Financial Crime World

ALBANIA: Strengthening Financial Institution Due Diligence Requirements to Combat Money Laundering and Terrorist Financing

Albania has taken a significant step to strengthen its financial intelligence unit and combat money laundering and terrorist financing by implementing stricter customer due diligence requirements for financial institutions. The new measures aim to prevent the misuse of financial systems by criminals and terrorists.

Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CTF) Law

The AML/CTF law requires financial institutions to conduct rigorous customer due diligence procedures, including:

  • Identifying and verifying customer identities
  • Understanding the purpose of business relationships
  • Monitoring transactions

Entities are also mandated to report suspicious activities and cease maintaining anonymous accounts.

Financial Intelligence Unit of Albania (FIU-Albania)

The FIU-Albania is responsible for supervising AML/CTF activities in the country and serves as the central authority for receiving, analyzing, and disseminating reports related to:

  • Suspicious transactions
  • Money laundering
  • Terrorist financing

Customer Due Diligence Requirements

Financial institutions operating in Albania must adhere to specific customer due diligence requirements, including:

Transaction Thresholds

  • Transactions equal to or exceeding 100,000 Lek for specific entities or those providing transfer services, foreign exchange, or gaming services.

Validity of Previous Data

  • Doubts about the accuracy of previously acquired identification data must be addressed.

Suspicion of Illicit Activities

  • Suspicion of money laundering or terrorist financing, regardless of transaction values, requires attention.

Simplified Due Diligence Measures

In low-risk cases, financial institutions can apply simplified diligence processes based on:

  • Risk assessments by relevant authorities
  • Internal processes

However, ongoing monitoring of client relationships is necessary to detect unusual or suspicious transactions. If the risk is no longer low during ongoing monitoring, entities must shift to complete measures.

Documentation for Customer Identification

Financial institutions are required to maintain accurate and up-to-date documentation for customer identification, including:

Natural Persons

  • Name
  • Date/place of birth
  • Residences
  • Employment
  • Identification document details
  • Personal numbers
  • Name
  • Registration details with the National Registration Centre
  • Documents showing the scope of activity
  • Taxpayer Identification Number (TIN)
  • Address for legal persons engaged in for-profit activities

Regulations and Penalties

The Albanian AML/CTF law regulates:

  • Customer due diligence procedures
  • Reporting suspicious transactions
  • Maintaining records of transactions and customer information

Failure to comply with these regulations can result in penalties, including:

  • Administrative sanctions
  • Civil sanctions
  • Criminal sanctions

Recommendations and Clauses under 4th Enhanced Follow-up Report

Albania has made significant progress in addressing technical compliance issues since the Mutual Evaluation Report (MER) was adopted in July 2018. The country has implemented various measures to strengthen its AML/CTF framework and improve cooperation with international organizations.

Conclusion

The revised customer due diligence requirements in Albania aim to enhance the country’s ability to detect and prevent money laundering and terrorist financing activities. Financial institutions operating in the country must adhere to these strict regulations to ensure compliance with international standards and avoid penalties.