Enhanced Monitoring Report on the Implementation of the Standard on Transparency and Exchange of Information on Request 2026 Update (June)

Determinations

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

n.a.

LC

Ratings

LC

LC

C

C

LC

C

C

C

C

LC

Recommendation (A.1, practice)

Andorra should review its system whereby a significant number of inactive companies remain with legal personality on the Companies Register.

Underlying factor

A notable number of inactive companies that maintain legal personality and do not comply with their filing obligations raises concerns that updated legal and beneficial ownership information might not be available in all cases.

(see paragraphs 68 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

New criteria for considering a company as “inactive” are under consideration. Andorra is designing an awareness campaign for companies to bring them up to date, prior to initiating administrative proceedings and the possible imposition of sanctions. Legislative amendments are also under consideration.

Conclusion

Andorra has taken preliminary steps to address the recommendation, but no material progress has been reported for more than three years since the recommendation was issued. It is urged to make substantive progress before the next self-assessment.

Status determined

Has not been addressed

Actions required

Andorra should submit a schedule for completion of steps to address the recommendation and an update on the progress made by 31 March 2026. In particular, Andorra should –

• Provide information on the steps taken towards minimising the risk that the significant number of inactive companies that retain legal personality may pose to the availability of ownership information.

• Provide updated statistics on the number of companies that have regularised their situation and the number of companies that are currently considered as inactive.

• Provide an explanation regarding the new criteria under consideration for determining a company as inactive, the status of their adoption/ implementation and how they influence the proportion of affected companies as well as the availability of ownership information.

Recommendation (A.1, practice)

Andorra should supervise the implementation in practice of the new obligations and take enforcement actions, where necessary.

Underlying factor

As the legal requirements for companies to maintain updated beneficial ownership information and to register their beneficial owners with the Companies Register have recently been introduced in Andorra since 1 January 2018, no supervisory and enforcement actions have yet been carried out.

(see paragraphs 81 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

The Companies Register has worked to implement a program to register accurate and up-to-date information on the beneficial owners, including by improving the forms, developing a computer application which facilitates access, and conducting trainings. AML-obliged persons are mandatorily required to consult the information held in the beneficial ownership register.

Conclusion

Andorra has made progress to address the recommendation. It is urged to make further substantive progress before the next self-assessment.

Status determined

In the process of being addressed

Actions required

In its next self-assessment in 2028, Andorra should –

• Provide details regarding the monitoring processes adopted by the Companies Register to verify compliance with the reporting obligations and the accuracy of beneficial ownership information.

• Provide statistics on the level of compliance and the supervisory and enforcement measures conducted.

Recommendation (A.2, practice)

Andorra should review its system whereby a significant number of inactive companies remain with legal personality on the Companies Register.

Underlying factor

A notable number of inactive companies that maintain legal personality and do not comply with their filing obligations raises concerns that accounting records might not be available in all cases.

(see paragraphs 137 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

New criteria for considering a company as “inactive” are under consideration. Andorra is designing an awareness campaign for companies to bring them up to date, prior to initiating administrative proceedings and the possible imposition of sanctions. Legislative amendments are also under consideration.

Conclusion

Andorra has taken preliminary steps to address the recommendation, but no material progress has been reported for more than three years since the recommendation was issued. It is urged to make substantive progress before the next self-assessment.

Status determined

Has not been addressed

Actions required

Andorra should submit a schedule for completion of steps to address the recommendation and an update on the progress made by 31 March 2026. In particular, Andorra should –

• Provide information on the steps taken towards minimising the risk that the significant number of inactive companies that retain legal personality may pose to the availability of accounting information.

• Provide updated statistics on the number of companies that have regularised their situation and the number of companies that are currently considered as inactive.

• Provide an explanation regarding the new criteria under consideration for determining a company as inactive, the status of their adoption/ implementation and their impact on the proportion of affected companies as well as the availability of accounting records.

Recommendation (B.2, practice)

Andorra should monitor the exercise of the right of appeal to ensure that its use is compatible with an effective exchange of information.

Underlying factor

During the review period, 38% of the EOI requests were subject to appeal and, in 14 cases, the whole procedure has lasted more than 180 days and, in one case, more than one year. Taking into account that the appeal procedure in Andorra has suspensive effect on the exchange of information, this may impede effective EOI and affect the timeliness of Andorra’s responses to the EOI requests of its peers.

(see paragraphs 210 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

An appeal is not an obstacle to exchanging information and information has been provided in all cases, where there was an appeal, as the actors involved with exchange of information are more familiar with the process and collaborate fully.

Conclusion

Andorra has taken monitoring actions to address the recommendation. It should make further progress before the next self-assessment. While it is positive to note that all requested information was exchanged, the time taken to dispose appeals remains largely the same as at the time of the 2019 Report.

Status determined

In the process of being addressed

Actions required

In its next self-assessment in 2028, Andorra should –

• Provide information, including statistics, on the steps taken to minimise the consequences of appeals on the timeliness of exchanges.

Recommendation (B.2, practice)

Andorra should monitor the practical implementation of the exceptions to prior notification to ensure that responses are always provided in a timely manner.

Underlying factor

The exceptions to prior notification introduced in the Andorran legislation have been tested in practice only recently. While the seven first cases processed in the first quarter of 2018 were answered in an average time of 205 days, Andorra’s response time has significantly decreased after the review period.

(see paragraphs 217 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

Requests for applying an exception to prior notification reduce a step in the response procedure. Such an exception has been requested in a limited number of cases between 2019 and 2024.

Conclusion

Andorra has taken monitoring actions to address the recommendation and the practical implementation of the exceptions to prior notifications have not affected the timeliness of exchanges. Andorra is no longer required to report on this recommendation.

Status determined

Considered provisionally addressed in the context of the monitoring process, subject to detailed validation

Actions required

No immediate action required.

Recommendation (C.5, practice)

Andorra should continue to improve the timeliness of its replies.

Underlying factor

Peers were in general satisfied with the timeliness and quality of the answers provided and the timeliness has further improved at the end of the review period. However, the requested information was not provided in all cases in a timely manner.

(see paragraphs 295 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

Timeliness of exchanges was affected by the pandemic related restrictions, diversion of staff, the general elections in 2023 and the workload of the EOI Unit. Exchange of information is now a priority, and Andorra is working hard to quickly respond to pending requests.

Conclusion

The recommendation has not been addressed more than three years since it was issued. There has been backsliding since the 2019 Report and the peer input has raised important concerns regarding the timeliness of exchanges. Andorra is urged to make substantive progress before the next self-assessment.

Status determined

Has not been addressed

Actions required

Andorra should submit a schedule for completion of steps to address the recommendation along with an update on the progress made by 31 March 2026. In particular, Andorra should –

• Report actions taken to improve the timeliness of exchanges.

Recommendation (C.5, practice)

Andorra should monitor the effectiveness of its new internal procedure to ensure it provides status updates to EOI partners within 90 days in all those cases where it is not possible to provide a complete response within that timeframe.

Underlying factor

Andorra has made progress in providing status updates within 90 days in the event that it was unable to provide a complete response within that time to its EOI partners, in particular in the recent period. However, it did not provide such status updates within that timeframe in all cases.

(see paragraphs 305 et seq. of Andorra’s 2019 Report for more information)

Summary of actions reported

Andorra reported that since 2018, status updates are sent at each stage of the request.

Conclusion

Andorra has made progress to address the recommendation. It is urged to make further substantive progress before the next self-assessment. The peer input reflects that the issue persists and the statistics for 2024 show that there is room for improvement.

Status determined

In the process of being addressed

Actions required

In its next self-assessment in 2028, Andorra should –

• Report actions taken to systematically provide status updates in all EOI requests where a response could not be provided within 90 days.

Recommendation

(C.5, practice)

Andorra is recommended to ensure that adequate resources are available for effective exchange of information.

Underlying factor

While there are six persons involved in exchange of information on request (including the Competent Authorities), they all handle several other tasks. Prior to and during the monitoring period, all EOI personnel were diverted to other programmes. This led to a lack of dedicated resource persons for exchange of information due to the competing priorities of the EOI personnel and significantly affected effective exchange of information. Peers raised ongoing concerns in this regard, some of whom also reported delays in communication and withdrawal of five requests during the monitoring period.