Financial Crime World

Strengthening Financial Crime Risk Management Framework in Albania

Tirana, Albania - In an effort to combat financial crime and maintain transparency in the country’s financial sector, Albania has implemented a robust framework for managing financial crime risk.

Financial Intelligence Unit (FIU-ALBANIA)

At the heart of this effort is the Financial Intelligence Unit (FIU-ALBANIA), which serves as the central authority for receiving, analyzing, and disseminating reports related to suspicious transactions, money laundering, and terrorist financing. The FIU-ALBANIA works closely with other regulatory bodies, including:

  • National Bank of Albania
  • State Authority for Financial Services

Customer Due Diligence (CDD) Requirements

To prevent money laundering and terrorist financing, Albanian financial institutions are required to adhere to strict CDD requirements. These measures include:

  • Rigorous identification and verification of customer identities
  • Understanding the purpose of business relationships
  • Continuous monitoring of transactions
  • Updating customer records

Simplified Due Diligence Procedures

Entities operating in Albania must also implement simplified due diligence procedures for low-risk customers, while maintaining ongoing monitoring of client relationships to detect unusual or suspicious transactions. If the risk is deemed high, entities must shift to full CDD measures.

Politically Exposed Persons (PEPs) and Suspicious Transactions

The country’s financial intelligence unit has also established a framework for identifying and monitoring PEPs, as well as guidelines for reporting suspicious transactions and activities to the FIU-ALBANIA.

Regulations and Penalties

In addition, Albania has implemented regulations on:

  • Customer due diligence
  • Record-keeping
  • Sanctions
  • Penalties for entities and individuals found in violation of anti-money laundering and counter-terrorism financing regulations

International Recognition

The country’s efforts have been recognized by international organizations, with Albania receiving a positive rating in its mutual evaluation report (MER) in 2018. The report highlighted the country’s progress in resolving technical compliance issues and addressing shortcomings in customer due diligence and record-keeping obligations.

Consequences of Non-Compliance

Penalties for non-compliance with AML/CTF regulations are severe, with failure to follow CDD and record-keeping obligations resulting in proportional and deterrent consequences. Trustees, in particular, are required to maintain crucial information about founders, beneficiaries, and de facto control persons, and must disclose their status when establishing a business relationship or conducting occasional transactions.

Conclusion

As Albania continues to strengthen its financial crime risk management framework, the country is sending a clear message that it is committed to combating financial crime and maintaining transparency in its financial sector.