In 2015, Andorra faced one of its biggest financial crises in decades: the money laundering scandal involving Banca Privada d’Andorra (BPA). Allegations from US regulators triggered government intervention, and Andorran authorities took over the bank. Below, we examine what happened, the role of anti money laundering rules, how “corruption and money laundering” feature in this case, and what lessons have followed.

What happened — Key Facts

• On March 6, 2015, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a notice calling BPA a foreign financial institution of primary money laundering concern.
• Following that, Andorran authorities, with backing from Spanish regulators, expropriated BPA and its subsidiaries. The bank was split into a “good bank” (handling non-toxic assets) and a “bad bank” with assets considered problematic.
• BPA’s clients had to prove the legitimacy of their funds in many cases; access to some assets was frozen or restricted.
• In 2016, FinCEN withdrew its designation, saying BPA no longer posed a threat to the U.S. financial system.
• Spanish courts later exonerated BPA and its directors—no convictions for money laundering were obtained.

Role of anti money laundering enforcement & regulatory oversight

• The anti-money laundering (AML) framework came under stress: FinCEN exercised strong regulatory power by cutting off BPA’s access to the U.S. dollar-based financial system, though evidence publicly presented was disputed.
• The Andorran financial authority (INAF, later renamed AFA or Financial Authority) had asked all banks to report reputational risks; BPA did report accounts with clients from Russia, China, and  Venezuela. But those reports did not lead to warnings or earlier intervention by authorities.
• The handling of BPA demonstrates how corruption and money laundering allegations, political pressure, and regulatory tools can intertwine. The narrative includes claims that corrupt motives (political suppression of Catalan influence, etc.) played a role in the bank takeover.

The Aftermath & Financial Impact

• A bridge bank, Vall Banc, was created to take over the “good” assets of BPA. Non-toxic assets and deposits judged legitimate were transferred.
• Around 93% of clients were considered “good clients” and their deposits were transferred.
• The Andorran government, via banking resolution laws and funds (AREB, FAREB), restructured the bank. Good assets were recapitalized; the rest were liquidated.
• Many investors suffered losses, particularly holders of rejected assets, and there was serious reputational damage to BPA to Andorra’s banking sector. 

Why is a corruption and money laundering case in perception

• Even though legal convictions for money laundering were not achieved, the allegations and actions have led many observers to see BPA as part of a larger scandal involving misuse of regulatory power and political influence.
• Operation Catalonia is cited as one political project implicated in the case: BPA was allegedly targeted to force disclosure of accounts belonging to Catalan politicians; leaked documents and letters suggest coordination among Spanish, Andorran, and US authorities.

Lessons & Implications for Banking & AML

1. Regulatory power can be decisive, even without criminal convictions. Regulatory bodies like FinCEN, national supervisory authorities can force major changes.
2. Transparency matters: Disclosure, ability to respond to allegations, and treating reporting institutions fairly are essential. BPA reported risk cases but says it had no chance to contest allegations properly.
3. Political risk is real: The intersection of finance, politics, and law can lead to actions that are perceived as driven by political motives rather than pure legal or financial standards.
4. Strengthening AML frameworks: After the scandal, Andorra reformed laws and oversight to align better with international standards. This helps restore trust in its banking sector.

FAQs

What triggered the takeover of BPA?
The takeover was triggered by a FinCEN notice in March 2015 that accused BPA of being a “foreign financial institution of primary money laundering concern.” 

Were any convictions made for corruption and money laundering in BPA’s case?
No. Courts in Spain and investigations after the fact found no convictions. BPA and its executives were exonerated. 

What is the current status of BPA?
BPA was dismantled. A new bank, Vall Banc, took over ‘good’ assets. BPA’s owners filed lawsuits seeking compensation. Legal cases continue in some jurisdictions. 

Did BPA have practices violating anti-money laundering laws?
Allegations were made, especially by FinCEN, but many of those cases were already reported by BPA to Andorran authorities. There was no proof in courts of systematic legal violations. 

How did this affect Andorra’s international reputation?
Significantly. Before the scandal, Andorra had been viewed as more of a tax haven or secrecy-friendly jurisdiction. After reforms were introduced, Andorra signed on to more international agreements, strengthened bank resolution laws, and anti-money laundering regulations. 

What to Do If You Are an Investor or Bank Client

• Always ask for clarity on what happens when regulatory agencies issue allegations.
• Check whether banks have robust AML compliance, transparency, and whether they report to financial intelligence units.
• Understand political risks in jurisdictions where regulatory action may be influenced by state politics.

Conclusion

The Andorran BPA case is a prime example of how money laundering scandals, anti-money laundering enforcement, and corruption and money laundering perceptions can drive major legal, financial, and political actions—even in the absence of criminal conviction. For smaller financial jurisdictions, it shows how critical strong regulation, clear oversight, and procedural fairness are to preserve trust and stability.