FATF Status

Albania is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 27 October 2023

The FATF welcomes Albania’s significant progress in improving its AML/CFT regime. Albania strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2020 related to (1) conducting additional in-depth analysis to understand its ML and other risks sufficiently, and enhancing institutional coordination and cooperation; formalising the economy and reducing the ML/TF risks posed by the widespread use of cash; and registering property ownership information across nearly the entire country (2) improving the timely handling of mutual legal assistance requests; (3) establishing effective mechanisms to detect and prevent criminal infiltration of the economy, including by strengthening competent authorities’ powers to take necessary action; (4) ensuring that accurate and up to date basic and beneficial ownership information is available on a timely basis; (5) increasing the number and improving the sophistication of prosecutions and confiscations for ML, especially in cases involving foreign predicate offenses or third-party ML; (6) improving the implementation of targeted financial sanctions, in particular through enhanced supervisory action and targeted, proactive outreach. Albania is therefore no longer subject to the FATF’s increased monitoring process.

The FATF welcomes Albania’s commitment to respect the FATF principles in case Albania introduces a VTC programme in the future.

Albania should continue to work with MONEYVAL to sustain its improvements in its AML/CFT system.

Compliance with FATF Recommendations

The latest Follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Albania was undertaken in 2023. According to that Evaluation, Albania was deemed Compliant for 6 and Largely Compliant for 31 of the FATF 40 Recommendations. It remains rated Highly Effective for 0 and Substantially Effective for 2 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Albania has established a legal framework to combat corruption, yet it remains a significant barrier to economic growth and foreign investment, particularly affecting the judiciary, public procurements, and the construction sector. Despite recent judicial reforms supported by the U.S. and EU, which have led to the dismissal of numerous officials, enforcement of anti-corruption measures is still weak, and the culture of impunity persists. Continued efforts in judicial reform and cooperation among government agencies are essential for improving the investment climate and advancing Albania's EU candidacy.

Albania is classified as an upper middle-income country with a GDP of USD 24 billion and a population of approximately 2.8 million. The economy has shown resilience, recovering from a contraction during the COVID-19 pandemic with growth rates of 8.9% in 2021 and 4.9% in 2022, although growth is projected to slow to 3.4% in 2023. Despite challenges such as corruption and labor shortages, Albania has attracted significant foreign direct investment, particularly in sectors like real estate and tourism.

Albania's investment climate is characterized by a liberal foreign investment regime that allows for 100 percent foreign ownership in most sectors, although significant challenges remain due to corruption, a large informal economy, and labor shortages. The Law on Strategic Investments, aimed at promoting both domestic and foreign investments, has not attracted substantial foreign capital, with most approved projects focusing on tourism and dominated by domestic investors. Despite these hurdles, Albania has seen an increase in foreign direct investment, particularly in real estate and extractive industries, indicating untapped potential across various sectors.