Financial Crime World

Andorra’s Banco Privada de Andorra Labeled as Money-Laundering Shop by US Regulators

Damning Report by FinCEN

Chris Hamblin, Media correspondent, London, 24 March 2015

US Downgrades Andorra’s Credit Rating

  • A damning report by the US Financial Crimes Enforcement Network (FinCEN) labeled Banco Privada de Andorra (BPA) as a money-laundering operation.
  • This classification led to the downgrading of Andorra’s credit rating by Standard & Poor’s (S&P).
  • The banking sector in Andorra accounts for around 20% of its GDP, making this a significant blow.

Banco Privada de Andorra Classified as Money Laundering Concern

  • The Director of FinCEN classified BPA as “of primary money laundering concern” in February 2015.
  • This classification paves the way for US financial institutions to implement stringent measures to prevent transactions with the Andorran bank.

Banco Privada de Andorra: A Hidden Den of Money Laundering

Background

  • Banco Privada de Andorra (BPA) is the fourth-largest of Andorra’s five banks and functions as a subsidiary of the BPA Group.
  • Founded in 1962, the bank provides private banking, corporate banking, and small-scale personal banking services.
  • It operates in Andorra and has foreign branches in Spain, Switzerland, Luxembourg, Panama, and Uruguay.

Accusations

  • BPA’s top officials, known as High-Level Managers, are accused of colluding with third-party money-launderers (TPMLs) to process illicit transactions.
  • These managers had close relationships with the TPMLs and facilitated transactions worth billions of dollars for corrupt officials and criminal organizations.

Case Studies

Andrey Petrov and High-Level Manager A

  • A Russian TPML named Andrey Petrov and High-Level Manager A at BPA in Andorra colluded to help Petrov secure a line of credit from a Spanish bank.
  • Spanish police later arrested him and several associates for money laundering approximately €56 million.

Venezuelan TPML and High-Level Manager B

  • A Venezuelan TPML and his network used BPA to deposit the proceeds of public corruption.
  • High-Level Manager B at BPA facilitated the transactions, opening a shell company on behalf of the Venezuelan TPML and allowing him to give false contracts to support the transactions.
  • Approximately $2 billion moved through various Venezuelan shell company accounts at BPA, some of which transited through the US.

BPA’s Negligence

  • BPA’s negligence in monitoring transactions was evident in several instances.
  • High-Level Managers knowingly provided services to unlicensed money transmitters.
  • Large, round dollar amounts and wire transfers worth over $50 million involving Panamanian shell companies raised red flags.

Conclusion

  • The US Department of the Treasury’s FinCEN report unearthed striking evidence of money laundering activities at Banco Privada de Andorra.
  • The implications of this revelation could significantly impact the reputation of Andorra, which has long been known for its tax havens and offshore banking sector.