Compliance Guidelines:

Regulatory Bodies in Albania

Financial Intelligence Unit of Albania (FIU-Albania)

The Financial Intelligence Unit of Albania (FIU-Albania) is responsible for supervising Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CTF) activities in the country. It serves as the central authority for receiving, analyzing, and disseminating reports related to suspicious transactions, money laundering, and terrorist financing.

Regulatory Compliance Framework

Law No. 9917 – Prevention of Money Laundering and Financing of Terrorism

Customer Due Diligence (CDD) Requirements

Entities operating in Albania must adhere to specific customer due diligence requirements:

• Transaction Thresholds: Transactions equal to or exceeding 100,000 Lek for specific entities or those providing transfer services, foreign exchange, or gaming services. For transactions equal to or more than 1,000,000 Lek conducted in one go or through linked transactions, identification is required once the threshold is met.
• Validity of Previous Data: Doubts about the accuracy of previously acquired identification data must be addressed.
• Suspicions of Illicit Activities: Suspicion of money laundering or terrorist financing, regardless of transaction values, requires attention.
• Due Diligence Procedures: Entities should follow these measures during the due diligence process, including rigorous identification and verification of customer identities, understanding the aim of the business relationship, continuous monitoring of transactions, and updating customer records. Strict verification protocols must be in place for sporadic customers or those entering a relationship prior to verification completion. Non-compliance with due diligence standards results in reporting suspicious activities and ceasing to maintain anonymous accounts.

Article 4/2: Simplified Due Diligence Measures

• Simplified diligence processes can be applied in low-risk cases, based on risk assessments by relevant authorities and internal processes.
• Monitoring Requirement: Ongoing monitoring of client relationships is necessary even when simplified diligence is applied to detect unusual or suspicious transactions.
• Transition to Full Due Diligence: If the risk is no longer low during ongoing monitoring, entities must shift to the complete measures detailed in article 4/1.
• Exclusions from Simplified Diligence: This approach is not allowed in cases of suspicions of money laundering, terrorist financing, or other criminal activities. Prohibition by the responsible authority is possible in certain customer categories.

Article 5: Documentation for Customer Identification

• For Natural Persons Identification: Required data includes name, date/place of birth, residences, employment, identification document details, and personal numbers.
• Natural Persons (For-Profit Activities) Identification: This entails name, registration details with the National Registration Centre, documents showing the scope of activity, Taxpayer Identification Number (TIN), and address.
• Legal Persons (For-Profit Activities) Identification: Necessary data includes name, registration details, activity certification, TIN, and addresses.
• Legal Persons (Non-Profit Activities) Identification: Entities must capture name, registration details, activity nature, addresses, and legal representatives.
• Legal or Proxy Representatives of a Customer: Data includes name, date/place of birth, citizenship, residences, employment, identification details, and representation document copy.
• Legal Arrangements: Identification of the founder, beneficiary, trustee, or the person in control, based on whether they are a natural person or legal entity.
• Authenticity of Documents: Accept only genuine documents, notarized copies, or valid electronic documents from customers, stamped with the entity’s seal and retained within their validity period.
• Additional Documents: Entities can request additional identification documents if needed to confirm the provided data.

Article 287 of the Albanian Criminal Code

Article 287 of the Albanian Criminal Code pertains to laundering proceeds of a criminal offense, involving transferring property, concealing its true nature, conducting financial transactions to avoid reporting, and advising or inciting public calls for such offenses.

Regulation on Customer Due Diligence (CDD) (Article 7)

This regulation provides guidelines on conducting customer due diligence procedures, including the identification and verification of customer identity, as well as requirements for collecting and verifying customer information.

Regulation on Reporting and Record Keeping (Article 18)

This regulation prescribes procedures and requirements for reporting suspicious transactions and activities to the FIU-Albania, along with the obligations of financial institutions and other reporting entities to maintain records of transactions and customer information.

Regulation on Politically Exposed Persons (PEPs) (Article 12)

This regulation defines criteria for identifying and monitoring politically exposed persons (PEPs) and outlines the enhanced due diligence measures required when dealing with PEPs.

Regulation on Sanctions and Penalties (Article 23)

This regulation defines the sanctions and penalties for entities and individuals found in violation of AML and CTF regulations under the law. It outlines administrative, civil, and criminal penalties that may apply.

Recommendations and Clauses under 4th Enhanced Follow-up Report

Albania approved the Mutual Evaluation Report (MER) in July 2018, which examined the country’s progress in resolving technical compliance (TC) issues. Re-ratings were granted where sufficient development had been accomplished. Overall, Albania addressed most TC shortcomings by the end of the third year following the MER’s adoption.

Customer Due Diligence (CDD) and Record-Keeping Obligations under Criterion 25.7

Failure to follow AML/CFT Law’s CDD and record-keeping obligations can result in penalties. Proportional and deterrent consequences apply for trust-related responsibilities under Art. 3/1.

Article 3

The AML/CFT legislation stipulates the obligations of trustees, including those managing third parties’ assets, providing services to customers, and acting as trustees or equivalent functions for other legal arrangements, including individuals engaged in asset administration, foundation, registration, administration, and functioning of legal arrangements.

Article 3/1

AML/CFT Law mandates trustees to maintain crucial information about founders, beneficiaries, trustees, de-facto control persons, regulated agents, and service providers. Trustees are required to disclose their status when establishing a business relationship or conducting occasional transactions.

Art. 4/1

Art. 4/1 discusses the obligations of trustees in Albania, particularly in the context of foreign trusts under the AML/CFT Law. Trustees must identify the Beneficial Owner of these trusts and take appropriate steps to verify their identity using reliable sources.

Art. 5, AML/CFT Law

When dealing with legal arrangement customers, known as Reporting Entities (REs), there is an obligation to identify key individuals such as the founder, beneficiary, trustee, or any person who exercises actual control over them. This identification process also encompasses determining the residence of the trustee, ensuring transparency and compliance with AML and CTF measures.

References

1. Law No.9917, May 19, 2008 “On The Prevention Of Money Laundering And Financing Of Terrorism”
2. Albanian Financial Intelligence Unit