Database of Legislation

Article 40. Internal procedures

1. Financial parties under obligation shall:

a) contract an independent external audit to verify compliance with this Law and send a copy of the report issued for this purpose to the UIFAND;

b) appoint an internal control and communication body in charge of organising and monitoring compliance with the rules on prevention against money laundering and terrorist financing and notify this appointment to the UIFAND;

c) establish internal audit and control procedures aimed at verifying compliance with regulations, detecting, preventing and effectively managing the money laundering and terrorist financing risks.

The UIFAND may establish, by means of a technical communiqué, the criteria to be followed in audits.

2. Parties under obligation that are legal entities shall:

a) appoint an internal control and communication body in charge of organising and monitoring compliance with the provisions on prevention and fight against money laundering and terrorist financing and notify this appointment to the UIFAND.

The members of the internal control and communication body shall be members of the management or the senior management of the party under obligation;

b) establish internal control procedures.

Non-financial parties under obligation who are individuals that conduct activities which imply that they shall abide by this Law will be considered to be their own body of internal control and communication.

3. Parties under obligation shall designate, at least, one member of the internal control and communication body acting as a representative before the UIFAND, on the basis of the person’s training, suitability, and experience in the sector.

4. The representative of the parties under obligation before the UIFAND shall, in any case:

a) made the suspicious transaction report referred to in article 20 of this Law;

b) receive the inquiries and requests from the UIFAND.

5. Where a natural person falling within any of the categories listed in paragraph 2 of article 2 of this Law performs professional activities as an employee of a legal person, the obligations in this section shall apply to that legal person rather than to the natural person.

6. Financial parties under obligation that undertake financial activities in an occasional or very limited basis can be excluded from compliance with some or all provisions established by this article when there is a low risk of money laundering or terrorist financing.

Article 41. Internal controls in parties under obligation that are part of a group

1. Parties under obligation that are part of a group shall implement group-wide policies and procedures, including data protection policies and policies and procedures for sharing information within the group for prevention of money laundering and terrorist financing purposes. Those policies and procedures shall be implemented effectively at the level of branches and majority-owned subsidiaries in other countries.

2. Parties under obligation that operate branches in other countries shall ensure that those branches respect the national provisions on prevention of money laundering and terrorist financing.

3. Where parties under obligation have branches or majority-owned subsidiaries located in countries where the minimum requirements on prevention of money laundering and terrorist financing are less strict than those of Andorra, their branches and majority-owned subsidiaries located in other countries shall implement the requirements of Andorra, to the extent that the law of the country in which are located the branches or majority-owned subsidiaries, so allows.

4. Parties under obligation, where the law of the other country does not permit the implementation of the policies and procedures required under paragraph 1, shall ensure that branches and majority-owned subsidiaries in that country apply additional measures to effectively handle the risk of money laundering or terrorist financing, and inform the UIFAND. If the additional measures are not sufficient, the UIFAND shall exercise additional supervisory actions, including requiring that the group does not establish or that it terminates business relationships, and does not undertake transactions and, where necessary, requesting the group to close down its operations in the country concerned.

5. Unless the UIFAND states otherwise, the information on suspicious transactions shall be shared within the group, for the purposes of having an aggregated view of the entities’ risks, that allows to detect funds which may be the proceeds of criminal activity or may be related to terrorist financing.

Article 42. Training

1. Parties under obligation shall take measures proportionate to their risks, nature and size so that their employees are aware of the provisions on the prevention and fight against money laundering and terrorist financing.

Those measures shall include participation of their employees in special ongoing training programmes to help them recognise operations which may be related to money laundering or terrorist financing and to instruct them as to how to proceed in such cases.

2. The UIFAND, by means of training programs or technical communiqués, informs parties under obligation on the practices of money launderers and financers of terrorism and on indications leading to the recognition of suspicious transactions.

3. The UIFAND provides to the parties under obligation, where practicable, timely feedback on the effectiveness of and follow-up to their suspicious transaction reports.