Financial Crime World

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Andorra’s Financial Crime Investigation Procedures Under Scrutiny

A recent evaluation of Andorra’s financial crime investigation procedures has highlighted several areas that require improvement. The country received ratings from the Financial Action Task Force (FATF), which reflect its compliance with international anti-money laundering and counter-terrorism financing standards.

Compliance Ratings

According to the report, Andorra is:

  • Partially compliant in 14 out of 40 evaluation criteria, including:
    • Assessing risk and applying a risk-based approach
    • National cooperation and coordination
    • Confiscation and provisional measures
    • Targeted financial sanctions related to terrorism and terrorist financing
    • Non-profit organisations
    • Customer due diligence
    • Record keeping
    • Reliance on third parties
  • Largely compliant in 16 areas, such as:
    • Money laundering offence
    • Politically exposed persons
    • Correspondent banking
    • Wire transfers
    • Reporting of suspicious transactions
    • Tipping-off and confidentiality
    • DNFBPs: customer due diligence
    • Regulation and supervision of financial institutions
    • Powers of supervisors
    • Financial intelligence units
    • Statistics
    • Guidance and feedback
    • International instruments
    • Other forms of international cooperation
  • Non-compliant in three areas, including:
    • Financial institution secrecy laws
    • Higher-risk countries
    • DNFBPs: other measures
  • Compliant only in two areas, namely:
    • Regulation and supervision of DNFBPs
    • Mutual legal assistance: freezing and confiscation

Deficiencies Identified

The FATF report has identified several deficiencies in Andorra’s financial crime investigation procedures, including:

  • Inadequate regulations and supervision of financial institutions
  • Lack of transparency in beneficial ownership of legal persons and arrangements
  • Insufficient cooperation with other countries in the fight against money laundering and terrorist financing

Deadline for Reform

Andorra has been given a deadline to address these shortcomings and improve its compliance with international standards. The country must now implement reforms to strengthen its financial crime investigation procedures and prevent the misuse of its financial system for illegal activities.