Andorra Raises Its Anti-Money Laundering and Combating the Financing of Terrorism Rating

From Partially Compliant to Largely Compliant: Andorra’s Significant Improvements

Andorra has made notable strides in strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations, resulting in a re-rating from Partially Compliant to Largely Compliant by the Financial Action Task Force (FATF).

Addressing Previous Deficiencies

Prior to these improvements, FATF had identified several shortcomings in Andorra’s regulatory framework. Specifically, the country was criticized for not requiring certain financial institutions and designated non-financial businesses and professions (DNFBPs) to comply with customer due diligence (CDD) requirements.

Key Changes

To address these concerns, Andorra has implemented several key changes:

• The AML/CFT Act of 2017 requires all obliged entities, including DNFBPs, to comply with CDD measures set out in Recommendation R.10.
• Casinos and other gambling services providers are now required to apply CDD measures upon the collection of winnings or wagering of a stake, regardless of transaction amount.
• The definition of trust and company service providers has been broadened to include activities such as providing accommodation for companies or partnerships, arranging for another person to act as a trustee, and acting as a nominee shareholder. This brings Andorra’s definition in line with international standards.

Strengthened Record-Keeping Requirements

Andorra has also strengthened its record-keeping requirements, making them applicable to all reporting entities. While minor issues still remain regarding the timely provision of information on the nature and purpose of business relationships, these are expected to be resolved shortly.

Improved Rating

Andorra’s progress in addressing AML/CFT deficiencies has earned it a re-rating from Largely Compliant to Compliant with Recommendation R.22, while also improving its overall rating.