In March of 2015, the small European nation of Andorra became mired in a global financial crisis. What happened? A single announcement by a United States government agency—the Financial Crimes Enforcement Network (FinCEN)—claimed that Banca Privada d’Andorra (BPA) was involved in money laundering. That announcement triggered a series of events that destroyed one of Andorra’s most prominent private banks. 

What Was BPA? 

Banca Privada d’Andorra (BPA) was a privately owned bank in Andorra that catered to international clients. It was thought to be a reputable financial institution in a growing banking system before the scandal of 2015.

The BPA Bank Scandal 2015: What Happened?

On March 10, 2015, FinCEN issued a Notice calling BPA a “primary money laundering concern.” Although this wasn’t a formal sanction, it had the same tragic effect—BPA was cut off from global dollar activities and trust.

So, what happened next?

• The Andorran government took control of BPA the very next day.
• A week later, the failed bank was closed down.
• BPA was subsequently split into a “good bank” (Vall Banc) and a “bad bank” with toxic assets.
• Clients lost access to their money and had to prove their money was legitimate, even if they committed no wrongdoing.
• Shareholders lost control and rights at the bank.

Perhaps most alarmingly, BPA was shuttered with no public evidence being offered and no way to defend itself.

What Happened Next For BPA?

In 2016, the plot thickened when FinCEN withdrew its notice. In practical terms, this withdrawal meant that the U.S. agency was no longer standing by its allegations. BUT, by this point, the damage was done:

• BPA was never restored to its status prior to 2015. 
• There were no criminal money laundering convictions instituted against BPA or its executives. 
• BPA’s owners, the Cierco brothers, commenced a €364 million lawsuit against the Andorran state on grounds of political motivation and illegal expropriation.

FinCEN’s retraction still left an indelible mark on BPA’s reputation and structure.

Why the BPA Case Matters

The BPA case illustrates the power of financial enforcement bodies and raises important questions like:

1. Can a bank be destroyed on the basis of suspicion?
2. Where is the accountability when there is no public evidence cited?
3. Should FinCEN and other transnational agencies be subjected to oversight for such conduct?

Final Thoughts

The role of the BPA Bank scandal of 2015 did not ultimately end as a banking story. It was a story of transparency, power, and due process. A notice from one agency in the US brought the closure of a foreign bank without any trial, evidence, or a defense. 

Years later, the impact of BPA Bank is felt in Andorra’s financial and legal systems.

FAQs for the BPA Bank Scandal

Q1: What was the origin of the BPA Bank scandal? 

The scandal began when FinCEN issued a notice in March 2015 that accused BPA Bank of money laundering.

Q2: What happened to the clients of BPA Bank? 

BPA Bank’s clients lost access to their funds and were required to justify the sources of their funds in order to retrieve funds, even though they did not take part in any wrongdoing. 

Q3: Did FinCEN provide public evidence of wrongdoing on the part of BPA Bank? 

There was no public evidence from FinCEN, and BPA Bank did not have a proper hearing.

Q4: After FinCEN retracted its notice, was BPA Bank returned to its original state? 

BPA Bank was never restored to its original status and had already destroyed its business.

Q5: What is the current status of BPA Bank? 

The Cierco brothers, former owners of BPA Bank, are currently suing Andorra for 364 million euros, alleging illegal expropriation.