ALBANIA TIGHTENS MONEY LAUNDERING LEGISLATION IN LINE WITH EU DIRECTIVE AND FATF RECOMMENDATIONS

ALBANIA TIGHTENS MONEY LAUNDERING LEGISLATION IN LINE WITH EU DIRECTIVE AND FATF RECOMMENDATIONS

Enhanced Anti-Money Laundering Framework for Albania

TIRANA, Albania - In a significant move to strengthen its anti-money laundering (AML) framework and align with European Union standards, the Albanian Parliament has adopted amendments to the country’s AML law. These changes are aimed at enhancing transparency, strengthening customer due diligence measures, and imposing tougher penalties for non-compliance.

Key Amendments to the AML Law

Definition of Politically Exposed Persons (PEPs): The revised legislation introduces a new definition of PEPs, which includes not only senior government officials but also middle-ranking management and junior officials who are no longer in office. This designation will remain for up to three years after they leave their positions.
Re-categorization of Professions: Various professions such as lawyers, notaries, auditors, chartered accountants, and fiscal advisors have been re-categorized as “obliged entities.” These individuals and businesses must now adhere to stricter customer due diligence requirements when establishing business relationships.
Remote Business Relations: Obliged entities can establish business relations with clients remotely, provided they conduct a thorough risk assessment that determines the low likelihood of money laundering or terrorism financing.
Enhanced Due Diligence Measures: In line with EU Directive 2015/849, obliged entities will be required to apply enhanced due diligence measures for transactions involving high-risk countries. These include conducting more rigorous checks on customers and their sources of funds.

Stiffer Penalties for Non-Compliance

Serious contraventions of the AML law will now carry stiffer penalties, including:

Fines up to twice the amount gained by committing the breach or a maximum of ALL 125 million (approximately EUR 930,000).
For banks, non-banking financial institutions, and exchange bureaus, the penalty can reach up to 10% of their annual turnover.

International Recognition and Reputation

The Albanian authorities have taken these measures in response to recommendations from the Financial Action Task Force (FATF) and Moneyval, an international organization that evaluates countries’ AML/CFT regimes. By implementing these changes, Albania aims to enhance its reputation as a transparent and stable financial hub.

Guidance and Support

The KPMG team in Albania is available to provide guidance and support on the new regulations and their implications for businesses operating in the country.