Financial Crime World

Albania Urged to Strengthen Risk-Based Approach to Financial Crime

A recent evaluation report by MONEYVAL, the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing, has called on Albania to step up its efforts in combating financial crime. The report highlights several areas where the country needs to improve its risk-based approach to prevent money laundering (ML) and terrorist financing (TF).

Major Risk Factors for ML in Albania

  • Corruption is a major risk factor for ML in Albania, with organized crime activities generating substantial amounts of criminal proceeds that undermine the effectiveness of the criminal justice system.
  • Law enforcement has so far paid limited attention to targeting corruption-related ML.

Recommendations from MONEYVAL

Risk Assessment and Analysis

  • Conduct a more in-depth risk assessment to understand the impact of the informal economy and corruption on ML/TF risks.
  • Assess the risk posed by legal persons.

Prosecution Performance

  • Review the reasons behind low prosecution performance in ML investigations.
  • Pursue more indictments in ML cases involving foreign proceeds.

Asset Confiscation

  • Ensure that adequate efforts are made to identify criminal proceeds located abroad and take appropriate actions for their confiscation.

Terrorist Financing Risks

  • Albania’s perception and understanding of TF risks do not adequately address the characteristics of potential TF activities in the country and the Western Balkan region.
  • No systematic approach towards identifying and investigating financing aspects of terrorism-related offences.

Bank of Albania

  • The Bank of Albania has a good understanding of ML and TF risks, but:
    • Inspections by the Financial Supervisory Authority (FSA) have been limited so far.
    • Recommendations include ensuring the implementation of high standards in licensing financial institutions, assessing criminal records beyond convictions, and obtaining international cooperation whenever appropriate.

Legislative Reforms

  • Simplify the existing legal framework for executing foreign mutual legal assistance requests.
  • Introduce a case management system (CMS).

Follow-Up Procedure

MONEYVAL has decided to apply its enhanced follow-up procedure to Albania, which will involve regular monitoring and reporting on the country’s progress in implementing the recommended measures.