Andorra has taken control of private bank Banca Privada D’Andorra (BPA) after the United States declared the lender as under suspicion for money laundering.
The government of the small principality located in the Pyrenees mountains between Spain and France, said in a statement the state intervention in the bank was not related to a solvency risk or balance sheet problems but alleged bad practice.
The state guaranteed the lender, one of Andorra’s five banks, would continue to function normally.
The U.S Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) said the activity involved the proceeds of organised criminals in Russia and China.
FinCEN claims nearly two billion euros have been laundered from Venezuelan state oil company PDVSA PDVSA.UL, foreign corruption, and other criminal activity.
The Bank of Spain said later on Tuesday it would take over Banco de Madrid, BPA’s wholly-owned Spanish unit, in the interests of the lender’s continuity following the events at BPA.