Albania: Despite Removal from ‘Grey List’, Money Laundering Concerns Remain
Tackling Financial Crimes: A Long Road Ahead for Albania
TIRANA, ALBANIA - Albania has been removed from the Financial Action Task Force (FATF) “grey list” after making a commitment to cooperate with global authorities to tackle financial crimes. However, experts and analysts warn that the country’s economy still grapples with the impacts of money laundering.
Progress Made but Concerns Remain
In February 2020, following its re-inclusion on the grey list, Albania made a substantial commitment to cooperate with FATF and the Council of Europe’s anti-money laundering and counter-terrorism financing evaluation body, Moneyval. Since then, the country has seen a notable rise in money laundering cases leading to indictments.
Key Developments
- Improved Compliance: The Council of Europe recently upgraded Albania’s compliance with FATF recommendations from partially compliant to largely compliant.
- Money Laundering Cases: There has been a notable increase in money laundering cases leading to indictments since Albania made its commitment to cooperate with global authorities.
Challenges Ahead
Despite progress, concerns remain over the significant increase in property prices and the glut of euros on the local market, which some attribute to money laundering. Analysts point out that lowering interest rates, raising obligatory banking reserves, increasing public spending, and reducing taxes could help alleviate the issue. However, these measures have not been implemented by the government or the Bank of Albania.
Expert Insights
- Journalist Gjergi Erebara believes that the presence of black money in the economy is behind the current state of affairs.
- He suggests a crackdown on money funding construction and enforcement of anti-money laundering rules as possible solutions, but notes that this is unlikely to happen.
The Impact of Money Laundering
A report by the Global Initiative against Transnational Organised Crime found that construction was a popular vehicle for money laundering in Albania between 2016 and 2019, with an estimated €1.6 billion in “dirty money” laundered through the real-estate sector during that period.
The Informal Economy
The size of Albania’s informal economy is estimated to be 31.9% of GDP PPP levels, representing approximately $18 billion.
As Albania continues to navigate its financial landscape, concerns over money laundering and its impacts on the economy remain a pressing issue. Experts warn that without effective measures to combat these crimes, the country may struggle to achieve sustainable economic growth and stability.