Activity
The activities of STIFA focus on the supervision of common-benefit foundations and establishments as well as private-benefit foundations and establishments that have voluntarily submitted to supervision. Unless the entity is exempted from the obligation to appoint an auditor, STIFA receives an annual audit report on the proper management and use of the assets for its supervisory purposes. These reports are processed by STIFA and, if necessary, regulatory measures are requested from the Princely Court of Justice. In the case of foundations and establishments that are exempt from the obligation to appoint an auditor, STIFA normally carries out audits itself every three years. Furthermore, STIFA’s remit also includes checking the accuracy of the filed notifications of formation and amendments in the event of private-benefit foundations not entered in the Commercial Register.
Supervised entities
1 These numbers include common-benefit and private-benefit foundations and establishments.
The material change in the case of private-benefit establishments relative to previous years results from the fact that STIFA decided in the year under review to apply the option of voluntary supervision provided for private-benefit foundations analogously to private-benefit establishments (Art. 551 Para. 2 in conjunction with Art. 552 § 29 Para. 1 Sentence 2 of the Liechtenstein Persons and Companies Act (“PGR”)). Besides the 82 foundations and establishments that came under supervision for the first time in 2019, STIFA released 4 foundations from its supervision, 69 supervised foundations were put into liquidation and 70 were removed from the Commercial Register. For the first time since 2011, there was a slight fall in the number of common-benefit foundations (reduction of 0.9 % compared to 2018).
Proceedings concerning auditors
| 2019 | 2018 | 2017 | 2016 | |
| Proceedings to appoint auditors | 116 | 93 | 95 | 121 |
| Proceedings for exemption from the obligation to appoint an auditor | 6 | 23 | 18 | 28 |
During the year under review, 116 foundations and establishments applied to the Princely Court of Justice for auditors to be appointed. STIFA was a party to each of these proceedings. During the year under review, 6 foundations applied to STIFA to be exempted from the obligation to appoint an auditor (Art. 552 § 29 Para. 3 PGR).
Audits conducted by the auditors
| Financial year | 2018 | 2017 | 2016 | 2015 |
| Objections | 21 | 26 | 48 | 46 |
| Referrals | 111 | 111 | 115 | 99 |
On 31 December 2019, 127 (previous year 128) audit reports were still outstanding. This means the number of objections and referrals relating to the audited 2018 financial year will increase slightly until the reports have been submitted in full.
With regard to the objections raised by auditors relating to the 2018 financial year, it should be noted that these were largely due to improper use of the assets of the foundation (e.g. distributions to non-beneficiary organisations; no distributions made over a longer period). In addition, organisational shortcomings (e.g. lack of documentation of foundation council resolutions; amendments of foundation documents incompatible with the provisions of foundation law or the articles) also led to a higher number of objections. With regard to the referrals made by auditors concerning the 2018 financial year, the picture is broadly similar, namely that a large proportion of the matters requiring notification related to deficiencies in distribution practice.
Audits conducted by STIFA
| 2019 | 2018 | 2017 | 2016 | |
| Objections | 6 | 15 | 7 | 8 |
| Referrals | 35 | 30 | 24 | 21 |
In the case of foundations and establishments that are exempt from the obligation to appoint an auditor, STIFA normally carries out the audit itself every three years. STIFA subjected a total of 67 (58 in the previous year) common-benefit foundations to an independent audit during the year under review. With regard to the objections and referrals ascertained by STIFA, it should be noted that, the picture is broadly analogous to the objections and referrals made by the auditors, namely that deficiencies or matters requiring notification were identified primarily on account of the improper use of the assets of the foundation and organisational shortcomings. In addition, STIFA highlighted the disproportionately high costs of foundation management.
Supervisory proceedings and other proceedings
| 2019 | 2018 | 2017 | 2016 | |
| Supervisory proceedings pursuant to Art. 552 § 29 Para. 3 PGR Application submitted by STIFA |
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| Proceedings opened | 16 | 13 | 12 | 20 |
| Proceedings concluded | 18 | 12 | 13 | 22 |
| Proceedings pending | 0 | 2 | 2 | 2 |
| of which pending before appeal | 0 | 0 | 1 | 1 |
| Supervisory proceedings pursuant to Art. 552 § 29 Para. 4 PGR Application submitted by foundation participants |
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| Proceedings opened | 4 | 3 | 6 | 1 |
| Proceedings concluded | 4 | 5 | 3 | 4 |
| Proceedings pending | 3 | 4 | 6 | 3 |
| of which pending before appeal | 1 | 2 | 1 | 3 |
| Proceedings pursuant to Art. 552 § 33 and 34 PGR Change of purpose / change of other content |
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| Proceedings opened | 6 | 4 | 5 | 1 |
| Proceedings concluded | 3 | 4 | 2 | 0 |
| Proceedings pending | 5 | 4 | 4 | 1 |
| Referral of matters to the Office of the Public Prosecutor | 1 | 7 | 1 | 8 |
In 16 cases STIFA applied to the Princely Court of Justice for supervisory measures during the year under review. In addition, in 4 instances foundation participants applied to the Princely Court of Justice for supervisory measures to be taken against foundations and establishments subject to STIFA supervision. STIFA was a party to each of these cases. Furthermore, in 2019 STIFA was asked to issue statements in 6 cases on account of its party status in respect of changes to the purpose and other contents of the foundation documents, in particular the organisation, that had been requested at the Princely Court of Justice. STIFA moreover reported one case to the Office of the Public Prosecutor due to suspected breach of trust pursuant to § 153 of the Liechtenstein Criminal Code by a member of the foundation council.
Audits of formation and amendment notifications
| 2019 | 2018 | 2017 | 2016 | |
|---|---|---|---|---|
| Audited non-registered foundations | ||||
| (brackets: number of representatives) | 107 (17) | 86 (16) | 72 (11) | 60 (6) |
In the case of a total of 17 representatives, the accuracy of the notifications of formation and amendments of private-benefit foundations not entered in the Commercial Register (Art. 552 § 21 PGR) was verified on a random basis during the year under review. Of the total of 107 foundations audited, there was only one referral concerning a missing signature certification. No objections were made.