Financial Crime World

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Andorra’s AML/CFT Measures: Progress Made, but Deficiencies Remain

In its latest country update report, Andorra has made significant progress in addressing technical compliance deficiencies identified by MONEYVAL. However, certain shortcomings remain, particularly with regards to the regulation of Virtual Asset Service Providers (VASPs) and Virtual Assets (VAs).

Assessment Highlights

According to the report, Andorra has conducted a specific risk assessment for VASPs and the VA sector as part of its National Risk Assessment 2020. While this is a positive step, the country still lacks a definition for VASPs, which are outside the scope of its Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Act.

Progress and Shortcomings

The report highlights that certain legislative acts aimed at addressing these deficiencies have not yet been adopted and cannot be considered. Andorra is encouraged to continue its efforts to address the remaining shortcomings.

MONEYVAL’s Assessment

Despite these challenges, MONEYVAL has re-rated Andorra’s technical compliance with the FATF Recommendations as follows:

  • Recommendation 8: Andorra has made sufficient progress in addressing some of the technical compliance deficiencies identified.
  • Recommendation 15: Andorra’s rating has been downgraded from “Largely Compliant” to “Partially Compliant” due to the lack of definition for VASPs and the absence of regulations governing their activities.

Future Expectations

Andorra will remain in enhanced follow-up and is expected to report back to MONEYVAL on its progress in one year’s time. The country’s technical compliance with the FATF Recommendations has been re-rated as follows:

  • Recommendation 1-10: Largely Compliant
  • Recommendation 11-20: Partially Compliant
  • Recommendation 21-30: Largely Compliant
  • Recommendation 31-40: Partially Compliant

Conclusion

Overall, MONEYVAL’s assessment highlights the need for Andorra to continue its efforts to strengthen its implementation of AML/CFT measures.