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Albania

Last updated: 23/11/2009

CENTRAL AUTHORITY FOR REPORTING

The General Directorate for the Prevention of Money Laundering (Drejtoria e Bashkerendimit te Luftes Kunder Pastrimit te Parave, DBLKPP) operates as the Albanian National Financial Intelligence Unit (FIU).

It is the national center for collecting, analysing and distributing information relating to potential money laundering activities.

OTHER ANTI-MONEY LAUNDERING REGULATOR(S)

ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

Under article 3 of Law on the Prevention of Money Laundering and Terrorism Financing (OPMLTF, see below), lawyers have been specifically included as ‘subjects’ required to adhere to AML.

This also includes notaries, as well as any other legal representatives.

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Visiting lawyers are obliged under the AML to report a suspicious transaction if the transaction, or the proposed transaction, is performed within the territory of Albania.

The threshold of a “suspicious transaction” is defined below in the section on suspicious transactions.

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

Instruction no. 11, published on 05.02.2009, “On modalities of reporting and procedures of non-financial independent professions” provides guidance for lawyers, notaries, authorized auditors etc. regarding the reporting process.

This guideline has been approved by the Ministry of Finance under the OPMLTF.

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

The National Chamber of Advocates and the Ministry of Justice supervise AML compliance over lawyers and other legal professionals. 

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

Under Article 4 OPMLTF, lawyers are required to identify and verify the identity of clients and any beneficial owners through original documents in all the following circumstances:

  1. Before establishing a business relationship;

  2. Whenever the client requests the transfer of:

    1. At least 200,000 Lek or equivalent for buying or selling of gambling coins or electronic equivalent;

    2. At least 1,500,000 Lek or equivalent as a lump sum or through various linked transactions.

      If the amount of the transaction is unknown at the time of execution, identification
      must be made as soon as the amount known exceeds the limit.

  3. When there are doubts about the identification data previously collected;

  4. In all cases when there is sufficient doubt for money laundering or terrorism financing.

Under article 16 OPMLTF, lawyers are also required to keep and store documentation about the client and any beneficial owner for 5 years, or longer if the Reporting Authority so requests, from the date of termination of the business relationship or from the date of the execution of the transaction.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

A risk-based approach has now been introduced with the enactment of OPMLTF in 2008.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

Enhanced due diligence requires:

  1. Physical presence of clients and their representatives before establishing a business relationship with the client or executing transactions on their behalf (article 7 OPMLTF);

  2. In relation to Politically Exposed Persons (as listed in article 28 OPMLTF):

    1. Obtaining approval from higher instances of administration and direction before establishing a business relationship;

    2. Obtaining a declaration on the source of the client’s wealth that belongs to the transaction;

    3. Performing an increased and continuous monitoring of the business relationship (article 8(1) OPMLTF).

  3. In relation to non-profit organisations:

    1. Gathering sufficient information about them, in order to completely; understand the sources of their finances, the nature of the activity and their method of administration and management;

    2. Verifying the client’s reputation by using public information or other means;

    3. Obtaining approval from higher instances of administration and direction before establishing a business relationship with them;

    4. Performing extended monitoring of the business relationship (Article 8(3) OPMLTF);

  4. Undertaking enhanced measures for all complex transaction and unusual transactions that do not have a clear economic or legal purpose (article 9(3) OPMLTF);

  5. Due diligence to be applied to business relationships and transactions with non resident clients (article 9(4) OPMLTF);

  6. Due diligence to be applied to business relationships and transactions with clients who reside or act in countries that do not apply or partly apply the relevant international standards of AML (article 9 (5) OPMLTF);

  7. Due diligence to be applied to business relationships and transactions with trusts and joint stock companies (article 9 6)) Or that are carried out by clients in name of third parties (article 9(7)).

Lawyers need to adopt policies or take appropriate measures according to the circumstances (article 9 (8)).

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES? 

Article 13 OPMLTF sets forth that the reporting to the Competent Authority is not required for:

  • Interbank transactions, excepts the ones performed on behalf of their customers;

  • Transactions between AML covered subjects and the Bank of Albania;

  • Transactions performed on behalf of public institutions and entities. 

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Lawyers are not permitted to rely on third party due diligence as they are obliged to identify their clients personally (Article 5 OPMLTF).

Furthermore, they are required by Article 7 OPMLTF to have the physical presence of clients and their representatives before establishing a business relationship with the client or executing transactions on their behalf.

Therefore, a third party due diligence would not be considered in compliance with the abovementioned law provisions and in general with the purpose of OPMLTF. 

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

Under article 12 OPMLTF, lawyers are required to make an immediate report:

  • Whenever they suspect that the property is proceed of a criminal offence or is intended to be used for the financing of terrorism;

  • When the lawyer suspects that a proposed transaction may be related to money laundering or terrorism financing. The lawyer should then request instructions as to whether it should execute the transaction or not.

Under article 12 OPMLTF, lawyers are also obliged to make a report within the time limits set by the law for:

  • All cash transactions equal or greater than 1,500,000 Lek or equivalent;

  • All non-cash transactions equal or greater than 6,000,000 Lek or its equivalent executed as a single transaction or as a series of linked transactions. 

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS? 

Article 14 OPMLTF states that obligated subjects, including lawyers, are able to breach professional secrecy rules in order to carry out their AML responsibilities.

However, article 25(2) OPMLTF states that lawyers are exempted from reporting when the data is obtained by the person they are defending or their representative, or from documents provided by the client in the course of the defending function. 

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Article 14 OPMLTF provides an indemnity against civil or criminal liability for lawyers who have followed their AML duties by filing a report, if they have acted in good faith.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

When doubts arise that the transaction intended to be performed by the client would involve money laundering or financing of terrorism, the lawyer is obliged to report it immediately to the competent authorities and request instructions whether to proceed or not with such transaction.

Under article 12 of the OPMLTF, the competent authority is obliged to respond with instructions within 48 hours from the notification. 

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

There is a tipping-off prohibition under article 15 OPMLTF. Lawyers are not allowed to disclose any information regarding the reported transaction nor are they permitted to notify any person who is involved in that transaction.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

Under Article 11 OPMLTF, lawyers are not permitted to open or maintain business relationships with anonymous clients or clients using fictitious names. Accounts cannot be opened which only contain account numbers for identification.

Additionally, lawyers are not allowed to establish or carry out business relationships if there are unable to fulfil their enhanced due diligence obligations (Article 9(9) OPMLTF).

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

Under Article 6 OPMLTF, lawyers are required to undertake continuous monitoring of business relationships with their clients and periodically update their clients’ data.

If they are suspicions regarding changes of a client’s situation, records need to be updated immediately.  

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

Failure to comply with AML obligations can lead to fines listed in article 27 OPMLTF. 

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

To the best of our knowledge, lawyers have not been implicated in any money laundering complaint, arrest or prosecution.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

The Moneyval Report (24th September 2009) states that improvements have been made in relation to Recommendations 1, 5, 10 and 13 as well as Special Recommendations II and IV.

In relation to Recommendation 5, Albania has provided in their AML law, Article 3 letter k that ‘attorneys, notaries, other independent legal professions and accountants are obliged entities when they prepare or carry out transactions for their clients in the following activities:

  1. Transfer of immovable properties, administration of money, securities and other assets;

  2. Administration of bank accounts;

  3. Administration of capital shares to be used for the foundation, operation or administration of commercial companies;

  4. Foundation, functioning or administration of legal entities;

  5. Legal agreements, securities or capital shares transactions and the transfer of commercial activities’.

Recommendation 10: DNFBPs are subject to the same reporting methods/record keeping requirements as set out in the AML/CFT Law.

In relation to recommendation 13 on suspicious transaction reporting where DNFBPs are concerned; it has been said that the General Directorate for the Prevention of Money Laundering have maintained an open dialogue regarding AML law. They have also organised training sessions for lawyers and other DNFBPs that have covered various trends and typologies relating to money laundering and the financing of terrorism. Further training on voluntary reporting has also been provided by the GDPML.

The Council of Ministers and the Minister of Finance have issued detailed rules regarding reporting methods, procedures as well as forms to ensure compliance with the Law for licensing and supervisory authorities etc. Albania’s AML law, since the first report, is broadly in line with recommendation 16’s reporting requirements for DNFBPs.

The notion of lawyers reporting through their organisation has currently been rejected because of the lack of compliance regarding voluntary reporting in some professions and the early stage of the reporting obligation in Albania. ‘Lawyers, notaries, accountants, real estate agents as well as casinos and games of chance are covered by the AML/CFT Law and therefore they are subject to all the provisions for threshold as well as suspicious activity reporting’.

No particular changes have been made since the last evaluation in relation to Special Recommendation IV (suspicious transaction reporting) regarding DNFBPs.  


Information supplied by:

Renata Leka
Senior Manager

Boga & Associates
Deshmoret e 4 Shkurtit str.
P.O. Box 8264
Tirana
Albania

General Email: boga@bogalaw.com  
Official Website: www.bogalaw.com  


Sources:

US department of State
MONEYVAL