Financial Crime World

Andorra Fails to Meet International Standards on Money Laundering Detection Methods

A recent evaluation by the Financial Action Task Force (FATF) has revealed that Andorra, a small European principality, has failed to implement several key measures to prevent money laundering and terrorist financing. The country received ratings ranging from “largely compliant” to “partially compliant” on 40 different criteria.

Key Findings

  • Andorra needs to improve its risk assessment and application of a risk-based approach to prevent financial crimes.
  • Strengthening national cooperation and coordination with other countries is necessary to combat money laundering and terrorist financing.
  • The country’s laws and regulations regarding money laundering offenses are in place, but the FATF recommends enhancing confiscation and provisional measures to freeze and seize illegal funds.

Areas for Improvement

  • Risk assessment: Andorra needs to improve its risk assessment and application of a risk-based approach to prevent financial crimes.
  • Regulation and supervision: The country received lower ratings for its regulation and supervision of financial institutions and designated non-financial businesses and professions (DNFBPs).
  • Transparency in beneficial ownership: Andorra’s lack of transparency in beneficial ownership of legal persons and arrangements was highlighted as an area for improvement.
  • International cooperation: Limited international cooperation and mutual legal assistance were also identified as areas that require attention.

Government Response

Andorra’s government has vowed to address the FATF’s recommendations and improve its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The country has committed to:

  • Strengthening its AML/CFT framework
  • Increasing international cooperation to combat financial crimes
  • Improving transparency and beneficial ownership of legal persons and arrangements

Next Steps

The FATF’s evaluation is a critical step in assessing Andorra’s progress in combating money laundering and terrorist financing. The country must now take concrete steps to address the recommendations and ensure that it meets international standards on AML/CFT.

In conclusion, Andorra faces significant challenges in implementing effective measures to detect and prevent money laundering and terrorist financing. It is essential for the country to prioritize these efforts and work towards strengthening its AML/CFT regime to meet international standards.