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Andorra Downgraded on Anti-Money Laundering and Counter-Terrorist Financing Measures

Financial Watchdog Downgrades Andorra to “Partially Compliant” Status

The MONEYVAL Committee, a financial watchdog, has downgraded Andorra to “partially compliant” (PC) on anti-money laundering (AML) and counter-terrorist financing (CFT) measures. This downgrade was announced in the committee’s third Enhanced Follow-up Report, which assessed Andorra’s progress in addressing technical compliance deficiencies identified in 2017.

Progress Made, But Shortfalls Remain

While Andorra has made some improvements, it still falls short of meeting international standards. The report noted that Andorra lacks a requirement to conduct risk assessments prior to launching new products, practices, and technologies. Additionally, the country failed to take appropriate measures to manage and mitigate identified risks.

Positive Developments

Andorra was praised for having addressed previous deficiencies through its 2017 AML/CFT Act. This act requires reporting entities to assess ML/FT risks associated with the development of new products and business practices. The report also highlighted that Andorra has initiated amendments to its AML/CFT Law aimed at regulating virtual assets (VAs) and virtual asset service providers (VASPs). However, these changes have not yet been adopted.

Next Steps

Andorra is encouraged to continue its efforts to address the remaining deficiencies. According to a MONEYVAL spokesperson, “The country’s technical compliance with FATF Recommendations has been re-rated as follows: R1-R8, LC; R9-R15, PC; R16-R20, C; and R21-40, LC.”

Timeline

Andorra will remain in enhanced follow-up and is expected to report back on its progress in one year.

Source: MONEYVAL Committee