Financial Crime World

Andorra’s AML/CFT Landscape: A MONEYVAL Report Analysis

Andorra, a small European principality, underwent a rigorous evaluation by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). This article examines Andorra’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) policies based on MONEYVAL’s Fifth Round Mutual Evaluation Report (MER) published in 2017.

Key Findings

  • Adoption of National Risk Assessment (NRA): Andorra adopted a candid NRA and action plans in December 2016. 1
  • Political Commitment: The political commitment to strengthen AML/CFT measures has been evident. 2
  • Cooperation and communication: Effective cooperation and communication between financial intelligence unit (UIFAND) and Law Enforcement Agencies (LEAs). 3
  • Investigation, Prosecution, and Conviction Rates: Andorra has modest results in terms of investigation, prosecution, and conviction rates regarding ML/TF cases. 4
  • Challenges: Areas for improvement include supervision, strategic engagement, and coordination among authorities. 5

National Risk Assessment (NRA) [1]

In December 2016, Andorra adopted a candid NRA. The assessment covers Money Laundering (ML) threats such as tax evasion, fraud, and corruption. Andorra also identified tobacco smuggling as a high risk. Despite having a low domestic crime rate, the country faces potential ML risks from foreign criminals using its financial system.

Political Commitment [2]

There has been a clear political commitment to revise and strengthen AML/CFT legislation. Key legislation, such as the Law on international cooperation in criminal matters and the fight against money laundering and the financing of terrorism, was already underway during the on-site visit.

Cooperation and communication [3]

The cooperation and communication between UIFAND and LEAs have been effective and collaborative. UIFAND uses intelligence and information from UIFAND to develop investigations efficiently.

Investigation, Prosecution, and Conviction Rates [4]

Andorra has recorded modest results in terms of investigation, prosecution, and conviction rates regarding ML/TF cases. The country has a small law enforcement and magistrates’ community, which has facilitated good cooperation and coordination. However, longer proceedings and complex cases call for further reforms.

Challenges [5]

Andorra has made progress in implementing AML/CFT regulations but still faces certain challenges:

  • Supervision: Improving oversight of regulated entities is crucial.
  • Strategic Engagement: Developing effective strategies for identifying and addressing ML/TF risks is essential.
  • Coordination among authorities: Enhancing cooperation and coordination between authorities will help address ML/TF risks more effectively.
  • Addressing International Risks: Addressing ML risks related to international financial transactions and foreign subsidiaries of Andorran banks remains a challenge.