Financial Crime World

Andorra Fails to Meet FATF Standards in Key Areas

A recent report from the Financial Action Task Force (FATF) has found that Andorra’s efforts to combat financial crime have been lacking in several key areas. The report assesses countries’ compliance with international anti-money laundering and combating terrorist financing standards, giving Andorra a largely compliant rating in some areas but highlighting significant shortcomings.

Risk and Risk-Based Approach

Andorra is deemed to be largely compliant when it comes to assessing risk and applying a risk-based approach. However, this is not the case across all 40 recommendations evaluated by the FATF.

Key Shortcomings

  • National cooperation and coordination: Andorra has failed to meet international standards in this area.
  • Regulation and supervision of financial institutions: The country is rated partially compliant.
  • DNFBPs (designated non-financial business and professions): Andorra needs to improve its regulation and supervision of these entities.
  • Transparency and beneficial ownership of legal persons: The country has been identified as lacking in this area.

Legislation and Enforcement

The FATF report also criticises Andorra’s legislation on money laundering offences, giving it a largely compliant rating. However, the country falls short in several areas, including:

Key Shortcomings

  • Confiscation and provisional measures: Andorra is deemed to be largely compliant.
  • Terrorist financing offence legislation: The country receives a largely compliant rating but has been identified as lacking in its targeted financial sanctions related to terrorism and terrorist financing.

Correspondent Banking

Andorra fares little better on correspondent banking, receiving a largely compliant rating in this area. However, the report highlights several key areas where the country needs to improve:

Key Shortcomings

  • Powers of supervisors: Andorra has a partially compliant rating.
  • Regulation and supervision of financial intelligence units: The country needs to improve its regulation and supervision of these units.

Conclusion

Andorra’s failings in these areas are reflected in its overall FATF rating, which is largely compliant but leaves much to be desired. The report serves as a wake-up call for the government to take action and address the shortcomings highlighted by the FATF.