Andorra's credit rating downgraded by S&P amid US accusations of bank money laundering scheme

People walk in front of Spain's Central Bank in Madrid, Spain, Thursday, March 12, 2015. The entire board of Spain’s Banco de Madrid bank catering to wealthy clients has resigned after its Andorran owner was accused by the U.S. of money laundering for clients from China, Russia and Venezuela, Banco de Madrid said Thursday. (AP Photo/Paul White) (The Associated Press)

A man speaks on a cell phone outside a Banco Madrid office in Madrid, Spain, Thursday, March 12, 2015. The entire board of Spain’s Banco de Madrid bank catering to wealthy clients has resigned after its Andorran owner was accused by the U.S. of money laundering for clients from China, Russia and Venezuela, Banco de Madrid said Thursday. (AP Photo/Paul White) (The Associated Press)

MADRID – Tiny Andorra has had its credit rating downgraded by Standard & Poor's following U.S. accusations that one of its five banks laundered money for groups from China, Russia and Venezuela.

S&P said in a statement Friday it is downgrading the country's rating from BBB+ to BBB, which is two notches above so-called junk status. It also placed Andorra, which is wedged between Spain and France, on negative credit watch, which means another downgrade is possible.

The downgrade comes days after Banca Privada d'Andorra was deemed a "primary money-laundering concern" by the U.S. Treasury Department, which puts it at risk of being shut out of the U.S. financial system.

S&P noted uncertainty about BPA and "possible consequences on the rest of the country's banking system and the government's medium-term fiscal position."