Background Note - Andorra

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PROFILE

OFFICIAL NAME:
Principality of Andorra

Geography
Area: 468 sq. km. (180 sq. mi.); about half the size of New York City.
Cities: Capital-Andorra la Vella.
Terrain: Mountainous.
Climate: Temperate, cool, dry.

People
Nationality: Noun and adjective-Andorran(s).
Population (2006): 81,222.
Annual growth rate: 2.4%.
Ethnic groups: Catalan, Spanish, French, Portuguese.
Religion: Roman Catholic.
Languages: Catalan (official), Spanish, French.
Education: Years compulsory--to age 16. Attendance--100%. Literacy--100%.
Health: Infant mortality rate--3/1,000. Life expectancy--76 yrs. male, 81 yrs. female.

Government
Type: Parliamentary democracy that retains as its heads of state two co-princes.
Constitution: Ratified in March 1993.
Independence: 1278.
Branches: Heads of State--Two co-princes (President of France, Bishop of Seu d'Urgell in Spain). Executive--Head of Government (Cap de Govern) and eleven ministers. Legislative--Parliament (founded 1419) consisting of 28 members. Judicial--Civil cases heard in first instance by four judges (batlles) and in appeals by the one-judge Court of Appeals. The highest body is the five-member Superior Council of Justice. Criminal cases are heard by the Tribunal of Courts in Andorra la Vella.
Subdivisions: Seven parishes (parroquies)--Andorra la Vella, Canillo, Encamp, La Massana, Ordino, Sant Julia de L?ria, and Escaldes make up the districts represented in the General Council.
Political parties/groups: Andorran Liberal Party (PLA), CDA (Democratic Center of Andorra), and the Social Democratic Party (PS).
Suffrage: Universal at 18.

Economy
GDP (2005): $2.77 billion.
Natural resources: Hydroelectric power, mineral water, timber, iron ore, lead.
Agriculture: Products--tobacco, sheep.
Industry: Types--tourism, (mainstay of the economy), tobacco products, furniture.
Trade: Major activities are commerce and banking; no official figures are available. Duty-free status.
Official currency: Euro.

PEOPLE
Andorrans live in seven valleys that form Andorra's political districts. Andorrans are a minority in their own country; Spanish, French, and Portuguese residents make up 64% of the population.

The national language is Catalan, a romance language related to the Proven¡al groups. French and Spanish are also spoken.

Education law requires school attendance for children up to age 16. A system of French, Spanish, and Andorran public schools provides education up to the secondary level. Schools are built and maintained by Andorran authorities, who pay also for Andorran teachers. French and Spanish schools pay for their own teachers. About 35% of Andorran children attend the French primary schools, 35% attend Spanish, and 29 % attend Andorran schools. Andorran schools follow the Spanish curriculum, and their diplomas are recognized by the Spanish education system. In July 1997, the University of Andorra was established. The number of students makes it impossible for the University of Andorra to develop a full academic program, and it serves principally as a center for virtual studies, connected to Spanish and French universities. The only two graduate schools in Andorra are the Nursing School and the School of Computer Science.

HISTORY
Andorra is the last independent survivor of the March states, a number of buffer states created by Charlemagne to keep the Muslim Moors from advancing into Christian France. Tradition holds that Charlemagne granted a charter to the Andorran people in return for their fighting the Moors. In the 800s, Charlemagne's grandson, Charles the Bald, made Count of Urgell overlord of Andorra. A descendant of the count later gave the lands to the diocese of Urgell, headed by Bishop of Seu d'Urgell.

In the 11th century, fearing military action by neighboring lords, the bishop placed himself under the protection of the Lord of Caboet, a Spanish nobleman. Later, the Count of Foix, a French noble, became heir to Lord Caboet through marriage, and a dispute arose between the French Count and the Spanish bishop over Andorra.

In 1278, the conflict was resolved by the signing of a pareage, which provided that Andorra's sovereignty be shared between the Count of Foix and the Bishop of Seu d'Urgell of Spain. The pareage, a feudal institution recognizing the principle of equality of rights shared by two rulers, gave the small state its territory and political form.

Over the years, the title was passed between French and Spanish rule until, in the reign of the French King Henry IV, an edict in 1607 established the head of the French state and the Bishop of Urgell as co-princes of Andorra.

Given its relative isolation, Andorra has existed outside the mainstream of European history, with few ties to countries other than France and Spain. In recent times, however, its thriving tourist industry along with developments in transportation and communications have removed the country from its isolation.

GOVERNMENT
Until recently, Andorra's political system had no clear division of powers into executive, legislative, and judicial branches. A constitution was ratified and approved in 1993. The constitution establishes Andorra as a sovereign parliamentary democracy that retains as its heads of state two co-princes.

The fundamental impetus for this political transformation was a recommendation by the Council of Europe in 1990 that, if Andorra wished to attain full integration into the European Union (EU), it should adopt a modern constitution, which guarantees the rights of those living and working there. A Tripartite Commission--made up of representatives of the Co-princes, the General Council, and the Executive Council--was formed in 1990 and finalized the draft constitution in April 1991.

Under the 1993 constitution, the co-princes continue as heads of state, but the head of government retains executive power. The two co-princes serve co-equally with limited powers that do not include veto over government acts. They are represented in Andorra by a delegate. As co-princes of Andorra, the President of France and the Bishop of Seu d'Urgell maintain supreme authority in approval of all international treaties with France and Spain, as well as all those, which deal with internal security, defense, Andorran territory, diplomatic representation, and judicial or penal cooperation. Although the institution of the co-princes is viewed by some as an anachronism, the majority sees them as both a link with Andorra's traditions and a way to balance the power of Andorra's two much larger neighbors.

Andorra's main legislative body is the 28-member General Council (Parliament). The sindic (president), the subsindic, and the members of the Council are elected in the general elections held every four years. The Council meets throughout the year on certain dates set by tradition or as required. The most recent general elections took place on April 24, 2005.

At least one representative from each parish must be present for the General Council to meet. Historically, within the General Council, four deputies from each of the seven individual parishes provided representation. This system allowed the smaller parishes, which have as few as 562 voters, the same number of representatives as larger parishes, which have up to 4,014 voters. To correct this imbalance, a provision in the 1993 constitution introduced a modification of the structure and format for electing the members of the Council; under this format, half of the representatives are chosen by the traditional system, while the other half are selected from nationwide lists.

A sindic and a subsindic are chosen by the General Council to implement its decisions. They serve four-year terms and may be reappointed once. They receive an annual salary. Sindics have virtually no discretionary powers, and all policy decisions must be approved by the Council as a whole. Every four years, after the general elections, the General Council elects the head of government, who, in turn, chooses the other members of the Executive Council. The current council has eleven ministers.

The judicial system is independent. Courts apply the customary laws of Andorra, supplemented with Roman law and customary Catalan law. Civil cases are first heard by the batlles court -a group of four judges, two chosen by each co-prince. Appeals are heard in the Court of Appeals. The highest body is the five-member Superior Council of Justice.

Andorra has no defense forces and only a small internal police force. All able-bodied men who own firearms must serve, without remuneration, in the small army, which is unique in that all of its men are treated as officers. The army has not fought for more than 700 years, and its main responsibility is to present the Andorran flag at official ceremonies.

POLITICAL CONDITIONS
Andorra held national elections on April 24, 2005. The ruling Andorran Liberal Party (PLA) won the elections but lost the absolute majority it had attained in the 2001 elections. After 10 years in power, Cap de Govern and PLA leader Marc Forn» stepped down as Cap de Govern. His replacement is Former Foreign Minister Albert Pintat, who comes from the same party. The center-right PLA went from 15 to 14 seats in the 28-seat Parliament, while the center-left Social Democratic Party (PS) doubled its representation from 6 to 12 seats. The remaining 2 seats are held by CDA-Segle-21, a union of two center-right parties which are likely to join in a coalition with PLA. Since the ratification of the constitution in 1993, four coalition governments have been formed. The Pintat government's principal goals are to address housing scarcity, modernize the country's taxation system, and press forward with reforms required to remove Andorra from the Organization for Economic Cooperation and Development's (OECD) list of tax haven countries.

There has been a redefinition of the qualifications for Andorran citizenship, a major issue in a country where only 35.7% of 78,549 are legal citizens. In 1995, a law to broaden citizenship was passed but citizenship remains hard to acquire, with only Andorran nationals being able to transmit citizenship automatically to their children. Lawful residents in Andorra may obtain citizenship after 25 years of residence. Children of residents may opt for Andorran citizenship after 18 if they have resided virtually all of their lives in Andorra. Mere birth on Andorran soil does not confer citizenship. Dual nationality is not permitted. Non-citizens are allowed to own only a 33% share of a company. Only after they have resided in the country for 20 years, will they be entitled to own 100% of a company. A proposed law to reduce the necessary years from 20 to 10 is pending approval in Parliament.

By creating a modern legal framework for the country, the 1993 constitution has allowed Andorra to begin a shift from an economy based largely on tax-free shopping to one based on tourism and international banking and finance. Despite promising new changes, it is likely that Andorra will, at least for the short term, continue to confront a number of difficult issues arising from the large influx of foreign residents and the need to develop modern social and political institutions. In addition to questions of Andorran nationality and immigration policy, other priority issues will include dealing with housing scarcities and speculation in real state, developing the tourist industry, defining its relationship with the European Union, and reforming the investment law to allow up to 100% foreign ownership in activities and sectors considered strategic.

Principal Government Officials
Co-Prince--Jacques Chirac, President of France
Co-Prince--Joan Enric Vives i Sicilia, Bishop of Seu d'Urgell, Spain
Head of Government--Albert Pintat
Sindic General--Joan Gabriel
Charge d'Affaires to the United Nations--Jelena Pia-Comella (also accredited as representative to the U.S. Government)

ECONOMY
Andorra's national income in 2005 was approximately $2.77 billion, with tourism as its principal component. Attractive for shoppers from France and Spain because of low taxes, the country also has developed active summer and winter tourist resorts. With some 270 hotels and 400 restaurants, as well as many shops, the tourist trade employs a growing portion of the domestic labor force.

There is a fairly active trade in consumer goods, including imported manufactured items, which, because they are taxed at lower rates, are less expensive in Andorra than in neighboring countries. Andorra's tax-free status has also had a significant effect on its relationship with the European Union. Its negotiations with the Union began in 1987. An agreement that went into effect in July 1991 sets duty-free quotas and places limits on certain items--mainly milk products, tobacco, and alcoholic beverages. Andorra is permitted to maintain price differences from other EU countries, and visitors enjoy limited duty-free allowances. In June 2004 Andorra signed a series of accords with the EU in the fields of economic, social, and cultural cooperation. Tax legislation was also approved that taxes interest from monetary products and fixed-interest investments belonging to non-residents while maintaining bank secrecy.

The results of Andorra's elections thus far indicate that many support the government's reform initiatives and believe Andorra must, to some degree, integrate into the European Union in order to continue to enjoy its prosperity. Although less than 2% of the land is arable, agriculture was the mainstay of the Andorran economy until the upsurge in tourism. Sheep rising has been the principal agricultural activity, but tobacco growing is lucrative. Most of Andorra's food is imported.

In addition to handicrafts, manufacturing includes cigars, cigarettes, and furniture for domestic and export markets. A hydroelectric plant at Les Escaldes, with a capacity of 26.5 megawatts, provides 40% of Andorra's electricity; Spain provides the rest.

FOREIGN RELATIONS
Since the establishment of sovereignty with the ratification of the constitution in 1993, Andorra has moved to become an active member of the international community. In July 1993, Andorra established its first diplomatic mission in the world, to the United Nations. In early 1995, the United States and Andorra established formal diplomatic relations. Andorra has also expanded relations with other nations.

Andorra is a full member of the United Nations (UN), United Nations Educational, Scientific and Cultural Organization (UNESCO), United Nations Conference for Commerce and Development (UNCCD), International Center of Studies for Preservation and Restoration of Cultural Heritage (ICCROM), Telecommunications International Union (UIT), International Red Cross, Universal Copyright Convention, European Council, EUTELSAT, World Tourism Organization, Organization for Security and Cooperation in Europe (OSCE), Customs Cooperation Council (CCC), Interpol, and International Monetary Fund among others. Since 1991, Andorra has had a special agreement with the European Union.

U.S.-ANDORRAN RELATIONS
As noted, the United States established diplomatic relations with Andorra in February 21, 1995. The two countries are on excellent terms. The U.S. Ambassador to Spain is also accredited as Ambassador to Andorra. United States Consulate General officials based in Barcelona are responsible for the day-to-day conduct of relations with Andorra.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Consular Information Sheets, Public Announcements, and Travel Warnings. Consular Information Sheets exist for all countries and include information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Public Announcements are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Public Announcements, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service representatives and operators for TDD/TTY are available Monday-Friday, 7:00 a.m. to 12:00 midnight, Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled "Health Information for International Travel" (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.