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Andorra Meets Most AML/CFT Standards, Minor Deficiencies Remain

Andorra has made significant progress in addressing its deficiencies under the Financial Action Task Force (FATF) Recommendations 16, 20, and 22. According to a report released today, Andorra has met most of the criteria, with only minor shortcomings remaining.

Progress Under Recommendation 16

Under Recommendation 16, Andorra was found to have addressed all but one deficiency, relating to batch file transfers. While there is no direct requirement for payment service providers (PSPs) to ensure that batch files contain required originator and beneficiary information, Andorra has implemented procedures to detect missing information.

Progress Under Recommendation 20

Andorra’s efforts to address deficiencies under Recommendation 20 were also recognized, with the country re-rated as Compliant after previously being rated Partially Compliant. The deficiency related to the criminalisation of money laundering (ML) offenses, including tax crime and smuggling of goods, which has been rectified through amendments to its anti-money laundering (AML) legislation.

Progress Under Recommendation 22

Under Recommendation 22, Andorra was found to have addressed most deficiencies, with only minor issues remaining. The report noted that Andorra’s AML/CFT Act requires all obliged entities, including designated non-financial businesses and professions (DNFBPs), to apply customer due diligence measures. However, the definition of trust and company service providers in the AML/CFT Act is still narrower than required by the standard.

Progress Under Recommendation 23

The report also highlighted Andorra’s progress under Recommendation 23, with the country re-rated as Compliant after previously being rated Partially Compliant. The deficiency related to reporting obligations, including requirements for non-financial entities to contract an independent external audit and ensure that foreign branches and majority-owned subsidiaries apply AML/CFT requirements consistent with home country requirements.

Remaining Deficiencies

While Andorra has made significant progress in addressing its deficiencies, minor shortcomings remain. The report noted that Andorra needs to continue working on ensuring that all reporting entities immediately obtain information on the nature and purpose of a business relationship, as required by Recommendation 22.

Conclusion

The FATF Recommendations are internationally recognized standards for combating money laundering and terrorist financing. Andorra’s progress in addressing its deficiencies is seen as an important step towards strengthening its AML/CFT regime and maintaining its position as a responsible financial jurisdiction.