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Andorra Adopts Stricter Financial Regulations to Combat Money Laundering and Terrorism Financing
The government of Andorra has introduced a range of new financial regulations aimed at combating money laundering and terrorism financing. These regulations come into effect on [date] and are designed to strengthen the country’s anti-money laundering (AML) and counter-terrorism financing (CFT) framework.
Simplified Due Diligence Measures
Under the new regulations, banking entities in Andorra will be required to apply simplified due diligence measures to clients, businesses, and transactions. This includes:
- Enhanced customer due diligence
- Monitoring of transactions
- Reporting of suspicious activities to the Financial Intelligence Unit (UIFAND)
Depositor Protection Regime
Andorra has also introduced a depositor protection regime, which guarantees deposits up to EUR100,000 in the event of bank insolvency. This regime is aligned with Directive 2014/49/EU of the European Parliament and Council.
Bank Secrecy Requirements
The Andorran Criminal Law regulates the breach of professional secrecy, making it a criminal offence punishable by imprisonment and disqualification from the position. However, due to international requirements on the exchange of information for tax purposes recommended by the OECD, bank secrecy is no longer applicable in Andorra.
Prudential Regime
Law 35/2018 requires banking entities to have minimum internal capital that is adequate in quantity, quality, and distribution. The law also introduces obligations to:
- Cover 100% of liquidity outflows net of inflows with high-liquidity assets within 30 days
- In a stress scenario
Benefits of the New Regulations
The new regulations are designed to strengthen Andorra’s financial system and protect its reputation as a safe and secure financial hub. The measures will also help to prevent money laundering and terrorism financing, ensuring that the country is in compliance with international standards.
Timeline for Implementation
The new regulations will come into effect on [date] and will be implemented by banking entities, financial institutions, and other relevant parties in Andorra.
Conclusion
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Andorra’s adoption of stricter financial regulations is a significant step towards strengthening its anti-money laundering and counter-terrorism financing framework. The measures are designed to protect the country’s financial system, prevent money laundering and terrorism financing, and ensure compliance with international standards.