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: 71,700 (as of December 2003).

Annual growth rate: 0.7%.

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
nine 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 Lòria, and Escaldes make up the districts
represented in the General Council.

Political parties/groups: Andorran Liberal Party (PLA), Andorran Democrat Center Party
(ACDP, former Democratic Party, PD.), and the Social Democratic Party (PS).

Suffrage: Universal at 18.

Economy

GDP: $2.3 billion (2002).

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 65.2% of the population.

The national language is Catalan, a romance language
related to the Provençal 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, but
teachers are paid primarily by France or Spain. About 50% of Andorran children attend the
French primary schools, the rest attend Spanish or 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 11^th 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 in March 2001. New elections are scheduled for
April-May 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 have provided representation. This
system allowed the smaller parishes, who have as few as 562 voters, the same number of
representatives as larger parishes which have up to 4014 voters. To correct this
imbalance, a provision in the new constitution introduces a modification of the structure
and format for electing the members of the Council; under this new format, half of the
representatives are to be 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 nine 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 elections in March 2001 and returned the Head of Government Marc
Forné to power. The clarification of political ideologies among principal
political groupings was strong evidence that democracy is well established in the
Principality. Three major parties with clear political tenets emerged: The Conservative,
and ruling, Andorran Liberal Party (PLA) of Forné, the Democratic Party (PD)
recently renamed as Andorran Democrat Center Party (ADCP), and the more left of center
Social Democratic Party (PS). The PLA is a reorganization of the Liberal Union, and the
other two were born from the remains of political formations now inactive but which at
one time had parliamentary representation. Since the ratification of the constitution in
1993, three coalition governments have been formed. The current government led by Marc
Forné won an absolute majority with 15 seats; the PD obtained 5 and the PS 6.
Forné was sworn in as Cap de Govern, or Head of Government on April 12,
2001.

The government continues to address many long-awaited
reforms: developing infrastructure including an airport and an aerial metro, social
welfare expansion, environmental conservation, advances in technology. Perhaps the most
urgent issue that the new government will have to deal with is the reform of the tax
system.

There has been a redefinition of the qualifications for
Andorran citizenship, a major issue in a country where only 23,000 of 71,700 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, and defining their relationship with the European
Union.

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–Marc Forné

Sindic General–Francesc Areny

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 2002 was approximately $2.3 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.

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

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