Financial Crime World

Andorra Tightens Financial Crime Reporting Rules:An Overview of New Laws and Regulations

Andorra, the tiny principality located between France and Spain, has recently strengthened its financial crime reporting requirements as part of global efforts to combat money laundering and terrorism financing. This article provides an overview of the new regulations announced by the Andorran Financial Authority (AFA).

New Measures to Improve Transparency and Accountability

The AFA has revealed new measures to improve transparency and accountability within the financial sector, including:

  1. Amendments to the Andorran Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) law.
  2. Changes in reporting, identification, and record-keeping procedures for financial transactions.

Stricter Reporting Requirements

Under the new regulations:

  • Financial institutions must report any suspicious transactions over €3,000 to AFA within 15 calendar days.
  • Reports below this threshold can be filed annually.

This represents a stricter approach, as the previous reporting threshold was set at €15,000.

Enhanced Due Diligence (EDD)

Financial institutions are now required to conduct Enhanced Due Diligence (EDD) for transactions, clients, or business relationships that present a higher risk of money laundering or terrorism financing. EDD includes:

  • Gathering and evaluating information from various sources.
  • Assessing the risk.
  • Developing a response strategy to mitigate potential threats.

Risk Assessment System

Financial institutions must maintain a risk assessment system, enabling them to identify and handle transactions and clients with increased risk levels effectively.

Detection and Reporting of Suspicious Activities

Financial institutions are now required to establish and maintain a system for detecting and reporting suspicious transactions or activities related to money laundering and terrorism financing. This new system should include both automated and manual processes.

Verification of Beneficial Owners

To combat money laundering through the use of anonymous accounts, the AFA now requires financial institutions to verify the identity of beneficial owners before opening new accounts. This update aligns with international financial norms set by the Financial Action Task Force (FATF).

Supporting a Competitive Business Environment

Despite the changes, Andorra remains committed to maintaining a competitive business environment while ensuring an agreeable balance between combating financial crimes and fostering a supportive financial sector. The AFA is collaborating with the European Union and other global regulatory bodies to develop a consistent and collaborative response to financial crimes.

Conclusion

The recent updates to Andorra’s financial crime reporting requirements represent a significant shift towards increased transparency and a more robust response to money laundering and terrorism financing. These changes position Andorra as a leader within the European financial sector, ensuring that the principality remains a key player in the global efforts to combat these illicit activities.

  1. Increased scrutiny of financial transactions.
  2. Stricter reporting requirements for suspicious transactions.
  3. Implementation of an enhanced due diligence process.
  4. Adoption of a risk assessment system.
  5. Establishment of a system for detecting and reporting suspicious activities.
  6. Verification of beneficial owners before opening new accounts.
  7. Collaboration with international regulatory bodies.