TIRANA, May 5 – The U.S. embassy in Tirana has expressed its concern over the country’s business climate and that two major North American companies are leaving the country rather than expanding their presence in Albania.
David Muniz, the embassy’s deputy chief of mission, says there are concerns about the business climate mainly in the legal system but also unpredictable changes in regulations and rules.
“We certainly have some concerns about the business climate in Albania. Many of them deal with the legal system. You will not be surprised to hear that we have many complaints from investors about the enforceability of contracts and corruption in the court system,” he told daily Panorama in an interview.
Property rights and public tenders remain another concern for potential U.S. investors.
“We know this is a high-priority issue, but I can say that many potential investors look at property rights and want to be sure that they are able to own property with no legal complications or challenges. This is especially challenging for the tourism industry,” said Muniz.
“The public tendering process also generates many complaints from U.S. firms. We regularly advocate for fair and transparent tenders with guidelines that all bidders understand in advance,” he added.
American companies see potential investment in services and exports of consumer goods in Albania, which is considered a small and developing economy where the profit potential for American firms is more limited.
The approval of the justice reform is also critical to improving the investment environment.
The American Chamber of Commerce in Albania has been critical of the business climate in the country, including the high level of taxes and government legal initiatives without consulting the business community.
The chamber has voiced concern over a government legal initiative making the registration of businesses with the country’s public chambers of commerce compulsory by paying an annual membership fee, considering it a new tax which increases business costs and strengthens public-run chambers of commerce.
The concern about major North American companies leaving the country is related to Canada-based Bankers Petroleum and U.S.-based TransAtlantic Petroleum.
Last March, Canada-based Bankers Petroleum signed a preliminary deal with China’s Geo-Jade Petroleum Corporation to sell its major Albania assets and a newly acquired minor oil block in Hungary for a reported C$575 million (€392 mln). The surprise announcement came as the country’s biggest oil producer has recently been facing tough times after more than a decade of operations in Albania due to a sharp cut in international oil prices and tax and environmental disputes with the Albanian government.
U.S.-based TransAtlantic Petroleum also announced the sale of its loss-making Albanian unit to GBC Oil only one year after acquiring it.
Mark Crawford, the president of the American Chamber of Commerce, earlier noted the business environment and taxes are the key concerns for American and Canadian investors, some of whom are already leaving the country.
The oil companies are leaving Albania because of problems with state-run agencies and taxes and not due to the sharp decline in international oil prices, he told a local TV.
“They think there is no stability here. If they come and invest here they think they could have problems with taxes or the government tomorrow,” said Crawford.
