Andorra’s Financial Institutions Face Stringent Regulatory Requirements
The Principality of Andorra has implemented a range of regulatory requirements for financial institutions operating within its borders. These measures aim to enhance investor protection, prevent money laundering and terrorism financing, and ensure transparency in tax compliance.
Enhanced Investor Protection and Anti-Money Laundering Measures
One key piece of legislation is Law 8/2013, which incorporates the Markets and Financial Instruments Directive (MiFID) into national law. The directive sets out basic principles on:
- Organizational requirements
- Operating conditions
- Investor protection
- Market abuse
- Financial guarantee agreements for financial institutions in Andorra
Financial institutions are required to establish policies on:
- Pre-contractual information
- Conflict of interest management
- Order execution
- Asset safeguarding
International Tax Transparency Efforts
The Common Reporting Standard (CRS) has been implemented in Andorra through Law 19/2016. The CRS is an international standard for the automatic exchange of tax information between countries, aimed at improving international tax compliance and combating tax evasion.
Under the law, financial institutions in Andorra are required to perform due diligence on account holders and report certain information to the authorities, which will then be exchanged with other participating countries.
Anti-Money Laundering and Counter-Terrorism Financing Measures
Andorran financial institutions are also subject to strict anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. The Andbank group has published a general statement on money laundering policies, which outlines its commitment to preventing money laundering and terrorism financing.
Guidance for Financial Institutions
The Wolfsberg Group AML Questionnaire is available online, providing guidance on best practices for financial institutions in complying with AML/CTF regulations. The USA PATRIOT Act Certificate is also accessible online, highlighting Andorra’s commitment to international cooperation in combating money laundering and terrorism financing.
Guarantee Schemes
Finally, the regulatory requirements for financial institutions in Andorra also cover guarantee schemes, which are designed to provide protection to investors in the event of insolvency or other adverse events. Access to information on guarantee schemes is available online, providing further guidance on these important regulations.
By implementing these stringent regulatory requirements, Andorra aims to maintain a secure and trustworthy financial environment for its citizens and international partners alike.