Financial Crime World

Albania Wins Fight Against Money Laundering, But Experts Warn of Remaining Threat

A Victory for Anti-Money Laundering Efforts in Albania

Tirana, Albania - The removal of Albania from the Financial Action Task Force’s (FATF) grey list is a significant step forward in the country’s fight against money laundering. However, experts warn that the threat of money laundering remains a concern and must be addressed with continued vigilance.

Commitment to Compliance

Albania was removed from the FATF list after making substantial commitments to cooperate with the organization and the Council of Europe’s anti-money laundering and counter-terrorism financing evaluation body, Moneyval. The country has seen a notable rise in money laundering cases leading to indictments, with the Council of Europe upgrading Albania’s compliance with FATF recommendations from partially compliant to largely compliant.

Concerns Over Continued Presence of “Dirty Money”

Despite these advancements, concerns remain over the continued presence of “dirty money” in the economy. The value of the euro decreased significantly against the lek due to a glut of EU currency on the local market, leading some analysts to suspect foul play.

  • Analyst and political commentator Neritan Sejamini notes: “We’re seeing a strengthening of the lek due to non-formal economic factors or what we call in Albanian ‘informal or criminal economy’.”
  • Solutions proposed by Sejamini include:
    • Lowering lek interest rates
    • Raising the level of obligatory banking reserves in the currency
    • Increasing public spending
    • Lowering taxes

The issue of money laundering has also been linked to the current housing price boom in Albania. Property prices have skyrocketed, with some new developments going for over €6,000 per square metre. The Global Initiative against Transnational Organised Crime published a report that found construction was a popular vehicle for money laundering in Albania, estimating that up to 60% of the value of projects could be derived from illicit money.

Size and Scope of Informal Economy

Experts warn that the informal economy is estimated to be around 31.9% of Albania’s GDP, which represents approximately $18 billion at GDP PPP levels. The size and scope of this sector raises concerns about the impact it may have on the country’s economic stability and development.

Conclusion

As Albania continues to recover from years of corruption and instability, experts emphasize that addressing money laundering must remain a top priority for the government. By working with international partners and implementing effective regulations, Albania can ensure that its economy is transparent and free from illicit activity.