Financial Crime World

Andorra Fails to Meet International Anti-Money Laundering Standards

Summary of Findings

A recent mutual evaluation report by the Financial Action Task Force (FATF) has revealed that Andorra has failed to meet several key requirements for combating financial crime. The country’s ratings reflect a lack of progress in implementing technical requirements outlined in the FATF Recommendations.

Areas of Weakness

The report identified weaknesses in various areas, including:

  • Assessing Risk and Applying a Risk-Based Approach: Andorra was found to be non-compliant with regards to assessing risk and applying a risk-based approach.
  • National Cooperation and Coordination: The country’s ratings were partially compliant (PC) due to weaknesses in national cooperation and coordination to combat financial crime.
  • Regulation and Supervision of Financial Institutions: Andorra received PC ratings for regulation and supervision of financial institutions, highlighting the need for improvement.
  • Confiscation and Provisional Measures: The country was found to be non-compliant with regards to confiscation and provisional measures.
  • Reporting of Suspicious Transactions: Andorra’s ratings were also partially compliant (PC) due to weaknesses in reporting suspicious transactions.

Areas of Compliance

However, the country received largely compliant (LC) ratings for areas such as:

  • Customer Due Diligence: Andorra was found to be compliant with regards to customer due diligence.
  • Record Keeping: The country’s records keeping practices were also deemed compliant.
  • Reliance on Third Parties: Andorra’s reliance on third parties was considered compliant.

Recommendations for Improvement

The FATF has urged the government to take concrete steps to address these weaknesses and improve its anti-money laundering framework. Key areas where Andorra needs to improve include:

  • Enhancing National Cooperation and Coordination: Strengthening national cooperation and coordination to combat financial crime.
  • Strengthening Regulation and Supervision of Financial Institutions: Improving regulation and supervision of financial institutions.
  • Improving Transparency and Beneficial Ownership: Enhancing transparency and beneficial ownership of legal persons.
  • Enhancing Powers of Supervisors and Law Enforcement Agencies: Strengthening the powers of supervisors and law enforcement agencies.

Conclusion

Andorra’s failure to meet international standards raises concerns about the country’s ability to prevent and detect financial crime. The FATF has given the government a deadline to implement these recommendations and improve its ratings. Failure to do so may result in further sanctions or reputational damage for the country.