Financial Crime World

Banks in Andorra Take Steps to Prevent Money Laundering

Andorra, a small principality nestled in the Pyrenees mountains between France and Spain, has made significant strides in implementing measures to prevent money laundering. According to the latest follow-up report from the Financial Action Task Force (FATF), a global watchdog on financial crime, Andorra’s banking sector has largely complied with international standards.

Assessing Risk and Applying a Risk-Based Approach

The report highlights that Andorra has implemented effective procedures for assessing risk and applying a risk-based approach. This involves:

  • Identifying high-risk customers and transactions
  • Implementing measures to prevent suspicious activity
  • Establishing robust customer due diligence processes, including verifying the identity of customers and conducting regular reviews of their accounts

National Cooperation and Coordination

The report notes that Andorra has made progress in promoting national cooperation and coordination among financial institutions, law enforcement agencies, and regulatory bodies. This includes:

  • The establishment of a Financial Intelligence Unit (FIU) as a central repository for suspicious transaction reports
  • Analysis provided by the FIU to help prevent money laundering

Confiscation and Provisional Measures

Andorra’s laws provide for effective confiscation and provisional measures, including:

  • Freezing orders
  • Asset seizures
  • Regulations to prevent the misuse of its financial system, such as restrictions on anonymous transactions and requirements for banks to report suspicious activity

Terrorist Financing Offense

The report notes that Andorra has a law in place that specifically prohibits terrorist financing offenses. This makes it easier to prosecute individuals who engage in this type of activity. Banks in the country have also implemented measures to prevent terrorist financing, including:

  • Screening transactions against sanctions lists
  • Monitoring customer activity for suspicious behavior

Targeted Financial Sanctions

Andorra’s financial institutions have been implementing targeted financial sanctions related to terrorism and terrorist financing, which involves freezing assets and restricting transactions with designated entities.

Non-Profit Organizations

The report highlights that Andorra has implemented effective measures to regulate non-profit organizations (NPOs). This includes:

  • Registering NPOs with the relevant authorities
  • Requiring them to maintain records of their activities
  • Implementing measures to prevent the misuse of NPOs for money laundering purposes

Financial Institution Secrecy Laws

Andorra has revised its financial institution secrecy laws, making it easier for banks to disclose information about customers suspected of money laundering or terrorist financing.

Customer Due Diligence

Banks in Andorra have implemented robust customer due diligence processes. This includes:

  • Verifying the identity of customers
  • Conducting regular reviews of their accounts

Overall, the report highlights that Andorra’s banking sector has made significant progress in implementing measures to prevent money laundering. While there are still areas for improvement, the country is moving in the right direction to comply with international standards and protect its financial system from illicit activities.