Financial Crime World

Albania Faces Challenges in Implementing Risk-Based Approach to Financial Crime

Progress Made in Implementing FATF Recommendations

Albania has made significant progress in implementing the Financial Action Task Force (FATF) Recommendations. According to a recent report, Albania has largely complied with several of the FATF’s recommendations. Some of these include:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Money laundering offense (R.3)
  • Confiscation and provisional measures (R.4)
  • Terrorist financing offense (R.5)
  • Non-profit organisations (R.8)
  • Financial institution secrecy laws (R.9)
  • Customer due diligence (R.10)
  • Record keeping (R.11)
  • Politically exposed persons (R.12)
  • Correspondent banking (R.13)
  • Money or value transfer services (R.14)
  • Wire transfers (R.16)
  • Internal controls and foreign branches and subsidiaries (R.18)
  • Reporting of suspicious transactions (R.20)
  • Tipping-off and confidentiality (R.21)
  • Transparency and beneficial ownership of legal persons (R.24)
  • Regulation and supervision of financial institutions (R.26)
  • Powers of supervisors (R.27)
  • Financial intelligence units (R.29)
  • Responsibilities of law enforcement and investigative authorities (R.30)
  • Powers of law enforcement and investigative authorities (R.31)
  • Statistics (R.33)
  • Guidance and feedback (R.34)
  • Sanctions (R.35)
  • International instruments (R.36)
  • Mutual legal assistance (R.37)
  • Extradition (R.39)

Challenges in Implementing Risk-Based Approach

However, Albania has been rated partially compliant in implementing several other recommendations, including:

  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Targeted financial sanctions related to proliferation (R.7)
  • New technologies (R.15)
  • Regulation and supervision of DNFBPs (R.28)
  • Mutual legal assistance: freezing and confiscation (R.38)

Additionally, Albania has been rated non-compliant in one area:

  • Corresponding banking (R.19)

Recommendations for Improvement

To address these challenges, the Albanian government should prioritize implementing a risk-based approach to financial crime, strengthening its national cooperation and coordination mechanisms, and improving its regulation and supervision of financial institutions. Additionally, Albania should enhance its international cooperation, including through mutual legal assistance and extradition agreements, to combat transnational financial crime.