Following a report from the Council of Europe’s Moneyval earlier this year that was highly critical of Monaco’s progress in ensuring banking transparency and combating money-laundering and the financing of terrorism, a report on Andorra published last week casts doubt on that principality’s readiness to be part of an Association Agreement with the European Union.
Martin Kreutner, Dean Emeritus of the International Anti-Corruption Academy, in A brief review on the Anti-Corruption & Anti-money Laundering State of Play in the Principality of Andorra pinpointed several shortcomings.
Its publication comes as Andorra, along with Monaco and San Marino, enter an advanced stage of negotiations with the EU for further integration through Association Agreements.
Andorra has yet to ratify influential and universal anti-corruption instruments, including the United Nations Convention against Corruption (UNCAC), OECD Bribery Convention and the Council of Europe’s Civil Law Convention against Corruption.
Andorra lacks an independent and specialised anti-corruption body/authority, in line with international standards and requirements.
Andorra has yet to fully implement crucial policies from the Council of Europe’s Group of States against Corruption (GRECO) and the Moneyval committee.
Andorra’s banking sector faces risks from the absence of a central bank and various key regulatory legislations.
Andorra’s banking and financial sector accounts for over 20% of the country’s GDP. Its banks attract large deposits from investors around the world, thanks to its low tax environment and opaque corporate laws. The sector has been steeped in scandal in recent years. Andbank, one of Andorra’s largest banks, was at the centre of a massive international tax evasion scheme revealed in the Panama Papers.
The unresolved case of Banca Privada d’Andorra (BPA), which was expropriated by the government in 2015, demonstrates how the authorities mishandled money laundering allegations and may have wrongfully taken over the bank, costing the taxpayer hundreds of millions of euros.
Martin Kreutner, the author of the report, said: “Alleged and adjudicated scandals have rocked Andorra in recent years. Understanding the state of play of the Principality’s anti-corruption and anti-money laundering architecture is critical if Andorra is to be allowed further EU integration. Improving anti-corruption and anti-money laundering regulations should be at the centre of Andorra’s agenda, especially in the upcoming elections.”
FILE PHOTO: Andorra Wikipedia Tiia Monto