Timeline

On March 6, 2015, the US Treasury Financial Crimes Enforcement Network (FinCEN) published a notice of finding that designated BPA as a foreign financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. FinCEN also published an order that prohibited U.S. financial institutions from opening or maintaining accounts and processing transactions involving BPA.

FinCEN did not inform BPA of the accusations against the bank and did not allow BPA to respond prior to the publication of the notice. The bank was, as a result, “killed off” immediately without warning.

The publication of FinCEN's notice triggered the expropriation of BPA and its subsidiaries. In Andorra, BPA was taken over by the Andorran National Institute of Finance (INAF – currently known as AFA) and was placed under the administration of the State Agency for Banking Resolutions (AREB). In Spain, Banco De España, the country’s central bank, took over Banco Madrid and placed it under the administration of the Anti-Money Laundering Supervisory Authority (SEPBLAC).

On 21 April 2015, the economic advisor of the United States embassy in Madrid Anton K. Smith confirmed that the US was frustrated with Andorra’s lack of progress regarding money laundering regulation and, as a result, published the notice against BPA. Speaking at an event in Madrid, SMITH said “the United States had been warning Andorra for months that it was concerned about errors in money laundering prevention, in especially the Moneyval and FAFT cases”, referencing a letter sent by the US to then Foreign Minister Gilbert Saboya. He explained that the Andorran authorities “were not paying attention with the fluidity that we were expecting, and that is the reason why in the end we had to use the hammer.”

Smith further acknowledged that FinCEN’s notice was about wider issues in Andorra in an an declassified email where he wrote "I was referring here [in his previous statement] to a general demarche that was delivered to the Andorran authorities in August of last year, triggered by concerns that led to the eventual 311 action."

Ramon and Higini Cierco filed a lawsuit against the U.S. Treasury and FinCEN claiming that the agency's actions against BPA were unjustified and unconstitutional. The Ciercos suit argued that FinCEN had no legitimate basis for its notice under Section 311 of the Patriot Act and that the notice was fatally defective, as it failed to provide the informational basis for its actions.

Subsequent events have made it clear that FinCEN did not have a basis to act against BPA, but in fact was frustrated with the Government of Andorra's unresponsiveness in making systemwide changes to its anti-money laundering measures. As a result, the Ciercos turned to US courts to rescind FinCEN’s order and enable them to resume control of the banks' remaining assets.

In February 2016, whilst the litigation proceedings against FinCEN were pending, the US announced that it was withdrawing its money-laundering notice against BPA citing that, due to the actions of Andorra’s government and the dissolution of the bank and its subsidiaries, “BPA is no longer operating as a financial institution that poses a money laundering threat to the U.S. financial system.” The withdrawal was made official on 04 March 2016.

The Ciercos welcomed the withdrawal of the notice as “a momentous victory for BPA's customers, employees, and all of its shareholders” that vindicates the Cierco’s and BPA. However, they warned that the withdrawal was a blatant effort to avoid any judicial scrutiny of the legality of FinCEN’s actions.  On March 11, 2016, FinCEN would have had to respond in court to the Ciercos' claim that the notices were illegal but along with the withdrawal of the notice FinCEN also submitted a motion to dismiss before the lawsuit could proceed.

Following the withdrawal of the notice, the US District Court for the District of Columbia granted FinCEN’s motion to dismiss the lawsuit, arguing that any controversy that once existed between the parties has been rendered moot by the withdrawal.

The Ciercos filed an appeal against the dismissal of the case.

In June 2016, the Cierco family filed suit against the Andorran Government and the Andorran National Institute of Finance (INAF) for the damages caused to BPA as a result of the reckless negligent and arbitrary actions of the bank's administration after it was expropriated by the Andorran authorities following FinCEN’s notice.

Despite numerous warnings and requests to avoid unnecessary and destructive actions, the mismanagement by the Andorran authorities has caused damages of over €364.6 million, as concluded by two independent valuators.

In July 2016, AREB formalised the sale of Vall Banc to US investment firm J.C. Flowers & Co (Vall Banc sale 14 07 2016). Vall Banc was a bridge bank created and owned by AREB to transfer what it deemed to be BPA’s ‘non-toxic assets’

The Cierco’s denounced the sale citing that “JC Flowers has shown disregard for transparency and credibility in the financial community, and their selection is the final proof of the rigged and illegal process managed by the Andorran Government.”

The US District Court for the District of Columbia reaffirmed its decision to dismiss the Ciercos’ lawsuit against FinCEN, following the institution’s withdrawal of its notice against BPA.

The Court rejected the appeal on the grounds that the withdrawal of the notice made BPA’s claims moot and that the window of time to have an impact on the position of Andorran authorities closed after it was announced that the Andorran government had finalised the sale of BPA’s assets.

The Magistrate of the Commercial Court No. 1 of Madrid (Magistrado del Juzgado de lo Mercantil Núm. 1 de Madrid) “absolved and dismissed” BPA from all claims against them raised by Spain’s Public Prosecutor.

The judge found that the investigation conducted by Spanish authorities did not provide evidence of any crimes or offences committed by BPA regarding money laundering.

The National Court (Audiencia Nacional), a criminal court based in Madrid found that BPA’s financial director, Santiago Rosello’s, involvement with Andrey Petrov did not amount to money laundering or any other punishable offences.

BPA’s involvement with Petrov was mentioned in FinCEN’s notice as one of the reasons for the designation of BPA as a foreign financial institution of primary money laundering concern.

BPA had previously denied any wrongdoing and had reported Petrov’s involvement in the bank to Andorran authorities through its audit report and letter to the INAF in 2014.

The Examining Magistrate's Court nº 38 (Juzgado de Instrucción Nº 38) of Spain dismissed the case against BPA, as Spanish authorities did not provide any evidence that Banco Madrid (BPA) facilitated money laundering activities. In fact, the Court stated Banco Madrid’s control procedures for the prevention of money laundering improved after BPA took over the entity. 

The Court also found that the report conducted by Spain’s financial authority (SEPBLAC) concluded that Banco Madrid had money laundering control procedures in place and did not find evidence that BPA facilitated illicit activities. 

The Andorran Institute of Human Rights (IDHA), along with BPA’s shareholders, filed a complaint against various members of Spain’s government and security bodies for “attack on Andorran sovereignty” and their role in the takeover and liquidation of BPA. The complaint states that Spanish officials pressured BPA’s CEO to release financial information from Catalan politicians, colluded with Andorran authorities and gave FinCEN false information to trigger the notice against BPA. These actions amount to the following crimes under Andorran law:

• Threats, coercion, extortion, and blackmail;

• Coercion of constitutional bodies;

• Falsification of documents. 

The claim was brought against former President Mariano Rajoy and members of his Cabinet: Minister of the Interior Jorge Fernández Díaz, Secretary of State for the Interior Francisco Martínez Vázquez, and Director of the National Police  Ignacio Cosidó Gutiérrez. The claim also calls various Andorran government officials to testify, including former Prime Minister Antoni Marti, current Prime Minister Xavier Espot, former Minister of Foreign Affairs Gilbert Saboya, and the former head of the Andorran Financial Authority (INAF/AFA) Maria Cosan. 

The Regional Court of Madrid (Audiencia Provincial de Madrid) rejected an appeal from Spain’s Public Prosecutor against the previous court ruling that cleared Banco Madrid (BPA) from any wrongdoing. ​​The Court reaffirmed that it did not find any evidence that the bank facilitated money laundering activities. 

A resolution from the Standing Committee of the Commission for The Prevention Of Money Laundering and Monetary Infringements (Ministry Of Economic Affairs) of Spain dismissed the proceedings initiated against BPA and cleared the bank from any wrongdoing in relation to Petrov.

The Standing Committee concluded that BPA followed the correct money laundering prevention procedures given the information available to the public about Petrov.

The Cierco family filed a suit against Spain’s central bank Banco de España for the €141million in damages caused to BPA’s shareholders as a result of Spain's expropriation and liquidation of Banco Madrid.

The claim highlights the fact that BPA and its directors have been cleared of any wrongdoing by Spanish courts on multiple occasions and references the threats and coercion faced by the bank from Spanish authorities, as part of Operation Catalonia.

The court case against BPA  – known as the ‘BPA Case’ or the ‘Gao Ping Case’ –  resumed after three years of postmonents in the Tribunal de Corts, Andorra’s criminal court. The case against BPA’s leadership was meant to start in 2018 but was delayed multiple times due to changes in legal representation and the Covid-19 pandemic. The case currently involves 25 former BPA directors. If found guilty, they could be sentenced to up to eight years in prison, ten years of professional disqualification, and receive a fine of €70 million. 

The Andorran authorities alleged that BPA assisted Chinese mobster Gao Ping and his associate Rafael Pallardo in their money laundering activities, but the bank’s directors deny any wrongdoing. 

Pallardo was a client of BPA between 2008 and 2011, but the bank decided to drop him when it acquired Banco Madrid and a banking licence in Spain, as Pallardó’s activities would amount to considered tax evasion in Spain. Andorran authorities were aware of Pallardó’s involvement in BPA as the bank reported his accounts in the  2011 and 2012 audit reports and he was mentioned in the reputation letter submitted to the INAF in 2014.

Pallardo and Ping were mentioned in FinCEN’s notice as  reasons for the designation of BPA as a foreign financial institution of primary money laundering concern.

On 16 May 2022, Spanish newspaper El Pais published recordings from former Spanish National Police Commissioner José Manuel Villarejo, a member of the so-called Patriotic Police, that revealed that the Spanish government engaged in a covert project aimed at crushing the Catalan independence movement, known as Operation Catalonia. The audios, and a later interview by Villarejo, confirm that Spain targeted and threatened BPA in an attempt to find incriminating information about the former-President of Catalonia’s government, Jordi Pujol. 

The audios also confirmed what BPA had argued since 2016, that Spanish officials had threatened BPA’s director to leak compromising data on Catalan officials and that "they would act against BPA" using the "American administration” (FinCEN) as a proxy if BPA did not comply. 

Andorra's Examining Magistrate Number 2, Stéphanie Garcia, charged the former Spanish prime minister, Mariano Rajoy, and his Minister of the Interior, Jorge Fernández Díaz, for allegedly pressuring Banca Privada d'Andorra (BPA), as part of Operation Catalonia. The investigation derives from a complaint filed in 2019  by the Institut de Drets Humans d'Andorra which the former president of BPA, Higini Cierco and the Pujol family joined as injured parties.

The investigations by the Andorran court are  ongoing.

The Congress of Deputies – Spain’s legislature – approved the creation of a commission to investigate the interference in the sovereignty of Andorra by former Prime Minister, Mariano Rajoy, former Minister of the Interior, Jorge Fernández Díaz, former Minister of Finance, Cristóbal Montoro, former Secretary of State for Security, Francisco Martínez and former Director General of Police, Ignacio Cosidó. The commission will start the investigation in September 2022.

The former CEO of BPA Joan Pau Miquel filed a complaint on Spain’s Audiencia Nacional (National Court) against former Minister of the Interior Jorge Fernández Díaz, deputy Minister Francisco Martínez and José Manuel Villarejo for alleged extortion, coercion, and blackmail.

The complaint is based on the actions taken by members of the Spanish Patriotic Police to obtain secret banking information protected by Andorran law on several Catalan leaders and their families, as part of Operation Catalonia.

The Congress of Deputies – Spain’s legislature – approved the launch of an inquiry to investigate the actions taken by former Prime Minister Mariano Rajoy’s government as part of the wider Operation Catalonia. The investigation’s remit will include “possible links with FinCEN and other international organisations that could have prompted interventions of banking entities.”

Higini Cierco, the former majority shareholder of Banca Privada d’Andorra (BPA), has filed a criminal complaint in the Andorran Tribunal De Corts – Court of First Instance – against the Head of Government of Andorra Xavier Espot Zamora for “fraud, influence peddling and waste of public funds.

The Bridge Tank releases its report - ‘The Case for Increased Financial Cooperation in Europe – The EU and the Micro-States’ - describing Andorra as a “severe threat to the rule of law in Europe”. The report added that BPA's takeover reflects "the weakness of the rule of law in Andorra" where investors "have little to protect them from unjust political interference."