Andorra Takes Steps to Address Deficiencies in Financial Regulation

In an effort to enhance its financial regulation, the government of Andorra has implemented measures to address shortcomings identified by international authorities. These efforts aim to guarantee the stability and integrity of its financial system.

Strengthening Business and Professional Repute Criteria

The country’s officials have published a document outlining the business and professional repute criteria for entities operating in the financial sector. This includes:

• Information on professional experience
• Education
• Non-conviction records
• Certificates of criminal record from Andorra and foreign countries

Clarifying Criteria for Rejecting Applications

The government has clarified the criteria for rejecting applications from entities that may negatively affect the stability or reputation of the Andorran financial system. This is based on:

• Article 27 of Law 8/2013
• Article 17 of Law 35/2010
• Ensuring sound and prudent management

Preventing Criminal Activity in Financial Sector

Andorra has implemented precautionary measures to prevent entities operating in the financial sector from being compromised by criminal activity. These include:

• Restrictions on entities affected by serious offences (Article 12 of Law 35/2018)
• Licencing requirements

Enhancing Cooperation with International Partners and Domestic Regulators

The country’s authorities have emphasized their commitment to cooperation with international partners and domestic regulators to prevent money laundering and terrorist financing. The Andorran Financial Authority (AFA) conducts checks using various databases and verification processes to reject not only criminals but also their associates from holding significant interests or management positions.

Addressing Remaining Deficiency

Despite these efforts, a deficiency remains in that close associates of criminals occupying shareholding or management roles are not explicitly covered by legal and regulatory measures. The country’s authorities have acknowledged this gap and continue to work towards addressing it.

IMF Assessment

The International Monetary Fund (IMF) has praised Andorra’s efforts, rating the country as “mostly met” in its assessment of financial regulation. However, there are still areas for improvement, including:

• Consolidated group supervision
• Licencing requirements
• Insurance sector oversight

Commitment to Strengthening Financial Regulatory Framework

Andorra’s authorities have committed to continuing their efforts to strengthen the country’s financial regulatory framework, ensuring a stable and trustworthy environment for both domestic and international investors.