Law regulating the creation of new banks of Andorran law since the General Council has approved in its session of June 30, 1998 as follows: law regulating the creation of new banks of Andorran law preamble in Spanish law of the financial system, dated November 27, 1993 they lay the Foundation for an effective improvement of the regime of status quo in which operated the banking system.

The articles of the above-mentioned Law was preceded by the considerations that had led the legislature to the conclusion that, in spite of having well present the principle of freedom of enterprise, the structuring of the financial system, because of exercising some functions vital for the whole of the economy of the country, could not be let free market forces the configuressin, but it had to be regularly taking as a major guideline in article 32 of the Constitution , which specifies that "the State can intervene in the management of the financial, commercial, labour and economic system to make it possible, within the framework of the market economy, the balanced development of society and the general welfare."

From this perspective, which confirms the primacy of the general interest in the economic organization of society, and also for reasons of prudence and, ultimately, economic effectiveness, it was necessary to try to ensure the smooth functioning of the financial system and its positive contribution to the economic life of the country, with the introduction of appropriate measures, all looking not to intervene over the strictly necessary. Authorizations in force at the time underwent a renovation, and, over the years, has been developing a regulatory body in the way that has been considered as the most suitable for the achievement of these aims.

Since 1993, and as he envisaged, not there have been variations in the composition of the financial system;

on the other hand, the entities that make up have already been subordinated to a technical and economic requirements that have been making the introduction to a new phase that should now complete with the effective opening of the system.

This period has been a transition phase in the evolution of the financial system and, at the same time, preparatory opening that the General Council has put in place effectively, with the present law, with regard to the banks.

It has been pondering in depth on the features that had to meet change with as much importance as the potential that is now being carried out. A feature has been claiming as a central idea of opening: the degrees. Once again, prudence and the pursuit of effectiveness have made take this basic philosophy. The practical implementation of the idea of degrees leading to initiate a new way in such a way that, in addition to remain open to all the possibilities with a view to the future, allows you to focus on, as from now, several fundamental objectives: the maintenance of an indispensable security; the contribution of a boost in the dynamism and the internal competition in the sector; the possibility to open new prospects for economic growth, and, beyond the apriorístiques theoretical formulations, the acquisition of experimental knowledge which must be extraordinarily useful for taking the right steps to conform, step by step, an optimal structure of the financial system.

With regard to the process of granting permits, had to take into account the gradual nature of the opening and it was necessary to establish a procedure that would ensure this basic condition and treatment objective of the applications. It has been considered that with the addition of a significant number of quantitative and qualitative criteria for the evaluation of the applications, this law contains the elements necessary to be able to take decisions on this matter with fairness and efficiency. On the other hand, to reinforce the gradual nature of the opening, it has been established, by means of a transitional provision, the number of new permits that the General Council considers it appropriate to grant until 2000.

In the process of resolution of the applications listed, with mandatory, the successive interventions of the two bodies of authority financial technique, which must mean contributions of objectives and technical criteria that should facilitate the work of study and determination of the Government.

In order to give consistency to the fact of the filing of applications, will provide a rigorous conditions, including the obligation to set up a deposit prior.

At the same time, in order to guide properly the people interested on the objectives you want to achieve with the creation of new entities that have to integrate in the Andorran financial system, has evaluated the specific criteria that will be considered at the time to carry out the evaluation of applications.

As indicated by the title of the present Law, the legislation that still affects only the banks. Indeed, since-for both the historical and current circumstances that there are complied with, such as their operational nature – the banking sector and the financial sector Bank not constitute two substantially different fields, has seemed advisable to make a temporary treatment separate, although no move away from them in a meaningful way. In this way, you can concentrate the efforts, in turn, to prepare and to regulate the opening of each of them.

Chapter i. Basic Provisions Article 1 General principles to) permits for creating banks of Andorran law are awarded with specific character and particularized b) permits for creating banks of Andorran law are awarded a gradually c) the concrete application of the principle of degrees in the granting of permits for creation of banks is based on the general interest weighted in function of the evolution of the various circumstances that find themselves in this matter Article 2 right to granting of authorisations

The authorizations of creating banks of Andorran law are granted by the Government.

Chapter II. Administrative procedure Article 3 Filing of requests requests for the authorization of the creation of banks of Andorran law must be submitted in three copies to the Ministry of finance, which sent a copy to the Commission of finance and to the INAF.

Article 4 resolution of the applications


The Government has to resolve provisionally requests in the form of prior authorization or deny them, within a maximum period of five months from your presentation.

Interim resolutions in the form of prior authorization must be transformed into final resolutions in the form of approval or denial within a maximum period of five months from the provisional decision.

Article 5 notification of resolutions the Government report to the entities applicants, within the deadlines provided for in article 4 of this law, the resolutions of their applications.

Article 6 publication in the official bulletin of the Principality of Andorra the resolutions that authorize the creation of a Bank are published in the official bulletin of the Principality of Andorra.

Article 7 The Resource sponsors can lodge an appeal against the decisions of the Government, the Administrative Section of the Court of magistrates, within thirteen working days starting from the day after the notification of the resolution of the request or, in the case of administrative silence, within thirteen working days starting from the day after the deadline established by the explicit statement of the resolution.

Article 8 report and opinion before The resolution of the applications for authorisation for the creation of new banks of Andorran law requires, prior, the report of the INAF and the opinion of the Commission of finance.

Chapter III. Conditions required for developers to apply for authorisation Article 9 Signing of a promoter can submit requests the sponsors whose exclusive object the creation of a Bank of Andorran law.

The name of the promoter has to include the name of the Bank projected.

Article 10 establishment of a tank The sponsors, before submitting their applications, have to make a deposit to the INAF of 500 million pesetas. This deposit is not paid.

The repository object of this article is returned to the sponsors, the applications which have been rejected, within twenty working days from the date of the corresponding resolution; and authorized entities, within a maximum of twenty days from the date of the commencement of their activity.

Article 11 documentation to enclose with the request The sponsors must submit detailed documentation in the article 13 of this law, in three copies and together with the request, the Ministry of finance. The Ministry of finance in relayed a copy to the Commission of finance and to the INAF.

Article 12 information accessories) The sponsors who have obtained a provisional decision in the form of prior authorization should be submitted in three copies to the Ministry of finance, within a maximum period of three months from the notification of the provisional decision, the documents detailed in article 14 of this law. The Ministry of finance in relayed a copy to the Commission of finance and to the INAF b) without prejudice to that stated in the preceding point a), during the period of instruction, the INAF, on its own initiative or at the request of the Commission of Finance or of the Government, may require the promoters that supplementary information that it considers appropriate, provided that it is related to the requirements to apply for permits for creation of banks the INAF communicated to the Ministry of Finance, with previous character, the nature of the information that you have to apply for the sponsors.

Chapter IV. Documentation to be presented by the applicants Article 13 documents to attach with the requests the promoters must provide, with the applications, the following documents: 1) relating to the specific features of the activity of the company projected.

in) a project of the statutes of the Bank to set up b) the program activity core, in which must be specifically the genus of operations that is projected to perform in particular will be indicated what commercial banking activities are planned to develop. For this purpose it will indicate all the elements that make it possible to observe the relative importance of the activities of commercial banking, in the whole of the global activity is projected to develop. Also indicate if it is planned to develop investment management activities.

c) an exhibition specifically for the eventual provision of activities related to the promotion of the economy at the level of country d) an exhibition specified of the eventual provision of activities related to sponsorship and patronage of educational and cultural activities, with grants for research, conservation and promotion of the cultural and natural heritage and the cultural action and the sponsorship of sports activities 2) relative to the shareholders of the Bank to set up.

d) the relationship of partners that constitute the company, indicating their nationality and their holdings in the share capital if they are legal persons, it should indicate the composition of its governing bodies, and to provide their financial statements with the annual report and the audit reports for the last three exercises.

If the legal entities forming part of a group of companies, it should indicate the composition of the group, provide the information indicated in the previous point referring to the essential components and the consolidated figures of the group.

e) sworn declaration where it is claimed that the contributions of funds to the company by the shareholders comply with the requirements established by legislation regarding the prevention of money laundering or of values from drug trafficking and other criminal activities f) information about the career, the professional activity and the patrimonial situation of the partners with shares of 5% , or higher, of the society to set up. If they are legal entities, the above-mentioned information corresponds to the members of its governing bodies g) in the event that the developers do not have to cover the entirety of the share capital of the entity that is intended to constitute, information on the mechanisms provided to complete the shareholding of the company and the procedure to be followed in particular, it is indicated if the promoters have intention to make a public offer of shares to facilitate a broad shareholder base.

h.) the relationship of people to integrate the first Board of Directors, with


information about the history and the professional activity of each of these 3) relative to the structural, technical and economic forecasts.

I) A description of the technical and human resources available to the Organization to carry out its activities. And a detailed description of the activities and services that will be developed in Andorra j) A generic description of the measures which it is planned to introduce in order to ensure adequate internal control procedures and to develop the activities in an environment of maximum security k) a reference to the General measures envisaged prior in relation to the provisions of the legislation relating to the protection of bank secrecy and the prevention of the laundering of money or securities products of the crime) links provided, if applicable, with other credit entities that aportarien the knowledge and technology bank or participate in the management, or comprometrien to provide financial support in the case of possible financial difficulties m) the location of the planned headquarters n) the number of offices that is expected to open in the first three exercises or) forecasts of recruitment of staff during the first three exercises with an indication of the levels p rating) the balance sheets and accounts of expected results for the first three years, together with the comments that it deems appropriate, for estimation of quantitative objectives. In particular precisarán the volumes of activity and income and expenses provided for by the commercial banking activities and other activities q) the politics of affectation of the results that is expected to carry out 4) relating to the fulfilment of prerequisites.

r) the justification of having formed the INAF deposit required Article 14 to present Documentation for the holders of prior authorisation The sponsors holders of an authorization to apply for the grant of authorisation and in order to update and complete the documentation submitted with the application, they must submit the following documents: s) the statutes of the company's ultimate t) information on the arrangements taken to locate the headquarters and the offices that are planned to open in the short term

u) update, or confirmation if not there have been variations, of the provisional information submitted with the applications in accordance with the provisions of the preceding points c), d), (e)), f), g), h) and l), in order to give you ultimate character v) the relationship of people to exercise in the general direction, with information on the background and the professional activity of each of them w) a statement explicitly of the person who is expected to chair the society , in virtue of which it becomes aware of the obligations established by the legislation relating to the financial system and, in particular, of the provisions of the legislation relating to the protection of bank secrecy and the prevention of the laundering of money or securities products of crime Chapter v. evaluation criteria the applications Article 15 generic Criteria of evaluation of applications applications will be valued on the basis of the strength of the project from the business point of view, and the prospects of contribution to the economy in general and the financial system in particular.

Article 16 specific criteria of assessment of applications on the basis of the general criteria set out in the preceding article, will value specifically: 1) the technical guarantees.

The consistency of the business project.

The knowledge, the experience and the potential ability of the promoters and stakeholders to achieve the objectives of development of the Bank projected.

Links to one or more credit institutions which contribute to the projected Bank and technological knowledge.

The commitments made by the credit institutions linked with regard to the management of the company projected.

2) economic guarantees.

The transparency of the origin of the funds and of the identity of the persons who constitute the core shareholder of the company projected.

The solvency of the subscribers of shares by a percentage higher than 5% of the share capital of the company projected.

The possible participation of one or more credit institutions in the capital of the company projected.

The ranking, the rating and the solvency of credit institutions linked to the project.

The commitments that have been able to contract credit institutions linked to the project, with regard to the provision of financial support to the company projected in the case of possible financial difficulties.

3) the prospects of corporate influence on the financial system.

Participation in the consolidation and expansion of a positive industry image.

The potential for innovation in the offer of financial services.

The contribution to the enhancement of the internal competition and the elevation of the sectorial technical standards on behalf of the clientele.

The contribution to the improvement of the productivity of the financial system.

The possible diversification of business or political characteristics of the components of the Andorran banking system.

4) the prospects of economic-social event for the country.

The atomization of the shareholder base, namely the participation of Andorra, or foreigners legally established with over 20 years of residence.

The participation of Andorra, or foreigners legally established with over 20 years of residence, in the organs of administration and management of the entity.

The number and qualification of jobs to create.

The coverage of jobs for locals or foreigners holding a residence permit with a not older than 5 years.

The policies aimed at the promotion of the economy of the country, especially in the promotion of new activities and the promotion of productive investment.

The rate of growth of the banking sector in relation to the global growth of the Andorran economy.

The policies aimed at sponsoring sports, cultural and educational activities, and to promote the research, conservation and promotion of the cultural and natural heritage.

5) the impact of international character.

The contribution to the strengthening of a positive international image.

First additional provision additional provisions the granting of authorisation for the creation of a bank involves the obligation, on the part of the sponsoring entity, constitute the Bank designed and, for part of this new entity, the


to start its activities within a maximum period of twelve months from the date of notification of the authorization to the sponsoring entity.

Second additional provision When the Bank authorised has not started its activities within twelve months after the date of granting of the permission to the sponsoring entity, the Government, with the previous report of the INAF and the previous opinion of the Committee of finance, anul.la the authorization and the INAF cancel.la the deposit formed by the sponsoring entity in application of article 10 of this law and enter the corresponding amount to the account of the Government , in concept of sanction for breach of the obligations set out in the preceding first additional provision.

Third additional provision The cancellation of the authorization and its effects will be notified by the Government to the Bank or, if this has not been established, to the sponsoring entity, within a maximum period of five working days from the day after the deadline to start the activities set out in the preceding first additional provision.

The sponsoring entity or the Bank may lodge an appeal against the decisions of the Government, the Administrative Section of the Court of magistrates, within thirteen working days starting from the day after the notice of cancellation or, in the case of administrative silence, within thirteen working days starting from the day after the deadline set for the notification.

Fourth additional provision The void authorization facilities are published in the official bulletin of the Principality of Andorra.

Transitional provisions first transitory provision of three months after the approval of this law, will be presented to the Government requests for the ordering of new banking entities.

Second transitional provision in) to ensure effective development of the opening of the banking system in keeping with the central idea of degrees as reflected in article 1 of this law, establishes a temporary rate of openness with regard to the first phase, which is set up in the two following phases: until 31 December 1999 the Government gives 2 permits for the creation of new banks.

Between 1 January 2000 and 31 December 2000 the Government gives 1 authorization of creation of new banks.

b) the implementation of the programme referred to in the preceding point) is subject to the receipt of a sufficient number of applications that meet the right conditions to apply for the authorization permits set out in the programme referred to in point a) precedent that, due to insufficient numbers of requests that meet the conditions to qualify for the permit, not from the first phase are given in the second phase.

c) the General Council to pronounce, before the end of the first half of 2001, on the temporary rate of the process of opening up of the banking system, with regard to the later stage which is regulated by a point) of this same derogatòries Provisions first transitory provision repealing the abrogated law Is the fourth transitional provision of regulation of the financial system, dated November 27, 1993 in what is affected by the present law.

Repealing the fourth transitional provision Is the second repealed law regulating deposit guarantee reserves and other operational obligations to maintain and deposited by entities operating in the financial system, dated May 11, 1995, in what is affected by the present law.

Final provisions first final provision empowers the Government to set up specific rules in relation to any point in the present law that may require a regulatory development to make it operative.

Second final provision this law enters into force on the day of its publication in the official bulletin of the Principality of Andorra.

Casa de la Vall, 30 June 1998 Francesc Areny Casal Syndic General Us the co-princes the sancionem and promulguem and let's get the publication in the official bulletin of the Principality of Andorra.

Jacques Chirac Joan Martí Alanis, President of the French Republic the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra