Background:
The Principality of Liechtenstein was established within the Holy
Roman Empire in 1719; it became a sovereign state in 1806. Until the
end of World War I, it was closely tied to Austria, but the economic
devastation caused by that conflict forced Liechtenstein to enter
into a customs and monetary union with Switzerland. Since World War
II (in which Liechtenstein remained neutral), the country's low
taxes have spurred outstanding economic growth. However,
shortcomings in banking regulatory oversight have resulted in
concerns about the use of the financial institutions for money
laundering.