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Combating Money Laundering and Terrorist Financing in Albania: Legal Requirements for Banks

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Introduction

In order to prevent money laundering and terrorist financing, banks in the Republic of Albania are subject to various legal requirements. This article outlines these requirements, which include laws, regulations, and instructions that must be followed by banks.

Banks in Albania must comply with the following legal requirements:

Anti-Money Laundering (AML) Law

  • Law No. 9917: Banks must comply with Law no. 9917 dated 19.05.2008 “On the prevention of money laundering and terrorism financing” (AML Law).

AML Regulation

  • Bank of Albania Regulation: Banks must also comply with the AML Regulation of the Bank of Albania no. 44/2009 “On the prevention of money laundering and terrorist financing” as amended.

Instruction No. 28

  • Albanian Financial Intelligence Unit (FIU): Banks must implement Instruction No. 28 dated 31.12.2012 of the FIU for reporting and action taking methods and procedures.

Key Areas to Address

When combating money laundering and terrorist financing, banks in Albania should focus on the following key areas:

Know Your Customer (KYC)

  • Customer Identification: Identifying and verifying a customer’s identity when opening an account.
  • Customer Due Diligence: Taking measures to identify and verify permanent or occasional customers.

Customer and Transaction Screening

  • Database Checks: Checking information against online databases, including politically exposed persons (PEPs), government records, watchlists, and sanctions screening.

Reporting Requirements

Banks in Albania must report the following:

  • All transactions in cash equal or higher than ALL 1 million (approximately USD 10,000) to the FIU.
  • Verifying the origin of large sums of money.
  • Reporting suspicious activities immediately to the FIU.

Additional Obligations

Banks must also implement the following measures:

  • Applying customer due diligence measures.
  • Building processes for identifying, measuring, monitoring, and mitigating risks arising from money laundering and financing terrorism.
  • Implementing adequate and appropriate AML/CFT systems.
  • Continuously monitoring business relationships with customers.

Internal Regulatory Perspective

From an internal regulatory perspective:

  • Effective AML Compliance Program: Banks must have an effective AML compliance program that meets regulatory requirements.
  • Failure to Comply: Failure to comply can result in punishment by the Bank of Albania or FIU.
  • AML Compliance Officer: All banks must have an AML compliance officer who provides oversight for the AML compliance program.

Banking Secrecy

The Albanian Banking Law regulates banking secrecy in articles 91 and 125, requiring banks to:

  • Protect professional secrecy, including protecting client information.