Financial Crime World

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Andorra Fights Financial Crime with Mixed Results, says FATF Report

A recent report by the Financial Action Task Force (FATF) has given Andorra mixed ratings on its efforts to combat financial crime and money laundering.

Implementation of Technical Requirements

The report assesses Andorra’s implementation of technical requirements set out in the FATF Recommendations. The country received a rating of “partially compliant” (PC) for 18 of the 40 recommendations, indicating that it has made some progress but still needs to improve in certain areas.

Areas of Improvement

Andorra received a PC rating in several areas, including:

  • Assessing risk and applying a risk-based approach (Recommendation R.1)
  • National cooperation and coordination (Recommendation R.2)
  • Confiscation and provisional measures (Recommendation R.4)

Money Laundering and Terrorist Financing

Andorra received an LC rating for several recommendations related to money laundering offence (R.3), terrorist financing offence (R.5), and targeted financial sanctions related to terrorism and terrorist financing (R.6).

Secrecy Laws as a Major Obstacle

The country’s secrecy laws were found to be a major obstacle in implementing some of the FATF Recommendations, particularly in areas such as:

  • Customer due diligence (R.10)
  • Record keeping (R.11)

Andorra was also rated LC for several recommendations related to financial institution secrecy laws (R.9) and correspondent banking (R.13).

Areas for Improvement

The report highlighted several areas where Andorra needs to improve, including:

  • Lack of transparency in beneficial ownership of legal persons and arrangements (Recommendation R.25)
  • Need for more effective regulation and supervision of financial institutions (Recommendation R.26)

Progress Made

Despite these challenges, the FATF report noted that Andorra has made some progress in recent years, particularly in implementing measures to prevent terrorist financing and proliferation.

Conclusion

The government of Andorra will need to address these shortcomings in order to improve its overall rating and ensure that it is effectively combating financial crime.