Andorran Banks Strive for Compliance in Face of International Regulations

The financial system of Andorra is a vital component of the country’s economy, accounting for approximately 20% of its gross domestic product alongside the insurance sector. The banking sector has a rich history spanning over 85 years and consists of five major banking groups: Andbank, Banc Sabadell d’Andorra, Credit Andorrà, Vallbanc, and Mora Banc.

International Regulations and Compliance

In recent times, the Andorran financial system has undergone significant changes in response to international regulations aimed at enhancing fiscal transparency, combating crime, and preventing money laundering and terrorist financing. As a result, opening a bank account in Andorra has become a more complex process, with banks demanding:

• Extensive personal information
• Detailed knowledge of clients’ operations

OECD Membership and Automatic Exchange of Financial Information

As an OECD member, Andorra is subject to the automatic exchange of financial information, also known as the Common Reporting Standard (CRS), which aims to combat tax evasion. To ensure compliance with international regulations, Andorran banks are strictly adhering to measures designed to prevent:

• Tax fraud
• Money laundering

Recent Developments in the Sector

One of the recent developments in the sector has been the accession of the five Andorran banking entities to SEPA (Single Euro Payments Area). This move allows them to join a geographic area where payments can be made and received with ease, regardless of location. The benefits of SEPA include:

• Lower commissions
• No need for SWIFT transfers between member countries

Our Banking Compliance Services

At our firm, we have a team dedicated to banking compliance that works closely with all Andorran banks to assist clients in opening bank accounts and navigating communications with financial institutions.