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What is Money Laundering in Andorra?

In recent years, Andorra has taken significant steps to strengthen its anti-money laundering (AML) framework. Located in the Pyrenees mountains between France and Spain, the small principality has implemented a comprehensive legal framework to combat money laundering and terrorist financing.

AML Legislation in Andorra

Andorra’s main legislation governing AML is the Law on the Prevention and Fight against Money Laundering and the Financing of Terrorism, enacted in 2010. The law establishes obligations for financial institutions, designated non-financial businesses and professions (DNFBPs), and other entities to prevent and detect money laundering activities.

Financial Institutions and DNFBPs

Andorra’s financial institutions, including banks, insurance companies, and investment firms, are subject to strict AML regulations. They must conduct thorough customer due diligence (CDD) procedures, including:

  • Identification and verification of customers’ identities
  • Monitoring of transactions
  • Reporting of suspicious activities to the Financial Intelligence Unit (FIU)

DNFBPs, such as lawyers, accountants, real estate agents, and casinos, are also subject to AML obligations. They must conduct CDD measures, including:

  • Identification of beneficial owners
  • Implementation of internal controls
  • Reporting of suspicious transactions to the FIU

Customer Due Diligence

CDD is a fundamental component of Andorra’s AML framework. Financial institutions and DNFBPs must conduct thorough due diligence on their customers to ensure they are not involved in money laundering or terrorist financing activities. This includes:

  • Identification and verification of customers’ identities
  • Assessment of risk profiles
  • Ongoing monitoring of transactions

Record Keeping and Reporting

Financial institutions and DNFBPs are required to maintain adequate records of their customers and transactions. They must also report suspicious transactions to the FIU, filing suspicious transaction reports (STRs) whenever they have reasonable grounds to suspect a transaction is related to money laundering or terrorist financing.

Financial Intelligence Unit (FIU)

Andorra’s FIU plays a crucial role in the country’s AML framework. It receives, analyzes, and disseminates information on suspicious transactions to relevant law enforcement and supervisory authorities. The FIU collaborates with international counterparts and participates in global initiatives to combat money laundering and terrorist financing.

International Cooperation

Andorra recognizes the importance of international cooperation in combating money laundering and terrorist financing. The country has actively engaged in international initiatives, implemented international standards, and signed various international agreements on mutual legal assistance and extradition.

Conclusion

In conclusion, Andorra’s efforts to strengthen its AML framework demonstrate its commitment to combatting money laundering and terrorist financing. By participating in international initiatives and cooperating with other countries, Andorra contributes to the global efforts to maintain the integrity of the financial system and protect against illicit activities.