State Department report 'blackens' Albania: Money laundering linked to drug and human trafficking

The US Department of State has published  the 2024  report  on the fight against narcotics and money laundering in Albania.

The report states that Albania remains vulnerable to money laundering due to corruption, organized crime and gaps in the legal framework.

Drug trafficking and organized crime activities are major sources of laundered funds, the report further states. 

"Albania remains vulnerable to money laundering due to corruption, organized crime and gaps in
its legal and regulatory framework for AML/CFT and obstacles to inter-institutional communications. Albania's economy is highly dependent on cash.

"Remittances and investments from abroad, often in cash, can obscure the sources of funding. Narcotics trafficking and organized crime activities are major sources of funds being laundered. Albanian criminal organizations are directly linked to counterparts in Europe and South America ," the DASH report states, among other things. 

Money Laundering Vulnerabilities and Methodologies
Most money laundering in Albania is related to drug and human trafficking. Albania’s largely cash-based economy and weak customs enforcement facilitate a black market for smuggled
goods. Criminals launder proceeds through real estate purchases, construction projects,
virtual assets, and other business development projects.

Parliament's proposed law regarding online gaming raised concerns that weak oversight could allow organized crime to infiltrate the activity.

Albanian authorities are effective in initial asset seizures, but face challenges meeting the evidentiary requirements to finalize the action. Albanian law requires public officials to declare assets annually and to declare preferential financial treatment and beneficial ownership of assets. Provisions prohibit officials from holding significant amounts of money outside the banking system. The law requires companies to register beneficial owners and bank accounts. It requires financial entities to electronically record customer accounts and safe deposit boxes and report them in real time to tax authorities.

This gives authorities access to conduct data analysis, investigate financial crimes, and trace illicit assets.

Most money laundering in Albania is related to drug and human trafficking, government contract fraud, tax evasion, and smuggling. Albania’s largely cash-based economy, weak border controls, and weak customs enforcement facilitate a black market for smuggled goods. Criminals launder proceeds through real estate purchases, construction projects, virtual assets, and other business development projects.

Legal, policy and regulatory shortcomings
Ongoing reforms include vetting judges and prosecutors for unexplained assets. Of the 702 judges and prosecutors reviewed since 2016, 41 percent have been approved to continue in office, with 59 percent removed from office through dismissal, resignation or retirement.

Despite some progress in identifying risks and strengthening supervision, Albania continues to face challenges related to proliferation sanctions, virtual currency, trusts, and non-bank regulation. Courts often refuse to convict for money laundering in the absence of a conviction for a predicate offense.

Albania needs to increase money laundering investigations and prosecutions to combat corruption, organized crime, and drug trafficking; improve inter-institutional cooperation; and fully integrate SPAK into anti-money laundering efforts. Despite numerous money laundering investigations, prosecutions remain low. Albania needs to implement existing laws, follow regulatory guidelines, conduct effective supervision, improve law enforcement cooperation, and expand the capacity of police and prosecutors to focus on corruption, money laundering, and economic crimes.