Financial Crime World

Albania’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework

Vulnerabilities in Albania’s Financial System

Albania has made significant strides in improving its AML/CFT framework, but certain vulnerabilities persist. These include:

  • Real Estate Sector: Historically considered high-risk, but improved risk awareness and mitigation measures have reduced vulnerabilities.
  • Notary Profession: Informal transactions pose a higher risk than formal ones.
  • Accountants and Lawyers: Involvement in company formation and client base consisting mainly of large enterprises (LEs) increases ML/TF risks.

Sector-Specific Assessments

The following sectors have been assessed for their vulnerability to money laundering (ML) and terrorist financing (TF):

Banking Sector

  • High level of awareness, implementation of mitigating measures
  • Still vulnerable due to ML/TF risks

Money Value Transfer Services (MVTS)

  • Considerable formalization and improvement in risk mitigation measures
  • Smaller entities remain vulnerable

FIs other than Banks

  • Not deemed particularly vulnerable

Assessment of Risks, Coordination, and Policy Setting

Albania has taken steps to improve its AML/CFT framework by:

  • Adopting amendments to the Law on the Prevention of Money Laundering and Financing of Terrorism (AML/CFT Law) in 2012 and 2017
  • Demonstrating a reasonable understanding of ML risks
  • Lacking assessment of informal economy and corruption’s impact on ML/TF risks

However, there is no AML/CFT policy document, but the country has set broader strategies to address economic and organized crime (OC) issues.

Areas for Improvement

To further enhance its AML/CFT framework, Albania should focus on:

  • Enhancing Coordination Mechanisms: Ensuring efficient delivery of expected results by relevant authorities
  • Increasing Prosecutions of Corruption-Related ML: Strengthening controls on cross-border cash movements
  • Preventing Abuse of Legal Persons: Oversight of non-profit organizations (NPOs)
  • Finalizing Regularization of Immovable Properties
  • Implementing Risk-Based Supervision for All Sectors

Overall, Albania’s progress in improving its AML/CFT framework is commendable, but areas for improvement must be addressed to mitigate ML/TF risks and ensure a more robust financial system.