The cover of Spain’s XL Semanal, a weekly magazine, is dedicated to Andorra with the headline “Andorra: secrets of the tax haven”.
Although Andorra is not a major secrecy jurisdiction – it is ranked 74th on the Financial Secrecy Index – it has been in the news in recent months following revelations that a Catalan politician had 4.3 million euros hidden with an Andorran private bank.
The XL Semanal article describes how, despite formally complying with international transparency agreements, Andorra’s banks continue to offer tax abuse services. Selected highlights:
– “Only five banks operate in Andorra, four of them of family origin. But the financial system has a disproportionate weight: it represents 18% of GDP and has 41 billion euros in assets”.
– “Andorra officially stopped being tax haven in 2009…[Andorra] signed a commitment to share tax information, as long the request was “justified” and a year later eliminated bank secrecy (in theory)…but the small print severely limits any investigations”.
– An executive defines the financial sector’s “core business” as “advising large fortunes”: “There will come a time when we can’t guarantee absolute secrecy, but we can always advise large investors on how to take money to Panama, Uruguay or Seychelles”.
The price? “3% of the assets under management.”
– Another banking source disagrees, saying “let’s not fool ourselves, most of our clients are not wealthy, but are small and medium businessmen…people who have money off the books, open a numbered account and forget about the tax authority”. This type of service costs 600 euros a year, for “a numbered account, and the right to deal with a bank employee personally in an office where nothing is written down, and it is not even allowed to put a cellphone on the table.”
Please see here for the full XL Semanal article (in Spanish).
The most recent evaluation of Andorra by Moneyval – the European anti-money laundering body – is from 2012 and raised a number of concerns, including that the regulations regarding numbered accounts were “too recent to be considered fully effective”. Moneyval also had “real concerns regarding the ability of the authorities to detect and prevent the unlawful physical cross-border transportation of currency” and found a low level of suspicious transaction reports.