Financial Crime World

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Andorra’s Struggle Against Money Laundering: A Review of Anti-Money Laundering Laws

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The Financial Action Task Force (FATF) has evaluated Andorra’s compliance with its recommendations on combating money laundering and terrorist financing. The results show that Andorra has made significant progress, but still faces challenges in implementing the technical requirements.

Compliance Status

Andorra was found to be:

  • Partially compliant in several areas, including:
    • Assessing risk and applying a risk-based approach (R.1)
    • National cooperation and coordination (R.2)
    • Money laundering offense (R.3)
    • Confiscation and provisional measures (R.4)
    • Terrorist financing offense (R.5)
    • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
    • Targeted financial sanctions related to proliferation (R.7)
  • Largely compliant in areas such as:
    • Non-profit organizations (R.8)
    • Financial institution secrecy laws (R.9)
    • Customer due diligence (R.10)
    • Record keeping (R.11)
    • Politically exposed persons (R.12)
    • Correspondent banking (R.13)
    • Money or value transfer services (R.14)
    • New technologies (R.15)
    • Wire transfers (R.16)
    • Reliance on third parties (R.17)
    • Internal controls and foreign branches and subsidiaries (R.18)
    • Reporting of suspicious transactions (R.20)
    • Tipping-off and confidentiality (R.21)
    • DNFBPs: customer due diligence (R.22)
    • DNFBPs: other measures (R.23)
    • Transparency and beneficial ownership of legal persons (R.24)
    • Regulation and supervision of financial institutions (R.26)
    • Powers of supervisors (R.27)
    • Financial intelligence units (R.29)
    • Responsibilities of law enforcement and investigative authorities (R.30)
    • Powers of law enforcement and investigative authorities (R.31)
    • Cash couriers (R.32)
    • Statistics (R.33)
    • Guidance and feedback (R.34)
    • Sanctions (R.35)
    • International instruments (R.36)
    • Mutual legal assistance (R.37)
    • Mutual legal assistance: freezing and confiscation (R.38)
    • Extradition (R.39)
    • Other forms of international cooperation (R.40)

Challenges

Andorra was found to be:

  • Non-compliant in areas such as:
    • Higher-risk countries (R.19)
    • Transparency and beneficial ownership of legal arrangements (R.25)
  • Faces challenges in implementing effective internal controls and foreign branches and subsidiaries (R.18) and relying on third parties (R.17)

Conclusion

The FATF evaluation highlights the need for Andorra to strengthen its anti-money laundering regime, particularly in areas such as customer due diligence, record keeping, and reporting of suspicious transactions. The country’s authorities must also improve their coordination and cooperation with other countries to combat money laundering and terrorist financing.

In conclusion, while Andorra has made significant progress in implementing the technical requirements, it still faces challenges in several areas. The country’s authorities must take concrete steps to address these weaknesses and strengthen its anti-money laundering regime to prevent illicit activities from flourishing in its territory.