Andorra Under Fire for Terrorist Financing Risks

International authorities have released a scathing report criticizing Andorra’s lack of measures to combat terrorist financing and money laundering, despite its close ties with neighboring countries and the European Union.

Lack of Measures to Prevent Abuse of Non-Profit Organizations (NPOs)

• Andorra has not fully implemented measures to prevent the abuse of NPOs for terrorist financing purposes.
• The country lacks a robust system for monitoring and supervising NPOs, leaving them vulnerable to exploitation by criminal groups.

Financial Institutions and Businesses at Risk

• Andorra’s financial institutions and businesses have been found to be at risk due to inadequate controls and supervision.
• Some banks continue to rely heavily on cash transactions, while others may be downplaying the risks of money laundering and terrorist financing.

Lack of Coordination with Neighboring Countries and the European Union

• The authorities expressed concern about Andorra’s lack of coordination with neighboring countries and the European Union in combating terrorist financing and money laundering.
• This raises questions about whether the country has an adequate understanding of the risks posed by these threats.

Limited Regulatory Regime for NPOs

• Andorra’s limited regulatory regime for NPOs does not fully target or seem proportionate to the risk of abuse.
• The authorities have also failed to train NPOs on possible misuse of the sector for terrorist financing purposes, leaving them unaware of the risks.

Conclusions and Recommendations

The report concludes that Andorra needs to take immediate action to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) framework, including:

• Implementing robust export controls over proliferation-sensitive goods and technologies.
• Improving coordination with neighboring countries and the European Union in combating terrorist financing and money laundering.

Warning from International Authorities

Andorra’s authorities have been given a stern warning by international authorities to improve their measures to prevent terrorist financing and money laundering. The country must take concrete steps to demonstrate its commitment to addressing these risks and preventing the abuse of its financial system.

In summary, Andorra needs to take immediate action to strengthen its AML/CFT framework and address the risks posed by terrorist financing and money laundering. Failure to do so may result in further international scrutiny and potential consequences for the country’s financial stability.