Recently, there was a very dangerous situation in the banking system of Andorra. This small country was famous for its very good ski slopes and the liberal banking legislation, which allowed to keep money in banks in Andorra, without worrying that it would be known to other persons. It is difficult to say how many Ukrainian businessmen keep their money in this country. But now there is a problem that could make Andorran banks a dangerous place to store money.
After the Cyprus crisis of 2013, the appearance of Andorra on the market was very welcomed by people who wanted to hide their money in a country that does not ask questions. For several years, the bank deposits in Andorra grew by 15-20% annually.
And it seemed that everything was going well until the scandal broke. Andorran banks BPA and Andbank were involved in money laundering by Spanish celebrities and officials, and the activity of BPA bank was terminated by the U.S. Department of Treasury's lead agencies in the fight against money laundering Treasury (FINCEN). The Bank's activities and all customers’ accounts were blocked for more than 10 months. The bank was accused of laundering money by criminal communities in Russia, China, and Venezuela. In December 2015, through the operations in Andorra, Montserrat Caballe has been condemned for tax evasion. 10 February 2016 will begin the trial of the former President of Catalonia, Mr. Pujol, who has admitted to money laundering through banks in Andorra. And it is fraught with serious problems for the entire banking system of Andorra. The third largest bank in Andorra - Credit Andorra – has simply lost control of clients' investment portfolios, and from April to December 2015 it has lost about 40% of the value of their investment funds.
After all these events, Spain has forced Andorra to sign the unequal treaty, implying the automatic exchange of information. Signing the agreement with Spain has led to the actual flight of deposits from Spain to Andorra. If customers had some undeclared accounts, it became impossible to keep them in Andorra. And if customers had "white" money in the accounts, they had no sense to keep money in Andorra, whose rating fell almost to the "junk" level. According to some estimates, the total outflow of deposits from Andorra in 2015-2016 might exceed 50%.
January 15 this year, the Cabinet of Ministers of Ukraine has approved the signing of an agreement on tax cooperation and the exchange of tax information between Ukraine and Andorra. The agreement actually allows law enforcement authorities of Ukraine to obtain information on the accounts of citizens of Ukraine in the banks in Andorra. And it is dangerous for those who already keeps the money there.
Actually, there is a trend in the world, and especially in the EU: a mass assault on the different kinds of offshore companies and secret bank accounts. Everyone wants to know about all. So it becomes harder and harder for Ukrainian businesspersons and corrupted officials to hide money abroad. In fact, Andorra is falling out of the offshore zone, and now it is unprofitable to hide money there. And where would be profitable? One thing is clear: the money of Ukrainian businesspersons would newer return to Ukraine. There is no stability and tranquility in Ukraine, so money of its people are hidden abroad.