TIRANA, Jan. 24 – Albanian authorities have drafted legal changes to tighten measures and penalties in countering money laundering and terrorism financing following a critical report by a Council of Europe monitoring body.
The main proposed legal changes concern the obligation for the declaration of assets by senior government, public administration and judiciary officials who will be considered ‘politically exposed people’ for up to ten years after leaving state office and even more if deemed necessary.
Under current legislation, senior officials have to declare their assets with the High Inspectorate on Declaration and Audit of Assets and Conflicts of Interest for two to four years after leaving office depending on the duty they held.
While judges and prosecutors are already undergoing a tight vetting process on their financial assets as part of a judiciary reform that has already ousted half of examined senior judges and prosecutors for failing to justify their wealth, an opposition-proposed similar vetting on politicians has not found backing among the ruling majority. Last December, a draft opinion by the Venice Commission, a Council of Europe advisory body, showed main opposition Democratic Party-proposed constitutional amendments fail to provide sufficient guidance and safeguards and may lead to abuse of power and severe implications for the rights of those subject to it, but acknowledged the legitimate aim to remove offenders and their influence from governance and political life.
Proposed legal changes also include digital currency transactions and providers of such services on the watch list.
Bank and non-bank operators, currency exchange shops and money transfer agencies will also be required to preserve documentation on transactions for a 10-year period, compared to a current 5-year obligation.
As a rule, banks and other financial institutions have to report on transactions of more than 1 million lek (€8,000) while the Property Registration Office reports on contracts worth more than 6 million lek (€48,000).
New provisions also slightly increase the obligation to declare with customs authorities assets worth starting €10,000 or its equivalent in other currencies. The current provision is for carrying cash or non-cash assets worth more than 1 million lek (around €8,000).
In addition to initiating legal action for failure to declare or false declarations, proposed legal changes also envisage customs authorities can impose fines starting from 10 percent to 50 percent for undeclared or unjustified amounts of more than €10,000 when crossing the Albanian border.
Drafted by the financial intelligence unit, the legal changes have been submitted to the government for approval and are expected to turn into law in the next few months.
The legal changes come few months after a report by Moneyval, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, a monitoring body of the Council of Europe, placed Albania into enhanced follow-up, a rating assigned to countries with serious incompliance with standards and which have taken no satisfactory action to exit regular follow-up within five years from the adoption of the last report.
Criminal proceeds deriving from trafficking of narcotics, crimes in the customs and tax areas such as smuggling and tax evasion as well as corruption are the main threats of money laundering in Albania, according to the Moneyval report.
Being placed under enhanced follow-up means Albania will have to report back more frequently with Moneyval and that compliance enhancing procedures ensuring that countries take steps to meet the international standards and follow Moneyval recommendations within an appropriate time frame can be applied.
Back in 2015, Moneyval decided to remove Albania from the regular follow-up process following adequate progress since 2010.
The new enhanced follow-up rating comes following rising concerns of drug and other criminal proceeds being laundered into the country, considered a major cannabis producer and a key transit route for cocaine and heroin for European markets.
The main opposition Democratic Party and some economy experts have linked Euro’s free fall against the national currency during the past year to alleged illegal euro inflows resulting from the peak 2016 cannabis cultivation and ongoing drug trafficking in the country.
Albanian law enforcement authorities seized about €9 million in suspected money laundering transfers and bank accounts in 2017 with the majority of identified cases originating from drug trafficking and cultivation, according to an annual report by the country’s Financial Intelligence Unit.
Authorities identified family members of politically exposed individuals, people with criminal records and young men in their twenties involved in money laundering schemes in some 1,384 suspicious activity reports they received from financial institutions, mostly commercial banks, notaries public and money transfer agencies.
