ANDORRA Law and Practice Contributed by: Miguel Cases, Marc Ambrós and Marta Felipó, Cases & Lacambra
Cases & Lacambra Manuel Cerqueda i Escaler 3-5 - AD 700 Escaldes Engordany Andorra Tel: +376 728 001 Email: andorra@caseslacambra.com Web: www.caseslacambra.com
1. Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation 1.1 Legal Framework The laws and statutory regimes applicable to insolven - cies in Andorra are the following. • Decree on insolvencies and bankruptcies of 4 October 1969, Decret en relació a la cessació de pagaments i fallides, del 4 d’octubre de 1969 (the “Insolvency Decree”), which establishes the statu - tory regime applicable to judicial insolvencies and bankruptcy proceedings in Andorra. • Act 7/2021, of 29 April 2021 on recovery and resolution of banking entities and investment firms, Llei 7/2021, del 29 d’abril, de recuperació i de reso- lució d’entitats bancàries i d’empreses d’inversió (the “Banking Recovery Act”), based on Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms. • Act 7/2024, of 27 May 2024, which covers the organisation and operating conditions of operat - ing entities in the Andorran financial system and market abuse, Llei 7/2024, del 27 de maig, sobre organització i funcionament de les entitats opera- tives del sistema financer i l’abús de mercat (the “Financial Act”), sets the effects of insolvency or bankruptcy proceedings in respect of netting agreements or collateral arrangements. • Act 12/2017, of 22 June 2017 on the organisation and supervision of insurance and reinsurance of the Principality of Andorra, Llei 12/2017, del 22
de juny, d’ordenació i supervisió d’assegurances i reassegurances del Principat d’Andorra (the “Insur - ance Act”), provides specific control measures that could be adopted by the Andorran Financial Authority in case of financial hardship. • Act 20/2007, of 18 October 2007, on limited liability companies, Llei 20/2007, del 18 d’octubre, de societats anònimes i de responsabilitat limitada (the “Companies Act”), on the liquidation of companies as well as the duties of officers and directors. • Act 9/2005, of 21 February 2005 of the Criminal Code, Llei 9/2005, del 21 de febrer, qualificada del Codi penal (the “Criminal Code”), establishes the actions carried out by any debtor leading to a bankruptcy situation to the detriment of third par - ties as a criminal offence. • Act 22/2021, of 17 September 2021 of the Civil Procedure Code, Llei 22/2021, del 17 de setembre, del Codi de procediment civil (the “Civil Procedure Code”), amends the procedural provisions stated in the Insolvency Decree to align them with the new civil judicial proceedings. One of the main priorities of the Andorran govern - ment is to introduce an effective insolvency regime, by updating and improving the current insolvency regula - tions, specifically the Insolvency Decree. To do this, a new bill is being drafted with the aim of modernising and adapting the existing regulations to international insolvency law standards. It is expected that the new bill will be drafted to strike a balance between the debtor’s financial difficulties, the interests of the credi - tors and public policy concerns. The bill will specifical - ly take the exponential increase of international trade
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