Andorra’s Financial Sector Adapts to New Compliance and Regulatory Changes

Andorra, a small principality nestled in the Pyrenees mountains between France and Spain, has been working tirelessly to strengthen its financial regulatory framework to align with international standards. A series of key changes have taken effect in recent years, aimed at improving investor protection, preventing money laundering and terrorist financing, and increasing transparency.

Key Developments

• Implementation of MiFID (Markets and Financial Instruments Directive): Law 8/2013 sets out the basic principles for financial institutions operating in Andorra, including organizational requirements, operating conditions, investor protection, market abuse prevention, and financial guarantee agreements.
• Adoption of CRS (Common Reporting Standard): The Automatic Exchange Law, passed in 2016, came into effect on January 1, 2017, requiring Andorran financial institutions to report and conduct due diligence on financial account information to improve international tax compliance.

Combating Money Laundering and Terrorist Financing

• Completion of USA Patriot Act questionnaire: Andorra has implemented strict measures to prevent money laundering and terrorist financing, including the completion of the USA Patriot Act questionnaire.
• Submission of AML Wolfsberg Questionnaire: Andorran banks have adopted comprehensive policies on prevention of money laundering and the fight against terrorism.

Investor Protection and Financial Stability

• Guarantee schemes for investors: Andorra’s financial institutions have established guarantee schemes to protect investors and ensure the stability of the financial system.

Conclusion

These regulatory changes demonstrate Andorra’s commitment to aligning its financial sector with international standards and best practices. The country is now well-positioned to maintain its reputation as a secure and transparent financial hub in the region.