Andorra's Uifand Promotes Simplified Due Diligence for Low-Risk Transactions

Andorra's Financial Intelligence Unit (Uifand) is promoting simplified due diligence for low-risk business relationships and transactions, provided entities first perform thorough risk assessments, to allocate resources more effectively against higher threats.

In its first technical communiqué on the matter, Uifand draws on applicable state regulations and international recommendations to encourage obligated entities—including financial institutions and other regulated parties—to adjust the scope, intensity, and frequency of controls based on identified risks. The goal is to concentrate preventive efforts on clients, operations, or relationships with elevated money laundering or terrorism financing exposure, while ensuring no reduction in overall oversight.

Entities must base simplifications on a documented evaluation confirming low risk, rather than relying on checklists or isolated factors. This allows for measures such as collecting minimal information from a single reliable source to verify identity, requesting less detail on business purposes, extending review intervals, easing transaction monitoring frequency, and applying tailored scrutiny thresholds.

Uifand stresses that these steps do not diminish monitoring obligations. Firms must still track client and beneficial owner details continuously, detect profile shifts or suspicious activity promptly, and revert to standard or enhanced due diligence if risks increase. Any changes in circumstances require reassessment and full documentation.

The communiqué clarifies that simplified approaches reduce bureaucracy without compromising vigilance, enabling proportional resource use across varying risk levels.