Financial Crime World

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Andorra’s Anti-Money Laundering and Combating the Financing of Terrorism Compliance Requirements Under Scrutiny

In its latest report, Andorra has been evaluated on its compliance with the Financial Action Task Force (FATF) Recommendations, which assess the country’s efforts to prevent money laundering and terrorist financing. The report highlights areas where Andorra needs improvement, as well as its strengths in implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.

Assessing Risk and Applying a Risk-Based Approach

Andorra has made significant progress in this area, with the country’s financial institutions showing a good understanding of the risk-based approach. However, there is still room for improvement in terms of the frequency and quality of risk assessments.

National Cooperation and Coordination

The report praises Andorra’s efforts in promoting national cooperation and coordination among its various authorities, including the Financial Intelligence Unit (FIU) and law enforcement agencies.

Money Laundering Offence

Andorra has implemented a robust legal framework to combat money laundering, with severe penalties for those found guilty. However, there are concerns about the lack of publicly available information on court decisions and convictions related to money laundering.

Confiscation and Provisional Measures

The country’s confiscation regime is considered effective, but there are concerns about the lack of transparency in the freezing and confiscation of assets.

Terrorist Financing Offence

Andorra has a strong legal framework in place to combat terrorist financing, with severe penalties for those found guilty. However, there are concerns about the lack of publicly available information on court decisions and convictions related to terrorist financing.

Targeted Financial Sanctions

The report notes that Andorra’s targeted financial sanctions regime is effective, but there are concerns about the lack of transparency in the listing and de-listing process.

Non-Profit Organisations

Andorra has implemented measures to prevent non-profit organisations from being used for money laundering or terrorist financing. However, there are concerns about the lack of guidance on the due diligence requirements for such entities.

Financial Institution Secrecy Laws

The country’s financial institution secrecy laws have been revised to ensure that they do not hinder AML/CFT efforts.

Customer Due Diligence

Andorra has implemented measures to improve customer due diligence, including the requirement for financial institutions to verify the identity of customers and beneficial ownership.

Record Keeping

The report notes that Andorra’s record-keeping requirements are robust, but there are concerns about the lack of guidance on the retention period for records.

Politically Exposed Persons

Andorra has implemented measures to prevent the misuse of politically exposed persons (PEPs) for money laundering or terrorist financing. However, there are concerns about the lack of publicly available information on PEPs and their activities in the country.

Correspondent Banking

The report notes that Andorra’s correspondent banking requirements are robust, but there are concerns about the lack of guidance on the due diligence requirements for correspondent banks.

Money or Value Transfer Services

Andorra has implemented measures to prevent the misuse of money or value transfer services for money laundering or terrorist financing. However, there are concerns about the lack of publicly available information on these entities and their activities in the country.

Andorra has implemented measures to improve transparency and beneficial ownership of legal persons. However, there are concerns about the lack of publicly available information on company ownership structures.

Regulation and Supervision of Financial Institutions

Andorra has implemented measures to regulate and supervise financial institutions. However, there are concerns about the lack of publicly available information on the supervision process.

Powers of Supervisors

The report notes that Andorra’s supervisors have robust powers to investigate and enforce AML/CFT regulations. However, there are concerns about the lack of transparency in the enforcement process.

International Cooperation

Andorra has implemented measures to promote international cooperation on AML/CFT. However, there are concerns about the lack of publicly available information on the country’s international cooperation efforts.

Conclusion

Overall, the report notes that Andorra has made significant progress in implementing AML/CFT regulations. However, there are still areas where improvement is needed, particularly in terms of transparency and public disclosure.