Financial Crime World

Andorra’s AML/CTF Compliance Requirements Under Scrutiny: FATF Assessment Reveals Mixed Results

The Financial Action Task Force (FATF) has released its latest assessment of Andorra’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures, highlighting areas where the country falls short in implementing the required standards.

Progress Made

According to the report, Andorra has made progress in certain areas, including:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Transparency and beneficial ownership of legal persons (R.25)

Shortcomings Identified

However, the assessment also reveals significant shortcomings in other critical areas, including:

  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • International cooperation and mutual assistance (R.37-40)

Compliance Status

Andorra’s AML/CTF framework has been found to be largely compliant in several key areas, including:

  • Customer due diligence (R.10)
  • Record keeping (R.11)
  • Reporting of suspicious transactions (R.20)

However, the country still lags behind in implementing effective measures to prevent money laundering and terrorist financing, particularly with regards to:

  • Financial institution secrecy laws (R.9)
  • Correspondent banking (R.13)
  • Wire transfers (R.16)

Room for Improvement

The FATF assessment also highlights areas where Andorra has room for improvement, including:

  • Regulation and supervision of financial institutions (R.26) and DNFBPs (R.28)
  • Powers of supervisors (R.27) and law enforcement authorities (R.30)
  • Transparency in beneficial ownership of legal arrangements (R.25)
  • Limited cooperation with international partners in mutual legal assistance and extradition (R.37-40)

Call to Action

The FATF has urged Andorra to address these shortcomings and implement more effective measures to prevent money laundering and terrorist financing. Failure to do so could result in the country being placed on a watchlist, which would have severe consequences for its financial sector and reputation.