From: Exit Staff
EU Delegation: Albania’s Fiscal Amnesty Draft Law Could Be Used for Money Laundering

The EU Delegation has suggested the Albanian Government reconsider the adoption of their draft law on fiscal amnesty or address several issues if they decide to move ahead with it.

The government has drafted a fiscal amnesty law which will allow the declaration and deposit of assets legally in banks, without fiscal obligations and without criminal liability.

In a document seen by Exit News, the EU Delegation points at nine most important issues found during their assessment of the draft law on “Fiscal and Penal Amnesty for Subjects of Voluntary Declaration of Assets”.

Repatriation of assets should occur via international bank transfers rather than implying that cash could be moved physically. If earnings are abroad, their transfer above a certain limit needs to be declared at the customs office at the border. There is a risk that the draft law would create a “window of opportunity” for fiscal evasion and laundering of foreign money.  

The draft law risks ensure undue impunity to subjects holding illicit wealth.  

No adequate consultation with stakeholders took place before the draft was submitted to parliament. The government’s urgency does not seem to be justified. The draft lacks a necessary assessment of the expected assets to be formalised and expected revenues to be generated.

The scope of the amnesty goes beyond that of similar legislation implemented in other countries. The government should target only tax evasion committed by persons liable to be in Albania.

Such tax amnesty would be very difficult to implement as the definition of assets includes elements such as immovable property in Albania and outside of Albania, cash held in the national or a foreign currency, digital currency, valuable items of gold or precious stones. It is difficult to guarantee that 1) those do not proceed from criminal activities; 2) are declared by their actual (beneficial) owner and; 3) result from income which does not belong to a tax period that is either still subject to tax declaration or subject to an already notified tax audit.  

 Albania first must build a professional fiscal administration, which would block opportunities for money laundering and corruption.  

 In order to be credible and avoid the unfair competition from those who have maintained their assets outside the system until now, the fiscal amnesty should be combined with increased enforcement against non-compliant tax-payers.

 It is unclear for Banks and Moneyval how the Anti Money Laundering Law will be implemented in the context of this amnesty.

 The functioning of the Special Unit that will implement the law is unclear.

The EU Delegation did not reply to Exit News’ inquiry whether the document was prepared by them, when did the Albanian Government receive it, and whether changes suggested will be adopted.

The government’s initiative was also criticized by the IMF.

For more on this issue, you can read here, here, and here.