Financial Crime World

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Andorra Strengthens Anti-Money Laundering Measures to Combat Financial Crime

The principality of Andorra, nestled between France and Spain, has taken significant steps to enhance its anti-money laundering (AML) framework, reflecting the country’s commitment to combating financial crime and terrorism financing.

History of AML Efforts in Andorra

In 2010, Andorra enacted the Law on the Prevention and Fight against Money Laundering and the Financing of Terrorism, which established the obligations of:

  • Financial institutions, including banks, insurance companies, and investment firms
  • Designated non-financial businesses and professions (DNFBPs), such as lawyers, accountants, real estate agents, and casinos
  • Other entities to prevent and detect money laundering activities

The law also created the Financial Intelligence Unit (FIU) as the central authority responsible for:

  • Receiving suspicious transaction reports
  • Analyzing and disseminating information on suspicious transactions
  • Collaborating with international counterparts and participating in global initiatives to combat money laundering and terrorist financing

AML Regulations and Requirements

Financial institutions in Andorra are subject to strict AML regulations, requiring them to:

Implement robust customer due diligence procedures

  • Identify and verify customers’ identities
  • Assess their risk profiles
  • Ongoingly monitor transactions
  • Report suspicious activities to the FIU

DNFBPs are also required to conduct:

Customer Due Diligence Measures

  • Identification and verification of customers’ identities
  • Assessment of their risk profiles
  • Ongoing monitoring of transactions
  • Reporting of suspicious transactions to the FIU

Enhanced Due Diligence Measures

Andorra’s financial institutions and DNFBPs apply enhanced due diligence measures to:

High-Risk Customers

  • Politically exposed persons (PEPs)
  • Those from high-risk jurisdictions

Record-Keeping Requirements

Financial institutions and DNFBPs are required to maintain adequate records of their customers and transactions, including information on:

Customer Identification and Transactions

  • Identity of customers
  • Nature of business relationships
  • Source of funds

Suspicious Transaction Reports

Suspicious transaction reports must be filed with the FIU whenever there is reasonable ground to suspect a transaction is related to money laundering or terrorist financing.

International Cooperation

Andorra recognizes the importance of international cooperation in fighting financial crime and has actively engaged in:

Global Initiatives

  • Participating in FATF (Financial Action Task Force) initiatives
  • Implementing international standards to strengthen its AML framework

The country is a member of the Financial Action Task Force (FATF), an intergovernmental organization that sets global standards for AML and counter-terrorism financing, and has undergone mutual evaluations by the FATF to assess its compliance with these standards.

Conclusion

Andorra’s commitment to combating financial crime and terrorism financing is evident in its robust AML legislation, rigorous customer due diligence requirements, and active participation in international initiatives. The country’s efforts contribute to maintaining the integrity of the global financial system and protecting against illicit activities.