Andorra Money Laundering Scandal Rocks Financial World: US Treasury Names Banca Privada d’Andorra as Primary Money Laundering Concern
US Treasury Designates Banca Privada d’Andorra as Foreign Financial Institution of Primary Money Laundering Concern
In a shocking move, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has designated Banca Privada d’Andorra (BPA), a major Andorran bank, as a foreign financial institution of primary money laundering concern. The decision comes after FinCEN found that high-level managers at BPA knowingly facilitated transactions for third-party money launderers acting on behalf of transnational criminal organizations.
Corruption and Weak Anti-Money Laundering Controls Facilitated Money Laundering
According to FinCEN Director Jennifer Shasky Calvery, BPA’s corrupt high-level managers and weak anti-money laundering controls have made it an easy vehicle for third-party money launderers to funnel the proceeds of organized crime, corruption, and human trafficking through the US financial system. “Today’s announcement is a critical step to address this compromised financial institution’s egregious conduct and send a message that the United States will take strong measures to protect the integrity of its financial system from criminal actors,” Calvery said.
BPA’s Activities in Andorra
The scandal involves BPA’s activity in Andorra, where high-level managers established financial services tailored to their third-party money launderer clients to disguise the origins of funds. In exchange for these services, BPA managers accepted payments and other benefits from their criminal clients.
FinCEN’s Action
FinCEN has delivered a notice of its finding to the Federal Register, which explains the basis for this action. The agency also issued a Notice of Proposed Rulemaking (NPRM) that would prohibit covered US financial institutions from opening or maintaining correspondent or payable-through accounts for BPA and other foreign banks used to process transactions involving BPA.
Proposed Measures
The NPRM proposes to require covered financial institutions to apply special due diligence to their correspondent accounts maintained on behalf of foreign banks to guard against processing any transactions involving BPA. The measures are subject to a 60-day comment period.
International Efforts
This action is part of FinCEN’s ongoing efforts to combat money laundering and terrorist financing. The agency has been working closely with international partners, including the Andorran authorities, to investigate this activity fully.
Quotes from Law Enforcement Agencies
- “International financial institutions are welcome to provide a conduit for their customers to utilize American banks, as long as they abide by our laws that govern those transactions,” said Richard Weber, Chief of the IRS Criminal Investigation. “However, when senior managers of these institutions turn to corruption and bribery to enrich themselves, they should not be surprised when special agents from IRS CI come knocking at their door.”
- “This is a significant blow to the criminal organizations that use BPA as a conduit for their illegal activities,” said Peter Edge, Executive Associate Director of U.S. Immigration and Customs Enforcement (ICE). “Today’s action demonstrates our commitment to disrupting and dismantling these criminal networks.”
Warning from FinCEN
FinCEN is urging financial institutions worldwide to remain vigilant and report any suspicious transactions or activity involving BPA or its subsidiaries. The agency is also warning individuals and companies not to do business with BPA until further notice.
Global Financial Community Impacted
The scandal has sent shockwaves through the global financial community, highlighting the need for stricter anti-money laundering controls and international cooperation to combat money laundering and terrorist financing.