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Banking Regulatory Framework in Andorra

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Andorra has a robust regulatory framework in place for banking entities, ensuring compliance with international Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) standards. This summary provides an overview of the key aspects of the regulatory framework.

AML/KYC Requirements

Compliance with International Standards

Andorra is committed to complying with international AML/CFT standards, ensuring a secure and transparent banking environment.

Banking Entity Obligations

Banking entities in Andorra must:

  • Identify clients and beneficial owners: Prior to establishing a business relationship.
  • Report suspicious transactions: To the UIFAND (Unitat d’Intervenció Financera i Antidolencià, Financial Intervention and Anti-Doping Unit).
  • Maintain client admission policy, documentation, and employee training programs: Ensuring effective AML/CFT measures are in place.
  • Conduct independent external audits: To ensure compliance with regulatory requirements.

Depositor Protection

Guarantee Scheme

Deposits in Andorran banks are guaranteed up to EUR100,000. The FAGADI (Fondo de Garantia d’Andorra, Andorran Deposit Guarantee Fund) administers the deposit guarantee scheme, with ex ante resources reaching 0.8% of guaranteed deposits by 2024.

Bank Secrecy

International Cooperation

Bank secrecy is no longer applicable in Andorra due to international cooperation on tax purposes. Three types of exchange of information for tax purposes are regulated:

  • On request: When requested by another country.
  • Automatic: Through automatic exchange of financial account information.
  • Spontaneous: Voluntary exchange of information.

Prudential Regime

Alignment with EU Directives

Law 35/2018 aligns Andorran banking regulations with EU Directives and Regulations on prudential requirements for credit institutions. Banking entities must:

  • Maintain minimum internal capital: Adequate in quantity, quality, and distribution.
  • Subdivide capital into categories: Common Equity Tier 1, Additional Tier 1, and Tier 2.

Note

This summary is based on the provided text only and may not be exhaustive or up-to-date. For more detailed information or specific questions, it’s recommended to consult the original sources or relevant authorities.