Justice in the style of a prince

The region is returning to its roots in medieval absolutism.

Liechtenstein aims to be a clean financial center with the rule of law, an independent judiciary, and a modern ruler. Those who store their money here can trust that everything is above board.

The fact that a medieval fortress clings to the mountainside above Vaduz shouldn't deter investors, donors, or anyone looking for a safe haven for their money in uncertain times. An absolutist prince still rules here, but in a modern version.

He could, of course, refuse to sign any law, thus preventing it from coming into force. He could, of course, refuse to recognize the result of any referendum, thus invalidating it. He could overrule parliament and even dismiss rulers he dislikes. After all, the courts in this country are called the Princely Regional Court, the Princely High Court, and the Princely Supreme Court.

Foreign judges, mostly imported from Austria, preside here. They are not civil servants, but rather employees, chosen by the Judicial Selection Committee, some of whose members are lawyers and trustees. The Prince himself serves as chairman of the Judicial Selection Committee.

So that everyone knows who is in charge in Liechtenstein's judicial system, every verdict is issued "in the name of Prince and People." In that order, mind you. Upon inquiry, the Crown Prince graciously states that he naturally does not interfere in the independent third branch of government, the judiciary. A somewhat strange claim, considering that all verdicts are issued in his name.

This is also a ruling that eliminated previously existing legal certainty and, with legal caveats, ushered in a return to medieval arbitrary law. This concerns foundation law in the Ländle region.

After Liechtenstein's accession to the Automatic Exchange of Information meant that foundations lost their attractiveness as hiding places for undeclared money, their number shrank from over 50,000 to under 9,000 within a few years. However, the number of trustees and lawyers in Liechtenstein who made a fortune by establishing and managing these foundations remained the same.

However, these approximately 140 trustees, who are required to sit on every foundation under princely law, now have less than a fifth of these funds at their disposal. In their desperation, they occasionally resort to unfair methods to offset the dramatic loss of income.

How else could one maintain one's accustomed standard of living? A Liechtenstein trustee, for example, managed to build what is arguably the most complete collection of Rolls-Royces in the world. He had a multi-story museum built specifically for them so that he could edify himself with them.

But alas, in 2021, this collection went under the hammer; its precious pieces were sold at auction. While proceedings are underway against the previously highly respected owner on suspicion of breach of trust and money laundering. And the proceedings are ongoing, because such matters are handled rather leisurely in the name of the prince.

Other trustees, including a princely privy councilor and other dignitaries, ended up in jail for simply dipping into the coffers. More sophisticated members of the guild resort to the trick of so-called decanting. Since, as foundation board members, they have the right to represent the foundation, they simply pour the financial contents of a foundation into a new container. If the founder then inquires about the whereabouts of his assets, he is told with a regretful shrug that they are gone. Where to? Well, unfortunately, attorney-client and business privilege prohibit further disclosure.

This method, however, quickly spread, and more and more founders resorted to countermeasures by having themselves, or at least a beneficiary, sit on the foundation's board. This allowed the trustees to be kept under close scrutiny.

But nothing is too difficult for the Liechtenstein financial engineer. How does he get rid of this unwanted inspector, who not only prevents decanting, but also prevents the trustee from self-indulging with exorbitant self-imposed fees, lavish expense regulations, and annual lump sums?

The founder or beneficiary as a member of the foundation board must go, that's clear. They stand in the way of the usual and proper self-enrichment. But how? That's where the royal judiciary comes into play. Because even in the state of Baden-Württemberg, the disruptive foundation board cannot simply be banished with the stroke of a pen. Instead, they must be extracted through the courts. But how?

Even the judicial engineer in the Ländle region isn't afraid of this. After all, this foundation board is also a beneficiary. This constellation allows a judge, in the name of the prince (and the people), to hang him. The letter reads "mere appearance of a possible conflict of interest." What that is? It doesn't matter; the important thing is that such an appearance of something possible can easily be assumed of anyone and anything.

A glance at the sky might reveal the mere appearance of possible rain, even though the observer doesn't have an umbrella. A clear conflict of interest. Something like that. Now, an upstanding citizen might think that the prince surely wouldn't allow such a regression into pure arbitrariness and Wild West justice to persist through all instances. But he's mistaken about the prince, because even his highest court protected this Wild West, which was then used to evict an undesirable foundation board member and beneficiary from his foundation.

Whereupon the remaining Liechtenstein foundation board members (or, more precisely, one who then brought a second on board) approved lavish fees totaling €50,000 per person per month, mind you, and they've been doing so for over a year. In return? Due to a lack of expertise, they're dismantling the foundation's real estate assets to bits. Managing approximately 900 properties exceeds the capabilities of a harmless Liechtenstein lawyer, who, after all, has only learned to count money and use text blocks to establish a foundation.

Is there anything else going on in the princely Wild West region? Oh yes, because this bizarre ruling must be legally acknowledged and defended. Initially, they simply wanted to sweep it under the rug. But after critical publicity arose, the published reasoning behind this scandalous ruling by the princely court now clearly demonstrates what the people in the region think of the rule of law:

"A legal opinion does not necessarily have to be based on a specific statutory norm to be constitutional. It is precisely the task of every court not only to interpret the laws and thus necessarily specify their normative content, but also to fill existing gaps with the rule that the court, as legislator, would establish."

Again, for the layperson: This means that if existing princely laws don't suit the princely court, then it can simply ignore them. This is shocking because it eliminates any legal certainty. Anyone who believes they are protected by existing princely laws, who believes that everything is subject to law and order as in a civilized state, with the court ensuring that decisions are made according to these laws and within this legal system, is mistaken.

It's high time the Princely Court put a stop to this arbitrary justice system. Fortunately, it has the authority and the power to do so, before such Wild West justice causes further serious damage to the Liechtenstein financial center. After all, what founder would still entrust their assets to a Liechtenstein foundation in such uncontrolled growth? If appearances aren't deceiving, they run a huge risk of losing their money. While the Princely court provides complicity.