Financial Crime World

Know Your Customer Procedures: Essential for Financial Institutions in Albania

Financial institutions operating in Albania are required to implement rigorous Know Your Customer (KYC) procedures as part of their Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CTF) efforts. The Financial Supervisory Authority (FSA), an independent public organisation, oversees the AML/CTF compliance of organisations involved in insurance, securities, and voluntary pension funds.

Key Authorities Involved

In addition to the FSA, other key authorities responsible for developing and enforcing AML/CTF policies include:

  • General Directorate for the Prevention of Money Laundering (GDPML)
  • Coordination Committee for the Fight Against Money Laundering (CCFML)
  • Albanian State Police (ASP)
  • General Prosecutor’s Office (GPO)
  • General Directorate of Customs (GDC)
  • Bank of Albania (BOA)

Applicability of AML/CTF Regulations

For financial institutions, complying with AML/CTF regulations is a critical requirement. In Albania, these rules apply to:

  • Banks
  • Non-banking financial institutions
  • Exchange offices
  • Savings and credit enterprises
  • Postal services that handle payments
  • Stock exchanges
  • Life insurance companies
  • Gambling businesses
  • Law firms
  • Public notaries
  • Other legal representatives

Compliance Requirements

To comply with AML/CTF regulations in Albania, reporting entities must:

  • Conduct customer due diligence (CDD) precautions
  • Apply a risk-based approach to detecting and mitigating risks related to money laundering and terrorism financing
  • Implement suitable AML/CTF systems
  • Continually assess clients’ business connections

Reporting Suspicious Transactions

Financial institutions are also required to report suspicious transactions to the appropriate authorities immediately if they suspect that a transaction may involve proceeds of crime or funds derived from criminal conduct used to finance terrorism.

Consequences of Non-Compliance

Failure to comply with these requirements can result in severe penalties, including:

  • Fines
  • Imprisonment

Conclusion

In conclusion, financial institutions operating in Albania must take AML/CTF compliance seriously and implement robust KYC procedures to prevent money laundering and terrorist financing. By understanding their obligations and requirements, these institutions can help maintain the integrity of the financial system and protect against illicit activities.