Financial Crime World

Andorra Reinforces Financial System Legislation to Meet EU Requirements

The Principality of Andorra has taken significant steps to strengthen its financial system legislation in line with European Union requirements. A series of laws and decrees have been enacted to ensure the robustness and capital adequacy of the country’s financial system, providing robust protection for depositors and investors.

Key Legislative Changes

Strengthening Financial System Legislation

  • Law regulating the disciplinary regime of the financial system (November 27, 1997) establishes a framework for disciplining entities that operate within Andorra’s financial system, aimed at guaranteeing its stability and solvency.
  • Law 35/2018 on solvency, liquidity, and prudential supervision of banking entities and investment firms (December 20, 2018) implements Capital Requirements Regulation (CRR) and Capital Requirements Directive IV (CRD IV) provisions on prudential, solvency, and liquidity requirements.

Accounting Framework

  • Decree approving the accounting framework for entities and collective investment undertakings (December 22, 2016) requires entities operating in Andorra’s financial system to prepare their annual accounts in accordance with international financial reporting standards adopted by the European Union.

Insurance Sector Reform

  • Law 12/2017 on regulation and supervision of insurances and reinsurances in the Principality of Andorra (June 22, 2017) establishes a modern and comprehensive regulatory framework for the Andorran insurance and reinsurance market, aligning with EU requirements.

Anti-Money Laundering and Terrorist Financing

  • Law 14/2017 on the prevention and fight against money or securities laundering and terrorism financing (June 22, 2017) implements the Fourth Money Laundering Directive provisions and recommendations from the Financial Action Task Force (FATF) to adapt Andorra’s legal framework to international standards.

Other Key Legislation

  • Law 20/2014 on electronic contracting and operators that develop their economic activity in a digital space (October 16, 2014) establishes a basic legal framework for electronic contracting and digital commerce.
  • Law 13/2013 regulates effective competition and consumer protection, aimed at improving market efficiency and consumer protection.
  • Decree regulating the cessation of payments and insolvency (October 4, 1969) regulates the premises for declaring insolvency, including arrangements with creditors or liquidation of companies.

Data Protection

  • Law 29/2021 on the protection of personal data (February 2, 2021) ensures the protection of individuals’ personal information in line with EU requirements.

Conclusion

These legislative measures demonstrate Andorra’s commitment to maintaining a robust financial system that meets EU standards and provides adequate protection for depositors and investors.