Josef II died.

Liechtenstein has sought further integration into the world community. The country was admitted to the UN in September 1991. In Europe, Liechtenstein joined EFTA in 1991 and became a member of the European Economic Area (EEA) in 1995.

Disagreements between Prince Hans-Adam II and parliament arose in the latter half of 1999. In September, the prince's assertion that he had the right to dissolve the government at his discretion raised tensions to the point where Hans-Adam threatened to go into exile in Austria. In October, the European Court of Human Rights ruled on a complaint filed by Dr. Herbert Wille, a senior judge whom the prince had refused to re-appoint because of Wille's assertion that the country's Supreme Court rather than its monarch should be the ultimate authority on constitutional issues. The court ruled that in depriving Wille of his judicial position because of his political views, the prince had violated the judge's freedom of speech. Wille was awarded 10,000 Swiss francs in compensation as well as payment of his legal costs.

Sixty-four percent of Liechtenstein's voters approved a new constitution for Liechtenstein in a referendum held in March 2003; Hans-Adam II will be granted near-absolute powers. Turnout was large, with 14,800 of Liechtenstein's 17,000 electorate casting votes. The prince now has the right to dissolve government, control a committee appointing judges, and has veto power over legislation. The constitution also gives the people the power to call a referendum and abolish the monarchy. As a result of the changes, which many observers deemed undemocratic, Prince Hans-Adam II rescinded his pledge to leave the country. On 15 August 2004 Prince Hans-Adam II transferred the official duties of the ruling prince to his son and heir apparent, Alois, who was seen as less confrontational than his father. Prince Hans-Adam II retained the status of Chief of State.

Liechtenstein ranks as one of the world's most prosperous countries with one of the world's highest living standards while its people pay very low taxes. In 1999, the royal family itself was ranked as the wealthiest in all of Europe while Prince Hans-Adam II personally was ranked as Europe's third-wealthiest monarch. However, in 2000 Liechtenstein ranked among the top 15 countries named by an international task force investigating countries whose banking laws make money laundering possible. Liechtenstein took steps in 2001 to make its banking system more transparent, however a 2003 International Monetary Fund report concluded that although the banking sector had updated its banking regulation, there were not enough staff to fully enforce the regulations.

GOVERNMENT

Liechtenstein is a constitutional monarchy ruled by the hereditary princes of the house of Liechtenstein. The monarchy is hereditary in the male line. The constitution of 5 October 1921, as amended in 1987, provides for a unicameral parliament (Landtag) of 25 members elected for four years. Election is by universal suffrage at age 18 and is on the basis of proportional representation. Women gained the right to vote in 1984. A new voting system that went into effect as of the 1974 national elections provides nine representatives for the Upper Land district and six representatives for the Lower Land district.

A new constitution was approved in March 2003 that grants the ruling prince extensive powers, including the right to veto legislation and to control the appointment of judges, in addition to the rights guaranteed to him under the former constitution.

The prince can call and dismiss the Landtag. On parliamentary recommendation, he appoints the prime minister, who must be of Liechtenstein birth, and the deputy prime minister for four-year terms. It is the regular practice for the prime minister to be of the majority party and the deputy prime minister to be selected from the opposition. The Landtag appoints four councilors for four-year terms to assist in administration. Any group of 1,000 persons or any three communes may propose legislation. Bills passed by the Landtag may be submitted to popular referendum. A law is valid when it receives majority approval by the Landtag and the prince's signed concurrence.

POLITICAL PARTIES

The two principal parties are the Fatherland Union (Vaterländische Union—VU) and the Progressive Citizens' Party (Fortschrittliche Bürgerpartei—FBP). In the general elections of 1997, the VU, which has held a majority since 1978, won 13 seats in the Landtag and the FBP 10. Other parties included the Free List (Freie Liste—FL), two seats; and the Liechtenstein Non-party List (Uberparteilische Liste Liechtensteins—ULL), which was not represented.

The general elections in 1993 resulted in a coalition government headed by Mario Frick of the Fatherland Union (VU). Frick was reelected as prime minister by the Landtag in 1997. Although the VU remains the largest single party, Liechtenstein had a coalition government from 1938 until 1997.

In the 2001 elections, the FBP won 49.9% of the vote and 13 seats in the Landtag, to the VU's 41.1% and 11 seats. The Free List (Greens) won 8.8% of the vote and 1 seat. Otmar Hasler was named prime minister. It was the first time since 1978 that the FBP held a majority in parliament. The 2005 elections saw the FBP retaining power with 48.7% of the vote and 12 seats, to the VU's 38.2% and 10 seats. The minority party Free List increased their following with 13% of the vote and 3 seats. The next elections were scheduled for 2009.

LOCAL GOVERNMENT

The 11 communes (gemeinden) are fully independent administrative bodies within the laws of the principality. They levy their own taxes. Liechtenstein is divided into two districts—the Upper Land (Vaduz) and the Lower Land (Schellenberg)—for purposes of national elections.

JUDICIAL SYSTEM

The principality has its own civil and penal codes, although in certain instances courts composed of Liechtenstein, Swiss, and Austrian judges have jurisdiction over Liechtenstein cases. Courts that function under sole Liechtenstein jurisdiction are the county court (Landgericht), presided over by one judge, which decides minor civil cases and summary criminal offenses; the juvenile court; and the Schöffengericht, a court for misdemeanors. The remaining courts, with five judges each, have a mixed composition for purposes of impartiality: three Liechtenstein lay judges, one Swiss judge, and one Austrian judge. The criminal court (Kriminalgericht) is for major crimes. Other courts of mixed jurisdiction are the assize court (Schöffengericht-Vergehen), the superior court (Obergericht), and a supreme court (Oberster Gerichtshof). An administrative court of appeal hears appeals from government actions, and the Constitutional Court determines the constitutionality of laws. In June 1986, Liechtenstein adopted a new penal code abolishing the death penalty.

The constitution provides for public trials and judicial appeal. The judiciary is separate from the executive and legislative branches. The 2003 referendum gave the prince the ultimate right to control the appointment of the country's judges.

The constitution provides for freedom of assembly, association and religion. Crime is rare and Switzerland is responsible for Liechtenstein's defense. Liechtenstein retains a restrictive law on the availability of abortion, and is allowable only when the life or health of a woman is threatened.

ARMED FORCES

Since 1868, no military forces have been maintained in Liechtenstein, but there is obligatory military service for able-bodied men up to 60 years of age in case of emergency.

INTERNATIONAL COOPERATION

Liechtenstein became a member of the United Nations on 18 September 1990; it belongs to the IAEA, ITU, UNCTAD, UPU, and WIPO. Liechtenstein is also a member of the Council of Europe, the European Bank for Reconstruction and Development, EFTA, the OSCE, and the WTO. The principality joined the European Economic Area in 1995. Liechtenstein now has diplomatic relations with nearly 50 countries. In environmental cooperation, the country is part of the Basel Convention, Conventions on Biological Diversity and Air Pollution, Ramsar, CITES, the Kyoto Protocol, the Montréal Protocol, and the UN Conventions on Climate Change and Desertification.

ECONOMY

Despite its small size and limited national resources, Liechtenstein is one of the richest countries in the world on a per capita GDP basis. It has developed since the 1940s from a mainly agricultural to an industrialized country and a prosperous center of trade and tourism. Factories produce a wide range of high-technology manufactures, especially precision instruments. Liechtenstein is also a world leader in specialized dental products. Industrial products are manufactured almost exclusively for export.

Special economic advantages enjoyed by very small nations of Europe (e.g., the issuance of new postage stamps, free exchange of currencies, and liberal laws that provide incentives for the establishment of bank deposits and of nominal foreign business headquarters) also play a part in this prosperity.

In 1999 Liechtenstein became the subject of an international investigation into money laundering. Although Liechtenstein subsequently drafted legislation to combat money laundering, the Finance Action Task Force placed the principality on the international "black list" for failing to cooperate with international authorities on the matter.

About 35% of the people employed in Liechtenstein commute from Switzerland and Austria. Liechtenstein remains a well-known tax haven, and a location for holding companies to establish nominal offices; these provide for 30% of state revenues. The country has no central bank and does not print its own currency, but uses the Swiss franc instead. Liechtenstein is engaged in harmonizing its economic policies with those of the EU.

In 1999, its GDP (at purchasing power parity) was $825 million, an 11% improvement over the previous year. In 2002, the unemployment rate for the country's 10,000 domestic workers was 1.3%. More than 19,000 workers commute to Liechtenstein from neighboring countries—Austria, Switzerland, and Germany.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Liechtenstein's gross domestic product (GDP) was estimated at $825.0 million. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $25,000. The annual growth rate of GDP was estimated at 11%. The average inflation rate in 2001 was 1%.

LABOR

As of end 2001 (the latest year for which data was available), there were 29,000 persons in the labor force, including 19,000 foreigners, of whom 13,000 commuted to work from Switzerland, Germany and Austria. As of that date, 1.3% of the workforce were in the agricultural sector, with industry accounting for 47.4% and the services sector 51.3%. Liechtenstein's workforce is highly skilled, but there are not enough native-born workers to meet industry's needs. Unemployment as of September 2002 was 1.3%.

All workers, including foreigners, are entitled to form and join unions. There is one trade union that represents about 13% of the workforce. Strikes are permitted but are not generally used. Most collective bargaining agreements are adapted from ones signed between Swiss workers and employers.

There is no minimum wage, although wages are among the highest in the world. The legal workweek is 45 hours in the industrial sector and 48 hours in nonindustrial firms. The actual workweek is usually 40 to 43 hours. Occupational safety and health standards are set by the government and are rigorously enforced. The minimum working age is 16, but exceptions to this may be made for children wishing to leave school at the age of 14.

AGRICULTURE

Liechtenstein has only 912 hectares (2,254 acres) of arable land. Until the end of World War II (1939–45), the economy was primarily focused on agriculture. In the Rhine Valley, the most productive area, the chief vegetables are corn, potatoes, and garden produce. On gradual mountain slopes, a variety of grapes and orchard fruits are grown.

ANIMAL HUSBANDRY

Alpine pasture, particularly well suited for cattle grazing, covers over 35% of the total land area.

In 2005, cattle numbered about 6,000; hogs, 3,000; and sheep, 2,900.

FISHING

There is no commercial fishing in Liechtenstein. Rivers and brooks are stocked for sport fishing.

FORESTRY

The forests of Liechtenstein not only supply wood but also have an important function in preventing erosion, landslides, and floods. Forests cover about 7,000 hectares (17,200 acres).

More than 90% of all forestland is publicly owned; of the 474 hectares (1,171 acres) of private forest, 158 hectares (390 acres) are the property of the prince. The most common trees are spruce, fir, beech, and pine. Roundwood production in 2004 amounted to 22,167 cu m (782,820 cu ft).

MINING

There was no mining of commercial importance.

ENERGY AND POWER

The first Liechtenstein power station went into operation in 1927; its capacity is now 900 kW. Another station was constructed in 1947–49; it has an installed capacity of 9,600 kW. Total installed capacity in 1989 was 23,000 kW; production amounted to 150 million kWh in 1995. Since domestic production no longer meets local requirements, supplementary energy is imported from Switzerland, especially in winter. In 1995, 92.5% of Liechtenstein's energy requirement was imported from abroad. Consumption of electricity in 2001 was 313.5 million kWh. Imports of electricity in the same year totaled 232.8 million kWh.

INDUSTRY

The industry of Liechtenstein, limited by shortages of raw materials, is primarily devoted to small-scale production of precision manufactures. The output includes optical lenses, dental products, high-vacuum pumps, heating equipment, electron microscopes, electronic measuring and control devices, steel bolts, knitting machines, and textiles. Pharmaceuticals, electronics, ceramics, and metal manufacturing are also important. The largest industrial companies in Liechtenstein are Hilti (construction services), Balzers (electro-optical coatings), Hilcona (frozen foods), and Ivoclar-Vivadent (dental medical technology). Liechtenstein's industry is completely geared to exports; industrial exports rose from SwFr196.7 million in 1967 to SwFr3.0 billion in 1996. Around 48% of the labor force is engaged in industry, trade, and construction.

In 1999, industry made up approximately 40% of the overall GDP. By 2004, this share fell to 26.4%. Trade and services are the main contributors to the economy, with a 71.6% share.

SCIENCE AND TECHNOLOGY

Like Swiss industry, manufacturing in Liechtenstein entails a high degree of precision and technological sophistication. Balzers, the country's second-largest employer, is known for its leading role in providing equipment and thin film technology for the CD-ROM industry. Liechtenstein itself has no educational institutions offering advanced scientific training. The Liechtensteinische Gesell-schaft für Umweltschutz, founded in 1973, is concerned with environmental protection.

DOMESTIC TRADE

Liechtenstein and Switzerland are essentially linked in one common economic zone. The domestic economy is largely based on industry and financial services. The primary product industries are electronics, metal manufacturing, and medical precision instruments. About 48% of the work force are foreigners, with 29% commuting from Switzerland and Austria. Vaduz and Schaan, the chief commercial centers, have some specialty shops, but the smaller communities have only general stores. Regular business hours are generally from 8 am to 6:30 pm. Normal banking hours are from 8:15 am to noon and from 1:30 pm to 4 or 5 pm, Monday through Friday.

FOREIGN TRADE

Goods to and from Liechtenstein pass freely across the frontier with Switzerland, with which Liechtenstein maintains a customs union. Exports in the mid-1990s averaged SwFr2,021,800 per year, as compared with SwFr893,385,000 in 1980. Exports in 1994 were valued at $2.6 billion. Some 40% of exports in 1996 went to EEA countries.

Important exports include precision instruments, ceramics, textiles, and pharmaceuticals. Liechtenstein imports mainly raw materials, light machinery, and processed foods. In the mid-1990s, imports averaged SwFr1,074,600,000 per year.

In 2003, Liechtenstein's exports reached $3.6 billion. Most of these exports went to the EU and Switzerland. The principal export commodities were construction techniques, electronic products, car parts, dental products, and processed agricultural products.

BALANCE OF PAYMENTS

The US Central Intelligence Agency (CIA) reported that in 1996 the purchasing power parity of Liechtenstein's exports was $2.47 billion while imports totaled $917.3 million resulting in a trade surplus of $1.5527 billion.

BANKING AND SECURITIES

Although there is a national bank, the duties of the central bank are performed by the Swiss National Bank, a consequence of the currency union with Switzerland. Liechtenstein's banks form an important part of the economy, and they have experienced significant growth in the 1990s. An estimated 4% of the work force was employed by the banking sector in the 1990s.

The National Bank of Liechtenstein (Liechtensteinische Landesbank), founded in 1861, is the state bank of issue; in addition, it deals in real estate mortgages and ordinary banking operations. Liechtenstein Global Trust (LGT), the country's biggest financial institution (owned by the royal family), and the Private Trust Bank Corp., founded in 1956, play an important role in the finance and credit spheres of Liechtenstein's economy. Banking is linked with the Swiss banking system, as is securities trading. In 1945, Liechtenstein's banks had a combined balance sheet of SwFr38 million; in 2003, it was SwFr120 billion, an astonishing SwFr3.6 million for every person in the country. Net income from Liechtenstein's banks totaled SwFr232.5 million in 1996, and contributed over 12% to the country's national income in terms of taxes and dividends paid.

Because of Liechtenstein's strict bank secrecy, several thousand foreign businesses are nominally headquartered there. The secrecy laws are, however, waived in the case of criminal intent. There are at present no restrictions on foreign investors' access to financing in Liechtenstein. New laws to combat insider trading and money laundering have recently tightened fiduciary regulations.

INSURANCE

Insurance activities in Liechtenstein are variously conducted by the government (old age and survivors' insurance), by private companies under government regulation (e.g., life, accident, health, and fire), and by farmers' associations. In 1996, a new insurance law came into force, focusing on attracting insurance business from abroad, as Liechtenstein is now a member of the European Economic Area.

PUBLIC FINANCE

Liechtenstein's economy has experienced more extensive development and industrialization in the past 40 years than any other Western country. In that period, it went from a predominantly agricultural economy to a highly advanced industry-driven economy.

The US Central Intelligence Agency (CIA) estimated that in 1998 Liechtenstein's central government took in revenues of approximately $424.2 million and had expenditures of $414.1 million. Revenues minus expenditures totaled approximately $10.1 million.

TAXATION

The main taxes are levied on personal income, business income, and principal. Personal income tax rates are determined by taxable income and taxable wealth. The basic tax rate is 1.2% on income and 0.06% on wealth. However, the communes levy a communal tax of 200%, which brings the combined tax rates to 17.82% on income and 0.89% on wealth. In addition, a surcharge is levied on the basic tax on income and wealth at rates ranging from 5–395%. Thus, the totals of basic tax, communal tax, and surcharges results in the national tax due. Corporations pay income tax at a rate of 7.5–15%. However, if the company's distributed dividends exceed 8% of taxable capital, an increase of 1–5% is added, based upon the dividend distribution percentage, which can push the maximum rate to 20%. Dividends and interest are subject to a 4% withholding tax. Royalty income is not taxed.

Other levies include a capital gains tax on the sale of real estate; death, estate, and gift duties; a motor vehicle registration tax; and a value-added tax (VAT) on goods and services within Liechtenstein and Switzerland at a standard rate of 7.5%.

Firms domiciled in Liechtenstein but conducting no gainful pursuits there benefit from extremely favorable tax arrangements, a prime factor in the establishment of nominal business headquarters. Foreign clients pay 1% per year in capital taxes; and only 0.5% for foundations with taxable assets exceeding SwFr10 million. The communes may impose property and income taxes.

Since joining the European Economic Area in 1995, Liechtenstein has not entered into any agreements covering double taxation, except for Austria.

CUSTOMS AND DUTIES

There have been no customs between Switzerland and Liechtenstein since a customs treaty was ratified in 1924. On the Austrian border, Switzerland collects the customs at its own rates. Liechtenstein's part of the duties is calculated on the basis of population and the principality pays an annual indemnification to Switzerland for customs and administration.

FOREIGN INVESTMENT

The Prince of Liechtenstein Foundation has established a number of ventures abroad, mainly in the field of investment management and counseling.

Several thousand foreign companies have established offices in Liechtenstein because taxes are very low, banking operates in strict secrecy, and the principality is politically stable. Some industrial establishments are owned and managed by Swiss interests.

ECONOMIC DEVELOPMENT

The government generally encourages the increasing diversification of industry and the development of tourism. The principality's low taxes and highly secret banking system are attractive to foreign corporations wanting to safeguard patents and trademarks and to individuals who want to protect their wealth for the future. Thousands of corporations have established nominal headquarters in Liechtenstein. In recent years, the principality is accused of serving as a center for money laundering. In 2002, the International Monetary Fund (IMF) conducted an Offshore Financial Center (OFC) Assessment of Liechtenstein, to evaluate the regulation and monitoring of the country's financial center. The IMF approved of Liechtenstein's efforts to fight money laundering and the financing of international terrorism, and of its planned establishment of an independent supervisory authority.

Research and development is a driving force of Liechtenstein's economic success; in 2000, total research and development spending rose over 20% to around $149 million. Also, the industrial sector is diversified and dynamic, serving mostly niche markets outside the country. The relative attractive tax base keeps some of the more prominent companies (Hilti and Unaxis Balzers) in the country, and the low public spending costs (Liechtenstein has no army, no university, and no major medical clinics) keep the federal budget on a surplus. Export income per capita outweighs that of Germany by more than 10 times.

SOCIAL DEVELOPMENT

There is a universal pension system covering all residents, employed persons, and self-employed individuals. It is funded primarily by the government along with contributions from employees and employers. It provides benefits for old age, disability, and survivorship. A social insurance system and universal medical coverage provides sickness and maternity benefits. All residents and persons employed in Liechtenstein are entitled to medical coverage. Work injury and unemployment insurance are provided to all employed persons. There is a family allowance based on number of children and a birth grant provided to all residents and nonresident workers.

Equality for women is protected by law, and several groups monitor and promote women's rights. An equal opportunity law addresses workplace discrimination and sexual harassment. In 2004 the government-sponsored mentoring classes to inspire women to run for seats in parliament. Domestic violence laws have been enacted and are actively implemented. Human rights are fully respected in Liechtenstein.

HEALTH

The government regulates the practice of medicine and subsidiary occupations, such as nursing and pharmacy. Life expectancy in 2005 was about 79.55 years. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 11.2 and 6.8 per 1,000 people. The infant mortality rate was an estimated 4.7 per 1,000 births in 2005.

In 2000, Liechtenstein had an estimated 2.5 physicians per 1,000 people. There were approximately 8.3 hospital beds per 1,000 people. A program of preventive medicine, introduced in 1976, provides regular examinations for children up to the age of 10.

HOUSING

Houses in the countryside are similar to those found in the mountainous areas of Austria and Switzerland. Liechtenstein does not have a significant housing problem. About 82% of all dwellings have central heating, 89% have a kitchen, 91% have a private bath, 95% have hot water, and 88% have a common sewage system.

EDUCATION

Education is based on Roman Catholic principles and is under government supervision. In 1974, the compulsory primary school attendance period was lowered from eight years to five, beginning at age seven. Kindergarten, offered to children ages five to seven, is optional, followed by five compulsory years of primary school. Secondary education is divided into three tracks: oberschule (general); realschule (which offers vocational and, in some cases, university preparatory education), and gymnasium (which provides an eight-year program to prepare students for a university education, with concentrations in either the classics and humanities or economics and mathematics). Liechtenstein also has an evening technical school, a music school, and a children's pedagogic-welfare day school.

While there are no universities in Liechtenstein, gymnasium graduates are may attend universities in Switzerland and Austria and the University of Tubingen in Germany without passing an examination.

LIBRARIES AND MUSEUMS

The National Library (founded in 1961) serves as the public, academic, and national library. It is located in Vaduz and has over 200,000 volumes. There are three specialized libraries maintained by private institutes, and a small library attached to a state music school.

The National Museum, located in Vaduz, includes collections from the Prince and the State, containing an important Rubens collection. The Prince Liechtenstein Art Gallery, founded in 1620 and located in Vaduz, is an important cultural institution in Liechtenstein. The museum is housed upstairs in the tourist information office. Also in the capital are a postage museum and a state historical museum. A ski museum opened in Vaduz in 1994, and there are also museums in Schaan, Schellenberg, and Triesenberg.

MEDIA

The post office (including telegraph and telephone services) is administered by Switzerland. Liechtenstein, however, issues its own postage stamps. The Swiss dial system extends to the principality. Direct-dialing is used throughout the country and includes international service. In 2002, there were 19,900 mainline phones and 11,400 mobile phones in use throughout the country. Telegraph service is efficient.

As of 2001, there were one state and one private television station broadcast, along with a private radio station. Residents also receive radio and television broadcasts from neighboring countries. In 1997 there were 21,000 radios and 12,000 television sets in the country. In 2002, there were 20,000 Internet subscribers in the country.

Two daily newspapers are published. The Liechtensteiner Volksblatt reflects the political outlook of the Progressive Citizen's Party. It had a circulation of about 8,200 in 2002. The Liechtensteiner Vaterland reflects the views of the Fatherland Union. It had a circulation of about 9,580 in the same year. Liechtensteiner Wochenzeitung, a weekly, had a circulation of 14,000.

The media is said to enjoy a large degree of autonomy and freedom from interference, owing to an independent press, an effective judiciary, and a democratic political system.

ORGANIZATIONS

Organizations include the Chamber of Industry and Commerce, the Historical Society of the Principality of Liechtenstein, three concert societies, and various other cultural organizations. There are professional organizations representing several fields and occupations. Kiwanis and Lion's clubs are active in the country. Charitable institutions include the Liechtenstein Caritas Society (founded in 1924) and the Liechtenstein Red Cross Society (1945). Youth organizations include the Scouts and Guides of Liechtenstein. There are also several organizations devoted to sports and leisure activities.

TOURISM, TRAVEL, AND RECREATION

Attractions include mountaineering and nature walks, the castles of Vaduz and Gutenberg (overlooking Balzers), the ruins of several fortresses, the numerous local brass bands and choirs, as well as the operetta societies of Vaduz and Balzers. The most popular sports are swimming, golf, tennis, hiking, and skiing. The ski resort of Malbun has 12 hotels and 7 ski lifts.

Modern, comfortable buses offer regular service throughout Liechtenstein, connecting with Austria and Switzerland. In Vaduz, the lower country, and the Alpine regions there are hotels and guest houses.

The government actively encourages and supports the tourism industry. In 2003, there were 49,002 visitors, mainly from Luxembourg and Switzerland. Hotel rooms numbered 591 with 1,160 beds and an occupancy rate of 25%. The average length of stay that year was two nights.

FAMOUS LIECHTENSTEINERS

Joseph Rheinberger (1839–1901), an organist and composer who lived in Munich, was the teacher of many famous composers. Prince John II (r. 1858–1929) was admired for donating some SwFr 75 million to the struggling country after World War I. Prince Franz Josef II (1906–89), whose rule began in 1938, was Europe's longest-reigning sovereign. Liechtenstein's current monarch is Prince Hans Adam II (b.1945), who first was given executive power in 1984 and assumed control in 1989. Prince Alois (b.1968) is regent.

In 1980, Hanni Wenzel (b.1956) and her brother Andreas (b.1958) won the World Cup international skiing championships.

DEPENDENCIES

Liechtenstein has no territories or colonies.

BIBLIOGRAPHY

Annesley, Claire (ed.). A Political and Economic Dictionary of Western Europe. Philadelphia: Routledge/Taylor and Francis, 2005.

Beattie, David. Liechtenstein: A Modern History. New York: I.B. Tauris, 2004.

Duursma, Jorri. Self-Determination, Statehood, and International Relations of Micro-States: The Cases of Liechtenstein, San Marino, Monaco, Andorra, and the Vatican City. New York: Cambridge University Press, 1996.

Meier, Regula A. Liechtenstein. Santa Barbara, CA: Clio Press, 1993.

LIECHTENSTEIN

Principality of Liechtenstein

Fürstentum Liechtenstein

COUNTRY OVERVIEW

LOCATION AND SIZE.

The independent principality of Liechtenstein is located in central Europe and bordered on the east by Austria and on the south, west, and north by Switzerland. It is one of the smallest countries in the world, with a total area of only 160 square kilometers (62 square miles). Liechtenstein is about 25 kilometers (15.6 miles) long and 6 kilometers (3.75 miles) wide. Its total area is about 0.9 times the size of Washington, D.C. The western edge of the territory lies in the valley of the upper Rhine River and contains a narrow flat strip of arable land. The rest of the area consists of the foothills of the Alps, covered with forests and rising to several high and rugged peaks in the south. Along with Uzbekistan in Central Asia, Liechtenstein is one of the only two doubly landlocked countries in the world (bounded by other land-locked countries only). The capital and principal urban center, Vaduz, is a small town with a population of about 5,000 located in the west-central part of the country near the Rhine River.

POPULATION.

The population of Liechtenstein was estimated at 32,207 in July of 2000; in 1998, it was 31,717. Although quite mountainous, Liechtenstein is densely populated, with an overall density of 198 persons per square kilometer (513 per square mile). The population is unevenly distributed and concentrated in the western, lower part of the country, along the Rhine. The principality has a population growth rate of 1.02 percent, with a birth rate of 11.83 births per 1,000 population. The death rate is 6.64 deaths per 1,000 population, and there is a high positive net migration rate of 5.03 immigrants per 1,000 population (all according to 2000 estimates).

Approximately one-third of the population are resident aliens, including Iranians, Turks, and others, while the vast majority of the Liechtenstein nationals are mostly of ethnic Germanic origin, like their neighbors in eastern Switzerland and western Austria. A south German dialect, Alemannish, is commonly spoken by some 87.5 percent of the population, while literary German is the official language of the country. In 2000, the labor force included 22,891 people, of which an astounding number of 13,847 were foreigners, mostly guest workers ; 8,231 people commuted from neighboring Austrian and Swiss towns to work daily. Unlike Switzerland, however, immigration does not seem to be a major issue in the domestic political debates in Liechtenstein (in 2000, the Swiss electorate had to vote in a referendum on a conservative proposal to impose an 18 percent quota on the number of foreign workers in the country but decided against).

Approximately 88 percent of the population are traditionally Roman Catholic. In 1991, primary (elementary and junior high) school enrollment in the principality totaled 1,985 children, and about 1,200 attended secondary (high) schools. Primary and secondary education is free in Liechtenstein and schooling is required for 8 years. The population, as elsewhere in Europe, is aging, with a high life expectancy at birth (82.47 years for women, 75.16 for men, 78.81 for the total population, all 2000 estimates). Around 18 percent of the people are 14 years of age and younger, 71 percent are between 15 and 64, and 11 percent are 65 or older. The high and stable standards of living and the declining fertility rate, combined with the limited but steady immigration flow, will contribute to a slow growth of the population and the aging of the Liechtenstein nationals, while immigrants' and guest workers' families will display a more youthful population profile.

OVERVIEW OF ECONOMY

Liechtenstein is tiny in size and has very limited natural resources, but it is nevertheless a prosperous country with a highly industrialized market economy and a robust financial services sector. Since World War II (in which the principality remained neutral), its liberal political regime and remarkably low business taxes have fueled strong economic growth and attracted many foreign companies. For over 80 years, Liechtenstein has been participating in a customs union with Switzerland; it uses the Swiss franc as its national currency, and in most aspects may be regarded as a part of the Swiss economy. Liechtenstein statistics are also included in the Swiss national statistics. Since 1919, Switzerland has represented Liechtenstein abroad diplomatically, as well. Living standards in the country are similar to those in the urban areas of neighboring Switzerland and Austria, both reckoned among the most affluent societies in the world. Its gross domestic product (GDP) per capita of $23,000 (1998 estimate) is also among the highest in the world.

Favorable tax treatment and extremely streamlined incorporation legislation have lured as many as 74,000 holding (or so-called "letter box") companies, operating overseas, to establish their head offices nominally in Liechtenstein, providing thus as much as 30 percent of the country's revenue basically in maintenance, administrative, and office services fees. Liechtenstein has been an active member of the European Economic Area (EEA), an organization serving as an intermediary between the European Free Trade Association (EFTA) and the European Union (EU) since May 1995. The government is working to harmonize its economic policies and legislation with those of the EU, although it is not negotiating for full membership in the union.

Some modern manufacturing industries have developed recently; notably in precision instruments, dental and optic materials, pharmaceuticals, and electronics. These industries contribute much to the country's positive trade balance. Yet much of the principality's income is also derived from tourism, banking, the sale of postage stamps and other retail services, and from the office expenses of the international companies maintaining their headquarters there.

POLITICS, GOVERNMENT, AND TAXATION

Liechtenstein is a constitutional monarchy governed by a hereditary prince. According to the constitution of 1921, legislative power is vested in the unicameral parliament (Landtag), consisting of 25 members elected by universal suffrage for 4-year terms. The Landtag members are elected in the 2 multi-seat constituencies (electoral districts): the Upper (or highland, formerly called Vaduz) and the Lower (or lowland, formerly called Schellenberg), by proportional representation . Although very small in size, Liechtenstein is further divided into 11 administrative units or communes (Gemeinden): Balzers, Eschen, Gamprin, Mauren, Planken, Ruggell, Schaan, Schellenberg, Triesen, Triesenberg, and Vaduz.

Elections for the Landtag held on 9 and 11 February 2001, gave 49.9 percent of the vote and 13 Land-tag seats to the Progressive Citizens' Party in Liechtenstein (FBPL), a conservative group. The then ruling conservative Patriotic Union (VU) received 41.1 percent and 11 seats, and its representative, chief of government Mario Frick, resigned accordingly. An environmentalist group, Free List (FL), remained third with 8.8 percent of the vote, or just 1 seat in the House. In February 1997, the Free List (FL) had achieved the best score in its history with 11.6 percent of the vote, corresponding to 2 seats in the Landtag. Like the VU, in 2001 the FL lost some votes in favor of the FBPL and was not able to retain its former positions in the lowland constituency. Participation in the election reached 86.7 percent, just a bit less than in 1997, when 86.9 percent of the electorate voted.

The hereditary prince and the elected government constitute the executive branch of government. The ruling prince, Hans Adam II, assumed his executive powers in 1984, and his heir apparent is his son, Prince Alois von und zu Liechtenstein. On the motion of the parliament, the prince appoints a prime minister and 4 councilors to form the cabinet. Prior to the February 2001 elections, Mario Frick of the VU was the prime minister and chief of government since 15 December 1993. Following the 2001 elections, Otmar Hasler was selected as the prime minister.

Liechtenstein is a member of many international organizations such as the United Nations (it maintains a permanent mission to the UN in New York), the Council of Europe, the Organization on Security and Cooperation in Europe, the European Bank for Reconstruction and Development, the EFTA, the World Trade Organization, the International Atomic Energy Agency, and the World Intellectual Property Organization, among others.

With a maximum tax rate of 18 percent, Liechtenstein has one of the most liberal tax regimes in the world, and its banks, generally considered as members of the Swiss banking family, enjoy a stable reputation for their solidity and privacy policies. The country has a stable foreign trade balance surplus and zero foreign debt . But in 2000, it faced its biggest domestic and foreign political crisis since World War II as the affluent principality was shaken by allegations that it was an international money laundering center and by the subsequent arrests of several leading public figures ordered by a special prosecutor from Austria.

A conflict between Prince Hans Adam II and the government over the extent of the royal family's powers, rein-vigorated by the money laundering allegations in 2000, almost brought about a constitutional crisis later that year. The prince and the cabinet had been at odds for quite a long time over a pending project for a constitutional reform. The prince had claimed he wanted to modernize the way Liechtenstein is run and give more power to the people, while the then prime minister Mario Frick and other critics held the opposite was true and claimed the envisaged reforms would concentrate more power in the prince's hands. The prince threatened to muster the 1,500 signatures required by law to bring about a referendum on the issue if he did not get what he wanted, and said if he was to lose the constitutional debate he would leave for Austria, the seat of his family before World War II. That might raise serious questions about how the principality would be governed in the future.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

The transportation system of Liechtenstein consists of 18.5 kilometers (11.5 miles) of railroads, all electrified, owned and operated by, and included in the statistics of

the Austrian Federal Railways. There are 323 kilometers (201 miles) of paved highways. There are no ports or harbors (the Rhine River is not yet navigable anywhere in Liechtenstein) and there are no airports in the small mountainous principality. The country is served in these respects by the extensive infrastructure of neighboring Switzerland and Austria. Liechtenstein is not traversed by any major international routes and road traffic in the country is 96 percent home-made while only 4 percent is accounted for by transit traffic, running mostly along the Schaanwald-Nendeln-Eschen-Bendern axis.

Electricity production in 1995 was about 150 million kilowatt hours (kWh), and Liechtenstein imported more than 90 percent of its energy from Switzerland and Austria. There is a modern telecommunications network with 19,000 main lines in use in 1995. All are linked to and operated by the Swiss telecom networks (some of the world's most technologically advanced) by cable and microwave radio relay. In 1999, 115 of the Swiss Internet service providers were offering service in Liechtenstein.

ECONOMIC SECTORS

Liechtenstein is highly industrialized, but much of its income is derived from banking, tourism, commerce, the sale of postage stamps, and from the international firms maintaining offices in the country because of more favorable tax treatment. Major manufactures include precision machinery, instruments and tools, pharmaceuticals, food products, metal goods, furniture, and pottery. The distribution of the labor force by occupation in 1997 was estimated to be as follows: industry, trade, and building, 45 percent; services, 53 percent; and agriculture, fishing, forestry, and horticulture less than 2 percent.

AGRICULTURE

Agriculture contributes just 2 percent of GDP, although about 24 percent of Liechtenstein's territory consists of arable land, with permanent highland pastures making up 16 percent, and forests and woodland occupying 35 percent of the land. Animal husbandry and dairy farming are among the principal agricultural activities. Livestock graze in the alpine meadows during the summer. The fertile soil of the Rhine valley is used mostly for market vegetable gardening. Local agriculture products include wheat, barley, corn, potatoes, and grapes. The principality imports food, and some of it is processed and reexported.

Before World War II, almost half of the working population was occupied in agriculture. This number has continually decreased, and in 2000, about 350 persons (or 1.7 percent of the workforce) are active in agriculture, fishing, forestry, and horticulture. Despite the decline in that number, yields have been significantly increasing due to scientific rationalization and intensive machine cultivation.

INDUSTRY

About one-third of the nearly 23,000 working people of Liechtenstein are employed in industrial establishments. Due to the favorable economic conditions, an efficient, export-oriented high-tech industrial manufacturing sector developed over the last decades of the 20th century. Manufacturing, reported jointly with construction and trade, was responsible for nearly 45 percent of the jobs and the GDP by 2000 and a large percentage of the country's exports. Electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products and beverages, and precision instruments manufacture are all well developed. The fact that Liechtenstein's economy exports so much is largely due to its high-tech manufacturing sector that accounts for the majority of its exports.

Among the most important domestic manufacturers are the Hilti Corporation, a large international supplier of rail anchors and anchor installation services to the rail transport industry, and electrical equipment; Ivoclar-Vivadent, developer and distributor of well-regarded products for prosthetic, restorative, and preventive dentistry; Balzers-Bal-Tec AG, manufacturers of electron microscopy preparation products for biological specimens; Fancoldi R.T., gem industry specialists, producing colored diamonds; and Aqualine, a major Austrian Alps mineral water bottling company.

Construction is also an important contributor to the economy, although its scope is necessarily limited. According to the building statistics, in the last quarter of 2000, 115 new buildings were granted permits. As compared to the same period of 1999, this corresponded to 39 permits less, but the construction volume increased by 5.6 percent and construction costs increased by 17.2 percent to 163.3 million Swiss francs. Building activities generally shifted from housing developments and public buildings towards industry and trade. The construction volume in that sector increased by 110.4 percent, while a decrease of 93.4 percent was registered for public buildings.

SERVICES

Liechtenstein's economy is increasingly service-based, as in most of western Europe. Services contributed to 53 percent of GDP, and about 10,000 people were employed in the sector in 2000. It particularly expanded over the last decade of the 20th century. In addition to the catering branch (made of 42 hotels and inns, and 81 restaurants and cafes), the public administration, insurance companies, and the health and educational systems, this sector is specially characterized by a vigorous presence in international commercial and financial transactions and in fiduciary business.

Finance in Liechtenstein is traditionally a very well-developed sector. Apart from the presence of the Swiss banks due to the monetary and customs union and the geographical and cultural proximity between the 2 states, 13 local banks exist. These include Liechtenstein-LGT Bank, an international private bank, claiming to be the largest banking operation in the country; Bank von Ernst, a financial institution providing Swiss private banking services, portfolio management, and family foundation; and Liechtenstein-VP Bank Group, a private bank founded in 1956, providing a wide range of financial services, holding assets worth some $5.5 billion, and employing about 600 people (but currently facing some serious legal troubles, as shown below), as well as the Centrum Bank AG, Liechtensteinische Landesbank AG, Neue Bank AG, Verwaltungs-und Privat-Bank AG, and Vorarlberger Volksbank AG. The largest banks in Liechtenstein belong to the Swiss Banking Association and recognize most of its rules, as do all the Swiss banks.

The Liechtenstein banks, which administer 112.5 billion Swiss francs (US$70 billion), have been known for their liberal policies and privacy, yet, following some serious money laundering allegations in 2000 described below, they intend to end anonymous accounts and carry out identity checks on their customers. Legislative changes to that effect are being pushed through parliament in hopes of averting possible sanctions from European Union countries and the United States following the scandals. However, bankers are reluctant to give up their judicial independence.

Tourism is also an important contributor to the economy. Despite its small size, alpine Liechtenstein is a diverse country with various communities offering a mix of attractions for all tastes. Situated between some of the most attractive tourist regions in Europe, the Swiss and Austrian Alps, the tiny principality often appears on their visitors' itineraries. Museums, banks, boutiques, dining establishments, historical sites, vineyards, and sports (particularly skiing and hiking) facilities are varied and charming. Liechtenstein is considered a microcosm of the European continent. Apart from the 42 hotels and 81 restaurants, the sale of postal stamps by the state post offices, galleries and shops offering art objects, local handicrafts, and souvenirs are also a significant source of revenue.

Retail is well-developed and targeted at serving the tourist clients as well as the local customers and commuters, but the small size of the market is still more conducive to small family-owned stores. Retail trade experienced a marked upswing over the 1990s as a result of increased specialization of stores, so that a wide range of diverse products is now available. As the Swiss retail sector is developing towards large-scale self-service and discount chain stores, Liechtenstein retailers have had to face fierce competition from the large Swiss shopping malls in the vicinity. Many of the small family-owned shops, relying basically on local customs, went out of business during the 1990s. Some 1,600 retail and wholesale trade enterprises are united in the Liechtenstein Chamber of Trade and Commerce as an umbrella organization. Trade enterprises cater mainly to the domestic market and contribute to the efficient infrastructure of the country.

Companies specializing in serving the offshore "letter box" companies' various needs in Liechtenstein include the Gestina Trust, specialists in the development and management of offshore companies, legal structures, and settlement advice; the Vazus-Syndikus Treuhandanstalt, offering financial advice and consulting in economic and legal matters, accounting, and contracts; the Vazus-Wanger Group, a law and patent firm in commercial law and asset management, and many others.

INTERNATIONAL TRADE

Due to the very small size of the country's market, Liechtenstein's industry is heavily dependent on exports. In 1996, the country exported $2.47 billion worth of goods and services, while importing $917.3 million worth. The European Economic Area (EEA) states are its most important export destinations. Liechtenstein joined the European Free Trade Association (EFTA) as an associate member in 1960 and has been a full member since 1991. In addition, it became a member of the EEA (the intermediary body between the EFTA and the EU) in 1995. Although small, the Liechtenstein economy is very open and its foreign trade balance is traditionally strikingly positive, with exports far outweighing imports, largely thanks to its high-tech manufacturing sector. Principal trade partners in 1995 were the EU and EFTA, recipients of 60.57 percent of exports, and Switzerland, recipient of 15.7 percent, and they were the origins of a comparable percentage of its imports. All trade numbers for Liechtenstein are included in the Swiss national statistics, and therefore a more clear-cut picture of its international trade is difficult to assemble.

MONEY

Liechtenstein has many advantages issuing from its use of the Swiss franc and from officially being part of the Swiss monetary system. It has a strong currency, a balanced budget with revenues of $424.2 million and expenditures of $414.1 million in 1998 (estimate), and a leading banking sector with solid private banks with a reputation for privacy, limited regulation, and the acceptance of foreign deposits with little oversight. Similarly to Switzerland in the late 1990s, however, these conditions have also led to some serious legal drawbacks.

Throughout 2000, Liechtenstein has been troubled by recurrent international allegations of domestic money laundering for transnational organized crime, an abuse of Swiss banking privacy policies. In 2000, the German press printed stunning details from a German federal intelligence agency report accusing Liechtenstein of acting as banker to Central American drug cartels and the Russian mafia. The report alleged that a former prime minister, Hans Brunhart, currently head of the Verwaltungsund Privat-Bank (VP Bank), had been laundering drug money. The report named Liechtenstein as the only European country on an International Financial Action Task Force (FATF) list of 15 nations accused of failing to cooperate against money laundering. Finally, the Organization for Economic Cooperation and Development (OECD), in another 2000 publication, listed the principality

among harmful offshore tax havens alongside Tonga, the Bahamas, and Barbados.

The allegations caused a storm of indignation in the country. Brunhart objected, and an independent investigator from Austria appointed by Liechtenstein did not support the case. The investigator found that Liechtenstein was not a hub of money laundering, although he criticized its preventive work against "hot money." In early 2001, the FATF confirmed that the country had made significant progress in connection with the fight against money laundering. The country was removed from the blacklist by the FATF in June of 2001.

POVERTY AND WEALTH

Liechtenstein is renowned as one of Europe's most affluent and carefree communities. With one of the highest measures of GDP per capita in the world, a low inflation rate (in terms of consumer prices) of 0.5 percent (1997 estimate), and the benefits of the monetary and economic union with Switzerland, the tiny principality offers its subjects one of the highest standards of living in the world, although at a very high cost of living. No data as to Liechtenstein's economic equality index ( Gini index ) are currently available, but if Switzerland's index is used for reference, economic equality in the principality is likely to be in better shape than the United States and even in the more egalitarian United Kingdom. No data as to any extreme cases of poverty are available.

WORKING CONDITIONS

Due to the number of specialized high-tech companies in Liechtenstein, there is an enormous demand for highly qualified specialists. Since the national job market, on account of its tiny size, can only partly satisfy the demand, the internationally active companies in particular are heavily recruiting in other countries, mostly Switzerland and Austria, but also elsewhere in Europe and the Middle East.

In 2000, the labor force included 22,891 people of which 13,847 were foreigners, mostly guest workers; 8,231 people commuted from neighboring Austrian and Swiss towns to work daily. A highly skilled workforce, laws promoting labor flexibility, and agreements between trade unions and employers' associations have resulted in very little labor unrest. The late 1990s have been good for Liechtenstein workers, with salaries having increased by an average of 7 percent between 1997 and 1999. It is all the more important that it was possible at the same time to realize improvements on the job market and to lower the unemployment rate.

In 2000, the unemployment ratio fell to 1.0 percent of the domestic labor force. The number of 274 individuals registered as unemployed at the end of February 2001 represents the lowest figure since June 2000, when 260 individuals had been registered. In February 2001, 28 persons were registered as unemployed either for the first time or were re-registered. Some 51 individuals were taken out of the statistics, 32 of whom started a new job, and the rest reached retirement age or started a new business. Full employment is a prominent aim of domestic economic policy. It is a goal that can be reached through measures including a project for the occupation of long-time unemployed, as well as a program for the better integration of handicapped employees.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1719. The former domain of Schellenberg and the country of Vaduz are combined into the Principality of Liechtenstein within the Holy Roman Empire.

1806. The principality is recognized as a sovereign state. Until the end of World War I, it remains closely tied to the Austrian Empire (named the Austro-Hungarian Empire after 1867).

1918. The military defeat and the collapse of the Austro-Hungarian Empire in World War I forces Liechtenstein to conclude a customs and monetary union with its other prosperous yet neutral neighbor, Switzerland.

1938. Prince Franz Joseph II becomes sovereign; the principality remains neutral in World War II (1939-45), while neighboring Austria is annexed by Nazi Germany.

1984. Executive authority is transferred to Prince Hans Adam II (crowned in 1989); a referendum grants women the right to vote in national elections.

1990. Liechtenstein joins the United Nations.

1991. Liechtenstein joins the European Free Trade Association (EFTA).

1992. Voters approve Liechtenstein's membership in the European Economic Area (EEA).

2000. Liechtenstein is disturbed by a money-laundering scandal and a constitutional crisis between the prince and the government.

FUTURE TRENDS

The Liechtenstein economy is closely related to the Swiss one and is dependent on the latter's progress towards full integration in the EU. It is likely that, despite financial scandals and constitutional problems, the principality will preserve its sound economy and high living standards and will continue to attract foreign companies and workers in the foreseeable future.

Liechtenstein has already developed close links with the EU through its participation in the EEA, the comprehensive adjusting of its domestic economic regulations to fit the EU standards, and its close relations with the Austrian economy (Austria is a full member of the union). In the event Switzerland finally decides to join the EU, the adjustment of the monetary and banking system (and possibly some agricultural subsidy policies) will likely be among the serious problems facing the small principality in this regard.

As to the problems related to the 2000 banking scandal, there is reason to believe that Liechtenstein can guarantee the implementation of some effective measures to combat money laundering. The former prime minister appointed 4 new judges working at the national court, the prosecution was restructured , the state department for financial services was strengthened, a new Financial Intelligence Unit (FIU) was founded, and a special bank department was set up within the national police force. Some needed legislative changes are being vigorously debated. It is expected that the country's banking practices will be soon brought in line with the general EU provisions, without reducing its competitive advantages too much. The positive ruling by the FATF in June of 2001 indicated the success of these measures.

It is harder to predict the outcome of the constitutional crisis. In 2000, Hans Adam II announced that he would end the discussion around the constitution as soon as possible. But reflecting on his new constitutional proposal of 1 March 2001, the former head of the constitutional commission, Peter Wolff, noted that in the controversial points, on which parliamentary criticism focused, nothing had been changed. Whatever the decision, however, it is not likely to cause any serious political disturbance in the principality that might jeopardize social stability and economic development.

DEPENDENCIES

Liechtenstein has no territories or colonies.

BIBLIOGRAPHY

Global Investment Business Center, Inc. Staff. Liechtenstein: A Country Study Guide. International Business Publications, 2000.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed July 2001.

U.S. Department of State. Background Notes: Europe: Liechtenstein. <http://www.state.gov/www/background_notes/eurbgnhp.html>. Accessed January 2001.

—Valentin Hadjiyski

CAPITAL:

Vaduz.

MONETARY UNIT:

Swiss Franc (SFR). One SFr equals 100 centimes or rappen. There are notes of 10, 20, 50, 100, 200, and 1,000 Swiss francs, and coins of 5, 10, 20, and 50 centimes and 1, 2, and 5 Swiss francs. The country maintains a monetary and customs union with Switzerland. The Liechtenstein monetary, fiscal, and banking systems can therefore be regarded as an extension of their Swiss counterparts.

CHIEF EXPORTS:

Small specialty machinery, dental products, stamps, hardware, pottery.

CHIEF IMPORTS:

Machinery, metal goods, textiles, foodstuffs, motor vehicles, fuels.

GROSS DOMESTIC PRODUCT:

US$730 million (1998 est.).

BALANCE OF TRADE:

Exports: US$2.47 billion (1996 est.). Imports: US$917.3 million (1996 est.).

Liechtenstein

Compiled from the October 2007 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:

Principality of Liechtenstein

PROFILE

Geography

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.

People

Nationality: Noun—Liechtensteiner(s), adjective—Liechtenstein.

Population: (2006) 33,987, 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.

Government

Type: Hereditary constitutional monarchy.

Independence: January 23, 1719 Imperial Principality of Liechtenstein established; July 12, 1806 established independence from the Holy Roman Empire.

Constitution: October 5, 1921.

Government branches: Executive—chief of state: Prince Hans Adam II (assumed executive powers on August 26, 1984, acceded to the throne on November 13, 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 April 5, 2001). Cabinet: Five cabinet members. The cabinet is elected by the Diet, and approved by the Prince. Legislative—Unicameral Diet or Landtag (25 seats; members are elected by direct popular vote under proportional representation to serve four-year terms). Judicial—District Court (low), Superior Court (medium), Supreme Court (high).

Political subdivisions: The country is subdivided into 11 districts.

Political parties: Fatherland Union (VU), Progressive Citizens’ Party (FBP), and the Free List (FL).

Currency: Swiss Franc.

National holidays: Assumption Day, August 15.

Economy

GDP: U.S. $3.52 billion (SFr.4.28 billion).

Annual growth rate: 2.6%.

Unemployment: 2.3% (or 689 individuals).

Avg. inflation rate: 0.6%.

Agriculture: (7% of GDP) Wheat, barley, corn, potatoes, livestock, dairy products.

Industry: (40% of GDP) Electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments.

Services: (26% of GDP) Financial, tourism.

Trade: (2005) Exports—$2.6 billion (+0.8% over 2004). Main products—small specialty machinery, dental products, stamps, hardware, pottery. Major markets—U.S., Germany, Switzerland, France, Italy, Taiwan, Japan, Austria, and United Kingdom. Imports—$1.5 billion (+1.5% over 2004). Main products—machinery, metal goods, textiles, foodstuffs, motor vehicles. Major suppliers—EU countries, Switzerland.

HISTORY

The Liechtenstein Family of Austria acquired the fiefs of Vaduz and Schel-lenberg 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 1995.

GOVERNMENT

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-a-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 parliament.

The Prince's involvement in legislation includes the right to take initiatives in the form of government bills and the right to veto parliamentary proposals.

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.

POLITICAL CONDITIONS

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 commissions.

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 Liechtenstein 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 were scheduled for early 2006.

Principal Government Officials

Last Updated: 2/1/2008

Head of State: HANS ADAM II, Prince

Head of Government (Prime Minister): Otmar HASLER

Deputy Head of Government: Klaus TSCHUETSCHER

Min. for Culture: Rita KIEBER-BECK

Min. for Economic Affairs: Klaus TSCHUETSCHER

Min. for Education: Hugo QUADERER

Min. for Environmental Affairs, Land-Use Planning, Agriculture, & Forestry: Hugo QUADERER

Min. for Family Affairs & Gender Equality: Rita KEIBER-BECK

Min. for Finance: Otmar HASLER

Min. for Foreign Affairs: Rita KIEBER-BECK

Min. for Health: Martin MEYER

Min. for Interior: Martin MEYER

Min. for Justice: Klaus TSCHUETSCHER

Min. for Public Works: Otmar HASLER

Min. for Social Affairs: Hugo QUADERER

Min. for Sport: Klaus TSCHUETSCHER

Min. for Transportation & Telecommunication: Martin MEYER

Chmn., Liechtenstein State Bank: Josef FEHR

Ambassador to the United States: Claudia FRITSCHE

Permanent Representative to the UN, New York: Christian WENAWESER

Liechtenstein maintains an embassy in the United States at 888 17th Street, NW, Suite 1250, Washington, DC 20006. Telephone (202) 331-0590.

ECONOMY

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. In 2007, Liechtenstein will have an obligation under the EEA treaty to harmonize its laws with EU directives 2005/36 and 1999/42 on the mutual recognition of EU and EEA university and professional diplomas. Liechtenstein is also part of the EU fund on research and technology and is entitled to participate to EU projects and subsidies.

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. Total exports increased from $1.8 billion (SFr. 3 billion) in 2000 to $2.5 billion (SFr. 3.2 billion) in 2005, while total imports increased from $892 million (SFr.1.5 billion) to $1.5 billion (SFr.1.9 billion) during the same period. About 13% of Liechtenstein's goods are exported to Switzerland, 69.3% to the EU, 16% to the U.S. and the remaining share to the rest of the world. Liechtenstein imports more than 90% of its energy requirements. The Liechtenstein industrial sector contributes 40% of the country's GDP, followed by banking and finance (30%), services (25%), and agriculture (5%). Despite Liechtenstein's overall good competitive performance, there is a trend among business to outsource their production in low cost countries.

In 2005, the U.S. was the third most important trading partner for Liechtenstein, with approximately $420 million (SFr. 521 million) worth of exports and $58 million (SFr. 72 million) of imports. Germany was first with a total trade value of $1.7 billion (SFr. 2.1 billion) and Austria second with $1.1 billion (SFr. 1.4 billion). Although Switzerland is an important trading partner, trade statistics are unavailable because both countries are in 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. 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 funds transfers. 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.

U.S.-LIECHTENSTEIN RELATIONS

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. Embassy Officials

Last Updated: 2/19/2008

BERN (E) Jubilaumsstr. 93, 3005 Bern, APO/FPO No APO, 41-31-357-7011, Fax 41-31-357-7344, Work-week: Mon.–Fri., 8:30-5:30, Website: http://bern.usembassy.gov.

GENEVA (M) 11 Rte de Pregny, 1292 Chambesy, Geneva, Switzerland, 41-22-749-4111, Fax 41-22-749-4892, INMARSAT Tel 764114496/9, Work-week: M-F 8:30-5:30, Website: http://geneva.usmission.gov.

TRAVEL

Consular Information Sheet—Switzerland

August 23, 2007

Country Description: Switzerland is a highly developed democracy. Liechtenstein is a democratically run constitutional monarchy.

Entry Requirements: A passport is required for travel to both Switzerland and Liechtenstein. A visa is not required for stays up to 90 days in either country. For more information on entry requirements for both countries, travelers may contact the Embassy of Switzerland at 2900 Cathedral Avenue, NW, Washington, DC 20008, telephone (202) 745-7900, or the nearest Swiss Consulate General in Atlanta, Chicago, Los Angeles, New York, or San Francisco. Visit the Embassy of Switzerland's web site at http://www.swissemb.org for the most current visa information.

Safety and Security: Although there have been no recent terrorist attacks in Switzerland, violence by anti-globalization, anti-Semitic, and anti-establishment (anarchist) groups does occur from time to time. This violence is typically in the form of property damage and clashes between these groups and the police. The potential for specific threats of violence involving American citizens in Switzerland is remote. The Consular Agencies in Zurich and Geneva may close periodically to assess their security situation.

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site where the current Travel Warnings and Travel Alerts, including the Worldwide Caution Travel Alert, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444.

Crime: Switzerland has a low rate of violent crime. However, pick-pocketing and purse snatching do occur in the vicinity of train and bus stations, airports, and some public parks, especially during peak tourist periods (such as Summer and Christmas) and when conferences, shows, or exhibits are scheduled in major cities. Liechtenstein has a low crime rate. Travelers may wish to exercise caution on trains, especially on overnight trains to neighboring countries. Thieves, who steal from passengers while they sleep, can enter even locked sleeping compartments.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, contact family members or friends, and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Switzerland, through its 26 cantons (states), has programs to assist victims of crime and their immediate relatives. Medical, psychological, social, financial, and legal assistance are available throughout the country. These programs also protect the rights of the victim during criminal proceedings. The victim may receive compensation for some damages, if requested during the criminal procedure. Information is available at the Swiss Department of Justice located on Bundesrain 20, 3003 Bern, telephone: 41-31-322-4750, as well as on the Internet at http://www.bj.admin.ch/bj/en/home.html.

Medical Facilities and Health Information: Good medical care is widely available. Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the CDC's Internet site at http://wwwn.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Switzerland is provided for general reference only, and may not be totally accurate in a particular location or circumstance. Although many roads are mountainous and winding, road safety standards are high. In some mountain areas, vehicle snow chains are required in winter. Road travel can be more dangerous during summer, winter holidays, the Easter break, and Whitsunday weekend (late spring) because of increased traffic. Travel on expressways (indicated by green signs with a white expressway symbol) requires purchase of a sticker or “vignette,” which must be affixed to the car's windshield. Vignettes can be purchased at most border crossings points, gas stations and at Swiss post offices. Drivers using the highway system without a vignette are subject to hefty fines levied on the spot. Public transportation in Switzerland and Liechtenstein is excellent.

Visit the website of Switzerland's national tourist office at http://www.myswitzerland.com/en.cfm/home.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Switzerland's Civil Aviation Authority as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Switzerland's air carrier operations. For more information, travelers may visit the FAA's web site at http://www.faa.gov.

Special Circumstances: Costs of search and rescue operations are the responsibility of the victim, thus, travelers who plan to participate in mountain activities (summer and winter) are strongly encouraged to buy mountain search and rescue insurance. Search and rescue insurance is available inexpensively in Switzerland and may be purchased at many Swiss post offices.

Information can be obtained from the Swiss National Tourist Office, at http://www.myswitzerland.com, at most tourist information offices or with the Swiss Air Rescue Organization at http://www/rega.ch. Such insurance has proved useful as uninsured rescues can easily cost $25,000.

Switzerland's customs authorities encourage the use of an ATA (Admission Temporaire/Admission) Carnet for the temporary admission of professional equipment, commercial samples, and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters located at the U.S. Council for International Business, 1212 Avenue of the Americas, New York, N.Y. 10036, and issues and guarantees the ATA Carnet in the United States. For additional information call (212) 354-4480, send an email to atacar-net@uscib.org, or visit http://www.uscib.org for details.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Switzerland's laws, even unknowingly, may be expelled, arrested, or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Switzerland are severe, and convicted offenders can expect long jail sentences and heavy fines. Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family.

Registration and Embassy Locations: Americans living or traveling in Switzerland are encouraged to register with the U.S. Embassy in Bern, with the Consular Agencies in Geneva or Zurich, or through the State Department's travel registration web site, and to obtain updated information on travel and security within Switzerland and Liechtenstein. Americans without Internet access may register directly with the nearest U.S. Embassy or Consulate. By registering, American citizens make it easier for the Embassy, Consulate, or Consular Agent to contact them in case of emergency. The U.S. Embassy is located at Jubilaeum-strasse 93, 3005 Bern; Tel. (41)(31) 357-7011, fax (41)(31) 357-7280. The Embassy's email address is bernacs@ state.gov. The U.S. Embassy web site at http://bern.usembassy.gov answers many questions of interest to Americans visiting and residing in Switzerland.

The U.S. Consular Agency in Zurich is located at the American Center of Zurich, Dufourstrasse 101, 8008 Zurich; Tel: (41)(43) 499-2960, fax (41)(43) 499-2961. The U.S. Consular Agency in Geneva is located at rue Versonnex 7, CH-1207 Geneva, Tel: 022-840-51 60; fax 022-840-51 62. There is no U.S. Embassy or Consulate in Liechtenstein.

For assistance and information on travel and security in Liechtenstein, U.S. citizens may contact or register at the U.S. Embassy in Bern at the address above.

LIECHTENSTEIN

Compiled from the October 2004 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Principality of Liechtenstein

PROFILE

Geography

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.

People

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.

Government

Type: Hereditary constitutional monarchy.

Independence: 23 January 1719 Imperial Principality of Liechtenstein established; 12 July 1806 established independence from the Holy Roman Empire.

Constitution: 5 October 1921.

Branches: Executive—chief of state: Prince Hans Adam II (since 13 November 1989, but already assumed executive powers since 26 August 1984); 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 the Prince. Legislative—Unicameral Diet or Landtag (25 seats; members are elected by direct popular vote under proportional representation to serve four-year terms). 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 List (FL).

Currency: Swiss Franc.

National holiday: Assumption Day, 15 August.

Economy

GDP: (2002) $1.8 billion, down from $2.6 billion in 1999.

Annual growth rate: N/A.

Unemployment: 1.68% (617 persons).

Avg. inflation rate: (2003) 0.7%—Same as in Switzerland because of the customs union.

Agriculture: wheat, barley, corn, potatoes, livestock, dairy products.

Industry: electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments, tourism.

Trade: (2002) Exports—$1.8 billion, 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 countries, Switzerland.

HISTORY

The Austrian Liechtenstein family acquired the fiefs of Vaduz and Schellenberg in 1699 and 1713 respectively, and they became an independent principality under 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 1995.

GOVERNMENT

According to the Constitution, the government is a collegiate 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 or new law 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 in entitled to exercise his right to state leadership in accordance with the provisions of the constitution and of other laws.

He represents the state vis-à-vis foreign states. He signs international treaties either in person or delegates this function to a plenipotentiary. Some treaties under international law only become valid when they have been ratified by parliament.

The Prince's involvement in legislation includes the right to take initiatives in the form of government bills and the right to veto parliamentary proposals.

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 nevertheless 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.

On the basis of the names put forward by parliament, 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.

The Prince's other authorities include exercising the right to mitigate and commute 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, namely of colleagues collaborating with each other. 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.

POLITICAL CONDITIONS

The political parties are the moving forces with regard to the composition of the government and in the parliament. For the 2001 – 2005 legislature period of office one Councilor and three deputies are women.

From 1938 to 1997 Liechtenstein had a coalition government. Until a few years ago, 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. Since 2001, it has been the Progressive Citizen's Party that has provided all the members of the government. The minority parties, as opposition parties, act as a check on the government in parliament and on parliamentary commissions.

The Liechtenstein electorate on March 16, 2003 endorsed Prince Hans-Adam II's proposal for a revision of the Liechtenstein Constitution with 64.3 percent of votes. The Prince now has 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. The Council of Europe decided against introducing a formal monitoring procedure for the new constitutional order but will maintain an open dialogue with the Liechtenstein Parliament.

rincipal Government Officials

Last Updated: 10/27/03

Head of State: Hans , Adam II, Prince
Head of Government (Prime Minister): Hasler , Otmar
Deputy Head of Government: Kieber-Beck , Rita
Min for Construction: Hasler , Otmar
Min for Culture & Sports: Ospelt , Alois
Min for Economy: Frick , Hansjoerg
Min for Education: Kieber-Beck , Rita
Min for Environment, Agriculture, & Forestry: Ospelt , Alois
Min for Family Affairs & Equal Rights: Hasler , Otmar
Min for Finances: Hasler , Otmar
Min for Foreign Relations: Walch , Ernst
Min for General Government Affairs: Hasler , Otmar
Min for Health: Frick , Hansjoerg
Min for Interior: Ospelt , Alois
Min for Justice: Kieber-Beck , Rita
Min for Social Matters: Frick , Hansjoerg
Min for Transport & Communication: Kieber-Beck , Rita
Chmn., Liechtenstein State Bank: Kindle , Herbert
Ambassador to the United States: Fritsche , Claudia
Permanent Representative to the UN, New York: Wenaweser , Christian

Liechtenstein maintains an embassy in the United States at 1300 Eye Street, NW, Washington, DC 20005, Telephone (202) 216-0460.

ECONOMY

Since the signing of the Customs Treaty in 1924, Liechtenstein and Switzerland have represented one mutual economic area. Therefore, the borders between those states are open. The country also uses the Swiss franc as its national currency, and Swiss customs officers secure its 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 laidout 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 (5%).

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 SFr.).

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 funds transfers.

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-Liechten-stein 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.

U.S.-LIECHTENSTEIN RELATIONS

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. Embassy Officials

BERN (E) Address: Jubilaeumsstr. 93, 3005 Bern; APO/FPO: No APO; Phone: 41-31-357-7011; Fax: 41-31-357-7344; Workweek: Mon.-Fri., 8:30-5:30; Website: http://www.usembassy.ch

TRAVEL

Consular Information Sheet–Switzerland

October 21, 2004

Country Description: Switzerland is a highly developed democracy. Liechtenstein is a democratically run constitutional monarchy.

Entry/Exit Requirements: A passport is required for travel to both Switzerland and Liechtenstein. A visa is not required for U.S. citizens for stays of up to 90 days in either country. For more information on entry requirements for both countries, travelers may contact the Embassy of Switzerland at 2900 Cathedral Avenue, N.W., Washington, D.C. 20008, telephone (202) 745-7900, or the nearest Swiss Consulate General in Atlanta, Chicago, Houston, Los Angeles, New York, or San Francisco. Additional information for both countries is available at http://www.swissemb.org. In an effort to prevent international child abduction, many governments have initiated new procedures at entry/exit points. These procedures often include requiring documentary evidence of relationship and permission for a child to travel, if the parent(s) or legal guardian is not present. Having such documentation on hand, even if not required, may facilitate entry/departure.

Dual Nationality: U.S. citizens who are also considered by the Swiss Government to have Swiss citizenship may be subject to compulsory military service and other requirements while in Switzerland. Those who might be affected should inquire at a Swiss Embassy or Consulate regarding their status. In some instances, dual nationality may hamper U.S. government efforts to provide protection abroad. In addition to being subject to all Swiss laws affecting U.S. citizens, dual nationals may also be subject to other laws that impose special obligations on Swiss citizens.

For additional information, see the Consular Affairs home page on the Internet at http://travel.state.gov for our Dual Nationality flyer.

Safety and Security: The potential for specific threats or acts of violence involving American citizens in Switzerland is remote; nonetheless, travelers should always review their security practices and be alert to their surroundings. The Consular Agencies in Zurich and Geneva may close periodically to assess their security situations. Americans are encouraged to check the Consular Affairs home page for updated travel and security information.

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov where the current Worldwide Caution Public Announcement, Travel Warnings and Public Announcements can be found. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the United States, or, for callers outside the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Crime: Switzerland has a low rate of violent crime. However, pick-pocketing and purse snatching do occur in the vicinity of train and bus stations, airports, and some public parks, especially during peak tourist periods (such as summer and Christmas) and when conferences, shows, or exhibits are scheduled in major cities. Liechtenstein has a low crime rate. Travelers may wish to exercise caution on trains, especially on overnight trains to neighboring countries. Even locked sleeping compartments can be entered by thieves, who steal from passengers while they sleep. The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. U.S. citizens may refer to the Department of State's pamphlet, A Safe Trip Abroad, to promote a trouble-free journey. The pamphlet is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, and via the Internet at http://www.gpoaccess.gov or via the Bureau of Consular Affairs home page at http://travel.state.gov.

If you are the victim of a crime overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends, and explain how funds could be transferred. Although the investigation and prosecution of a crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal process and to find an attorney if needed.

Medical Facilities and Insurance: Good medical care is widely available. Serious medical problems requiring hospitalization and/or medical evacuation to the United States can cost many thousands of dollars. Doctors and hospitals often expect immediate cash payment for health services.

The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Furthermore, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. However, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas including emergency services such as medical evacuations.

When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the U.S. may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, ascertain whether payment will be made to the overseas healthcare provider or whether you will be reimbursed later for expenses you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death. Supplemental medical insurance with specific overseas coverage, including provision for mountain rescue and/or medical evacuation, is strongly advised, particularly for those who plan to participate in mountain activities (summer or winter). Rescue insurance is available inexpensively in Switzerland and may be purchased at many Swiss post offices. Information can be obtained from the Swiss National Tourist Office: e-mail http://www.myswitzerland.com, at most tourist information offices in Switzerland, or with the Swiss Air Rescue Organization http://www.rega.ch. Such insurance has proved useful as uninsured rescues can easily cost $25,000 or more.

Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure, Medical Information for Americans Traveling Abroad, available via the Bureau of Consular Affairs home page.

Other Health Information: Information on vaccinations and other health precautions may be obtained from the Centers for Disease Control and Prevention's hotline for International Travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via their Internet site at http://www.cdc.gov. For information about outbreaks of infectious diseases abroad consult the World Health Organization's web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Switzerland and Liechtenstein is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

Safety of public transportation: Excellent
Urban road conditions/maintenance: Excellent
Rural road conditions/maintenance: Excellent
Availability of roadside assistance: Excellent

Although many roads are mountainous and winding, road safety standards are high. In some mountain areas, vehicle snow chains are required in winter. Road travel can be more dangerous during summer, winter holidays, the Easter break and Whitsunday weekend (late spring) because of increased traffic. Travel on expressways (indicated by green signs with a white expressway symbol) requires purchase of a sticker or "vignette", which must be affixed to the car's windshield. Vignettes can be purchased at most border crossing points, gas stations and at Swiss post offices. Drivers using the highway system without a vignette are subject to hefty fines levied on the spot. Public transportation in Switzerland and Liechtenstein is generally excellent.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Swiss civil aviation authority's oversight of Switzerland's air carrier operations as category 1—in compliance with international aviation safety standards. For further information, travelers may contact the Department of Transportation within the U.S. at 1-800-322-7873, or visit the FAA Internet website at http://www.faa.gov/avr/iasa/index.cfm.

Customs Regulations: Switzerland's customs authorities encourage the use of an ATA (Admission Temporaire/Temporary Admission) Carnet for the temporary admission of professional equipment, commercial samples, and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters, located at the U.S. Council for International Business, 1212 Avenue of the Americas, New York, N.Y. 10036, issues and guarantees the ATA Carnet in the United States. For additional information call 212-354-4480, send an email to atacarnet@uscib.org, or visit http://www.uscib.org for details. In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines. A current list of those countries with serious problems in this regard can be found here.

Criminal Penalties: U.S. citizens are subject to the laws of the country in which they are traveling. Sometimes these laws can differ significantly from those in the United States and may not afford the protections available to individuals under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. In Switzerland and Liechtenstein, penalties for possession, use, and dealing in illegal drugs are strict, and convicted offenders can expect jail sentences and heavy fines. Under the Protect Act of April 2003, it is a crime, prosecutable in the United States, for a U.S. citizen or permanent resident alien, to engage in illicit sexual conduct in a foreign country with a person under the age of 18, whether or not the U.S. citizen or lawful permanent resident alien intended to engage in such illicit sexual conduct prior to going abroad. For purposes of the PROTECT Act, illicit sexual conduct includes any commercial sex act in a foreign country with a person under the age of 18. The law defines a commercial sex act as any sex act, on account of which anything of value is given to or received by a person under the age of 18.

Under the Protection of Children from Sexual Predators Act of 1998, it is a crime to use the mail or any facility of interstate or foreign commerce, including the Internet, to transmit information about a minor under the age of 16 for criminal sexual purposes that include, among other things, the production of child pornography. This same law makes it a crime to use any facility of interstate or foreign commerce, including the Internet, to transport obscene materials to minors under the age of 16.

Children's Issues: Since July 1988, Switzerland has been party to the Hague Convention on the Civil Aspects of International Child abduction. For information on international adoption of children and international parental child abduction, please refer to our Internet site at http://travel.state.gov/family/index.html or telephone Overseas Citizens Services at 1-888-407-4747.

This number is available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except federal holidays). Callers who are unable to use this toll-free number, such as those calling from overseas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Registration/Embassy and Consulate Locations: Americans living or traveling in Switzerland are encouraged to register with the nearest U.S. Embassy or Consulate through the State Department's travel registration website, https://travelregistration.state.gov, and obtain updated information on travel and security within Switzerland. Americans without Internet access may register directly with the nearest U.S. Embassy, Consulate or Consular Agent in Geneva and Zurich.

The U.S. Embassy in Bern is located at Jubilaeumstrasse 93, 3005 Bern; Tel. (41)(31) 357-7011, fax (41)(31) 357-7280. The Embassy's 24 hour emergency telephone number is (41)(31) 357-7777. The Embassy's e-mail address is bernacs@state.gov. The U.S. Embassy website at http://www.us-embassy.ch answers many questions of interest to Americans visiting and residing in Switzerland.

The U.S. Consular Agency in Zurich is located at the American Center of Zurich, Dufourstrasse 101, 8008 Zurich; Tel. (41)(1) 422-2566, fax (41) (1) 383-9814.

The U.S. Consular Agency in Geneva is located at the American Center Geneva, 7 Rue Versonnex, 1207 Geneva; Tel. (41)(22) 840-5160, fax (41)(22) 840-5162, e-mail: consulate.us@ties.itu.int

There is no U.S. Embassy or Consulate in Liechtenstein. For assistance and information on travel and security in Liechtenstein, U.S. citizens may contact or register at the U.S. Embassy in Bern at the address above.

LIECHTENSTEIN

Compiled from the November 2003 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Principality of Liechtenstein

PROFILE
HISTORY
GOVERNMENT
POLITICAL CONDITIONS
ECONOMY
DEFENSE
U.S.-LIECHTENSTEIN RELATIONS
TRAVEL

PROFILE

Geography

Area: 61.7 square 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.

People

Nationality: Noun—Liechtensteiner(s); adjective—Liechtenstein.

Population: (2001) 33,525 of which 34.3% are 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.

Government

Type: Hereditary constitutional monarchy.

Independence: Imperial Principality of Liechtenstein established January 23, 1719; established independence from the Holy Roman Empire July 12, 1806.

Constitution: October 5, 1921.

Branches: Executive—chief of state, Prince Hans Adam II, since November 13, 1989, but already assumed executive powers since August 26, 1984; Heir Apparent Prince Alois, son of the monarch was born on June 11, 1968, and will assume executive powers in August 2004. Head of government, Otmar Hasler (since April 5, 2001). Cabinet (five cabinet members); elected by the Diet and approved by the Prince. Legislative—Unicameral Diet or Landtag (25 seats); members are elected by direct popular vote under proportional representation to serve 4-year terms. 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 List (FL).

Currency: Swiss franc.

National holiday: Assumption Day, August 15.

Economy

GDP: (2002)$1.8 billion, down from $2.6 billion in 1999.

Annual growth rate: N/A.

Unemployment: 1.68% (617 persons).

Avg. inflation rate: (2003) 0.7% (same as in Switzerland because of the customs union).

Natural resources: Products—wheat, barley, corn, potatoes, livestock, dairy products.

Industry: Types—electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments, tourism.

Trade: (2002) Exports—$1.8 billion, main products: small specialty machinery, dental products, stamps, hardware, pottery. Major markets—U.S., Germany, Switzerland, France, Italy, Taiwan, Japan, Austria, and U.K. Imports—$877 million: machinery, metal goods, textiles, foodstuffs, motor vehicles. Major suppliers—EU countries, Switzerland.

HISTORY

The Austrian Liechtenstein family acquired the fiefs of Vaduz and Schellenberg in 1699 and 1713 respectively, and they became an independent principality under 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 Liechtenstein family's archives, which had been confiscated during the Soviet occupation of Vienna in 1945 and later moved to Moscow. In 1978, Liechtenste in 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 the World Trade Organization in 1995.

GOVERNMENT

According to the Constitution, the government is a collegiate 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.

Amendment to the Constitution or new law 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 in entitled to exercise his right to state leadership in accordance with the provisions of the Constitution and of other laws.

He represents the state vis-à-vis foreign states. He signs international treaties either in person or delegates this function to a plenipotentiary. Some treaties under international law only become valid when they have been ratified by parliament. The Prince's involvement in legislation includes the right to take initiatives in the form of government bills and the right to veto parliamentary proposals. 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, nevertheless, required.

The Prince has the right to convene and adjourn Parliament and, for serious reasons, to adjourn it for 3 months or to dissolve it. On the basis of the names put forward by Parliament, 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.

The Prince's other authorities include exercising the right to mitigate and commute 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 also must 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; namely, of colleagues collaborating with each other. 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.

POLITICAL CONDITIONS

The political parties are the moving forces with regard to the composition of the government and in the Parliament. For the 2001-05 legislature period of office, one Councilor and three deputies are women. From 1938 to 1997 Liechtenstein had a coalition government. Until a few years ago 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. Since 2001 it has been the Progressive Citizen's Party that has provided all the members of the government. The minority parties, as opposition parties, act as a check on the government in Parliament and on parliamentary commissions.

The Liechtenstein electorate on March 16, 2003, endorsed Prince Hans-Adam II's proposal for a revision of the Liechtenstein Constitution with 64.3% of votes. Prior to the vote, the Prince indicated that he and the reigning family would leave the country if his endorsed Constitution failed to pass. The Prince now has 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 6 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. Finally, the Prince now has the final say on the appointment of judges, and the State Court loses its key competence to mediate between the government and the Prince on constitutional matters. The opponents of the Prince's proposal announced an appeal against the referendum decision before the Liechtenstein State Court. The Council of Europe has indicated that it may "monitor" the new Constitution.

Principal Government Officials
Last Updated: 10/27/03

Head of State: Hans, Adam II, Prince

Head of Government (Prime Minister): Hasler, Otmar

Deputy Head of Government: Kieber- Beck, Rita

Min. for Construction: Hasler, Otmar

Min. for Culture & Sports: Ospelt, Alois

Min. for Economy: Frick, Hansjoerg

Min. for Education: Kieber-Beck, Rita

Min. for Environment, Agriculture, & Forestry: Ospelt, Alois

Min. for Family Affairs & Equal Rights: Hasler, Otmar

Min. for Finances: Hasler, Otmar

Min. for Foreign Relations: Walch, Ernst

Min. for General Government Affairs: Hasler, Otmar

Min. for Health: Frick, Hansjoerg

Min. for Interior: Ospelt, Alois

Min. for Justice: Kieber-Beck, Rita

Min. for Social Matters: Frick, Hansjoerg

Min. for Transport & Communication: Kieber-Beck, Rita

Chmn., Liechtenstein State Bank: Kindle, Herbert

Ambassador to the United States: Fritsche, Claudia

Permanent Representative to the UN, New York: Wenaweser, Christian

Liechtenstein maintains an embassy in the United States at 1300 Eye Street, NW, Washington, D.C. 20005, tel. (202) 216-0460.

ECONOMY

Since the signing of the Customs Treaty in 1924, Liechtenstein and Switzerland have represented one mutual economic area. Therefore, the borders between those states are open. The country also uses the Swiss franc as its national currency, and Swiss customs officers secure its 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 country 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, Liechtenstein developed from a mainly agricultural state to one of the most highly industrialized countries in the world.

Besides its efficient industry, there also is 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 10 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. Liechtenstein exports 12.7% of its goods to Switzerland, 42.1% to the EU, and 45.2% to the rest of the world. It imports more than 90% of its energy requirements. The industry sector contributes 40% of the country's GDP, followed by banking and finance (30%), services (25%), and agriculture (5%).

In 2002, the United States was Liechtenstein's the third most important trading partner, with $334 million (SFr. 518 million) worth of imports and SFr.44.5 million exports. Germany is the most important, with total trade worth $747 million (SFr. 1.1 billion,) and Austria second with $454 million (SFr. 705 million). Although Switzerland is an important trading partner, trade statistics are unavailable because both countries share a customs union. Some 5% of the country's revenues are invested in research and development, one of the driving forces behind Liechtenstein's successful economy. Total research and development spending in 2000 rose by 20.7% to about $149 million (233 million francs).

The Principality of Liechtenstein also is 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 funds transfers.

Liechtenstein has chartered 17 banks, three 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), most for non-Liechtenstein residents. About 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

Defense is the responsibility of Switzerland.

U.S.-LIECHTENSTEIN RELATIONS

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.

Principal U.S. Embassy Officials

The United States does not have an embassy in Liechtenstein, but the U.S. Ambassador to Switzerland also is accredited to Liechtenstein.

Bern (E), Jubilaumsstrasse 93, 3005 Bern, Tel [41] (31) 357-7011, Fax 357-7344; After-hours 357-7218; AMB Tel 357-7259; DCM Tel 357-7258; POL/ECO Tel 357-7424; ADM Tel 357-7295; PAO Tel 357-7238, Fax 357-7379; IPC Tel 357–7201; RSO Tel 357-7296; DEA Tel 357-7367, Fax 357-7253; DAO Tel 357-7240, Fax 357-7381; LEGATT Tel 357-7340, Fax 357-7268; CON Fax 357-7398; FCS Fax 357-7336; COM Fax 357-7336. Website: www.usembassy.ch

Last Modified: Monday, December 08, 2003

TRAVEL

Consular Information Sheet for Liechtenstein and Switzerland
March 7, 2003

Country Descriptions: Switzerland is a highly developed democracy. Liechtenstein is a democratically run constitutional monarchy.

Entry Requirements: A passport is required for travel to both Switzerland and Liechtenstein. A visa is not required for U.S. citizens for stays of up to 90 days in either country. For more information on entry requirements for both countries, travelers may contact the Embassy of Switzerland at 2900 Cathedral Avenue, N.W., Washington, D.C. 20008, telephone (202) 745-7900, or the nearest Swiss Consulate General in Atlanta, Chicago, Houston, Los Angeles, New York, or San Francisco. Additional information for both countries is available at http://www.swissemb.org. In an effort to prevent international child abduction, many governments have initiated new procedures at entry/exit points. These procedures often include requiring documentary evidence of relationship and permission for a child to travel, if the parent(s) or legal guardian is not present. Having such documentation on hand, even if not required, may facilitate entry/departure.

Dual Nationality: U.S. citizens who are also considered by the Swiss Government to have Swiss citizenship may be subject to compulsory military service and other requirements while in Switzerland. Those who might be affected should inquire at a Swiss Embassy or Consulate regarding their status. In some instances, dual nationality may hamper U.S. government efforts to provide protection abroad. In addition to being subject to all Swiss laws affecting U.S. citizens, dual nationals may also be subject to other laws that impose special obligations on Swiss citizens. For additional information, see the Consular Affairs home page on the Internet at http://travel.state.gov for our Dual Nationality flyer.

Safety and Security: The potential for specific threats or acts of violence involving American citizens in Switzerland is remote; nonetheless, travelers should always review their security practices and be alert to their surroundings. The Consular Agencies in Zurich and Geneva may close periodically to assess their security situations. Americans are encouraged to check the Consular Affairs home page for updated travel and security information.

Crime: Switzerland has a low rate of violent crime. However, pick-pocketing and purse snatching do occur in the vicinity of train and bus stations, airports, and some public parks, especially during peak tourist periods (such as summer and Christmas) and when conferences, shows, or exhibits are scheduled in major cities. Liechtenstein has a low crime rate. Travelers may wish to exercise caution on trains, especially on overnight trains to neighboring countries. Even locked sleeping compartments can be entered by thieves, who steal from passengers while they sleep. The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. U.S. citizens may refer to the Department of State's pamphlet, "A Safe Trip Abroad," to promote a trouble-free journey. The pamphlet is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, and via the Internet at http://www.access.gpo.gov/sudocs or via the Bureau of Consular Affairs home page at http://travel.state.gov.

If you are the victim of a crime overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends, and explain how funds could be transferred. Although the investigation and prosecution of a crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal process and to find an attorney if needed.

Medical Facilities and Insurance: Good medical care is widely available. Serious medical problems requiring hospitalization and/or medical evacuation to the United States can cost many thousands of dollars. Doctors and hospitals often expect immediate cash payment for health services.

The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Furthermore, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. However, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas including emergency services such as medical evacuations.

When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the U.S. may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, ascertain whether payment will be made to the overseas healthcare provider or whether you will be reimbursed later for expenses you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death. Supplemental medical insurance with specific overseas coverage, including provision for mountain rescue and/or medical evacuation, is strongly advised, particularly for those who plan to participate in mountain activities (summer or winter). Rescue insurance is available inexpensively in Switzerland and may be purchased at many Swiss post offices. Information can be obtained from the Swiss National Tourist Office: e-mail www.myswitzerland.com, at most tourist information offices in Switzerland, or the U.S. Embassy in Bern. Such insurance has proved useful as uninsured rescues can easily cost $25,000 or more.

Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure, "Medical Information for Americans Traveling Abroad," available via the Bureau of Consular Affairs home page or autofax: (202) 647-3000.

Other Health Information: Information on vaccinations and other health precautions may be obtained from the Centers for Disease Control and Prevention's hotline for International Travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via their Internet site at http://www.cdc.gov. For information about outbreaks of infectious diseases abroad consult the World Health Organization's website at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Switzerland and Liechtenstein is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

Safety of public transportation: Excellent
Urban road conditions/maintenance: Excellent
Rural road conditions/maintenance: Excellent
Availability of roadside assistance: Excellent

Although many roads are mountainous and winding, road safety standards are high. In some mountain areas, vehicle snow chains are required in winter. Road travel can be more dangerous during summer, winter holidays, and Whitsunday weekend (late spring) because of increased traffic. Travel on highways (indicated by green signs with a white highway symbol) requires purchase of a sticker or "vignette," which must be affixed to the car's windshield. Vignettes can be purchased at most border crossing points, gas stations and at Swiss post offices. Drivers using the highway system without a vignette are subject to hefty fines levied on the spot. All forms of public transportation in Switzerland and Liechtenstein are generally excellent.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Swiss civil aviation authority's oversight of Switzerland's air carrier operations as category 1 — in compliance with international aviation safety standards. For further information, travelers may contact the Department of Transportation within the U.S. at 1-800-322-7873, or visit the FAA Internet website at http://www.faa.gov/avr/iasa. The U.S. Department of Defense (DOD) separately assesses some foreign air carriers for suitability as official providers of air services. For information regarding the DOD policy on specific carriers, travelers may contact the Pentagon at 703-697-7288.

Customs Regulations: Switzerland's customs authorities encourage the use of an ATA (Admission Temporaire/Temporary Admission) Carnet for the temporary admission of professional equipment, commercial samples, and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters, located at the U.S. Council for International Business, 1212 Avenue of the Americas, New York, N.Y. 10036, issues and guarantees the ATA Carnet in the United States. For additional information call 212-354-4480, send an e-mail to atacarnet@uscib.org, or visit http://www.uscib.org for details.

Criminal Penalties: U.S. citizens are subject to the laws of the country in which they are traveling. Sometimes these laws can differ significantly from those in the United States and may not afford the protections available to individuals under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. In Switzerland and Liechtenstein, penalties for possession, use, and dealing in illegal drugs are strict, and convicted offenders can expect jail sentences and heavy fines.

Children's Issues: For information on the international adoption of children, international parental child abduction, and international child support enforcement issues, please refer to our Internet site at http://www.travel.state.gov/childrens_issues.html or tel. 1-888-407-4747.

Registration and Embassy and Consulate Locations: U.S. citizens are encouraged to register and obtain updated information on travel and security within Switzerland at the U.S. Embassy in Bern or at the two U.S. Consular Agencies, which offer limited consular services to U.S. citizens, in Zurich and Geneva.

The U.S. Embassy in Bern is located at Jubilaeumstrasse 93, 3005 Bern; Tel. (41)(31) 357-7011, fax (41)(31) 357-7280. The Embassy's 24 hour emergency telephone numbers are(41)(31) 357-7218 or 7777. The Embassy's e-mail address is bernacs@state.gov. The U.S. Embassy website at http://www.us-embassy.ch answers many questions of interest to Americans visiting and residing in Switzerland.

The U.S. Consular Agency in Zurich is located at the American Center of Zurich, Dufourstrasse 101, 8008 Zurich; Tel. (41)(1) 422-2566, fax (41) (1) 383-9814.

The U.S. Consular Agency in Geneva is located at the American Center Geneva, 7 Rue Versonne x, 1207 Geneva; Tel. (41)(22) 840-5160, fax (41)(22) 840-516 2, e-mail: consulate.us@ties.itu.int

There is no U.S. Embassy or Consulate in Liechtenstein. For assistance and information on travel and security in Liechtenstein, U.S. citizens may contact or register at the U.S. Embassy in Bern at the address above.