Albania Strengthens Anti-Money Laundering Regulations

Introduction

The Albanian government has taken significant steps to bolster its anti-money laundering (AML) regulations. The aim is to strengthen the country’s financial sector and prevent illicit activities.

Background

The key legislation governing AML in Albania is Law no. 9917, dated May 19, 2008. This law was amended in 2019 to align with international standards. It requires banks and other financial institutions to implement Know Your Customer (KYC) procedures, including verifying customer identities, assessing their suitability for a business relationship, and monitoring transactions.

Key Provisions

Under the AML Law, banks must:

• Collect identification data from customers, including business name, date of incorporation, and personal data of legal representatives
• Take due diligence measures in cases where there are doubts about previously obtained identification data or when transactions exceed certain thresholds

Customer Due Diligence Requirements

The AML Law prescribes specific customer due diligence requirements for financial institutions, including:

• Identifying customers and ultimate beneficiaries
• Collecting transaction data, including business relationships between parties in a transaction
• Verifying identity through passport or ID documents
• Conducting risk assessments to identify potential money laundering activities

Ongoing Monitoring and Reporting

Banks must implement ongoing monitoring of customer transactions to detect suspicious activity. The law stipulates that financial institutions must have adequate procedures in place for reporting suspicious transactions to the authorities.

Outsourcing Customer Due Diligence: A Gray Area

While the AML Law does not explicitly permit outsourcing customer due diligence, it implies that such practices may be allowed under certain circumstances. Banks must ensure that any external providers meet the same standards as in-house procedures and maintain liability for proper due diligence.

Conclusion

The Albanian government’s move to enhance its AML regulations demonstrates its commitment to preventing financial crime and maintaining a robust financial sector. As international scrutiny on money laundering continues to intensify, Albania’s efforts are expected to set a positive precedent for other countries in the region.