Andorra’s Anti-Terrorism Efforts Leave Much to Be Desired
A recent evaluation has highlighted significant shortcomings in Andorra’s efforts to combat terrorism and terrorist financing. Despite its close relationship with European Union (EU) member states, Andorra has not taken sufficient steps to recognize terrorists and terrorist organizations designated by the EU and neighboring countries.
Regulatory Regime for Non-Profit Organizations
The report notes that Andorra lacks a robust regulatory regime for non-profit organizations (NPOs), which are vulnerable to being misused for terrorist financing purposes. Furthermore, NPOs operating in close proximity to conflict areas have a lack of awareness about terrorist financing risks.
Countering Proliferation Financing
Andorra’s framework for countering proliferation financing is also incomplete, with insufficient evidence of coordination and cooperation among relevant authorities. The country has not frozen any assets or funds related to proliferation financing, leaving it unclear whether the authorities have an adequate understanding of these risks.
Financial Sector
In addition, the financial sector in Andorra continues to be plagued by a high reliance on cash transactions, which makes it difficult to track and trace suspicious activity. While some banks have taken steps to strengthen their anti-money laundering (AML) and counter-terrorism financing (CFT) policies and procedures, smaller financial institutions and designated non-financial businesses and professions (DNFBPs) appear less aware of these risks.
Supervision Regime
The report also highlights concerns about the effectiveness of Andorra’s supervision regime. The country’s Financial Intelligence Unit (UIFAND) is understaffed and lacks resources, which hampers its ability to conduct effective inspections and monitoring. Furthermore, the UIFAND does not fully apply a risk-based approach to supervision, instead focusing primarily on ensuring that policies and procedures are in place.
Coordination and Engagement
The evaluation also notes that there is limited coordination and engagement between Andorra’s supervisory authorities, including the prudential supervisor and DNFBP sector. This lack of cooperation and information-sharing hinders the country’s ability to effectively combat terrorist financing and money laundering.
Conclusion
In conclusion, while Andorra has made some progress in combating terrorism and terrorist financing, there is still much work to be done to bring its regime up to international standards. The country must prioritize strengthening its regulatory framework, enhancing supervision and coordination among authorities, and increasing awareness of terrorist financing risks among financial institutions and DNFBPs.
- Strengthen regulatory regime for non-profit organizations
- Improve countering proliferation financing framework
- Enhance financial sector’s anti-money laundering and counter-terrorism financing policies and procedures
- Improve supervision regime through risk-based approach and adequate resources
- Increase coordination and engagement between supervisory authorities