Financial Crime World

ANDORRA TIGHTENS LID ON MONEY LAUNDERING: A LOOK AT THE PRINCIPALITY’S AML FRAMEWORK

In recent years, Andorra has taken significant steps to strengthen its anti-money laundering (AML) framework, solidifying its commitment to combatting financial crime and terrorism financing. As a small principality nestled in the Pyrenees mountains between France and Spain, Andorra’s unique position as a tax haven has long made it an attractive destination for illicit financial activities.

AML LEGISLATION AND FINANCIAL INSTITUTIONS

The law requires financial institutions, including banks, insurance companies, and investment firms, to implement robust customer due diligence (CDD) procedures. This includes identifying and verifying customers’ identities, monitoring transactions, and reporting suspicious activities to the Financial Intelligence Unit (FIU).

DNFBPs, such as lawyers, accountants, real estate agents, and casinos, are also subject to AML obligations. They must conduct CDD measures, including identifying beneficial owners, implementing internal controls, and reporting suspicious transactions to the FIU.

CUSTOMER DUE DILIGENCE AND RISK ASSESSMENT

Customer due diligence is a fundamental component of Andorra’s AML framework. Financial institutions and DNFBPs are required to conduct thorough due diligence on their customers to ensure they are not involved in money laundering or terrorist financing activities. This includes identifying and verifying customers’ identities, assessing their risk profiles, and ongoing monitoring of transactions.

Enhanced due diligence measures are applied to high-risk customers, such as politically exposed persons (PEPs) and customers from high-risk jurisdictions.

Benefits

  • Enhanced customer due diligence measures
  • Ongoing monitoring of transactions
  • Risk assessment for high-risk customers

FINANCIAL INTELLIGENCE UNIT

The FIU plays a crucial role in Andorra’s AML framework. It is responsible for receiving, analyzing, and disseminating information on suspicious transactions to relevant law enforcement and supervisory authorities. The FIU collaborates with international counterparts and participates in global initiatives to combat money laundering and terrorist financing.

Benefits

  • Receiving and analyzing information on suspicious transactions
  • Disseminating information to relevant authorities
  • Collaboration with international counterparts

INTERNATIONAL COOPERATION

Andorra recognizes the importance of international cooperation in the fight against money laundering and terrorist financing. The country has actively engaged in international initiatives and implemented international standards to strengthen its AML framework. Andorra is a member of the Financial Action Task Force (FATF) and has undergone mutual evaluations by the FATF to assess its compliance with these standards.

Benefits

  • International cooperation in combating money laundering and terrorist financing
  • Implementation of international standards
  • Mutual evaluations by the FATF

CONCLUSION

Andorra’s commitment to combating money laundering and terrorist financing is evident in its robust AML legislation, customer due diligence requirements, and the role of the FIU. By actively participating in international initiatives and cooperating with other countries, Andorra contributes to the global efforts to maintain the integrity of the financial system and protect against illicit activities.

As a business hub, Andorra’s focus on compliance and AML measures provides a secure environment for businesses and investors. With its unique position as a tax haven, Andorra is an attractive destination for companies looking to expand their operations in Europe. By understanding Andorra’s AML framework, businesses can navigate the principality’s regulatory landscape with confidence.

RESOURCES

For more information on doing business in Andorra, including company registration, foreign investment applications, and business bank account setup, please visit:

  • Company Registration with the Andorran Government
  • Foreign Investment Application (Advantia Advisory)
  • Business Bank Account Setup (MoraBanc Business Banking)
  • Obtaining NRT (Tax Registration Number) (Andorra Guides – Taxes)
  • Company and Legal Structure Information (Setup Andorra)
  • Public Notary Services in Andorra (Andorra Notary Services)
  • Commercial Registry Access (Andorra Commercial Registry)
  • Legal and Tax Advisory Services (Andorra Insiders)
  • Understanding Andorran Taxes and Business Law (Laduchi Consult)