Regulatory Requirements for Financial Institutions in Albania
Overview
The Albanian financial sector is subject to stringent regulations aimed at preventing money laundering and terrorism financing. The country’s regulatory framework, which includes the AML Law (Law no. 9917) and the AML Regulation (no. 44/2009), requires financial institutions to adhere to a range of requirements designed to ensure transparency and accountability.
Know-Your-Customer Principle
At the heart of these regulations is the know-your-customer (KYC) principle, which mandates that financial institutions verify the identity, suitability, and risks associated with maintaining business relationships with clients. This includes collecting detailed information on customers, such as:
- Identification data
- Ultimate beneficiaries
- Transaction data
Customer Due Diligence Requirements
According to the AML Law, the following transactions require due diligence:
- Before establishing a business relationship
- When customers carry out or intend to carry out transactions exceeding 100,000 Lek (approximately $900 USD) for certain entities, such as those providing transfer services, foreign exchange, or gaming services
- In cases where there are doubts about the veracity of previously obtained identification data
Third-Party Requirements
While it is possible for financial institutions to engage professional advisors, such as notaries or attorneys, to verify certain components of the due diligence process, these third parties are still subject to strict regulations. The liability and responsibility for proper due diligence remain with the bank or financial institution.
Additionally, the AML Law does not explicitly regulate the use of third-party providers that are not obligated by law to meet AML regulations. However, it is implied that such practices are not permitted.
Regulatory Oversight
The General Directorate on Prevention of Money Laundering serves as the primary regulatory authority in Albania, overseeing compliance with AML regulations and ensuring that financial institutions adhere to established requirements.
Financial institutions operating in Albania must comply with these regulations to maintain a reputation for transparency and accountability.