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The Archives from 2013 news around Andorra as it was!

Let`s see what happened or in most cases what has not!

18th November 2013   The end of the plastic bag

As of today all the usual plastic bags which the authorities describe as "for one sole use" are prohibited. No longer will you be able to buy these for 2 centimes from the supermarket checkout. The replacement that they are allowed to sell to you is a plastic bag that can be used for 12 to 15 times which they are not allowed to sell for the current 2 centimes. It remains to be seen what price they will charge, hopefully something sensible so suffice to say bring your own carrier bags like our grand parents used to!

15th November 2013  Keep snow chains in the car

Legislation is being rushed through to bring into force for this winter ( it must have crept up without the politicians noticing) to provide for fines where the Andorran registered car has no special equipment for snow and ice. Every year between 1 November and 15 May when there is snow or ice on the road ( a little subjective perhaps)   all Andorran cars must carry at least snow chains. For those that do not have contact tyres or snow chains the fine will be €180. For those with contact tyres and no chains the fine will be €60. Even 4 x 4s it seems must carry those snow chains. Now very unfortunately everyone who lives in Andorra knows that the worst culprits are the tourist cars who insist on driving to the point where they simply cannot get any further and get out to try to put on the chains, and this always happens in the middle of the road. They are exempt from this new law!

6th November 2013  Andorra signs Multilateral Convention on Mutual Administrative Assistance in Tax

On November 5th 2013 Andorra quietly became the 60th country to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MCMAATM) at the offices of the OECD. This is the theory of the agreement: The Multilateral Convention provides for all forms of mutual assistance: exchange on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection, while protecting taxpayers’ rights.

While the Convention contemplates the automatic exchange of information, this aspect of the agreement requires further separate agreements between the individual countries. The automatic exchange of information would not be permitted under current Andorran banking laws. In fact there is not a lot of difference from the 17 or so international accords Andorra has signed for the Agreements for Financial Disclosure,  the procedure requiring judicial authority for release of information. Once again (Article 26 of this new agreement) emphasises that there are to be no fishing expeditions, the requesting country requiring to submit thorough proof ( as well as footing the bill).  The Convention has been described as a minefield which in reality may never actually be workable.

21st October 2013  Hallo hallo....

There has been a little bit of an argument recently between the police and the legal world here in Andorra. The Police adamantly refused access to lawyers to advise suspects when they choose to make an admission to a crime. The Chief of Police stated adamantly that under the penal code legal assistance can only be requested and granted once a person is detained and not before as in the case of a suspect who may wish to conveniently admit to some facts. Once made he is then obviously detained and then can get that legal assistance! This interpretation has now been very quickly removed and suspects whether or not detained can have now legal assistance. It seems there are still prominent areas of the Administration that are clearly struggling to follow Andorra into the "opening up" of the country to the world in the 21st Century ( I might need that lawyer now!!)

11th October 2013  Andorra's new fiscal border controls

As from 1st January 2014 Andorra will limit what you can bring in and take out in cash and equivalents at the borders. Up until now there have been no exchange controls in Andorra, the only controls were in France and Spain when "exporting" cash to Andorra. So those who bring their cash up in suitcases will now have to run two gauntlets of an Andorran control as well as the French and Spanish. The limit decreed for importing and exporting physical cash is €10,000 per person or the equivalent in cheques and other financial instruments ( presumably valuable metals as well). Those who fail to declare and are caught face a fine of 25% of the excess cash starting at a minimum of €600. Not quite as draconian as the Spanish, but who knows what happens if you then cross the border after being caught already at the Andorran side of the border. I have not yet had wind of any proposed exchange controls via bank transfers !

10th October 2013- Vallnord

The financial problems surrounding the ski resort of Vallnord continue to simmer with various "options" being discussed. They have always denied that a foreign investor would be required or welcome. Now we are told that there are two private investors negotiating, most notably an American conglomerate who according to sources may acquire up to 51% of the company. There have been counter rumours that none of these negotiations are serious and it is political posturing only by the executives. Whatever happens we can all go skiing this year at least as passes are now on sale and at a discount until October 28th.

17th September 2013 Proposed changes in rental contracts

The Government has accepted a new proposal to examine the law on rental contracts in which it is proposed to make the legal term 2 years instead of the current 5 years. This is a positive move since 5 years is often too long for a landlord to in effect lose control over his property particularly in a rising market where he may wish to sell but would not be able to do so.
On another matter affecting rental contracts, current temporary legislation that allows one month's notice to over-ride the three months stated in the contract may be coming to an end. The Association of Estate Agents (AGIA) has now requested this legislation be removed, there are also currently two cases  before the courts to determine this, so be prepared in future to give three month's notice. Also as a post note AGIA has held a series of meetings as they are very unhappy that any changes in the rental conditions are being proposed without their input, especially a clause about properties being allowed to be sublet, let's see what transpires from these proposals. As the law currently stands the 1 month notice rule for tenants still remains in effect.

12th September 2013. Annual car inspections changes

As of today for those cars subject to the ITv ( equivalent of the MOT mechanical inspection) and who fail, the grace period for re-examination has been increased from 4 days to 15 days. This means that if the car failed, say for brakes, then you now have 15 days to get them fixed and return to prove such without paying for another testing. The original 4 day grace period was always difficult, a welcome improvement.

3rd July 2013. Wanna bet?

The go ahead for a casino in Andorra will be given shortly, they are looking to open in the second half of next year. The fact that they have not yet found a premises ( Another "Heliport" protest inevitable) and that they are talking about a croupier school here for training may make the start date optimistic to say the least.

28th June 2013. There are taxes and there are taxes.

Most of what Andorra is trying to achieve in bringing itself inline with an angry Europe and the world community are understandable and inevitable. However soon to be levied on any place, and place includes a taxi, shop, hotel or common area, that has music or television broadcast in public will be a "royalties tax".  For example a taxi who happens to play music over the radio will have to pay €20 per month. A hotel that has an average of 30 rooms occupied will end up paying over € 22,000 per year based on a tax per TV and/or music per room occupied. The tax is being introduced as it is now apparently the norm in France and Spain. It's a shame Andorra has to use these particular countries as a bastion of financial common sense, and more importantly for kicking the motor of the tourist industry while it is lying on the floor in need of help`.

13th May 2013.  The continuing slippery slopes at Vallnord.

Well the figures for the last ski season are out and they have already had some preliminary meetings as to how to deal with the accrued deficit, financing charges and of course the income. In fact last season will be remembered for probably having too much snow. Arcalis suffered due to avalanche risks, and in all areas the piste machines could not cope. La Massana have announced preliminary figures of a deficit of €2.5million for Pal and Arinsal, while Arcalis in Ordino itself has managed a deficit of € 2 million. La Massana have emphasized that if they were to strip away the cost of debt and debt service the deficit would only this season have been €100,000, while Ordino have proudly announced the customary waving of €1million in debts owed to the Comu. If we could all make debt disappear then what a great solution to the Sovereign debt crisis in Europe. Now if only they could (agree on and) find a private investor.  Anyone want a punt,  the deficit is only about €32 million?? ( Too many "if onlys....)
UPDATE 2013: It is proving difficult to attract local private investment...now I wonder why that is ?

11th April 2013.  FATCA Regulations

Later this year the new FATCA regulations for USA Nationals come into effect. In summary the IRS in America has decided to order every bank on the planet to disclose annually all accounts of USA citizens where so ever they may be. Now the penalty for not complying with big brother is fines imposed on the banks with a threat to cancel the banking license of that poor entity to operate in the America. Given that the vast majority of the world banking clearing system is based there, no bank can afford not to comply. This will apply to Andorra too where the initial attitude of some banks here has been to suggest no more USA citizen's bank accounts. It would appear now though that they may be satisfied by the client signing a full disclosure agreement.

Now Monsieur Hollande has been watching this carefully for he has proudly announced that he would like to see similar full disclosure for French nationals where so ever they may be. Just as Andorra and other countries have recently complied with the directives, mainly instigated by France, to remove themselves from the list of financial paradises ( Andorra opted for the 35% EU withholding tax for non resident accounts), Monsieur Hollande is proposing that failure of countries to allow full disclosure of all accounts and wealth of French Nationals resident or not resident in any third country will result in that country being cast back into the financial paradise cage. Just how much of a threat this is remains to be seen. Also what remains to be seen is whether the Andorran authorities have the hair on their chest to defend the system here against such pressure from one of it's historical rulers.
9th April 2013. Speeding fines, to pay or not to pay?

Andorran registered cars driving in Spain, France and any other country are immune from fines from radar traps unless stopped by the police after or in relation to a similar offence such as not wearing a seat belt. The same immunity applies to foreign registered cars in Andorra that set the radars flashing here.  There is a new  EU agreement that comes into force at the end of the year that permits the inter change of information between EU countries and also makes compulsory the payment of fines for foreign registered cars in EU countries. Andorra however is not a  party to this agreement and there continues to be no proposals for Andorra to sign separate agreements with any other country. What they are looking at though is the possibility of employing a private company to notify Andorrans ( for fines in Spain for example) and to notify foreigners offending in Andorra that they should pay the fine. If the Governments of Andorra and another country do employ a private company the payment still will not be obligatory, nor will there be any repercussions if the driver does not pay. It would appear then that the status quo of immunity continues.

2nd April 2013. Andorra's first double taxation Agreement

Andorra has signed its first double taxation treaty with France. This will avoid the 35% services tax in France for Andorran companies and vice versa for French companies trading in Andorra. Similar treaties with Spain and Portugal are now being pursued.

26th February 2013. Don't go over the border with a fat wallet..or suitcase!

Always in the news are seizures by (mostly)  the Spanish authorities of cash being imported or exported to and from Andorra above the allowance. Andorra is outside the EU so normal allowances apply and that is €10,000 cash each maximum without declaring anything. Now if they find  persons as they have announced today, four persons were found to be carrying € 55, 910 between them, they WILL seize all the money and leave you each with €1,000 which they deem appropriate for living expenses.  It does not end there, as the fiscal authorities are likely to fine the persons again an equal amount as to the total amount which they were carrying. From time to time they do have operations and are always vigilant for suspicious behaviour, be warned!

21st February 2013 I saw an eyesore.

La Querola of Ordino is a futuristic apartment complex designed by Architect Jean Nouvel. For those who may not have seen this aesthetic work of beauty, I enclose a photo.
Very unfortunately they have found a font/swamp/well which emerges under the proposed reception area. It seems this has come as a shock to the Council of Ordino who knew nothing about it. Consequently the project may have to be abandoned and so all the fields and trees will just have to stay.  I know this font area quite well from my walks. Nice building though !?
Post Note: They seem to have sorted the problem, probably a large tap or something, so the scar in the landscape is well visible.

19th February 2013. Property transactions update

Property transactions are down 25% on this time last year according to today's article. Once again full mention is made of the hope for a revival of interest in the property with the new requirements to invest to secure passive residency. This seems to be the theme every couple of months or so.  Very soon at the end of June we will see the first anniversary of the new law and they will be able to gauge what effect if any the new law is having!

21st January 2013. Are the French playing politics with the winter access routes?

The French authorities have now closed the access to Andorra for several days due to the heavy snow and avalanche risk. This is causing some friction politically as the road itself is clear, but the danger of avalanches persists according to the Ariege authorities. Whereas in Andorra all avalanche areas are dynamited, there is a reluctance to do so on the French side, it is easier to close the pass. There are local murmurs that if at the end of the road there were French ski resorts, everything would be open very quickly. Some years ago this was precisely why all the ski tour operators switched from Toulouse airport to Spanish airports, coaches being stuck in France for several days. For those residents who do use the French side please take note. ( I am reliably informed that some Andorrans ignore the French barrier by driving around it. I suppose when you reach your destination they aren't going to turn you back !?)

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