"ZOMBIE TRUST" crisis due to the impact of US sanctions on Russian-linked trusts
07/07/2025
It has been reported that Liechtenstein is currently facing a significant financial crisis due to the impact of US sanctions on Russian-linked trusts.
The crisis has been dubbed the "ZOMBIE TRUST" CRISIS because many of these trusts have been left without managers, effectively freezing the assets within them. Approximately 475 trusts have been affected by the crisis.
Here's a brief overview of the situation:
- Sanctions and Trusts: The US imposed sanctions on Russian individuals and entities following Russia's invasion of Ukraine. These sanctions targeted assets held in trusts in Liechtenstein, many of which are linked to Russian oligarchs, including Vladimir Potanin and Gennady Timchenko.
- Manager Exodus: Due to the fear of repercussions from the US, many trust managers in Liechtenstein resigned en masse. This left hundreds of trusts without anyone to manage them, effectively freezing assets such as luxury real estate and yachts.
- Economic Impact: The financial sector, particularly trust funds, plays a crucial role in Liechtenstein's economy. The sudden freeze of these assets has created a significant economic challenge for the country.
- Government Response: The Liechtenstein government is working to address the crisis by appointing new managers to the trusts and considering centralising fund management to strengthen state control over the sector.
This situation highlights the far-reaching impact of international sanctions and the interconnectedness of global financial systems.
Sources
US sanctions against Russia hit trust funds in Liechtenstein ...https://finance.liga.net/en/ekonomika/novosti/liechtenstein-on-the-brink-of-its-biggest-crisis-since-2008-due-to-hundreds-of-trusts-linked-to-russia
$930 Billion at Risk! Tiny Liechtenstein Becomes the Epicenter of a ...https://regtechtimes.com/liechtensteins-trust-industry-shaken-by-russian/
FT – BEHIND A PAYWALL - https://www.ft.com/content/9581d545-2a2c-40cc-a7c6-14ddf31a06a4
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