Catastrophic future for Andorra

“By violating the right to privacy, the principle of public policy and data protection, Andorra sealed its fate as a disloyal financial center.”

The leak of information belonging to the Banca Privada d’Andorra (BPA) former clients, allowed by the Spanish government from its embassy once the bank had already been intervened, was perhaps one of the most controversial and reprehensible chapters in the allegedly “transparent” bank. This caused an outflow of savings from the Pyrenean country due to the loss of trust in the Andorran banks, whose resources have only decreased in the last three years, following the illegal exchange of information which took place when this crisis began.

According to a document recently leaked, two IT representatives from BPA, took in 2015 a hard drive to the diplomatic delegation which presumably contained information from clients. They met for almost ten hours with two Spanish police officers and the attaché for internal affairs, inspector Celestino Barroso.This entire conspiracy was kept out of sight from the Andorran authorities.

The liberal group has shown concern about these facts that they label as “very serious”, and that violated the right to privacy, the principle of public policy, professional secrecy and data protection.They also consider that these facts belittle the Andorran sovereignty.

There have also been criticisms about the minister and the head of government, Antoni Martí, who have not given any explanations regarding this matter.The damage done by BPA’s intervention is as of today not quantifiable in terms of finances and reputation, and no authority or financial entity has been able to face it in accordance with the European directive of resolution, disregarding that the ones who suffered the most losses were the savers and shareholders.

As of today, thousands of clients have not been able to recover their deposits, their savings still blocked with Vall Banc, with no evidence of them being linked to money laundering.Since the beginning, the criteria used to classify the clients as “not fit”, according to the letter issued by FinCEN, had a one hundred percent margin of error by the discredited consulting firm PricewaterhouseCoopers (PwC), adding to their 16 financial scandals in the last six years.

The end of the bank secrecy in Andorra became a turning point for the Principality’s banking.The government has not recognized it, but many international investors abandoned their deposits in the Andorran bank entities before the automatic exchange of information went into effect in January 2017. More than fifty countries subscribed to transparency agreements, including Spain and all other members of the European Union.

The great concern surrounding the Andorran banking’s current and future reality, is whether or not it can survive without being a tax haven.This means a great challenge which not only affects the five operational banks in the country: Crèdit Andorrà, Banca Mora, Andbank, BancSabadell d’Andorra and VallBanc, but also, the Andorran economy as a whole.

Everything points towards a situation where the Andorran banking scenario is only going downwards catastrophically. It has become unable to attract investors and assets as a financial center, due to the lack of a strategic plan, talent and credibility of its Andorran financial professionals who failed to achieve maximum competitiveness in the European and worldwide market. It simply takes observing that its benefits have dropped compared to previous years; therefore the Principality will have to face the consequences of its mistakes.