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 legal framework to combat corruption, including laws against money laundering and terrorism financing, and has created the Unit for the Prevention and the Fight Against Corruption to coordinate efforts. While human trafficking and drug trafficking are not significant issues, Andorra faces challenges with illicit trade, particularly in tobacco and counterfeit goods. The government demonstrates a commitment to fighting organized crime through international cooperation and has improved transparency and compliance with economic regulations.

Andorra's economy is primarily driven by tourism, trade, and commerce, which together account for nearly 60 percent of its economic activity, alongside a significant financial sector. The country, while not an EU member, uses the euro and has established itself as a wealthy commercial center due to low taxes and an integrated banking system. Recent reforms aim to diversify the economy and attract foreign investment, with initiatives focusing on sectors like fintech and biotechnology.

Andorra has established an open framework for foreign investment, allowing non-residents to own up to 100 percent of 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, the economic development office, actively promotes investment opportunities and supports both local and foreign investors in diversifying the economy.