ANDORRA Law and Practice Contributed by: Miguel Cases and Laura Nieto, Cases & Lacambra
• reduction of the risk profile (eg, liquidity); • allowing the timely adoption of internal recapitalisation measures; • reviewing the strategy and structure; • modifying the funding strategy; or • introducing changes to its corporate govern - ance system. In any case, the AREB will also have to be informed. As far as early intervention measures are con - cerned, Law 7/2021 establishes that the AFA may adopt other measures, which may include the segregation of assets to an asset manage - ment company. Law 7/2021 also sets out the measures that the AREB, in co-ordination with the AFA, may adopt to overcome the obstacles identified in the reso - lution plans (assessment of the potential resolu - tion of the institution), including: • a review of funding mechanisms; • limits on individual and aggregate risks; • the divestment of specific assets; • a limit or cessation of certain activities; • setting up a parent financial holding com - pany; and • issuing eligible liabilities. The powers of the AREB include the power to oblige institutions under resolution to adopt effective measures in relation to assets held in third countries, or even to halt the adoption of measures or revoke measures already adopted when they are not effective.
In respect of procedural issues, Law 7/2021 implements the following: • the introduction of liability against the AREB and its representatives; • the impossibility of exercising the social action of liability; • that civil courts are subject to the resolutions handed down by the administrative courts; • the inadmissibility of the interim suspension; • the urgent and preferential procedure for the protection of rights and freedoms; and • the appeal against the decisions and admin - istrative acts issued in matters of amortisation or the conversion of instruments, as well as internal recapitalisation. Regarding the winding-up regime, the most important aspects are as follows: • the rules on the priority of claims and loss absorption have the character of special leg - islation in Andorra; • the implementation of a new regime regarding the effects of early intervention and resolution processes and applications for a declaration of cessation of payments or insolvency; and • amendment of the Insolvency Law to include a new regime applicable to entities, covering general privileged credits, ordinary preferen - tial credits (the European standard uses the opposite sense and refers to ordinary non- preferential credits) and subordinated cred - its, with a clear alignment with EU Directive 2017/2339.
9. ESG 9.1 ESG Requirements
Andorran banking entities have been contribut - ing to more sustainable development for the last
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