Andorra Fails to Meet Anti-Money Laundering and Terrorist Financing Standards

A recent report by MONEYVAL, the Council of Europe’s anti-money laundering and terrorist financing monitoring body, has found that Andorra has made insufficient progress in implementing measures to combat money laundering and terrorist financing.

Inadequate Measures

The report criticizes Andorra for:

• Failing to conduct risk assessments prior to the launch of new products, practices, and technologies
• Not taking adequate measures to manage and mitigate risks identified
• Being only partially compliant with Recommendation 15, which requires countries to assess the money laundering and terrorist financing risks associated with virtual assets and service providers

Progress Made

Andorra has made some progress in addressing deficiencies identified in previous reports, including:

• Introduction of new requirements for reporting entities to assess ML/FT risks related to the development of new products and business practices
• Lack of definition of virtual asset service providers (VASPs) and legislation regulating VASPs and virtual assets

Remaining Deficiencies

The report highlights that Andorra’s risk assessment in relation to virtual assets is lacking concrete information gathered on the VASP sector and key threats and vulnerabilities associated with VASP products and operations. Additionally, the country’s failure to regulate VASPs means that they are currently unsupervised.

Recommendations

MONEYVAL has urged Andorra to:

• Continue its efforts to address remaining deficiencies
• Adopt legislation regulating VASPs and virtual assets without delay
• Report back on its progress in one year’s time
• Remain in enhanced follow-up until it meets the required standards

Consequences

The report highlights that Andorra’s technical compliance with FATF Recommendations has been downgraded from “compliant” to “partially compliant” due to these shortcomings.