Andorra is an independent principality with a population of about 78,000 and area of 181 square miles situated between France and Spain in the Pyrenees mountains. Although not a member of the European Union, Andorra is part of the EU Customs Union and, due to a monetary agreement with the EU, uses the euro as its national currency. Andorra is a popular tourist destination visited by over 8 million people each year who are drawn by its winter sports, summer climate, and duty-free shopping. Tourism and its related services sector account for over 80 percent of Andorra’s GDP. Andorra has also become a wealthy international commercial center because of its integrated banking sector and low taxes. As part of its effort to modernize its economy, Andorra has opened to foreign investment, and engaged in other reforms, including advancing tax initiatives. Andorra is actively seeking to attract foreign investment and to become a center for entrepreneurs, talent, innovation, and knowledge. In doing so, Andorra has fostered a large project with the Massachusetts Institute of Technology (MIT) on innovation and big data, employing Andorra’s unique economy as a test market ( www.actua.ad/en/innovationhubandorra ).
The Andorran economy is undergoing a process of diversification centered largely on tourism, trade, property, and finance. To provide incentives for growth and diversification in the economy, the Government began sweeping economic reforms in 2006. The Parliament approved three main regulations to complement the first phase of economic openness: the law of Companies (October 2007), the Law of Business Accounting (December 2007), and the Law of Foreign Investment (April 2008 and June 2012). From 2011 to 2017, the Parliament approved direct taxes in the form of a corporate tax, tax on economic activities, tax on income of non-residents, tax on capital gains, and personal income tax. These regulations aim to establish a transparent, modern, and internationally comparable regulatory framework.
These reforms aim to attract investment and businesses that have the potential to boost Andorra’s economic development and diversification. Prior to 2008, Andorra limited foreign investment, worried that large foreign firms would have an oversized impact on its small economy. For example, previous regulations allowed non-citizens with less than 20 years residence in Andorra to own no more than 33 percent of a company. While foreigners may now own 100 percent of a trading enterprise or a holding company, the Government must approve the establishment of any private enterprise. The approval can take up to one month, which can be rejected if the proposal is found to threaten the environment, the public order, or the general interests of the principality.
Andorra has per capita income above the European average and above the level of its neighbors, Spain and France. The country has developed a sophisticated infrastructure including a one-of-a-kind micro-fiber-optic network for the entire country that provides universal access to all households and companies. Andorra’s retail tradition is well known around Europe, thanks to more than 1,400 shops, the quality of their products, and competitive prices. Products taken out of the Principality are tax-free up to certain limits; the purchaser must declare those that exceed the allowance.
Table 1: Key Metrics and Rankings Data not available
Andorra’s laws penalize corruption, money laundering, drug trafficking, hostage taking, sale of illegal arms, prostitution, terrorism, as well as the financing of terrorism. Additional amendments were added in 2008, 2014, 2015, and 2016 to the Criminal Code and the Criminal Procedure Code that modify and introduce money laundering and terrorism financing provisions.
In 1994, Andorra joined the Council of Europe, an institution that oversees the defense of democracy, the rule of law, and human rights. That same year, the Justice Ministers of the Member States decided to fight corruption at the European level after considering that the phenomenon posed a serious threat to the stability of democratic institutions.
In early 2005, Andorra joined the Council of Europe’s Group of States against Corruption (GRECO) and, consequently, the fight against corruption. The Government has gradually built its internal regulations and relevant legal instruments and has undertaken numerous initiatives to improve the State’s response to reprehensible acts and conduct committed internally and internationally.
The Government created the Unit for the Prevention and the Fight against Corruption (UPLC) in 2008 to centralize and coordinate actions that might concern local administrations, national bodies, and entities with an international scope. UPLC is in charge of implementing the recommendations made by GRECO in the framework of periodic evaluation reports.
Andorra has not signed the UN Anticorruption Convention or the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.
There are explicitly defined rules for the ethical behavior of all participating bodies within the Andorran financial system. The Andorran Financial Authority (AFA) has also established rules regarding ethical behavior in the financial system.
The Andorran government modified and implemented new laws in order to comply with international corruption standards. The Andorran Financial Intelligence Unit (UIFAND), created in 2000 is an independent body charged with mitigating money laundering and terrorist funding (www.uifand.ad).
Resources to ReportCorruption:
Unitat de Prevencio i Lluita contra la Corrupcio
Ministeri de Justicia i Interior
Ctra.de l’Obac s/n
Phone: +376 875 700
Denmark is one of the world’s leading foreign investment destinations and ranks highly in indices measuring political, economic, and regulatory stability. It is a member of the European Union (EU), and Danish legislation and regulations conform to EU standards on virtually all issues. It maintains a fixed exchange rate policy, with the Danish Krone linked closely to the Euro. Denmark is a social welfare state with a thoroughly modern market economy heavily driven by trade in goods and services. Given that exports account for about 55 percent of GDP, the economic conditions of its major trading partners – the United States, Germany, Sweden, and the UK – have a substantial impact on Danish national accounts.
Denmark is a net exporter of food, fossil fuels, chemicals, and wind power, but its manufacturing sector depends on raw material imports. Within the EU, Denmark is among the strongest supporters of liberal trade policy. Transparency International regularly ranks Denmark as having among the world’s lowest levels of perceived public sector corruption.
Denmark’s underlying macroeconomic conditions are healthy, and the investment climate is sound. Denmark is strategically situated to link continental Europe with the Nordic and Baltic countries. Transport and communications infrastructures are efficient. Denmark is among world leaders in high-tech industries such as information technology, life sciences, clean energy technologies, and shipping.
Denmark initiated several compensation schemes to blunt the worst of the economic fallout from the COVID-19 pandemic. By mid-April 2021, Denmark has committed up to 28.8 percent of GDP, or DKK 670 billion (USD 103 billion), in liquidity measures through postponed tax payments, loans and guarantees, and provided fiscal stimulus worth DKK 135 billion (USD 20.7 billion), which the Ministry of Finance estimate sustained 80,000 jobs, about three percent of the workforce. The Danish economy suffered a contraction of 3.3 percent of GDP in 2020. A protracted recovery is likely, and some business leaders call for longer-term measures to stimulate inward investment and support the export sector.
The entrepreneurial climate, including female-led entrepreneurship, is robust.
New legislation establishing a Foreign Investment Screening mechanism to ensure critical infrastructure integrity goes into effect on July 1, 2021Implementing regulations were in development when this report was published. The legislation does not apply to Greenland or to the Faroe Islands.
Note: Additional information on the investment climates in the constituent parts of the Kingdom of Denmark, Greenland and the Faroe Islands, can be found at the end of this report.
Denmark is perceived as the least corrupt country in the world according to the 2020 Corruption Perceptions Index by Transparency International, which has local representation in Denmark. The Ministry of Justice is responsible for combating corruption, which is covered under the Danish Penal Code. Penalties for violations range from fines to imprisonment of up to four years for a private individual’s involvement and up to six years for a public employee’s involvement. Since 1998, Danish businesses cannot claim a tax deduction for the cost of bribes paid to officials abroad.
Denmark is a signatory to the OECD Convention on Combating Bribery, the UN Anticorruption Convention, and a participating member of the OECD Working Group on Bribery. In the Working Group’s 2015 Phase 3 follow-up report on Denmark, the Working Group concluded “that Denmark has partially implemented most of its Phase 3 recommendations. However, concerns remain over Denmark’s enforcement of the foreign bribery offence.”
Resources to Report Corruption
Resources to which corruption may be reported:
The Danish State Prosecutor for Serious Economic and International Crime
Kampmannsgade, 11604 København V
Phone: +45 72 68 90 00
Fax: +45 45 15 01 19
Transparency International Danmark
Dalgas Have 15, 2. sal, lokale 2c008
The Secretariat is manned by Rosa Bisgaard and Oliver Kofod Nørgård, who can be reached at firstname.lastname@example.org
Contact at Embassy Copenhagen responsible for combating corruption:
U.S. Department of State
Dag Hammarskjolds Alle 24, 2100 Copenhagen, Denmark
+45 3341 7100 CopenhagenICS@state.gov
In 2020, the Saudi Arabian government (SAG) continued its ambitious socio-economic reforms, collectively known as “Vision 2030.” Spearheaded by Crown Prince Mohammed bin Salman, Vision 2030 provides a roadmap for the development of new economic sectors, including tourism and entertainment, and for a significant transformation toward a digital, knowledge-based economy. The reforms are aimed at diversifying the Saudi economy away from its reliance on oil and creating more private sector jobs for a young and growing population.
To help accomplish these goals, the Saudi Arabian government (SAG) took additional steps in 2020 to improve the Kingdom’s investment climate, attract increased foreign investment, and encourage greater domestic and international private sector participation in its economy. To accelerate development and facilitate investment, the SAG elevated two Saudi authorities to full ministries in 2020: the Saudi Arabian General Investment Authority became the Ministry of Investment, and the Saudi Commission for Tourism and National Heritage became the Ministry of Tourism. On March 30, 2021, the SAG also announced the new Shareek program, an initiative designed to generate $3.2 trillion of domestic investment from the SAG, the sovereign wealth Public Investment Fund, and the private sector into Saudi Arabia’s economic development.
The Saudi Arabian government and its new stand-alone intellectual property rights (IPR) agency, the Saudi Authority for Intellectual Property (SAIP), have taken important steps since 2018 to improve IPR protection, enforcement, and awareness. In 2020, SAIP continued its inspection campaigns and seized millions of items that violated IPR protection. However, despite making measurable progress, the continued lack of effective protection of IPR in the pharmaceutical sector remains a significant concern. Several U.S. and international pharmaceutical companies allege the SAG violated their IPR and the confidentiality of trade data by licensing local firms to produce competing generic pharmaceuticals without approval. Industry attempts to engage the SAG on these issues have not led to satisfactory outcomes for the affected companies, while legal recourse and repercussions for IPR violations remain poorly defined. Primarily for these reasons, the U.S. Trade Representative included Saudi Arabia on its Special 301 Priority Watch List for the second consecutive year.
Infrastructure development remains a priority component of Saudi Arabia’s Vision 2030 aspiration to become the most important logistics hub in the region, linking Asia, Europe, and Africa. By establishing new business partnerships and facilitating the flow of goods, people, and capital, the country seeks to increase interconnectivity and economic integration with other Gulf Cooperation Council (GCC) countries. Improvements to transportation, such as the $23 billion Riyadh metro, are intended to support this plan. In addition, Saudi Arabia continues to create and expand “economic cities” – including plans for special economic zones – throughout the Kingdom as hubs for petrochemicals, mining, logistics, manufacturing, and digital industries. The Kingdom also continued its early-stage work on infrastructure for NEOM, a futuristic city in northwest Saudi Arabia that Saudi officials have said will cost $500 billion to develop.
Saudi Arabia is launching an $800 billion project to double the size of Riyadh city in the next decade and transform it into an economic, social, and cultural hub for the region. The project includes 18 “mega-projects” in the capital city to improve livability, strengthen economic growth, and more than double the population to 15-20 million by 2030. The SAG is seeking private sector financing of $250 billion for these projects with similar contributions from income generated by its financial, tourism, and entertainment sectors. While specific details of a new initiative announced in February 2021 to attract multinational companies’ regional headquarters offices to Saudi Arabia have not been finalized, senior SAG officials have said publicly that beginning in 2024, government contracts will only be awarded to companies whose regional headquarters are located in the Kingdom. “Saudization” polices requiring certain businesses to employ a quota of Saudi workers have led to disruptions in some private sector activities.
In recognition of the progress made in its investment and business climate, Saudi Arabia’s rankings on several world indexes improved between 2019 and 2021. The country jumped 13 places on the IMD World Competitiveness Yearbook 2019, the biggest gain of any country surveyed, and increased two more spots in 2020 to 24th place, supported by improvements to government and business efficiency. The World Bank ranked Saudi Arabia the world’s top reformer and improver in its Doing Business 2020 report. The Kingdom rose 30 places, from 92nd to 62nd, and improved in 9 out of 10 areas measured in the report. World Economic Forum’s 2020 Global Competitiveness ReportSpecial Edition ranked Saudi Arabia among the top 10 countries in the world for digital skills. The report attributed this progress to a number of factors including the adoption of information and communication technology, flexible work arrangements, national digital skills, and the legal digital framework.
On the social front, the removal of guardianship laws and travel restrictions for adult women, the introduction of workplace protections, and recent judicial reforms that provide additional protection have enabled more women to enter the labor force. From 2016 to 2020, the Saudi female labor participation rate increased from 19 percent to 33 percent.
Development of the Saudi tourism sector is also a priority under Vision 2030, with plans to develop tourist attractions that meet the highest international standards and develop potential UNESCO World Heritage Sites. In addition to introducing a new tourism visa in 2019 for non-religious travelers, the SAG no longer requires that foreign travelers staying in the same hotel room provide proof of marriage or family relations. Construction of several multi-billion dollar giga-projects focused on tourism, including Qiddiya, the Red Sea Project, and Amaala, continue to progress. The SAG is seeking private investments through its Tourist Investment Fund, which has initial capital of $4 billion, and the Kafalah program, which provides loan guarantees of up to $400 million. In addition, the Tourism Fund signed MOUs with local banks to finance projects valued up to $40 billion in an effort to stimulate tourism investment and increase the sector’s contribution to GDP. Due to the global pandemic, the SAG paused its Saudi Seasons initiative comprised of 11 annual tourism ‘seasons’ held in each region of the country, but has announced the program will resume in November 2021.
The Saudi entertainment and sporting events sector is growing rapidly. AMC, Vox, and other cinema companies continue to develop hundreds of movie theaters. The SAG is seeking to sign agreements for film production studios in Saudi Arabia for end-to-end film production. Saudi film festivals, like the Red Sea Film Festival, are being developed to meet the SAG’s Vision 2030 Quality of Life objectives. The SAG has also hosted several world class sporting events including the European Tour, Diriyah ePrix, Dakar Rally, Saudi Formula One Grand Prix, Diriyah Tennis Cup, WWE Crown Jewel, and Supercoppa. In addition, several festivals and concerts have demonstrated strong demand for a variety of art and culture content.
Investor concerns persist, however, over the rule of law, business predictability, and political risk. Although some have recently been released, the continued detention and prosecution of activists, including prominent women’s rights activists, remains a significant concern, while there has been little progress on fundamental freedoms of speech and religion. Pressure on Saudi Arabia’s fiscal situation from the sharp downturn in oil prices and demand in 2020, as well as the unexpected spending needed to respond to COVID-19, will likely dampen some of the SAG’s ambitious plans. Despite budget cuts imposed in 2020 and the possibility that further spending reductions may be forthcoming, companies working on the SAG’s giga-projects reported the ongoing availability of funding in 2020. Revenues generated by the tripling of Saudi Arabia’s value-added tax rate from 5 to 15 percent in July 2020 have helped ease fiscal stress.
The pressure to generate non-oil revenue and provide more jobs for Saudi citizens have prompted the SAG to implement measures that may weaken the country’s investment climate going forward. Increased fees for expatriate workers and their dependents, as well as “Saudization” polices requiring certain businesses to employ a quota of Saudi workers, have led to disruptions in some private sector activities and may lead to a decrease in domestic consumption levels.
Finally, while some U.S. companies, including those with significant experience in Saudi Arabia, continue to experience payment delays for SAG contracts, many were paid in full from late 2020 through the beginning of 2021. The SAG has committed to speed up its internal payment process and pay companies in a timely manner.
Foreign firms have identified corruption as a barrier to investment in Saudi Arabia. Saudi Arabia has a relatively comprehensive legal framework that addresses corruption, but many firms perceive enforcement as selective. The Combating Bribery Law and the Civil Service Law, the two primary Saudi laws that address corruption, provide for criminal penalties in cases of official corruption. Government employees who are found guilty of accepting bribes face 10 years in prison or fines up to one million riyals ($267,000). Ministers and other senior government officials appointed by royal decree are forbidden from engaging in business activities with their ministry or organization. Saudi corruption laws cover most methods of bribery and abuse of authority for personal interest, but not bribery between private parties. Only senior Oversight and Anti-Corruption Commission (“Nazaha”) officials are subject to financial disclosure laws. The government is considering disclosure regulations for other officials, but has yet to finalize them. Some officials have engaged in corrupt practices with impunity, and perceptions of corruption persist in some sectors, but combatting corruption remains a priority.
Nazaha, originally established in 2011, is responsible for promoting transparency and combating all forms of financial and administrative corruption In December 2019, King Salman issued royal decrees consolidating the Control and Investigation Board and the Mabahith’s Administrative Investigations Directorate under the National Anti-Corruption Commission, and renamed the new entity as the Oversight and Anti-Corruption Commission (“Nazaha”). The decrees consolidated investigations and prosecutions under the new Nazaha and mandated that the Public Prosecutor’s Office transfer any ongoing corruption investigations to the newly consolidated commission. Nazaha reports directly to King Salman and has the power to dismiss a government employee even if not found guilty by the specialized anti-corruption court.
Since its reorganization, Nazaha has not shied away from prosecuting influential players whose indiscretions may previously have been ignored. Throughout 2020, Nazaha published monthly press releases detailing its arrests and investigations, often including high-ranking officials, such as generals and judges, from every ministry in the SAG. The releases are available on the Nazaha website ( http://www.nazaha.gov.sa/en/Pages/Default.aspx ).
SAMA, the central bank, oversees a strict regime to combat money laundering. Saudi Arabia’s Anti-Money Laundering Law provides for sentences up to 10 years in prison and fines up to $1.3 million. The Basic Law of Governance contains provisions on proper management of state assets and authorizes audits and investigation of administrative and financial malfeasance.
The Government Tenders and Procurement Law regulates public procurements, which are often a source of corruption. The law provides for public announcement of tenders and guidelines for the award of public contracts. Saudi Arabia is an observer of the WTO Agreement on Government Procurement (GPA)
Saudi Arabia ratified the UN Convention against Corruption in April 2013 and signed the G20 Anti-Corruption Action Plan in November 2010. Saudi Arabia was admitted to the OECD Working Group on Bribery in February 2021.
Globally, Saudi Arabia ranks 52 out of 180 countries in Transparency International’s Corruption Perceptions Index 2020.
Resources to Report Corruption
The National Anti-Corruption Commission’s address is:
National Anti-Corruption Commission
P.O. Box (Wasl) 7667, AlOlaya – Ghadir District
The Kingdom of Saudi Arabia
Nazaha accepts complaints about corruption through its website www.nazaha.gov.sa or mobile application.