Paisaje urbano minimalista de Andorra en estilo anime, con edificios de oficinas y bancos de colores suaves, sin rostros humanos visibles. Ideal para ilustrar la adaptación de Andorra al régimen AML.

AML Package in Andorra: Adaptation to the New European Anti-Money Laundering Regime

Introduction

The AML Package in Andorra represents a fundamental legislative change for the Principality, which is preparing to adapt to the new European anti-money laundering and counter-terrorism financing regime. Although not a member of the European Union, Andorra must align its legal framework with these regulations to maintain its international recognition, financial interoperability, and credibility as a cooperative jurisdiction.

What is the AML Package and its scope?

The AML Package is a regulatory package approved by the European Parliament and the Council on May 31, 2024, establishing a uniform legal standard for the prevention of money laundering and terrorism financing across the European Union.

This legislative package includes four key components:

  • An directive that regulates institutional and organizational requirements for national authorities, setting competencies, independence, and minimum resources.
  • A single technical regulation detailing obligations for obliged entities such as banks, lawyers, real estate agents, notaries, corporate service providers, art and jewelry intermediaries, and crypto-asset platforms.
  • The creation of the European Anti-Money Laundering Authority (AMLA), based in Frankfurt, with the authority to directly supervise and sanction high-risk entities.
  • A specific regulation for crypto-asset transfers, imposing enhanced controls and traceability for this emerging sector.

Implications for the Andorran system

Adapting to the AML Package entails profound changes for Andorra, beyond isolated regulatory updates. Notable reforms include:

  • The need to reformulate the institutional architecture of the preventive anti-money laundering system.
  • Establishing integrity requirements for corporate service providers and including them in a supervised public register.
  • Implementing updated and accessible central registers of beneficial owners, interconnected with other countries via single access points.
  • Mandating the interconnection of real estate, commercial, and banking registers, and enabling real-time consultation by national authorities.
  • Expanding oversight to sectors such as luxury goods trade, sports sponsorship, and crowdfunding, considered areas with potential risks.

The European Anti-Money Laundering Authority (AMLA)

The creation of AMLA is one of the most relevant aspects of the new regime. This authority will coordinate national efforts and possess direct sanctioning power, imposing fines, ordering corrective measures, and suspending operations in supervised entities.

Although Andorra does not participate directly in AMLA, its close financial ties with the European Union and its commitment to organizations like Moneyval require it to adopt these measures to avoid losing international recognition and being subjected to enhanced surveillance procedures.

Institutional and technological adaptation

The Andorran Financial Intelligence Unit (UIFAND) has emphasized the importance of intensifying efforts to comply with these new regulations. This includes:

  • Reviewing and updating existing legislation.
  • Updating technical circulars and protocols.
  • Investing in information systems that enable effective information exchange.
  • Improving proactive risk detection mechanisms.
  • Providing specialized training for technical and operational staff responsible for supervision.

This effort aligns with preparation for the Moneyval evaluation round scheduled for 2026, increasing institutional pressure to meet international standards.

Conclusion

The AML Package sets an unprecedented benchmark in the fight against money laundering and terrorism financing across Europe. Andorra faces the challenge of adapting its regulatory, institutional, and technological framework to ensure its position as a recognized cooperative jurisdiction internationally.

For those considering living in Andorra or investing in the country, understanding these changes is crucial for a successful transition and compliance with new transparency and regulatory requirements.

More relevant information about the financial system, taxes, and residency in Andorra can be found at taxes in Andorra and residency in Andorra.