## _cr11188

## Source details

**Canonical URL:** [_cr11188](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2011/_cr11188.pdf)

## Other formats

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---

### ML/TF risk and system-wide findings
- Albania’s ML risk remains high due to:
  - A history of organized crime with clan-based and hierarchically organized networks mainly involved in drug trafficking.
  - The relative size of the cash-based informal economy which facilitates laundering and integration of proceeds of crime.
  - Identified vulnerable sectors including illegal gambling establishments and exchange bureaus.
  - Vulnerabilities related to cross-border transportation of currency.
- Despite efforts to reduce reliance on cash, use of cash through the informal economy remains a problem and circumvents preventive measures.
- Albania remains at risk of financing of terrorism activities; in the first half of the 2000s the government froze assets of terrorist financiers, curtailed activities of suspect Islamic NPOs, and expelled individuals suspected of having links to terrorism.
- The number of sectors identified with illegal practices and low numbers of suspicious transaction reports raise concerns about effectiveness.

### Legal framework and criminalization (Legal Systems and Related Institutional Measures)
- Albania has fully criminalized ML largely in line with the Vienna and Palermo Conventions; provisions extend to any type of property as defined in the FATF standard but do not extend to FATF-designated predicate offenses of insider trading and market manipulation.
- There have been few convictions for ML; demanding evidentiary requirements have negatively affected effectiveness.
- TF criminalization provisions have been significantly enhanced since 2006 but still fall short of FATF Recommendations and the U.N. Financing of Terrorism Convention because:
  - It is not clear that provision and collection are prohibited in the absence of the commission or attempted commission of a terrorist act.
  - A specific purpose or intent requirement is applied for conducts covered by the nine Conventions and Protocols listed in the Annex to the FT Convention.
  - Criminal provisions do not sufficiently apply to financing of all conducts in the annexed Conventions.
  - Financing does not clearly extend to the full extent of “funds” as defined in the FT Convention.
  - Financing of an individual terrorist is criminalized only if funds are provided or collected to support terrorist activities.
- Comprehensive framework for seizure and confiscation exists, including the 2009 Organized Crime Law providing for preventive seizure and confiscation using a civil standard for a wide range of serious offences; however there have been few actual confiscations and limited use of sequester authority in ML cases to date.
- Legal framework to implement UNSCR 1267 is sound; provisions applying to UNSCR 1373 are uncertain. Technical deficiencies identified include:
  - Insufficient updating of the domestic freeze list.
  - Absence of secondary provisions for subsistence or other expenditures for affected persons.
  - Lack of guidance to the private sector and publicly-available information on delisting and unfreezing procedures.

### Financial Intelligence Unit (FIU) and law enforcement cooperation
- FIU improvements:
  - Improved analytical processes producing timely and high quality financial intelligence.
  - Alignment with Joint Investigation Units (JIUs) has increased dissemination and integration into investigations.
  - Addition of cash reporting requirements and lowering of thresholds, improving timeliness and comprehensiveness of dissemination packages.
- Suggested enhancements:
  - Conduct more trend analysis.
  - Establish a prioritization mechanism for STRs and other transaction reports.
  - Strengthen statutory independence of the Directorate to address concerns about FIU independence.
  - Make the FIU’s responsibility to disseminate disclosures of suspicious transactions to domestic authorities more explicit.
- JIUs doubled the number of ML investigations from 2008 to 2009 and increased investigative efficiency, but challenges persist in establishing arrests and prosecutions.
- Legislative amendments needed to explicitly provide law enforcement with ability to postpone and waive arrest warrants and allow interceptions without advising defense counsel.
- Judiciary lacks expertise to review complex ML cases and requires training; concerns expressed about judicial integrity.
- Cross-border currency control oversight has improved but number of declarations remains low; customs capacity to collect and analyze cross-border currency data should be strengthened; cash couriers need to be tackled more effectively.

### Preventive measures — Financial Institutions
- AML/CFT Law adopted in 2008 establishes requirements for CDD, correspondent banking, unusual transactions, record keeping and reporting of suspicious transactions and covers all financial activities under the FATF definition of “financial institutions”.
- CDD framework: covers required essential criteria to an extent but contains technical gaps:
  - Some provisions technically only apply to identification and verification of customers and not to other CDD components.
  - Requirements for identifying and verifying beneficial owners are incomplete and inconsistent.
  - Limited provisions for CDD where there is suspicion of ML/TF.
  - Measures for conducting enhanced due diligence are inconsistently implemented.
  - Very limited requirements for ongoing due diligence.
  - No requirements regarding foreign politically exposed persons (PEPs).
- Implementation is uneven across the financial sector:
  - Banking sector shows the best understanding and sometimes complies to standards exceeding law due to higher overseas group standards.
  - Ongoing monitoring and beneficial ownership identification/verification are poorly implemented.
  - Customer risk factor concept is new and should be supported by additional guidance.
- STRs and reporting:
  - Requirements for submitting suspicious transaction reports have been improved but technical deficiencies remain.
  - Number of STRs is low relative to currency transaction reports.
  - No specific requirement to report attempted transactions.
  - Albania has exemptions from STR reporting not in line with FATF standards.
  - Very low number of terrorist financing reports raises concerns about effectiveness, particularly given NPO-related TF risk.
- Non-licensed operators remain a problem (informal bureaus of foreign exchange and money transmitters operating outside the regulated market pose ML/TF risks).
- Supervisory authorities:
  - Bank of Albania (BoA) and Financial Supervisory Authority (FSA) have adequate powers, but supervisory approach and implementation are uneven.
  - BoA offsite monitoring is inadequate; onsite risk–based supervision is at an embryonic stage.
  - FSA has not undertaken inspections of securities and insurance sectors for AML/CFT compliance.
  - FIU carries supervisory responsibilities for reporting obligations and has been the only supervisor to impose sanctions for non-compliance, though its legal authority for supervisory activities in DNFBP sectors is unclear.

### Preventive measures — Designated Non-Financial Businesses and Professions (DNFBPs)
- Preventive measures mirror those for financial institutions but implementation is at an early stage.
- Preventive measures apply to all DNFBP categories except some trust and company service provider activities.
- Some customer identification and record keeping obligations are met but majority of obligations not complied with due to lack of knowledge and absence of guidance.
- Authorities should address illegal gambling operations more proactively to mitigate ML risk.
- Designation of supervisory authorities for DNFBPs needs clarification:
  - Several supervisory authorities designated, but few AML/CFT examinations conducted and understanding of vulnerabilities is limited.
  - FIU is undertaking supervisory activities across DNFBP sectors despite absence of clear legislative authority.
  - Supervisory responsibilities of FIU and other supervisors need clear delineation and respect.

### Legal persons, arrangements, and Non-Profit Organizations (NPOs)
- Legal persons:
  - Legal framework improved concerning access to beneficial ownership information.
  - Establishment of the National Registration Center (NRC) is a positive step toward transparency.
  - Authorities have not taken measures to ensure bearer shares are not misused for ML.
- NPOs:
  - Measures relating to NPOs are deficient:
    - No formal review of the sector has been carried out.
    - No formal supervision of the sector.
    - Legal framework for NPOs has not been updated and does not provide accurate beneficial ownership information.
    - Registration requirements are largely quantitative with few checks on information provided.
    - Lack of outreach to the NPO sector.
  - Financial institutions are required to conduct enhanced CDD in relation to NPOs, indicating Albania’s awareness of TF risk posed by NPOs.

### National and international cooperation
- Domestic cooperation:
  - Establishment of the inter-agency Coordination Committee against Money Laundering and a National Strategy on the Investigation of Financial Crimes provide a good basis for collaboration.
  - Coordination Committee and working group facilitate discussion of National Strategy implementation and operational issues.
  - JIUs have contributed to greater collaboration among law enforcement, intelligence, prosecutors’ offices, the FIU and other government agencies.
  - Cooperation between supervisory agencies should be improved; FIU should coordinate more closely with financial supervisors on inspections and share findings.
  - Statistics gathering is not coordinated, resulting in inconsistencies.
- International cooperation:
  - Mechanisms are in place for the FIU, law enforcement and certain supervisors; information exchange with foreign FIUs is comprehensive and timely.
  - No evidence of collaboration between law enforcement agencies outside MLAT channels despite Interpol mechanisms.
  - Financial sector supervisors have memoranda of understanding with foreign counterparts but these are not frequently utilized.
  - Albania cooperates internationally under the Criminal Procedure Code (CPC) and the 2009 Mutual Legal Assistance Law; assistance is not subject to unduly restrictive conditions but shortcomings in ML/TF criminalization may limit MLA in some cases.
  - Limited ability to execute foreign requests for confiscation of assets under current legal framework; practical barriers include application of dual criminality in all circumstances, necessity of a court order for every execution, and occasional use of diplomatic channels.
  - ML is an extraditable offense with Council of Europe Member States and certain treaty partners and Albania may also extradite without a treaty based on reciprocity. FT is extraditable but dual criminality requirements and shortcomings under Special Recommendation II may limit extradition in certain FT cases.
  - A CPC provision gives the Minister of Justice wide discretion to impose requirements on extradition and should be reviewed for potential to defeat extradition.

### Key statistics and factual points preserved from source
- AML/CFT Law adopted in 2008.
- Organized Crime Law adopted in late 2009.
- Number of ML investigations doubled from 2008 to 2009.
- JIUs contributed to increased integration of FIU dissemination into investigations.
- FIU additions: cash reporting requirements and lowering of thresholds.
- Mutual Legal Assistance Law enacted in 2009.

### Key policy recommendations (drawn from source findings)
- Strengthen FIU statutory independence and clarify its responsibility to disseminate suspicious transaction disclosures to domestic authorities.
- Amend criminal provisions to address evidentiary/drafting shortcomings to improve ML and FT prosecutions and to meet FATF and FT Convention standards (including extension to insider trading and market manipulation where appropriate).
- Clarify and strengthen legal provisions implementing UNSCR 1373, update domestic freeze lists, and provide secondary provisions and guidance on delisting/unfreezing and subsistence expenditures.
- Address technical gaps in CDD framework:
  - Complete and make consistent requirements for identifying and verifying beneficial owners.
  - Introduce requirements for foreign PEPs.
  - Strengthen provisions for enhanced due diligence and ongoing due diligence.
  - Clarify application of CDD where suspicion of ML/TF exists.
- Increase quantity and quality of STRs, including reporting of attempted transactions; remove exemptions inconsistent with FATF standards.
- Strengthen supervision and enforcement:
  - Enhance BoA offsite monitoring and implement risk-based onsite supervision.
  - Ensure FSA undertakes AML/CFT inspections in securities and insurance sectors.
  - Clarify and delineate supervisory responsibilities among FIU and other designated supervisors for DNFBPs.
- Formalize supervision, registration accuracy, and outreach for NPO sector and undertake a formal review of NPOs to assess TF vulnerabilities.
- Tackle informal foreign exchange bureaus and unlicensed money transmitters operating outside regulated market.
- Improve customs capacity to collect and analyze cross-border currency data and increase effectiveness in addressing cash couriers.
- Provide judicial training on complex ML cases and review CPC extradition discretion provision to reduce potential to defeat extradition.
- Coordinate statistics gathering across agencies to remove inconsistencies and strengthen inter-supervisory cooperation domestically and internationally.

*Source: IMF assessment chapter — Albania AML/CFT (canonical PDF: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2011/_cr11188.pdf).*

### 1.      Although Albania has made considerable progress to tackle ML and FT the risk of ML

### 1.      Although Albania has made considerable progress to tackle ML and FT the risk of ML

### ML/TF risk and system-wide findings
- Albania’s ML risk remains high due to:
  - A history of organized crime with clan-based and hierarchically organized networks mainly involved in drug trafficking.
  - The relative size of the cash-based informal economy which facilitates laundering and integration of proceeds of crime.
  - Identified vulnerable sectors including illegal gambling establishments and exchange bureaus.
  - Vulnerabilities related to cross-border transportation of currency.
- Despite efforts to reduce reliance on cash, use of cash through the informal economy remains a problem and circumvents preventive measures.
- Albania remains at risk of financing of terrorism activities; in the first half of the 2000s the government froze assets of terrorist financiers, curtailed activities of suspect Islamic NPOs, and expelled individuals suspected of having links to terrorism.
- The number of sectors identified with illegal practices and low numbers of suspicious transaction reports raise concerns about effectiveness.

### Legal framework and criminalization (Legal Systems and Related Institutional Measures)
- Albania has fully criminalized ML largely in line with the Vienna and Palermo Conventions; provisions extend to any type of property as defined in the FATF standard but do not extend to FATF-designated predicate offenses of insider trading and market manipulation.
- There have been few convictions for ML; demanding evidentiary requirements have negatively affected effectiveness.
- Provisions criminalizing collection for and financing of terrorism have been significantly enhanced since 2006 but still fall short of FATF Recommendations and the U.N. Financing of Terrorism Convention (FT Convention) because:
  - It is not clear that provision and collection are prohibited in the absence of the commission or attempted commission of a terrorist act.
  - A specific purpose or intent requirement is applied for conducts covered by the nine Conventions and Protocols listed in the Annex to the FT Convention.
  - Criminal provisions do not sufficiently apply to financing of all conducts in the annexed Conventions.
  - Financing does not clearly extend to the full extent of “funds” as defined in the FT Convention.
  - Financing of an individual terrorist is criminalized only if funds are provided or collected to support terrorist activities.
- Albania has a comprehensive legal framework for seizure and confiscation, including the 2009 Organized Crime Law providing for preventive seizure and confiscation using a civil standard for a wide range of serious offences; however there have been few actual confiscations and limited use of sequester authority in ML cases to date.
- Legal framework to implement UNSCR 1267 is sound; provisions applying to UNSCR 1373 are uncertain. Identified technical deficiencies include:
  - Insufficient updating of the domestic freeze list.
  - Absence of secondary provisions for subsistence or other expenditures for affected persons.
  - Lack of guidance to the private sector and publicly-available information on delisting and unfreezing procedures.

### Financial Intelligence Unit (FIU) and law enforcement cooperation
- The FIU has improved analytical processes producing timely and high quality financial intelligence; alignment with Joint Investigation Units (JIUs) has increased dissemination and integration into investigations.
- Improvements include addition of cash reporting requirements and lowering of thresholds, improving timeliness and comprehensiveness of dissemination packages.
- Further enhancements suggested:
  - Conduct more trend analysis.
  - Establish a prioritization mechanism for STRs and other transaction reports.
  - Strengthen statutory independence of the Directorate to address concerns about FIU independence.
  - Make the FIU’s responsibility to disseminate disclosures of suspicious transactions to domestic authorities more explicit.
- Creation of JIUs has doubled the number of ML investigations from 2008 to 2009 and increased investigative efficiency, but challenges persist in establishing arrests and prosecutions.
- Legislative amendments needed to explicitly provide law enforcement with ability to postpone and waive arrest warrants and allow interceptions without advising defense counsel.
- Judiciary lacks expertise to review complex ML cases and requires training; concerns expressed about judicial integrity.
- Cross-border currency control oversight has improved but number of declarations remains low; customs capacity to collect and analyze cross-border currency data should be strengthened; cash couriers need to be tackled more effectively.

### Preventive measures — Financial Institutions
- The AML/CFT Law, adopted in 2008, establishes requirements for CDD, correspondent banking, unusual transactions, record keeping and reporting of suspicious transactions and covers all financial activities under the FATF definition of “financial institutions”.
- CDD framework covers required essential criteria to an extent but contains technical gaps:
  - Some provisions technically only apply to identification and verification of customers and not to other CDD components.
  - Requirements for identifying and verifying beneficial owners are incomplete and inconsistent.
  - Limited provisions for CDD where there is suspicion of ML/TF.
  - Measures for conducting enhanced due diligence are inconsistently implemented.
  - Very limited requirements for ongoing due diligence.
  - No requirements regarding foreign politically exposed persons (PEPs).
- Implementation is uneven across the financial sector:
  - Banking sector shows the best understanding and sometimes complies to standards exceeding law due to higher overseas group standards.
  - Ongoing monitoring and beneficial ownership identification/verification are poorly implemented.
  - Customer risk factor concept is new and should be supported by additional guidance.
- Requirements for submitting suspicious transaction reports have been improved but technical deficiencies remain:
  - Number of STRs is low relative to currency transaction reports.
  - No specific requirement to report attempted transactions.
  - Albania has exemptions from STR reporting not in line with FATF standards.
  - Very low number of terrorist financing reports raises concerns about effectiveness, particularly given NPO-related TF risk.
- Non-licensed operators remain a problem (informal bureaus of foreign exchange and money transmitters operating outside the regulated market pose ML/TF risks).
- Supervisory authorities:
  - Bank of Albania (BoA) and Financial Supervisory Authority (FSA) have adequate powers, but supervisory approach and implementation are uneven.
  - BoA offsite monitoring is inadequate; onsite risk–based supervision is at an embryonic stage.
  - FSA has not undertaken inspections of securities and insurance sectors for AML/CFT compliance.
  - FIU carries supervisory responsibilities for reporting obligations and has been the only supervisor to impose sanctions for non-compliance, though its legal authority for supervisory activities in DNFBP sectors is unclear.

### Preventive measures — Designated Non-Financial Businesses and Professions (DNFBPs)
- Preventive measures mirror those for financial institutions but implementation is at an early stage.
- Preventive measures apply to all DNFBP categories except some trust and company service provider activities.
- Some customer identification and record keeping obligations are met but majority of obligations not complied with due to lack of knowledge and absence of guidance.
- Authorities should address illegal gambling operations more proactively to mitigate ML risk.
- Designation of supervisory authorities for DNFBPs needs clarification:
  - Several supervisory authorities designated, but few AML/CFT examinations conducted and understanding of vulnerabilities is limited.
  - FIU is undertaking supervisory activities across DNFBP sectors despite absence of clear legislative authority.
  - Supervisory responsibilities of FIU and other supervisors need clear delineation and respect.

### Legal persons, arrangements, and Non-Profit Organizations (NPOs)
- Legal persons:
  - Legal framework improved concerning access to beneficial ownership information.
  - Establishment of the National Registration Center (NRC) is a positive step toward transparency.
  - Authorities have not taken measures to ensure bearer shares are not misused for ML.
- NPOs:
  - Measures relating to NPOs are deficient:
    - No formal review of the sector has been carried out.
    - No formal supervision of the sector.
    - Legal framework for NPOs has not been updated and does not provide accurate beneficial ownership information.
    - Registration requirements are largely quantitative with few checks on information provided.
    - Lack of outreach to the NPO sector.
  - Financial institutions are required to conduct enhanced CDD in relation to NPOs, indicating Albania’s awareness of TF risk posed by NPOs.

### National and international cooperation
- Domestic cooperation:
  - Establishment of the inter-agency Coordination Committee against Money Laundering and a National Strategy on the Investigation of Financial Crimes provide a good basis for collaboration.
  - Coordination Committee and working group facilitate discussion of National Strategy implementation and operational issues.
  - JIUs have contributed to greater collaboration among law enforcement, intelligence, prosecutors’ offices, the FIU and other government agencies.
  - Cooperation between supervisory agencies should be improved; FIU should coordinate more closely with financial supervisors on inspections and share findings.
  - Statistics gathering is not coordinated, resulting in inconsistencies.
- International cooperation:
  - Mechanisms are in place for the FIU, law enforcement and certain supervisors; information exchange with foreign FIUs is comprehensive and timely.
  - No evidence of collaboration between law enforcement agencies outside MLAT channels despite Interpol mechanisms.
  - Financial sector supervisors have memoranda of understanding with foreign counterparts but these are not frequently utilized.
  - Albania cooperates internationally under the Criminal Procedure Code (CPC) and the 2009 Mutual Legal Assistance Law; assistance is not subject to unduly restrictive conditions but shortcomings in ML/TF criminalization may limit MLA in some cases.
  - Limited ability to execute foreign requests for confiscation of assets under current legal framework; practical barriers include application of dual criminality in all circumstances, necessity of a court order for every execution, and occasional use of diplomatic channels.
  - ML is an extraditable offense with Council of Europe Member States and certain treaty partners; Albania may also extradite without a treaty based on reciprocity. FT is extraditable but dual criminality requirements and shortcomings under Special Recommendation II may limit extradition in certain FT cases.
  - A CPC provision gives the Minister of Justice wide discretion to impose requirements on extradition and should be reviewed for potential to defeat extradition.

### Key statistics and factual points preserved from source
- AML/CFT Law adopted in 2008.
- Organized Crime Law adopted in late 2009.
- Number of ML investigations doubled from 2008 to 2009.
- JIUs contributed to increased integration of FIU dissemination into investigations.
- FIU additions: cash reporting requirements and lowering of thresholds.
- Mutual Legal Assistance Law enacted in 2009.

### Key policy recommendations (drawn from source findings)
- Strengthen FIU statutory independence and clarify its responsibility to disseminate suspicious transaction disclosures to domestic authorities.
- Amend criminal provisions to address evidentiary/drafting shortcomings to improve ML and FT prosecutions and to meet FATF and FT Convention standards (including extension to insider trading and market manipulation where appropriate).
- Clarify and strengthen legal provisions implementing UNSCR 1373, update domestic freeze lists, and provide secondary provisions and guidance on delisting/unfreezing and subsistence expenditures.
- Address technical gaps in CDD framework:
  - Complete and make consistent requirements for identifying and verifying beneficial owners.
  - Introduce requirements for foreign PEPs.
  - Strengthen provisions for enhanced due diligence and ongoing due diligence.
  - Clarify application of CDD where suspicion of ML/TF exists.
- Increase quantity and quality of STRs, including reporting of attempted transactions; remove exemptions inconsistent with FATF standards.
- Strengthen supervision and enforcement:
  - Enhance BoA offsite monitoring and implement risk-based onsite supervision.
  - Ensure FSA undertakes AML/CFT inspections in securities and insurance sectors.
  - Clarify and delineate supervisory responsibilities among FIU and other designated supervisors for DNFBPs.
- Formalize supervision, registration accuracy, and outreach for NPO sector and undertake a formal review of NPOs to assess TF vulnerabilities.
- Tackle informal foreign exchange bureaus and unlicensed money transmitters operating outside regulated market.
- Improve customs capacity to collect and analyze cross-border currency data and increase effectiveness in addressing cash couriers.
- Provide judicial training on complex ML cases and review CPC extradition discretion provision to reduce potential to defeat extradition.
- Coordinate statistics gathering across agencies to remove inconsistencies and strengthen inter-supervisory cooperation domestically and internationally.

*Source: IMF assessment chapter — Albania AML/CFT (canonical PDF: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2011/_cr11188.pdf).*

### 1. Legal System and Related Institutional Measures

### 1. Legal System and Related Institutional Measures

### Criminalization of Money Laundering
- R.1 – PC; R.2 – LC
- Recommendations:
  - Enact a provision or amend existing provisions so that self-laundering is covered for the Article 287/b offences.
  - Extend criminalization of use beyond the use and investment in economic or financial activities.
  - Amend Article 287/b so that it is clear that its coverage extends beyond acquisition, possession or use in the case of stolen goods.
  - Enact provisions to cover insider trading and market manipulation.
  - Enact provisions so that all required ancillary activity is covered.
  - Provide training for courts, prosecutors and judicial police that will permit better use of existing provisions under more liberal standards.
  - Utilize Article 287/b CC more pro-actively.

### Criminalization of Terrorist Financing
- SR.II – PC
- Recommendations:
  - Enact amendments to the FT criminalization provisions in Chapter VII of the CC so that:
    - Article 230/a applies regardless of whether the terrorist act is actually committed or attempted and when there is only an intention that the funds be used;
    - it is clear that the financing prohibited extends to the full extent of “funds” as that term is defined in the FT Convention;
    - the financing of individual terrorists regardless of whether the funds are provided or collected to support terrorist activities is criminalized.
  - Enact amendments to Article 230 CC so that:
    - it covers each specific action that is required to be criminalized under all the treaties that are annexed to the FT Convention;
    - it covers actions “intended to cause” death or serious bodily harm, not simply that “might” cause this;
    - the specific purpose or intent requirement set forth in Article 2 para. 1 (b) of the FT Convention is not required in the case of the conducts specified in the annexed treaties (Article 2, para. 1(a));
    - the purpose set forth in the Article is to compel the Albanian or foreign government rather than “Albanian or foreign governmental agencies”.

### Confiscation, Freezing, and Seizing of Proceeds of Crime
- R.3 – LC
- Recommendations:
  - Through enhanced CC or CPC legislative provisions and/or the better use of existing provisions in criminal cases and/or parallel use of Organized Crime Act civil proceedings, work towards developing a framework that is effective in actually recovering criminal assets without the same degree of tracing, specificity and linkage between specific criminal acts and specific monies.
  - Make fuller use of the provisions in part by emphasizing the importance to law enforcement and prosecutors that criminal assets be pursued early on in every proceeds-generating crime under investigation/prosecution.
  - Establish a national registry of bank accounts administered by the BoA, which, upon proper authority, can be accessed on request by Law Enforcement authorities’ powers to facilitate the investigation of ML/FT, in order to enhance their capacity to identify and trace property that is or may become subject to confiscation or is suspected of being the proceeds of crime.
  - Include corruption as an offence under the Organized Crime Law which provides a civil standard and reverse onus in the recovery of proceeds of crime.
  - Provide training to the judiciary and prosecutors so they have a greater understanding of how provisions similar to the existing CC and CPC provisions for criminal confiscation in other civil law contexts are applied in a more lenient and effective fashion.
  - Make fuller use of the provisions in part by emphasizing the importance to law enforcement and prosecutors that criminal assets be pursued early on in every proceeds-generating crime under investigation/prosecution.

### Freezing of Funds Used for Terrorist Financing
- SR.III – PC
- Recommendations:
  - Revise the SFT Law to provide a clear legal basis for the Council of Ministers to make a designation pursuant to UNSCR 1373.
  - Enact a provision that gives persons listed in the UNSCR 1373 context a right to challenge not only a freeze but their listing (on grounds in addition to mistaken identity).
  - Adopt secondary provisions or mechanisms to address potential requests by affected persons for subsistence or other expenditures.
  - Continuously update the Council of Minister’s domestic list or provide a legal mechanism for automatic incorporation of the UNSCR 1267 list.
  - Provide guidance to the private sector and the public at large about their obligations.
  - Provide a legal mandate for the review of the compliance by entities subject to the AML/CFT Law with their obligations regarding the Council of Ministers list and regarding freezing of funds.
  - Consider on a regular basis whether there are persons/entities that should be designated domestically under UNSCR 1373 and make such designations.
  - Undertake more vigorous supervisory review of institutions for compliance with UNSCR obligations and include material in supervisory inspection manual/checklists.

### The Financial Intelligence Unit and its Functions
- R.26 – LC
- Recommendations:
  - Expand the GDPML’s authority to request additional information by specifically allowing it to request non-financial information that could assist in its functions.
  - Amend the Council of Minister’s Decision outlining the organization and functioning of the GDPML to reflect the FIU’s new responsibilities.
  - Clarify the GDPML’s authority to exchange information with non law enforcement authorities.
  - Enhance the GDPML’s strategic analytical capacity by conducting an in-depth review of existing disseminations to identify ML/FT trends specific to Albania. This information should be disseminated to help inform risk assessment activities by both authorities and obliged entities.
  - Enhance the IT system so that it allows for the prioritization of STRs and identifies patterns of suspicious transactions generating cases based on these findings.
  - Specify the autonomy and independence of the GDPML in legislation and establish a fixed term for the General Director and include a provision on the independent status of the Director.

### Law Enforcement, Prosecution and Other Competent Authorities
- R.27 – PC; R.28 – C
- Recommendations:
  - Conduct targeted training to the judiciary to increase their knowledge of ML, its inherent complexities and proceeds of crime in general.
  - Amend the provisions related to interception to remove the requirement to advise defense counsel that an interception activity has occurred five day following the activity.

### Cross Border Declaration or Disclosure
- SR IX – PC
- Recommendations:
  - Define the notion of “negotiable instruments”, so that it is fully consistent with the FATF definition of “bearer negotiable instruments”, and harmonize Article 187a of the Criminal Code so that a proper reference to bearer negotiable instruments is included.
  - Improve Customs officers’ access to information by:
    - Providing Customs access to TIMS;
    - Requiring the BMP to provide Customs all information related to the declaration requirements;
    - Interconnecting the databases at the Customs point and the database at the Customs HQ Unit for the Prevention of ML, so that they can be mutually queried.
  - Amend the Criminal Code or the AML/CFT law to include sanctions for the case of false/inaccurate declaration.
  - Require that cash deposits that are purported to be remittances from abroad are accompanied by the Customs declaration, when they exceed the threshold.

---

### 2. Preventive Measures: Financial Institutions

### Risk of Money Laundering or Terrorist Financing
- (No specific numeric ratings provided beyond topic headers.)

### Customer Due Diligence, including Enhanced or Reduced Measures
- R.5 – PC; R.6 – NC; R.7 – LC; R.8 – PC
- Recommendations:
  - Amend Articles 1025 and 1026 of the Civil Code and/or pass legislation to prohibit the issuing of bearer passbooks and pass legislation to prohibit the issuing of any other bearer instruments (e.g. certificates of deposit).
  - Extend the circumstances when “CDD” is required to all aspects of CDD, not just identification and verification.
  - Clarify in law or regulation the requirement to verify that a person acting on behalf of another is so authorized.
  - Include a requirement in law or regulation to verify the identity of a beneficial owner.
  - Extend the requirements in relation to beneficial ownership to include beneficial ownership of legal arrangements.
  - Clarify the inconsistency between the AML/CFT Law and Instruction 12 regarding the threshold for identifying the shareholding and voting rights of legal persons in determining beneficial ownership.
  - Establish a requirement in law or regulation to determine whether a person is acting on behalf of another.
  - Include a requirement in law, regulation or OEM that obliged entities obtain information on the purpose and intended nature of the business relationship.
  - Clarify the requirements in the AML/CFT Law on carrying out “continuous monitoring”, and on “periodically” updating client data by either amending the Law itself or issuing further guidance to ensure that ongoing monitoring is fully and consistently implemented by the obliged entities.
  - Clarify in law, regulation or OEM, or in guidance, the steps to be taken in when obliged entities are required to apply enhanced due diligence.
  - Extend the requirements relating to PEPs to foreign PEPs.
  - Provide a clear requirement to obtain on source of wealth and source of funds of PEPs.

### Third Parties and Introduced Business
- R.9 – NC
- Recommendation:
  - Consider the ML/TF risks in allowing third party reliance, and then decide whether allowing third party reliance would be appropriate and feasible in Albania.

### Financial Institution Secrecy or Confidentiality
- R.4 – C

### Record Keeping and Wire Transfer Rules
- R.10 – LC; SR.VII – PC
- Recommendations:
  - Amend the record keeping requirement for “account files and business correspondence” in the AML/CFT Law so that the five year period is calculated “following the termination of an account or business relations”, as required by the FATF standard.
  - Remove the option of requesting missing wire transfer-related information from the beneficiary of the transaction.

### Monitoring of Transactions and Relationships
- R.11 – PC; R.21 – PC
- Recommendations:
  - Impose a specific requirement for FIs to pay special attention to all complex, unusual large transactions and unusual patterns of transactions which have no apparent economic or visible lawful purpose.
  - Require obliged entities to record the findings of their examination of complex and unusual transactions in law, regulation or OEM.
  - Require obliged entities to examine and make written findings of business relationships and transactions with persons in countries with poor AML/CFT controls, if they have no apparent economic or visible lawful background.
  - Specify the counter-measures to be taken in cases where an FI deals with a person in or from such a country.

### Suspicious Transaction Reports and Other Reporting
- R.13 – PC; R.14 – LC; R.19 – C; R.25 – PC; SR.IV – PC
- Recommendations:
  - Ensure that the SAR requirement extends to all categories of offences required in the FATF standards.
  - Extend the definition of STR (Article 12 para 2) to include the proceeds of criminal activity.
  - Set out an explicit requirement in law or regulation that attempted transactions should be reported.
  - Remove the exemptions in Article 13 of the AML/CFT Law that relate to SARs.
  - Ensure that all instances of tax evasion are reported.
  - Clarify the AML/CFT law so that the prohibition against tipping off explicitly applies to directors and officers as well as employees.
  - Ensure that the SAR requirement extends to all categories of TF offences required in the FATF standards, and that it applies to situations beyond intended terrorist financing.

### Internal Controls, Compliance, Audit and Foreign Branches
- R.15 – PC; R.22 – LC
- Recommendations:
  - Specifically include FT among the responsibilities of the compliance officer.
  - Require that compliance officer has timely access to the data he/she may need.
  - Require FIs to establish an independent audit function.
  - Ensure that FIs put in place screening procedures to follow high standards when hiring employees.
  - Introduce a specific requirement to FIs adopt the highest AML/CFT in case of branch subsidiaries or branches in foreign countries.
  - Ensure that the Albanian AML/CFT standards are applied in a consistent way among the Albanian FIs foreign branches as a part of a group policy.

### Shell Banks
- R.18 – PC
- Recommendation:
  - Amend the AML/CFT Law to specifically prohibit FIs from operating with shell banks.

### Supervisory and Oversight System – Competent Authorities and SROs
- R.17 – PC; R.23 – PC; R.25 – PC; R.29 – PC
- Recommendations:
  - Review and update insurance and securities sector laws to take into account the requirements of the AML/CFT Law.
  - Ensure adequate and effective AML/CFT supervision of the insurance and securities sector by the FSA.
  - Enhance the channels of communication and information exchange between the GDPML and the supervision authorities. In particular the GDPML should share in a timely fashion the findings of the inspections it undertakes with the BoA and the FSA.
  - Review the existing process to impose sanctions in order to remove any repetition of inspections and the possibility to sanction twice for the same violation.
  - Introduce a unified administrative sanctions regime for ML/FT violations in order to avoid possible “supervisory arbitrage”.
  - Ensure that all the Albanian financial activities are subjected to adequate AML/CFT regulation and supervision.
  - Increase the inspections carried out on natural and legal persons providing a money or value transfer services and to a money and currency changing services.
  - Improve the offsite surveillance and risk-based onsite supervision.
  - Establish legal requirements for fit and proper tests for all the FIs that are subject to the Core Principles.

### Money Value Transfer Services
- SR.VI – PC
- Recommendations:
  - Impose a direct requirement for MVT service operators to maintain a current list of agents.
  - Take further steps to ensure that remittance activity takes place in the formal sector.

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### 3. Preventive Measures: Non-Financial Businesses and Professions

### Customer Due Diligence and Record-Keeping
- R.12 – PC
- Recommendations:
  - Extend requirements to all TCSP activities defined by the standard.
  - Increase the number of sanctions applied to games of chance operating illegally.
  - The ASP should identify dealers in precious metals and stones that are operating illegally and apply available sanctions.
  - Implement outreach programs and develop guidance to raise awareness of customer due diligence measures in the DNFBP sectors.

### Suspicious Transaction Reporting
- R.16 – PC
- Recommendation:
  - Implement training and guidance targeted to DNFBPs to enhance knowledge of STR detection reporting and internal control obligations as well as requirements to apply special attentions to transactions related to countries who insufficiently apply FATF recommendations.

### Regulation, Supervision, Monitoring, and Sanctions
- R.24 – PC; R.25 – PC
- Recommendations:
  - Designate a supervisor for real estate, accountants, and dealers in precious metals and stones (DPMS).
  - Require designated supervisory authorities to develop an action plan on how AML/CFT supervision will be integrated into their existing activities as well as undertake more AML/CFT inspections.
  - Review the casino license revocation provisions to allow license revocation in repeated instances of non-compliance with AML/CFT obligations.
  - Strengthen measures to prevent criminals or their associates from holding a controlling interest in casinos or games of chance and include the screening of key individuals by the conducting of criminal background checks on all shareholders, managers, and beneficial owners’ family members and close associates.
  - Clarify in the AML/CFT law the authority of the GDPML to conduct inspections related to compliance to AML/CFT requirements other than non-reporting requirements.

### Other Designated Non-Financial Businesses and Professions
- R.20 – PC
- Recommendations:
  - Enforcing the requirement requiring taxpayers, physical or legal commercial persons, not to engage in cash transactions where the amount is in excess of lek 300,000.
  - Fully implementing the recommendations of the public-private project-working group on the Reduction of Cash Transactions in Albania.
  - Requiring that all notarized transactions be conducted through a notary’s trust account.

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### 4. Legal Persons and Arrangements & Nonprofit Organizations

### Legal Persons – Access to Beneficial Ownership and Control Information
- R.33 – PC
- Recommendations:
  - Establish sanctions for the transitional regime-related obligations (commercial companies); increase the existing sanctions so that they are dissuasive (commercial companies); establish dissuasive sanctions for non compliance with the requirements to provide information (associations and NPOs).
  - Reform the system of registration of associations and NPOs, to ensure that beneficial ownership and control information is adequate, accurate and current.
  - Conduct a review of the information maintained by the Tirana District Court to ensure that the files contain all the information required by the law and that this information is accurate and up-to-date, especially for those associations/NPOs established prior to 2001.
  - Conduct a risk assessment concerning bearer shares and take appropriate measures to ensure that they are not misused for ML/FT (for example consider “dematerializing” bearer shares).

### Legal Arrangements – Access to Beneficial Ownership and Control Information
- R.34 – PC
- Not applicable (no further recommendations provided).

### Nonprofit Organizations
- SR.VIII – NC
- Recommendations:
  - Carry out a full risk assessment to establish what the TF risks are in the sector.
  - Establish, on the basis of the above review, whether the current measures in place for recording and accessing information relating to NPOs are proportionate to the TF risks they pose.
  - Improve the accuracy of the registration process for NPOs, including some form of verification of the information recorded and a sanctionable system for failing to update this information.
  - Develop a system for supervising or monitoring NPOs on the basis of the risk they present.

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### 5. National and International Cooperation

### National Cooperation and Coordination
- R.31 – LC
- Recommendations:
  - Conduct a review of the effectiveness of the AML/CFT system and conduct a national risk assessment to inform the future strategies on the investigation of financial crimes as well as provide guidance to obliged entities on the specific AML/CFT vulnerabilities in place in Albania.
  - Establish a forum between the GDPML and other designated AML/CFT supervisors to engage functional supervisors, coordinate supervisory activities, exchange inspection results, and ensure consistency in the application of AML/CFT obligations.
  - Include the GDPML and other supervisory bodies in the Committee to ensure that supervisory concerns are properly reflected in the national strategy.

### The Conventions and UN Special Resolutions
- R.35 – PC; SR.I – PC
- Recommendations:
  - Criminalize ML so that it is fully in line with the Vienna and Palermo Conventions.
  - Criminalize the FT so the offence is fully in line with FT Convention.
  - Address the shortcomings identified in relation to the implementation of UNSCRs 1267 and 1373.

### Mutual Legal Assistance
- R.36 – LC; R.37 – LC; R.38 – PC; SR.V – PC
- Recommendations:
  - Enact provisions that will permit a broader ability to execute of foreign requests to confiscate assets.
  - Review existing domestic legal provisions that Albania uses to implement obligations to provide assistance in identification, freezing, seizing and confiscation pursuant to various international instruments to which Albania is a party, determine their adequacy to meet all such obligations, and adopt provisions as necessary to meet fully such obligations.
  - Consider amending CPC Article 509 so that the diplomatic channel is no longer required in the case of MLA requests that are executed using this provision.
  - Undertake a review of possible barriers to more efficient provision of MLA assistance including the application of dual criminality principles and the requirement for use of diplomatic channels.
  - Develop explicit procedures for urgent outgoing requests that ensure that such requests are always identified and handled on an urgent basis.
  - Through training, improve understanding by the judiciary and law enforcement of the wider options available under international instruments with a view towards addressing the tendency of the courts to apply strict interpretations and standards.

### Extradition
- R.39 – LC; R.37 – LC; SR.V – PC
- Recommendations:
  - Amend the CPC (Article 491 para. 3) to delete the provision that appears to afford the Minister of Justice too wide discretion with respect to extradition.
  - Recognize, and as necessary perfect, competent authorities’ ability to extradite based upon the FT Convention (Article 11), Vienna (Article 6 para. 3) and Palermo (Article 16 para. 4 -5) Conventions. Take steps necessary to deposit instruments with the UN as necessary.
  - Remedy the deficiencies in the FT and predicate offence for ML to ensure that dual criminality does not limit extradition in such cases.
  - Decide whether there is an adequate legal basis to grant extradition in the absence of a treaty based upon reciprocity and in what circumstances that can occur given CC Article 11, and make this clear to prosecutors and other relevant officials.

### Other Forms of Cooperation
- R.40 – LC; SR.V – PC
- Recommendations:
  - Establish channels of cooperation with AML/CFT supervisors in the non-banking sectors.
  - Establish a clear authority for supervisory agencies to make inquiries or conduct investigations on behalf of foreign counterparts.
  - Establish safeguards to protect information received by foreign counterparts.

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### 6. Other Issues

### Resources & Statistics
- R.30 – PC; R.32 – PC
- Recommendations:
  - Establish controls to reduce the occurrence of corruption within Customs and the judiciary.
  - Conduct targeted training to the judiciary to increase their knowledge of ML, its inherent complexities and proceeds of crime in general.
  - Provide training for courts, prosecutors and judicial police that instruct regarding practices in Europe and elsewhere that will permit better use of existing provisions under more liberal standards.
  - Provide more training to customs officers in the area of AML/CFT, particularly with regard to the detection of cash couriers.
  - Implement AML/CFT training for individuals conducting AML/CFT supervision in the, FSA, the Ministry of Justice, the Chamber of Advocates and the SUGC.
  - Increase resources dedicated to AML/CFT within FSA, Customs and the SUGC.

*Source: _cr11188 - 1. Legal System and Related Institutional Measures*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2011/_cr11188.pdf_