Banking Regulation 2025

ANDORRA Law and Practice Contributed by: Miguel Cases and Laura Nieto, Cases & Lacambra

exceed 200% of the fixed component of the total remuneration for each individual. Andorran banking entities must follow the inspir - ing principles when implementing the remunera - tion policy, including salaries and discretionary retirement benefits for categories of staff such as senior management, employees who take risks, those who exercise internal control functions, and any employee who receives a lump-sum payment that includes them in the same scale of remuneration as senior management and other risk-taking employees. Law 7/2024 also establishes that infringements of these provisions may be sanctioned accord - ing to the Disciplinary Law. Andorra is totally committed to complying with international standards on anti-money launder- ing and terrorism financing through the imple - mentation of the Fourth Anti-Money Laundering Directive and the FATF’s recommendations. In this vein, both the European provisions and the FATF’s recommendations are intended to serve as the backbone of the Andorran system for the prevention of money laundering and terrorism financing. In turn, the UIFAND is entitled to draw up and publish annual reports and statistics to assess the effectiveness of the Andorran system for the prevention of money laundering and terrorism financing. Andorra is also periodically subject to the assessments of the Council of Europe, car - ried out by MONEYVAL. 5. AML/KYC 5.1 AML and CFT Requirements

Banking entities must comply with the following obligations: • prior to the commencement of the business relationship, the entity must solicit the infor - mation regarding both the client (and the beneficial owner) and the transaction in order to identify them; • the banking entity must report any suspicious transaction that could involve money launder - ing or terrorism financing to the UIFAND; • information about the identity of the issuer of the suspicious reporting must be kept confi - dential; • simplified and enhanced due diligence meas - ures must be applied according to the risk profile of the client, the business relationship, the product or the transaction; • a client admission policy must be drawn up; • documentation must be kept for at least ten years; • adequate procedures must be adopted for the detection of unusual or suspicious trans - actions, with the possibility of submitting a suspicious transaction report to the UIFAND; • AML/CFT training programmes for employees must be drawn up; and • an independent external audit must be con - ducted to verify compliance with AML/CFT provisions, with a copy of the report sent to the UIFAND. 6. Depositor Protection 6.1 Deposit Guarantee Scheme (DGS) The FAGADI Law regulates the guarantee system for deposits aligned with Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes. It also states that the FAGADI administers the scheme, as well as the relevant limits.

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