A Council of Europe report released yesterday has called on Albania to significantly step up its efforts to combat money laundering.
The report entitled “Anti Money Laundering and Counter Terrorist Financing Measures- Albania” was designed to analyse the AML/CFT measures that are in place within the country and to consider their effectiveness.
Whilst the report stated that the country has a “reasonably good understanding of it ML risks in the formal economy”, it stated that Albania failed in terms of the informal economy, organised crime, and corruption. Whilst noting that a national coordination mechanism for policy-making to address risks was in place, they were not being used, therefore making the mechanisms “not fully effective”.
One of the key concerns from the Council of Europe is the money laundering risk that corruption poses;
“Often linked to OC activities, it generates substantial amounts of criminal proceeds and seriously undermines the effective functioning of the criminal justice system. The authorities are aware of the risks from corruption but the law enforcement focus to target corruption-related ML has been very limited. “
The fact that investigations rarely, if ever, result in indictments, the report picked up on the fact that the number of investigations is decreasing and that significant events are usually suspended or dismissed by the prosecution.
In terms of the confiscation of criminal proceeds, whilst Albania has a robust legal framework in place for these matters, it seems that the number and value of seized assets does not commensurate with the level of criminality in the country. In practice, a non-conviction confiscation regime based on the Anti-Mafia Law is more widely used rather than criminal confiscation regime, which is mandatory and applies to all criminal offences.
The perception and understanding of TF related risks do not seem to adequately address the characteristics of potential TF activities in the country and the region. In the assessed period, until recently, religious radicalism and cases of recruitment of foreign terrorist fighters (FTFs) have increased in Albania as noted also in the National Risk Assessment (NRA), which contains limited analysis of TF risks and assesses TF through the terrorism threat as “low” risk. There is no systematic approach to identify and investigate financing aspects of terrorism-related offences. There have been convictions in foreign fighting cases linked to the Syrian conflict since 2014. However, there have been no TF prosecutions or convictions in Albania.
According to the report, the main risks of TF and ML come from criminal proceeds from the trafficking of narcotics, crime in customs, tax evasion, and corruption. Organised crime groups with Albanian member are active in many countries across Europe with a focus on drug trafficking, human trafficking, and rimes against property. The proceeds of such crimes are circulated and invested without checks in several forms in Albania, particularly through investment in real estate and commercial companies. This, combined with the large size of the informal economy, and the widespread use of cash as opposed to cards results in a significant ML vulnerability.