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Financial Crime Prevention Tips in Andorra

In a bid to strengthen its anti-money laundering (AML) framework, the principality of Andorra has implemented a comprehensive legal framework to combat money laundering and terrorist financing. The country’s efforts have been recognized globally, with Andorra being a member of the Financial Action Task Force (FATF) and actively participating in international initiatives.

AML Legislation in Andorra

The Law on the Prevention and Fight against Money Laundering and the Financing of Terrorism, enacted in 2010, sets out the obligations of financial institutions, designated non-financial businesses and professions (DNFBPs), and other entities to prevent and detect money laundering activities. The law also establishes the Financial Intelligence Unit (FIU) as the central authority responsible for receiving, analyzing, and disseminating suspicious transaction reports.

Financial Institutions and DNFBPs

Financial institutions in Andorra, including banks, insurance companies, and investment firms, are subject to strict AML regulations. They must implement robust customer due diligence (CDD) procedures, including:

  • Identification and verification of customers’ identities
  • Monitoring of transactions
  • Reporting of suspicious activities to the FIU

DNFBPs, such as lawyers, accountants, real estate agents, and casinos, are also subject to AML obligations. They must conduct CDD measures, including:

  • Identification of beneficial owners
  • Implementation of internal controls
  • Reporting of suspicious transactions to the FIU

Customer Due Diligence

Conducting thorough due diligence on customers is a fundamental component of AML measures in Andorra. Financial institutions and DNFBPs must:

  • Identify and verify customers’ identities
  • Assess their risk profiles
  • Monitor their transactions
  • Apply enhanced due diligence measures to high-risk customers, such as PEPs and customers from high-risk jurisdictions

Record Keeping and Reporting

Financial institutions and DNFBPs must maintain adequate records of their customers and transactions. These records should include information on:

  • The identity of the customers
  • Nature of the business relationship
  • Source of funds

They must also report suspicious transactions to the FIU by filing suspicious transaction reports (STRs) whenever they have reasonable grounds to suspect that a transaction is related to money laundering or terrorist financing.

Financial Intelligence Unit (FIU)

The FIU plays a crucial role in Andorra’s AML framework, receiving, analyzing, and disseminating information on suspicious transactions to relevant law enforcement and supervisory authorities. The FIU collaborates with international counterparts and participates in global initiatives to combat money laundering and terrorist financing.

International Cooperation

Andorra recognizes the importance of international cooperation in the fight against money laundering and terrorist financing. The country has actively engaged in international initiatives and implemented international standards to strengthen its AML framework. Andorra is a member of the FATF and has undergone mutual evaluations by the organization to assess its compliance with these standards.

Conclusion

In conclusion, Andorra’s commitment to combating financial crime and terrorism financing is evident through its robust AML legislation, customer due diligence requirements, and the role of the Financial Intelligence Unit. By actively participating in international initiatives and cooperating with other countries, Andorra contributes to the global efforts to maintain the integrity of the financial system and protect against illicit activities.