Financial Crime World

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

Albania remains at risk regarding possible financing of terrorism activities, highlighting the need for continued improvement in its anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.

Risk Assessment

  • Albania’s risk assessment is a major concern, with ongoing threats related to financing of terrorism activities.
  • Ongoing monitoring and evaluation are necessary to ensure that Albania remains compliant with international standards.

Key Areas for Improvement

Asset Freezing and Expulsions

  • There have been records of asset freezes, curtailment of suspect Islamic non-profit organizations (NPOs), and expulsion of individuals suspected of links to terrorism.
  • However, more needs to be done to strengthen the effectiveness of these measures.

Criminalization of Money Laundering (ML)

  • Albania has fully criminalized ML in line with the Vienna and Palermo Conventions, but there have been few convictions due to demanding evidentiary requirements.
  • Strengthening the ability to convict and prosecute individuals involved in money laundering is essential.

Terrorism Financing

  • Albanian provisions that criminalize the financing of terrorism fall short of meeting the FATF standard, despite significant enhancements in recent years.
  • Enhancements are necessary to meet international standards and prevent terrorist financing activities.

Financial Intelligence Unit (FIU)

  • The FIU has improved its analytical processes and financial intelligence, but needs strengthened operational independence and a clarified responsibility for disseminating suspicious transaction information.
  • Strengthening the FIU’s ability to gather and share financial intelligence will help prevent AML/CFT threats.

Preventive Measures

Beneficial Ownership and Customer Due Diligence (CDD)

  • Albania’s legal framework for preventive measures is incomplete, lacking provisions for the identification of beneficial owners and customer due diligence (CDD) measures for foreign politically exposed persons (PEPs).
  • Strengthening these provisions will help prevent AML/CFT threats.

Designated Non-Financial Businesses and Professions (DNFBPs)

  • Implementation of preventive measures by DNFBPs is limited, with uneven understanding of the provisions amongst financial institutions.
  • Enhancements are necessary to ensure that all sectors understand and implement effective AML/CFT measures.

Supervisory Authorities

  • The legal framework underpinning supervisory authorities’ power is sound, but the supervisory role of the FIU should be clarified, and inspections have not been conducted in all sectors.
  • Clarifying the FIU’s role and conducting regular inspections will help ensure effective AML/CFT supervision.

Cooperation Mechanisms

  • Domestic and international cooperation is good, with a number of established domestic and international cooperation mechanisms facilitating cooperation between competent authorities and foreign counterparts.
  • Continued strengthening of these mechanisms will help prevent AML/CFT threats.

Legal Systems and Related Institutional Measures

Criminalization of ML

  • Albania has fully criminalized ML, but lacks provisions for insider trading and market manipulation.
  • Enhancements are necessary to meet international standards and prevent financial crimes.

Terrorism Financing

  • Albanian provisions fall short of meeting the FATF recommendations and the U.N. Financing of Terrorism Convention (FT Convention).
  • Enhancements are necessary to meet international standards and prevent terrorist financing activities.

Seizure and Confiscation of Proceeds of Crime

  • Albania has a comprehensive legal framework to seize and confiscate the proceeds of crime, but there have been few actual confiscations.
  • Enhancements are necessary to ensure effective enforcement of AML/CFT laws.

Overall, while Albania has made progress in complying with AML/CFT regulations, there are still significant gaps in its legislative and institutional frameworks that need to be addressed.