ALBANIA: New AML Guidelines for Financial Institutions Go into Effect

Strengthening Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regulations

TIRANA, Albania - The Albanian Parliament has adopted a new law aimed at enhancing the country’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The Law No. 120/2021 on Amendments to the Law No. 9917, dated May 19, 2008, on Prevention of Money Laundering and Financing of Terrorism, has come into effect from January 5, 2022.

Key Changes in the New Law

The amendments aim to bring Albania’s AML/CFT regime in line with the European Union’s (EU) anti-money laundering directive (2015/849) and address recommendations made by the Financial Action Task Force (FATF) and Moneyval for Albania. The new law introduces several key changes, including:

Revised Definition of Politically Exposed Persons (PEPs)

• The amendments introduce a new definition that excludes middle-ranking management or junior-ranking officials from being considered PEPs.

Clarification on the Definition of Beneficial Owner

• The law now references the definition of beneficial owner in the Law on Register of Beneficial Owners.

Expansion of Obliged Entities

• New services, such as lawyers, notaries, and other professionals and entrepreneurs, are now categorized as obliged entities under the AML/CFT regime.
• Auditors, chartered accountants, fiscal advisors, and other individuals who provide financial assistance or advice will also be considered obliged entities.

Relaxation on Client Identification

• Obligated entities can establish business relationships without a client’s physical presence if they conduct a combined risk assessment and deem the risk level to be low.

Enhanced Customer Due Diligence Measures for High-Risk Countries

• Financial institutions must apply specific enhanced due diligence measures when dealing with businesses or transactions involving high-risk countries.

Tougher Penalties for Serious AML/CFT Contraventions

In addition, the new law introduces tougher penalties for serious AML/CFT contraventions. In cases where breaches are deemed serious, repetitive, systematic, or a combination thereof, obligated entities may face:

• Fines of up to twice the amount gained from committing the breach, or up to ALL 125 million in cases where the gain cannot be determined or is smaller.
• For banks, non-banking financial institutions, and exchange bureaus, penalties may reach up to 10 percent of their annual turnover, with a minimum penalty of ALL 625 million.