Andorra Country Summary

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 robust legal framework to combat various forms of crime and corruption, including money laundering and drug trafficking, with ongoing amendments to its Criminal Code to enhance its effectiveness. While human trafficking and drug-related issues are not prevalent, the country faces challenges such as illicit tobacco trade and occasional financial crimes, primarily linked to foreign criminal organizations using Andorra as a money laundering hub.

The government demonstrates a strong commitment to fighting organized crime through effective governance, specialized judicial units, and international cooperation, particularly with neighboring countries. Additionally, Andorra's emphasis on prevention strategies and community awareness programs reflects its resilience against crime, fostering a safer environment for its citizens.

Andorra, a small principality nestled in the Pyrenees mountains, boasts a robust economy primarily driven by tourism, trade, and commerce, which collectively account for nearly 60% of its economic activity. Although not a member of the European Union, Andorra utilizes the euro and adheres to EU free trade regulations, positioning itself as an attractive destination for foreign investment through favorable tax reforms and a commitment to economic diversification into sectors like fintech and biotech. The government has initiated various measures to enhance its investment climate, including the establishment of Andorra Business to support local and foreign enterprises, while also addressing growing concerns around housing availability and affordability through new regulations on foreign real estate investment.