Law 1/2011, 2 February, from creation of a system of guarantee of deposits for banks since the General Council in its session of February 2nd, 2011 has approved the following: Law 1/2011, 2 February, from creation of a system of guarantee of deposits for banks reason In application of article 17 of the Law of regulation of the financial system , adopted on 27 November 1993, the system of guarantee of the obligations of the banks has been governed since the year 1995, by a system of deposit guarantee reserves, the basic regulatory framework which regulates the law regulating deposit guarantee reserves and other operational obligations that entities need to be maintained and deposited in the financial system , May 11, 1995.

Despite the formal designation, this deposit guarantee system has operated to date as a system of financing in the framework of the financial policy of the State. At the same time, the system complements the mechanisms that guarantee the solvency and stability of the banking system, without form, however, a direct guarantee for repayment of deposits to their owners in case you suddenly become indisponibles.

The recent convulsions of the international financial markets have driven legislative initiatives relating to the deposit guarantee systems in the countries of our environment, which has led to a gradual appreciation of the Andorran legislator for the purpose of setting up the most suitable scheme to protect the soundness and solvency of the Andorran financial system to their depositors.

In accordance with the evolution of European references it seems appropriate to fix the maximum amounts of coverage of 100,000 euros to applicant and 100,000 euros per investor, for each entity, with a global limit on 94.1 million euros that will be increased by a system of annual contributions to the Fund's assets to reach the 1.5% of the calculation basis of the contribution defined in article 7 , with a maximum limit of 200 million euros (in absolute value).

The evaluation of various systems of warranty applied to comparative references (systems ex ante and ex post) and the particularities of a banking sector with a high concentration level have set up the system that regulates this law as a mechanism of guarantee ex post, which only act by paying the amounts corresponding guaranteed in cases of intervention or forced liquidation of the members.

The law establishes the compulsory membership of the banks authorised to operate in Andorra and a system that guarantees the confidentiality of the customers, subject to the control of a Management Committee composed of representatives of the Institut Nacional Andorrà de Finances (INAF) and of the Association of Andorran banks, as a representative of banking entities.

For the purposes of ensuring compliance with any obligations arising from the guarantee system, we propose the articulation of this system by means of investments of the adhered liquid assets that give consideration to a backup available.

The calculation of the amounts covered by the guarantee would be in the rough, that is to say, without compensation of any debts of the depositor with the bank concerned, and, in addition, be subject to a special regime of the credits of the depositaries to the maximum of the amount secured by the guarantee system, which requires the approval of a special regime of bankruptcy rules.

Chapter first. The system of guarantee of deposits in banks of Andorra Article 1 creation of the system will create a system of guarantee of deposits and investments with the aim of guaranteeing the repayment of the funds in cash and securities deposited in the banks members of the system of guarantee to the beneficiaries of this system.

The system of guarantee does not have its own legal personality, without prejudice to the ability to exercise the functions which are conferred, and is managed in accordance with the provisions of this law. The Management Committee is the Institut Nacional Andorrà de Finances.

Article 2 Beneficiaries of the system of guarantee Are beneficiaries of the system of guarantee the physical and legal persons, whatever their nationality or domicile, to retain cash deposits or securities with the Andorran banking entities. These beneficiaries are entitled to a refund of these deposits in the terms established in this law.

Article 3 members of the system of guarantee Are compulsorily and exclusively members of the system of guarantee all banks authorised to operate in the country.

The system of guarantee should cover the depositors at branches of banks of Andorra authorized in another country, you are subject to the following scheme: a) the assignment of the branches to the system warranty is compulsory when the deposits or the values guaranteed confined in the branch are not covered by any warranty system in their host country.

b) in the case of the deposits or the values guaranteed confined to the branch they are covered by a guarantee system in their host country, have been assigned to the Andorran System to cover the difference of level or scope when this is less than the guarantee covering the Andorran System. Otherwise, you will not need.

c) When branches foresaw the secondment to a guarantee system of the host country will inform the managing Commission of the modalities and conditions that regulate the said system so that you can evaluate its suitability.

Article 4 cases of coverage 1. The system of guarantees established the mechanisms of return of their deposits to the beneficiaries in the event that any of the members of the system to be formally declared in bankruptcy or suspension of payments or been involved administratively due to insufficient creditworthiness and, as a result of this situation, see impossibility to return the cash and/or securities deposited in the dates involved to do so.

2. In the event that there is a date specifically established, legally or contractually, for its expiration, as well as in cases in which they have started the liquidation of the insolvent Member of the system, it is understood that the term is in sight.

3. cash deposits covered by the system warranty are as follows:


a) Deposits of cash in sight or term deposits in any currency; in the latter case the amount is calculated, for the purposes of determining the equivalent in euros at the exchange rate on the day that has produced the Declaration of insolvency or the intervention of the insolvent Member of the system;

b) formalized in the form of deposits, certificates of deposit or other similar securities representing debt, not issued in series, paying in cash and that have been issued by the insolvent Member of the system.

4. The deposit of securities covered by the system warranty are the deposit of securities or cash deposits linked to the settlement of operations on these deposits, which cannot be separated from the assets of the insolvent Member or active mass of the system and that this cause can produce a patrimonial prejudice to the beneficiaries.

The system of warranty does not guarantee in any case the losses due to the fluctuations in value of the securities or financial instruments, to the loan losses or infringements of issuers or obligated under the securities or financial instruments or the markets or systems where these are traded, will compensin or liquidin. Nor does it guarantee the deposits in cash or financial instruments representing a financial debt paying for the insolvent Member of the system when you have set up or have been issued expressly with the character of subordinates, or when are subordinated to legal imperative.

5. Not considered in any case "cash deposits covered" or "deposit of securities covered", and will not be taken into account for the calculation of the mandatory reserve, the following deposits: a) the deposits made by entities or individuals below, self-employed and on their own behalf:-banks.

-investment banks and financial agencies of investment.

-insurance companies.

-management companies for collective investment institutions.

-asset management companies.

-other entities that, in accordance with its applicable regulations, play the typical activities above included in the financial system.

-any financial institution subject to supervision.

-Administrators, managers, partners with personal responsibility, that have a causal link with the other companies of the Group and shareholders who have at least 25 percent of the credit institution's capital, persons responsible for the audit of the accounts of the credit institution and depositors who have a similar situation in other companies of the group.

b) The certificates of deposit to the carrier and temporary assignments of assets.

c) the deposits made by companies or organizations that are part of the same group that the Member of the system.

d) deposits made by any public administration.

6. Despite the fact that it will be taken into account for the calculation of the mandatory reserve, according to what is established in article 7, is not considered in any case "cash deposits covered" or "deposit of securities covered" those who will constitute: a) against the provisions in force; in particular, those that have originated in operations in which there have been a criminal conviction in Andorra for offences resulting from operations of money laundering;

b) to customers who have obtained, in financial conditions, which have helped to aggravate the situation of the entity, provided that this circumstance has been determined by a firm sentence;

c) by people who act on behalf of any of the excluded depositors in the previous section, and to own or in concert with those who are mentioned in the paragraphs a) and b) precedents.

7. Entities cannot be used in your advertising membership system, however can include a mention on the same ownership without adding other data or information.

8. The accounting date is established for the determination of the balance in traffic operations.

9. When the applicant is not the beneficiary of the amounts deposited in the account, the warranty should protect the legal beneficiary as long as the latter has been identified or is identifiable before they will produce an event coverage. In the event that there are several legal beneficiaries, taking into account the participation of each one according to the rules for which will manage the amounts.

10. The existing balances at the time of the revocation of the authorization of an entity member must follow covered until the extinction of the same entity. The amounts are covered there at the time of the revocation.

Article 5 coverage Limit per beneficiary 1. The system of guarantee to guarantee the beneficiaries the reimbursement of the amount of its cash deposits covered, with a maximum limit per beneficiary of 100,000 euros, and the deposit of securities covered, also with a maximum limit per beneficiary of 100,000 euros, independent of the first. These amounts have been revised with a minimum frequency of five years from the entry into force of this law.

The amount of 100,000 euro is, in each case, by beneficiary and by a member of the system, and not by the deposit covered, so, for the purpose of determining the maximum limit established by the beneficiary, it must compute the total amount of the direct debit positions that each beneficiary with the insolvent Member of the system for cash deposits covered and the deposit of securities covered in the date on which the latter has been declared in suspension of payments , in bankruptcy, or is involved, and will not have to compute the creditor balance of each of the deposits of cash covered or deposit of securities that could have each beneficiary with the insolvent Member of the system.

2. The joint deposits or with more than one owner, it is considered "beneficiary" each of the holders, in accordance with the stipulated in the contract of deposit and, failing that, in equal parts.

3. The determination of the position of a claim against the insolvent Member beneficiaries of the system should be made on the basis of brute, in such a way that you cannot make compensation by reason of the unexpired credits that the insolvent Member of the system may have.

Article 6 Reservation required and a maximum limit of coverage


In order that the system of guarantee to comply with the obligations that are attributed to this law, all members of the system should create and maintain a backup available affected the fulfillment of the guarantees covered by the system warranty (hereinafter "reservation guarantee"). The maximum total amount of the guarantee reserves for the whole of the members of the system will be of 94.1 million euros at the moment and will establish a system of annual contributions up to the maximum of the 1.5% of the calculation basis defined in article 7, which will operate as a maximum limit of coverage of the guarantee System for the whole of the recipients. In any case, not be able to exceed the limit never set and all of 200 million euros.

Article 7 calculation of the mandatory reserve and investment of the amount 1. In order to calculate the guarantee reserve must take into consideration the total amount of cash kept in cash deposits covered and 5 percent of the market value of the securities included in the deposit of securities covered kept members of the system.

The values quoted in quotations are valued in accordance with the official quotation market known in which listed.

The values that are not traded on regulated markets are valued for their estimated value of realisation or value likely to negotiation, using internationally accepted valuation accounting procedures. The criteria used must pursue in the search for the most accurate assessment taking into account all the factors that come into play when it comes to value securities assets. In this sense, it is necessary to take into account the criteria accepted internationally as a best practice in assessment.

2. The amount of the guarantee reserve that must keep each Member of the system has been calculated annually, and should be kept throughout the following year for each Member of the system until the review occurs immediately following.

To calculate the amount of the initial guarantee reserve that must keep each Member of the system is to find the proportion corresponding to each Member of the system with respect to the amount resulting from the calculation of section 1 above, and should apply on 94.1 million euros of maximum amount for the first year, and the total of the Fund more contributions in the following exercises. Each Member of the system, immediately after you report the amount that should be set up or, where appropriate, that he has to adjust, you must create or have to adjust the amount of your reservation in warranty.

Annual contributions that must make the members of the system to calculate the following year established the initial amount, will be of 0.06% of the basis of calculation of section 1 above. These contributions will be kept until the assets of the funds reach the 1.5% of the calculation basis of the contribution defined in paragraph 1 of this article with a maximum limit of 200 million euros (in absolute value).

3. An amount equivalent to the guarantee reserve has to invest in safe and liquid assets and should consider that meets the following requirements: a) balances immediate deployment or with maturity not exceeding one month maintained in other credit institutions of Andorra, of member countries of the OECD, or of other organizations provided that they are subject to a precautionary rules that the INAF deems equivalent to those in force in Andorra;

b) investing in Andorran public debt or public debt of the Member States of the OECD;

c) other assets of immediate provision or term not exceeding one month, or that are easily dispensed with, and that the INAF consider adequate to each time.

4. The assets in which they materialize the reserves in guarantee of system members may not be subject to charge, encumbrance, Lien, execution Office or object, and cannot respond to other obligations or can be applied to other purposes other than those provided for in this law.

Second chapter. Management Committee Article 8 the managing Commission creates a managing Commission of the guarantee System in charge of managing the proper functioning of the guarantee System and develop the functions set out in this law.

Article 9 Organization 1. The Management Committee is made up of six members, three of them appointed by the members of the system through the Association of Andorran banks, and three appointed by the INAF. The Commission appoints a counsel who attends the Committee meetings with voice but without vote and advising on all legal issues that may be necessary in the development of the tasks and functions that correspond to the Management Committee.

The INAF du a record of appointments and terminations of the members of the Management Committee. All members must be persons with appropriate professional experience, subject to the duty of confidentiality in terms that at any given time set the rules governing the administrative regime of the Andorran banking entities.

2. The chairmanship of the managing Commission corresponds to the person chosen by its members from among the members appointed by the INAF.

3. The Management Committee meets every time I have the president or when requested by at least two of its members. In the latter case, the president must convene the meeting immediately. The decisions of the Management Committee will be taken by a majority and in case of a tie, the Chairman has a casting vote. The president should exercise the external representation of the managing Commission. In all that is established in this law, the Management Committee shall be governed by the rules of operation established and which must be approved by the Government.

4. The expenses of the managing Commission the need to pay for the members of the system, in the same proportion that the amount of the guarantee reserve that each should be kept out of the total of this reserve in guarantee.

5. the Commission establishes its rules of organization and functioning and relayed to the Government for approval and publication.

Article 10 Functions 1. Corresponds to the Management Committee to carry out the actions that are necessary for the proper functioning of the guarantee System, so that the beneficiaries receive the maximum amounts set out in this law.

2. In particular, but not limited to, the functions of the Management Committee are the following: a) to monitor the cases where the beneficiaries are entitled to receive the maximum amounts established if a event coverage.

b) recalculate the amounts that have been paid to each beneficiary.


c) Calculate annually before the 15th of March, according to data on the annual financial statements covered deposits of each Member of the system, the amount of the guarantee reserve that must keep each Member and the contributions they have made to the bottom.

d) Claim to each of the members of the system, when it has to pay to the beneficiaries, the amounts that each have to meet, with the limit of the guarantee reserve in each case for the current period in which occurred the event coverage, as well as organize payments to beneficiaries.

e) Represent members of the system, in the terms provided for in this law, in bankruptcy proceedings or administrative intervention affecting insolvent members of the system.

f to request the competent judicial or administrative authorities) the information essential for the fulfillment of their duties, and always respect, as much as possible, the confidentiality of the data and the circumstances of the recipients.

g) establish procedural rules for carrying out the above functions and all other attributed this law, which will be mandatory for members of the system once they have been approved by the INAF.

Third chapter. Payment to beneficiaries and bankruptcy rules Article 11 delivery of funds by members of the system when they are required for this purpose, the members of the system must deliver or put at the disposal of the managing Commission, in the form established by and in the necessary time to meet the deadline provided for in paragraph 3 of article 12, the amounts that are required for each , up to the limit of the amount of the guarantee reserve that each is required to maintain at all times.

The claim to each Member of the system on the part of the total that must be put at the disposal of the beneficiaries affected by the event coverage, is made in proportion to the reservation guarantee that each must be with respect to the reservation guarantee constituted by all members of the system. This calculation you exclude the insolvent Member of the system that motivates the application of the guarantee.

Article 12 payments to beneficiaries 1. The Management Commission must determine how it will recognize in each beneficiary the amount due and the form of payment.

2. it will begin to make payments to the beneficiaries with the proceeds of the sale of assets related to the reserve in guarantee of the insolvent Member of the system, and you can only use the reserves in guarantee of other members of the system when the guarantee reserve of the insolvent Member has been exhausted.

3. The Management Committee must pay the beneficiaries the amounts that correspond, within the maximum limits laid down in this law, as members of the system to comply with the obligation to deliver or make available the amounts with which corresponds to contribute, and in any case no later than the month following the date on which an event coverage.

4. In the event that, in the limits of overindulging indisponibles guarantee reserves held by members of the system, is not possible full refund to all beneficiaries of the totality of the maximum amounts set out in this law, it has to pay each one as much as possible and to establish a pro rata of the amounts available in the system of guarantee in relation to the right to have each received the same system taking after the privilege set forth in article 15 to collect the amount of the difference to reach the maximum limit established by law for each beneficiary.

Article 13 recovery of contributions in the field of insolvency procedures or of intervention 1. The members of the system are entitled to recover the amounts given to the managing Commission for payments made for beneficiaries and will rebuild the reservation guarantee. For this purpose, will be presented to the bankruptcy procedure or intervention that has been already in the insolvent Member of the system, and can be represented by the Management Committee in the terms established in article 14.

2. In respect of the amount that the beneficiaries had not been able to register, in accordance with what is established in this chapter, for inadequacy of reserves in guarantee and up to the maximum limit set out in this Act, if applicable, will also be represented together in the insolvency proceedings and intervention by the Management Committee.

Article 14 representatives of the managing Commission 1. The managing Commission acts in the name and on behalf of members of the joint system that had contributed with its reserves in guarantee for the payment to the beneficiaries, in order to recover the amounts and distribute after the amounts received in each of the system's members in proportion to what you have provided, if not you could recover the total or the whole paid effectively. It also represents the beneficiaries for the recovery of the amounts that, up to the maximum limit established by the beneficiary in this law, had not been able to receive because the guarantee reserves proved insufficient. To exercise these representations is not necessary to give any power of representation, since this representation shall be understood as conferred by this law.

2. The representation of the members of the system and of beneficiaries is limited, respectively, to the recovery of the amounts corresponding to the given guarantee reserves and uncashed amounts below the maximum limit established in this law.

In addition to the joint action for the recovery of the amounts paid by the guarantee reserves, members of the system and the beneficiaries may claim, separately and independently in the bankruptcy proceedings or relevant intervention, the amounts that exceed, if any, of the maximum limit established in this law, and any other credit that they could have with the insolvent Member of the system , in accordance with the General rules set forth in the law of bankruptcies and suspensions of payments or in other applicable regulations in force at any given time.

Article 15 bankruptcy Privilege of beneficiaries and members of the system


1. In case you have not been able to make the payment of the maximum amount established in this law for the guarantee, the beneficiaries will have a special privilege for the purpose of charging the over-active insolvent Member of the system the amount of the difference up to the maximum amount established in this law. The credits of the recipients who exceed the maximum amount set have the characterization appropriate in accordance with the law of bankruptcies and suspensions of payments or in other applicable regulations in force at any given time.

2. The payment of the amount corresponding to this privilege is made against any system on which the insolvent Member active not until a real right of guarantee in favour of third parties.

3. Once the beneficiaries have received the whole maximum amount established in accordance with the provisions of this law, either by the payment directly to the Management Committee, or once you have exercised his privilege in accordance with the provisions of this article, the members of the system will at the same time to a special privilege over the assets and rights of the over-active not subject to charges or encumbrances of real character , up to the total of the amounts that, by their respective guarantee reserves, each of the members of the system has delivered to the managing Commission to pay to the beneficiaries.

4. The privileges set forth in this article take precedence over any other that could be established by current legislation at all times on bankruptcies and suspensions of payments, but the mortgages and the wagers or judicial or administrative liens held prior to the Declaration of the event covered. The amounts recovered by the members of the system as a result of the exercise of this privilege must be used necessarily in the reconstitution of its reserves in guarantee.

Additional provisions first additional provision. Faculty development of the law empowers the INAF to develop, by means of technical releases, the precepts of this law that you have.

Second additional provision. Consideration of the guarantee reserve as own resources in accordance with the solvency ratio under the terms established in article 3 of the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996, the amount actually constituted in each moment as a reservation guarantee is considered as equity.

For the purpose of presenting the financial statements of banks, and while not carried out sectoral adaptation to the provisions established by law 30/2007, of December 20, the accounting for entrepreneurs, the reservation under warranty must be presented with the signature X-reservations-guarantee reserves, the liabilities of the balance established by the accounting plan that must implement all operating components of the financial system , approved by Decree on 19 January 2000.

The INAF, through the issuance of a technical release, you have to fix the accounting criteria that must be used and the methodology to be followed for the provision of the guarantee reserve to reach the joint amount not inferior to 94.1 million euros of initial coverage that establishes in article 6 and the annual contributions to the Fund by each Member of the system. Can be made to this effect charged to results or using freely available reserves.

Third additional provision. Bankruptcy rules related to the assets of the insolvent Member guarantee reserves must be separated from the over-active and must be put at the disposal of the managing Commission to sell them or pay to the beneficiaries, such as article 12.

To determine the amounts that enjoy the privilege in the face of the insolvent Member of the system's over-active pursuant to article 15, there will be enough with the certification that run the Management Committee, which will make faith of the holders of privileged credits and its amount.

Separate court proceedings that can start to understand who is harmed by situations of insolvency obsten not in the execution of the guarantee on the reservation affects assets constituted by the insolvent Member of the system, which can be carried out separately from the bankruptcy procedure, so that they can make the payment to the holders of the privilege established in article 15 of immediately.

Transitional provision 1. The system of guarantee which governs this law should be operational within a maximum period of six months from the entry into force of the same. Within this period will be should constitute the Management Committee and to affect investments in the reservation guarantee that regulates the second chapter and article 7, respectively.

2. The amounts deposited to banks in ITS JURISDICTION at the time of entry into force of this law, by virtue of the provisions of the law on the deposit guarantee reserves and other operational obligations which have to be maintained and deposited the entities operating in the financial system, of 11 May 1995, must be delivered to the members of the system , which must affect the liquid assets referred to in article 7 in order to cover the guarantee reserve to the amount corresponding to each Member of the system and come up with an initial set amount not inferior to 94.1 million euros of coverage that establishes in article 6.

When the Member of the system has fully covered its reserves in guarantee, the potential returns on assets that are collaborative must be fully available.

3. The cancellation of the deposits with the INAF and the affectation of the liquid assets indicated in the previous section must be carried out in a maximum period of one month after the determination by the Commission that manages the reservations that must be established for each Member of the system, in view of the amounts of the deposits of cash covered and the deposit of securities covered in each of the banks on 31 December 2010.

Repealing provision 1. Abolishes all the provisions regulating deposit guarantee reserves regime with regard to banks, which will continue in force for the rest of the entities in the financial system but the entities-non-banking credit and, in particular, the following: a) and Article 3 of the fifth transitional provision law regulating deposit guarantee reserves and other operational obligations to maintain and deposit the bodies operating in the system financial, 11 May 1995.


b) Decree of approval as to public funds, for the purposes of complying with the obligatory investment ratios of certain deposits with the Andorran National Institute of finance, of 22 August 1994.

c) law on the remuneration of the deposit guarantee reserves and other operational obligations which have to be maintained and deposited the entities operating in the financial system, of 4 July 2001.

2. Abolishes the legal provisions of equal or lower rank in which they are affected by this law.

First final provision. Modification of regulatory provisions of the deposit guarantee reserves of entities in the financial system 1. Modifies the article 17 of the Law of regulation of the financial system, adopted on 27 November 1993, which is worded as follows: "Article 17 Deposit guarantee reserves 1. In addition to the share capital, the non-banking entities in the financial system are required to maintain minimum reserves of shareholders ' equity that must be deposited at the Institut Nacional Andorrà de Finances, in guarantee of their obligations, with the exception of the non-banking entities – – specialised credit.

2. The Government, by means of regulation and the limits set out in this law, at the proposal of the Minister in charge of the Department of finance, has to fix with the previous report of the INAF, the scales have been applied in the Constitution of the deposits referred to, depending on the nature of the activity of the entity.

3. The General Council, by means of a specific regulation, must fix the maximum limits applicable to this concept and the minimum amounts required in each entity, depending on the nature of its activity.

4. The conditions that must be applied to the deposits referred to must be set by the Government. ".

2. Modifies paragraph b) of article 16 of the law regulating the disciplinary regime of the financial system, of 27 November 1997, which is worded as follows: "b) failure to comply with the rules in force in the field of guarantee of deposits.".

Second final provision. Entry into force this law shall enter into force the day after its publication in the official bulletin of the Principality of Andorra.

Casa de la Vall, Josep Dallerès Codina 2 February 2011 Syndic General Us the co-princes to the sancionem and promulguem and let's get the publication in the official bulletin of the Principality of Andorra.

Joan Enric Vives Sicília Nicolas Sarkozy President of the French Republic and the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra