Financial Crime World

Andorra’s Secretive Firms Linked to Global Money Laundering Schemes

A recent discovery has shed light on a web of secrecy surrounding several companies registered in Andorra, a small principality nestled in the Pyrenees between France and Spain. A private contract signed on October 29, 2010, between Andorran Financial Services Institute (AFSI) and an individual has revealed the firm’s involvement in global money laundering schemes.

Involvement with High-Profile Corruption Cases

According to documents obtained by this newspaper, AFSI worked with individuals linked to high-profile corruption cases in Spain, Brazil, and Portugal. One such case involves Ángel Cisneros Pérez, a “manager of money transfers” for his own companies, who was mentioned as having sent €730,000 abroad.

Money Laundering Schemes

The company, Lelila Inc, was dissolved only after AFSI and Alcogal received information from Spain’s Abc newspaper in 2015 about an operation against Chinese entrepreneur Gao Ping, whose business illegally sent €70 million to China from Andorra. Cisneros Pérez was later tried for money laundering as part of one of Spain’s biggest ever mafia cases.

Complex Tax Structures

AFSI also worked with Luis Carlos Fernandes Afonso, financial director of the Petros Foundation linked to Brazil’s Petrobras oil company and the country’s largest corruption scandal, “Lava Jato.” AFSI opened a company on his behalf in 2011, known as Ode Investments Group, which was used to hide funds received as bribes.

  • Another case involves Carlos Fernando Costa, former president of Petros, who was convicted in the Lava Jato case. The company told its counterparts in Panama not to dissolve the company but to change the name of the principal shareholder.
  • AFSI’s involvement in complex tax structures has also been revealed, including companies created in the Virgin Islands that acted as shareholders for companies in the Netherlands or Dutch Antilles.

“Dutch Sandwich” Scheme

This “Dutch sandwich” allowed dividends to leave a country and legally go to a Dutch company, where they were not taxed, before being taken to a tax haven.

Investigations and Consequences

The Andorran authorities have been investigating several cases arising from the main BPA case, including accusations of money laundering after taking tainted money from Odebrecht. The small bank also helped prominent members of Mexico’s Institutional Revolutionary Party (PRI) use Andorra to hide their money.

  • Despite these revelations, the Andorran government is striving to project an image of a country committed to fiscal transparency and with a hard line on money laundering.
  • The principality exchanges information with about 100 countries, including members of the European Union, and its Financial Intelligence Unit (Uifand) follows 40 FATF recommendations to prevent crime.

Unanswered Questions

However, questions remain unanswered regarding AFSI’s version of events, and Andbank, which declined to comment. As Andorra faces up to the past, the country must confront the secrecy surrounding its financial institutions and the impact it has had on global money laundering schemes.