Financial Crime World

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Financial Institution Due Diligence in Albania: Know Your Customer Requirements

In the financial services sector, due diligence is a crucial aspect of maintaining business relationships. The “know your customer” (KYC) guidelines and regulations require professionals to verify the identity, suitability, and risks involved with customers.

Anti-Money Laundering (AML) Regulations in Albania

The AML Law and Regulation No. 44/2009 serve as the main pieces of legislation governing anti-money laundering (AML) and combating terrorism financing in Albania. The General Directorate on Prevention of Money Laundering is responsible for overseeing AML controls in the country.

Know Your Customer (KYC) Requirements

Under the AML Law, financial institutions are required to conduct a typical KYC identification process, which involves collecting specific documents and data from customers. This includes:

  • Identification data:
    • Business name
    • Date of incorporation
    • Registration details
    • Taxpayer identification number
    • Legal seat
    • Legal representative’s personal data
  • Information about ultimate beneficiaries and their identification data

Transactions Requiring Due Diligence

The AML Law outlines the transactions that require due diligence, including:

  • Establishing a business relationship
  • Carrying out or intending to carry out certain financial transactions
  • Having doubts about previously obtained identification data
  • Suspicions of money laundering or terrorism financing

Practical Implementation

In practice, banks may require customers to physically present themselves at their premises for face-to-face identification. However, the AML Regulation does not necessarily require physical presence, and it is possible for financial institutions to engage professional advisors to verify certain components of the due diligence process.

Outsourcing Customer Due Diligence

Outsourcing customer due diligence to third parties is also possible, but only to entities that are obliged by law to comply with AML regulations. Financial institutions must ensure that they meet their due diligence requirements in-house and assume liability and responsibility for proper due diligence.

Designated Third Parties

In Albania, credit institutions, financial institutions, auditors, external accountants, tax advisors, notaries, and other independent legal professionals are specifically designated as third parties that can be relied upon to comply with AML regulations. Other entities, such as estate agents and providers of high-value goods, may also be considered as potential third parties for due diligence purposes.

Conclusion

Overall, financial institutions in Albania must adhere to strict regulations and guidelines when conducting due diligence on customers to prevent money laundering and terrorism financing. By understanding the requirements of the AML Law and Regulation No. 44/2009, financial institutions can ensure compliance and maintain a safe and secure environment for their customers.