Andorra Steps Up Efforts to Combat Financial Crime and Terrorism Financing

The Principality of Andorra, a small country nestled in the Pyrenees mountains between France and Spain, has strengthened its anti-money laundering (AML) measures to combat financial crime and terrorism financing. The government has implemented comprehensive legislation and regulations to prevent and detect money laundering activities.

The Law on Prevention and Fight Against Money Laundering and Terrorism Financing

At the helm of Andorra’s AML framework is the Law on Prevention and Fight Against Money Laundering and Terrorism Financing, enacted in 2010. This legislation establishes strict obligations for financial institutions and designated non-financial businesses and professions (DNFBPs) to prevent and detect money laundering activities.

Financial Institutions

• Financial institutions, including banks, insurance companies, and investment firms, are required to implement robust customer due diligence procedures.
• These include:
  • Identification and verification of customers’ identities
  • Monitoring of transactions
  • Reporting of suspicious activities to the Financial Intelligence Unit (FIU)

Designated Non-Financial Businesses and Professions

• DNFBPs, such as lawyers, accountants, real estate agents, and casinos, are also subject to AML obligations.
• They must conduct customer due diligence measures, including:
  • Identification of beneficial owners
  • Implementation of internal controls
  • Reporting of suspicious transactions to the FIU

Customer Due Diligence

Customer due diligence is a fundamental component of AML measures in Andorra. Financial institutions and DNFBPs must conduct thorough due diligence on their customers to ensure they are not involved in money laundering or terrorism financing activities.

Record-Keeping Requirements

Financial institutions and DNFBPs must also maintain adequate records of their customers and transactions. These records should include information on the identity of the customers, the nature of the business relationship, and the source of funds.

The Financial Intelligence Unit (FIU)

Andorra’s FIU plays a crucial role in the country’s AML framework. It is responsible for receiving, analyzing, and disseminating information on suspicious transactions to relevant law enforcement and supervisory authorities.

International Cooperation

Andorra has actively engaged in international initiatives and implemented international standards to strengthen its AML framework. The country is a member of the Financial Action Task Force (FATF) and has undergone mutual evaluations by the FATF to assess its compliance with these standards.

By strengthening its AML measures, Andorra contributes to global efforts to maintain the integrity of the financial system and protect against illicit activities.