TIRANA, June 18- Three draft-laws that are still at the stage of discussion in parliamentary committees intend to close the paths of informality, money laundering, and terrorist financing. They come as a reflection of claims made by Moneyval (Council of Europe’s anti-money laundering assessment unit), which last year included Albania on the list of monitored sites for a year to see the measures to be taken, part of which are these specific adjustments.
The Minister of Finance and Economy Anila Denaj emphasized that the package of three draft laws “Business Registration,” “On Tax Procedures in the Republic of Albania,” and “On Measures against the financing of terrorism,” aims to fulfill the recommendations and address the issues identified in the Council of Europe Monetary Committee evaluation report on money laundering and terrorist financing issues.
“Penalties should not be an end in themselves, neither for business nor for the Ministry, but should be in the function of promoting honest business by respecting the procedures and legal deadlines for filing, registering and opening bank accounts, which will play an important role in reducing the informal economy and preventing money laundering and financing of terrorism,” said Denaj.
Two innovations that the change in the law “On Business Registration” will bring include firstly, a greater transparency in the case of partner changes in a business, which should be declared according to the deadlines set. Secondly, predicting penalties for those who do not apply this point, and the application for the change of partner and/or structure of the partnership of a legal person is made within 30 calendar days from the date of the factual situation of the change. Likewise, it is foreseen that the application for the initial registration of the commercial companies is jointly made by all the founders or by the administrator of the company, or by any person authorized by them. If the individuals act in violation of the law they are subject to fines up to 100 thousand lek (820 euros).
Changes in the draft law “On Tax Procedures” will first aim to reduce the informal economy and the use of physical money by businesses, where every business with turnover over 2 million lek (16.4 thousand euros) should have a bank account. Already registered entities should open the bank account no later than 90 days from the entry into force of this law and declare it in the tax administration, while newly registered entities should open a bank account no later than 20 calendar days after enrolling at the National Business Center/Tax Administration, and declaring it to the Tax Administration. All those who fail to meet the requirements set forth in the law are penalized with fines based on their category and revenue, starting from 50 thousand lek (410 euros) to 100 thousand lek. If the subject does not open a bank account for the transactions even after the fine, then it will be penalized by double the first fine.
“On the prevention of money laundering and the financing of terrorism” law aims to protect the financial system and the economy as a whole from the threats of money laundering, terrorist financing, strengthening the integrity of the preventive system in the country and contributing to peace and security. Changes include firstly to provide an explanation of a set of terms related to correspondent services from banks and other financial institutions. Secondly, politically exposed observers will be extended for a period of 10 years after leaving office. This category also includes individuals who have or had important functions in a government and/or a foreign country, such as: head of state and/or government, senior politicians, senior government officials, courts or the army, senior executives of state companies, important political party officials.
This law also includes for the first time virtual tools marketed in digital form such as bitcoin, and also brings the concept of simplified attenuation to customers, which can be performed in cases where low risk of money laundering is identified and/or financing of terrorism, based on the risk assessments of the authorities charged by law, as well as risk assessments and management procedures established by the entities themselves.
Albania has entered the list of countries that will be subject to a follow-up or enhanced monitoring by Moneyval due to the weaknesses that have been identified in the latest 2018 report on measures to prevent money laundering and the fight against terrorism. “Territories or states may be placed under enhanced prosecution if identified serious compliance with standards or where countries or territories have not taken satisfactory measures to go beyond the 5-year regular assessment system after the approval of the report.” Albania has a year to address the problems, or it risks falling back on the gray list of countries with high risk of money laundering.
The graduated process is currently as follows:
- Step 1: MONEYVAL inviting the Secretary General of the Council of Europe to send a letter to the relevant Minister(s) of the State or territory concerned, drawing his/her/their attention to non-compliance with the reference documents and the necessary corrective measures to be taken;
- Step 2: Arranging a high-level mission to the non-complying State or territory to meet relevant Ministers and senior officials to reinforce this message;
- Step 3: In the context of the application of the 2012 FATF Recommendation 19 by MONEYVAL States and territories, issuing a formal public statement to the effect that a State or territory insufficiently complied with the reference documents and inviting the members of the global AML/CFT network to take into account the risks posed by the non-complying State or territory.
- Step 4: Referring the matter for possible consideration under the FATF’s International Co-operation Review Group (ICRG) process, if this meets the nomination criteria set out under the ICRG procedures
