Financial Crime World

Terrorism Financing Laws in Albania Need Improvement, Says FATF

Albania’s efforts to combat terrorism financing have been deemed “largely compliant” by the Financial Action Task Force (FATF), but significant gaps remain in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime.

Progress Made, But Gaps Remain

According to a recent follow-up report by the FATF, Albania has made progress in implementing technical requirements for:

  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Confiscation and provisional measures

However, there are still areas where improvement is needed. Specifically, Albania needs to strengthen its laws and regulations regarding:

  • Terrorist financing offences
  • Targeted financial sanctions related to terrorism and terrorist financing
  • Non-profit organizations

Areas for Improvement

Albania’s rating on the FATF scale is “largely compliant” for 27 of the 40 recommendations. However, there are areas where improvement is needed, including:

  • Targeted financial sanctions related to proliferation
  • New technologies
  • Transparency and beneficial ownership of legal persons

The report highlighted several weaknesses in Albania’s AML/CFT regime, including:

  • Lack of clear definitions for terrorist financing offences
  • Inadequate procedures for freezing and confiscation of assets
  • Financial intelligence unit not fully operational and lacking adequate resources
  • Limited scope of customer due diligence requirements
  • Inadequate record-keeping, internal controls, and reporting of suspicious transactions

Call to Action

Albania has been under pressure from international organizations to strengthen its AML/CFT regime, particularly since the country’s accession to the European Union in 2009. The government has committed to implementing further reforms to meet FATF standards and prevent the misuse of Albanian financial institutions for terrorist financing purposes.

The FATF report is a wake-up call for Albania to address these weaknesses and improve its AML/CFT regime, which is crucial for maintaining stability and preventing criminal activity in the region.