Financial Crime World

Financial Compliance in Albania: A Comprehensive Overview

Albania has taken significant steps towards implementing the Financial Action Task Force (FATF) Recommendations, a global standard for combating money laundering and terrorist financing. The Mutual Evaluation report conducted by the FATF in 2018 assessed Albania’s compliance with various aspects of financial regulation.

Risk Assessment and Risk-Based Approach

Compliance with Requirement R.1

Albania has largely complied with the requirement of assessing risk and applying a risk-based approach (R.1). The country’s risk assessment framework is comprehensive, covering various sectors such as:

  • Banking
  • Securities
  • Non-financial businesses and professions

National Cooperation and Coordination

Compliance with Requirement R.2

The Albanian government has made significant efforts to enhance national cooperation and coordination (R.2) among different law enforcement agencies, regulatory bodies, and financial institutions. This collaboration has improved the effectiveness of anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts.

Money Laundering Offence

Compliance with Requirement R.3

Albania has established a money laundering offence (R.3), which is in line with international standards. The country’s AML/CFT framework provides for penalties and confiscation measures to be applied in cases of money laundering.

Confiscation and Provisional Measures

Compliance with Requirement R.4

The Albanian authorities have largely complied with the requirement of confiscating proceeds of crime and implementing provisional measures (R.4). The country has also established a system for freezing and confiscating assets related to terrorist financing.

Terrorist Financing Offence

Compliance with Requirement R.5

Albania has established a terrorist financing offence (R.5) that is in line with international standards. The country’s AML/CFT framework provides for penalties and measures to be applied in cases of terrorist financing.

Targeted Financial Sanctions

Partial Compliance with Requirement R.6

The Albanian government has partially complied with the requirement of imposing targeted financial sanctions related to terrorism and terrorist financing (R.6). While the country has established a list of sanctioned entities and individuals, there are concerns regarding the effectiveness of these measures.

Correspondent Banking

Compliance with Requirement R.13

Albania has largely complied with the requirement of regulating correspondent banking relationships (R.13). The country’s regulatory framework requires banks to implement effective AML/CFT measures when establishing correspondent relationships with foreign banks.

Financial Institution Secrecy Laws

Compliance with Requirement R.9

The Albanian government has largely complied with the requirement of revising financial institution secrecy laws (R.9) to ensure that they are consistent with international standards.

Customer Due Diligence

Compliance with Requirement R.10

Albania has largely complied with the requirement of implementing customer due diligence measures (R.10). The country’s regulatory framework requires banks and other financial institutions to conduct effective AML/CFT risk assessments when onboarding customers.

Reporting of Suspicious Transactions

Compliance with Requirement R.20

The Albanian authorities have largely complied with the requirement of reporting suspicious transactions (R.20). The country’s financial intelligence unit, known as the National Bureau for Counter-Terrorism and Transnational Crime, receives and analyzes reports of suspicious transactions from financial institutions.

Transparency and Beneficial Ownership

Partial Compliance with Requirements R.24 and R.25

Albania has partially complied with the requirement of implementing transparency measures related to beneficial ownership of legal persons (R.24) and legal arrangements (R.25). While the country has established a system for registering and disclosing information on beneficial owners, there are concerns regarding the effectiveness of these measures.

Regulation and Supervision

Partial Compliance with Requirement R.26

The Albanian government has partially complied with the requirement of regulating and supervising financial institutions (R.26) and designated non-financial businesses and professions (DNFBPs). While the country has established a regulatory framework for financial institutions, there are concerns regarding the effectiveness of supervision and enforcement.

International Cooperation

Compliance with Requirements R.36-R.40

Albania has largely complied with the requirement of cooperating internationally in combating money laundering and terrorist financing (R.36- R.40). The country is a member of various international organizations, including the European Union and the Council of Europe, and has signed several bilateral agreements on AML/CFT cooperation.

Overall, Albania has made significant progress in implementing the FATF Recommendations, but there are areas where improvement is needed to ensure effective compliance with international standards.