The United States Department of State published a report on Money Laundering in 2020, where it concluded that the Albanian government “made no significant progress toward thwarting money laundering and financial crimes in 2020. Albania remains vulnerable to money laundering due to corruption, organized crime networks, and weak legal and government institutions.” The report goes on by saying that “The country has a large cash economy and informal sector, with significant money inflows from abroad in the form of remittances and diverse investments. Major proceeds-generating crimes in Albania include drug trafficking, tax evasion, and smuggling." /Tirana Times,
After the report published this week by U.S DOS, in which it was stated that Albania has not done progress in its money laundering fight, other investigations from the Albanian media further explains the depth of the money-laundering system in Albania. According to a long article published by BIRN and written by Klodiana Lala, Albania “has taken steps backwards in the fight against money laundering linked to organized crime and corruption, which distort the real estate market and the country’s sustainable economic development.” As reported in the article, the General Directorate for the Prevention of Money Laundering cites drug trafficking as the “largest source of ‘dirty money’ identified in the Albanian economy, while their laundering methods range from the simplest to the most complex.”
Some of the most common methods to do money laundering in Albania include the use of other persons without clear links to criminal activity to do purchases and investments in the real estate sector, or the use of bank loans to justify money laundering investments. “For the economic experts, ‘dirty’ money circulates in almost all the arteries of the fragile Albanian economy and even finances political corruption,” continues the article of BIRN, which then does a resume of the cases of money laundering that have been analyzed and properly addressed. The Directorate for the Prevention of Money Laundering, “has referred 1,426 suspected cases to the Police during the period 2015-2019, but only 429 cases or 30% of the total were subsequently sent to the Prosecutor’s Office. Together with referrals to the Prosecutor’s Office, the financial intelligence institution counts 1,855 cases reported in 5 years.” From the above cases, 28% of the cases are related to the criminal offense of trafficking or production of narcotics.
Another problem is the long process that the cases take from the Prosecution to the Court. According to BIRN “the number of proceedings registered by the Prosecutions for laundering of criminal products was halved from 269 cases in 2018 to 131 cases in 2020. The number of convicts from the courts has also shrunk from year to year and reached its lowest level in 2020 with only 3 convicted of money laundering.”
Another problem remains the sequestrated and confiscated assets which remains in stock and are administered by the Agency for the Administration of Sequestered and Confiscated Assets. While the Agency at the end of 2020 had under administration 466 assets for a value estimated around 50 million Euros, only 15% of the assets were confiscated by court decision, while for the rest “the legal proceedings continue.” The article of BIRN quotes the head of the Agency, Artur Kala, who considers the prolonged court processes as a problem, since “there are properties that are difficult to administer or that do not bring income, but require expenses,” such as the costs of maintenance and insurance, taxes and other spending. Although the assets seized from organized crime are estimated at tens of millions of Euros, the Agency has poured into the state budged around 7 million Euros. The Agency has opened also a special fund of 93 million ALL in 2019 for funding the institutions that fight organized crime and organizations that deals with the victims of such crimes. The main share of the stock sequestrated is held by real estate, and the Agency faces difficulties in selling them.
Between the institutions and researchers, there is a consensus that the construction sector is “the largest money-laundering machine in Albania.” BIRN quotes Zef Preçi, the executive director of the Albanian Center for Economic Research, who said regarding this issue: “Look at the real estate market: since 2015 there has been an increase of 40% in prices, even though sales are dropping […] See the construction permits for skyscrapers in Tirana,” said Preçi, adding that “they have nothing to do with urban development, they do not create jobs, but they corrupt the highest levels of state decision-making.”
The article brings to the attention also the new wave of arrests made by the Italian Antimafia in mid-January, which revealed that a clan of the mafia organization “Ndragheta”, was trying to enter the construction market in Tirana for money laundering, and were “looking for political connections and guarantees.” One of the most infamous wiretapped conversations that was made public, include a discussion between two of the detainees who had “three construction licenses in hand worth 180 million Euros, but who had only 10 million available […]”. During the conversation, the detainees say that while the real cost of the construction is 510 euros per square meter, “they are sold 3,800-4,000 euros per square meter.”