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 corruption and various forms of crime, including money laundering and drug trafficking, with significant amendments made to its Criminal Code in recent years. While human trafficking and drug-related issues are not major concerns, the country faces challenges such as tobacco smuggling and occasional financial crimes, primarily linked to foreign criminal networks exploiting its financial system.

Andorra, a small principality nestled in the Pyrenees, boasts a robust economy primarily driven by tourism, trade, and a burgeoning financial sector, with tourism alone accounting for nearly 60% of its economic activity. Although not a member of the European Union, Andorra adheres to EU free trade regulations and utilizes the euro as its currency, positioning itself as an attractive destination for foreign investment through a series of reforms aimed at economic diversification and modernization. The government has implemented various initiatives to enhance its investment climate, including the establishment of Andorra Business to facilitate foreign investments, the introduction of comprehensive tax reforms, and the pursuit of a new association agreement with the EU to integrate more fully into the European market.