FATF Status

Andorra is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Andorra was undertaken in November 2021. According to that Evaluation, Andorra was deemed Compliant for 9 and Largely Compliant for 28 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 4 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.​

Andorra has established a legal framework to combat corruption, money laundering, and terrorism financing, with significant amendments made to its Criminal Code between 2008 and 2016. The country joined the Council of Europe in 1994 and the Group of States against Corruption (GRECO) in 2005, enhancing its internal regulations and creating the Unit for the Prevention and the Fight Against Corruption (UPLC) in 2008 to coordinate anti-corruption efforts. Despite these measures, Andorra has not signed the UN Anticorruption Convention or the OECD Convention on Combatting Bribery.

Andorra's economy is primarily driven by tourism, trade, and commerce, which together account for nearly 60% of its economic activity, alongside a significant financial sector. The country, which uses the euro as its currency, has become a wealthy international commercial center due to its low taxes and integrated banking system. Recent reforms aim to diversify the economy and reduce reliance on tourism, with initiatives focusing on sectors like fintech and biotech.

Andorra has established an open framework for foreign investments, allowing non-residents to fully own Andorra-based companies since the Foreign Investment Law came into effect in 2012. The government has made recent modifications to this law to simplify the establishment process for foreign companies and enhance oversight mechanisms. Additionally, Andorra Business serves as a support agency to attract foreign investment and promote economic diversification.