The Principality of Andorra, tucked away in the Pyrenees, moved to abolish its tax haven status when its unicameral parliament approved a measure to share bank account information with other countries.
The General Council agreed that the measure will come into force from January 2018 on accounts held by people from European Union countries.
“Not approving this would have sent a very negative message to the world,” said the finance minister, Jordi Cinca.
Andorra is not a member of the European Union, but enjoys a special relationship with the EU and uses the euro as its currency.
Tourism accounts for some 80% of the economy while banking, backed by being a tax haven, represents nearly 20%. It has had its own share of scandal. Last year Andorran regulators had to take control of the principality’s fourth-largest bank, the Banca Privada d’Andorra, after it was accused by the US Treasury of accepting bribes and facilitating money laundering by Russian and Chinese organised crime gangs.
The Automatic Exchange of Information scheme is designed to crack down on tax evasion and to introduce fiscal transparency. An increasing number of nations and regions are being drafted in to extend AEOI globally.
Andorra follows Monaco, Switzerland, Liechtenstein and San Marino in signing up.
