2009 INCSR: Country Reports - Afghanistan through Comoros
Bureau of International Narcotics and Law Enforcement Affairs
Albania
I. Summary
Albania is a transit country for narcotics traffickers moving primarily Afghan heroin from Central Asia to destinations around Western Europe. In 2008, seizures of heroin and marijuana declined. Cannabis continues to be produced in Albania for markets in Europe, but cultivation has largely moved into the more remote mountain regions of Albania that the government has difficulty accessing. The Government of Albania (GOA), in response to international pressure and with international assistance, is confronting criminal elements more aggressively but continues to be hampered by a lack of resources and endemic corruption. Albania is a party to the 1988 UN Drug Convention.
II. Status of Country
Albania’s ports on the Adriatic and porous land borders, together with poorly financed, poorly managed and under-equipped police, border security and customs controls, make it an attractive stop on the smuggling route for traffickers moving shipments into Western Europe. In addition, marijuana is produced domestically for markets in Europe, the largest being Italy and Greece.
III. Country Actions against Drugs in 2008
Policy Initiatives. In 2005, the GOA outlawed the circulation of speedboats and several other varieties of water vessels on all of Albania’s territorial coastal waters for a period of three years, which appears to have slowed the movement of drugs by smaller waterborne vessels, particularly to Italy. Albania works with its neighbors bilaterally and in regional initiatives to combat organized crime and trafficking, and it is a participant in the Stability Pact and the Southeastern Europe Cooperative Initiative (SECI). In May of 2008, Albania enacted a new law to fight against money laundering. Albania signed the Stabilization and Association Agreement with the European Commission in June 2006, and it has since been ratified by twelve European Union member countries. The EU noted in its ratification that Albania “...is still facing serious challenges in tackling corruption and organized crime, achieving full implementation of adopted legislation, improving public administration and fighting trafficking in human beings and drugs.”
Law Enforcement Efforts and Accomplishments. Albanian police continued to make progress in their counternarcotics operations through the increased use of technology, improved police techniques, and an increase in overall capacity. Drug seizure numbers from both Italy and Greece show a marked decline in drugs seized coming from Albania to those countries, which demonstrates the success of Albania’s efforts. Albanian authorities organized major police operations and drug seizure operations throughout the country, particularly in Fier, Tirana, and the ports of Vlora and Durres. International cooperation also increased, including joint operations with Italian, Macedonian, Greek and Turkish authorities. Albanian authorities report that from January to September 2008, police arrested 354 persons for drug trafficking, and an additional 32 are being sought. The police seized over 59 kg of heroin, 2092 kg of marijuana, and 1kg of cocaine during this time. The police also destroyed 143,655 cannabis plants and 61 poppy plants. This coincides with a noted decrease in the number of drugs seized by Italian authorities, who for the first nine months of 2008 had seized only 10kg of heroin coming from Albania and 4 kg of marijuana.
The increase in the seizures of cocaine in Albania signals a slight rise in the trafficking of cocaine into Albania both for domestic consumption and for export to Greece and Italy. Prosecutions for organized crime offenses, according to the Prosecutor General’s annual report, increased 30% from 2006 to 2007. During the same time period, the number of cultivating and trafficking in narcotics cases increased 16%.
Corruption. Corruption remains a deeply entrenched problem in Albania. Low salaries, social acceptance of graft and Albania’s tightly knit social networks make it difficult to combat corruption among police, judges, and customs officials, and corruption aids and abets organized crime and drug trafficking. As part of the government’s anticorruption pledge, in May 2006, Albania ratified the UN Convention against Corruption. In 2007 and the first half of 2008, the police and judiciary have been more active in investigating government officials and law enforcement personnel for corruption. In her annual report to Parliament, the Prosecutor General reported that in 2007, the number of public officials charged for corruption-related offenses increased by 27 percent compared to 2006. In 2007, prosecutors registered 663 proceedings for corruption offenses against 385 defendants. As of the end of 2007, cases against 172 defendants were sent to trial, and 62 defendants had been convicted.
The overall increased number of corruption cases shows a commitment by prosecutors and police to crack down on corruption. Although these numbers are a significant improvement over 2005 and 2006, Albania continues to lack the judicial independence for truly unbiased proceedings and many cases are never resolved. The fact that high government officials enjoy immunity from prosecution hinders corruption investigations generally. However, the creation of a Joint Investigative Unit to Fight Economic Crime and Corruption (JIU) has had a significant impact on the fight against corruption in Albania’s capital. (See Section IV for a complete description of this unit and its work.)
Agreements and Treaties. Albania is a party to the 1988 UN Drug Convention, the 1961 UN Single Convention as amended by the 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. An extradition treaty is in force between the United States and Albania. Albania is a party to the UN Convention against Transnational Organized Crime (TOC) and its protocols against migrant smuggling and trafficking in persons, and since February 2008, to the protocol against illicit trafficking in firearms. The TOC Convention enhances the bilateral extradition treaty by expanding the list of offenses for which extradition may be granted. The U.S. has applied the TOC most recently in a few extradition requests to Albania.
Cultivation and Production. With the exception of cannabis, Albania is not a significant producer of illicit drugs. According to authorities of the Ministry of Interior’s Anti-Narcotics Unit, cannabis is currently the only drug grown and produced in Albania and is typically sold regionally. Although eradication programs co-sponsored by the police and local governments have been credited with substantially reducing cultivation of cannabis, cultivation persists despite these efforts. No labs for the production of synthetic drugs were discovered in 2008, and the trade in synthetic drugs remains virtually non-existent. Albania is not a producer of significant quantities of precursor chemicals.
The Law on the Control of Chemicals Used for the Illegal Manufacturing of Narcotic and Psychotropic Substances was passed in 2002 and regulates precursor chemicals. Unfortunately, police and customs officials are not trained to recognize likely diversion of dual-use precursor chemicals.
Drug Flow and Transit. Trafficking in narcotics in Albania continues as one of the most lucrative illicit occupations available. Organized crime groups use Albania as a transit point for drugs and other types of smuggling, due to the country’s strategic location, weak law enforcement and unreformed judicial systems, and porous borders. Albania is a transit point for heroin from Afghanistan, which is smuggled via the “Balkan Route” of Turkey-Bulgaria-Macedonia-Albania to Italy, Montenegro, Greece, and the rest of Western Europe. A limited, but growing, amount of cocaine is smuggled from South America to Albania, both for domestic consumption and external distribution. Additionally, criminal networks are increasingly using ethnic Albanians to smuggle cocaine and heroin from other countries into Albania, Italy and Greece.
Domestic Programs/Demand Reduction. The Ministry of Health believes that drug use is on the rise, but has no reliable data about drug abuse. According to health professionals, the addict population is as large as 30,000 users and current registered drug use could be just the tip of the iceberg for Albania. The GOA has taken steps to address the problem with a National Drug Demand Reduction Strategy but is hampered by the inadequate public health infrastructure that is ill equipped to treat drug abuse, and public awareness of the problems associated with drug abuse remains low. The Toxicology Center of the Military Hospital is the only facility in Albania equipped to handle overdose cases and is staffed by only three clinical toxicologists. This clinic has seen an average of 2000 patients per year over the past five years, and the number of cases has remained constant over this period. The clinic estimates that around 80 percent of the cases result from addiction to opiates, predominately heroin, and most were intravenous drug users. There were only two NGO’s operating in Albania during 2007, which dealt with drug related cases. Albania has few regulations on the sale of benzodiazepines, which are sold over the counter at local pharmacies, and the domestic abuse of these medications is believed to be rising, though no data is available.
IV. U.S. Policy Initiatives and Programs
Policy Initiative. The GOA continues to welcome assistance from the United States and Western Europe. The U.S. is intensifying its judicial sector assistance programs in the areas of law enforcement and legal reform through technical assistance, equipment donations, and training. One of the problems seen in training, however, is deep political polarization at all levels of government resulting in the absence of a strong civil service class and thus many trainees are subject to reassignment during times of political transition. This was especially acute in changes in the Albanian State Police following the 2007 municipal elections. Between 2005 and mid-2006, almost 90 percent of all Chief Controllers from Albania’s major border crossing points were transferred or removed from their posts and replaced by new personnel. In many cases, newly-assigned personnel had no apparent background, training or understanding of border functions.
The DEA and the FBI have conducted drug training and investigations training. The State Department-supported U.S. Department of Justice ICITAP and OPDAT programs continued their programs at the Ministry of the Interior, the General Prosecutor’s Office, the Serious Crimes Court and Serious Crimes Prosecution Office, all with the goal of professionalizing the administration of justice, combating corruption, and strengthening the GOA’s ability to prosecute cases involving organized crime and illicit trafficking. ICITAP continued to offer the Anti-Narcotics and Special Operations Sectors full-time advisory support, an advanced level of training (in cooperation with the FBI) to assist in combating illicit trafficking in people and drugs. ICITAP and State/INL continued to provide support for the GOA`s anti-narcotic strategy and efforts through its activities within the International Consortium and the Mini-Dublin Group. OPDAT worked closely with representatives from the Ministry of Interior, General Prosecutor’s Office, and Ministry of Finance on a new law on the prevention of money laundering and terrorist financing, enacted in May 2008, which lowered the threshold of financial transaction reporting and imposed new identification procedures for those engaging in financial transactions.
In 2007, OPDAT and ICITAP worked with the Albanian Ministry of Interior, Ministry of Finance, General Prosecutor’s Office, and State Intelligence Service to form an Economic Crime and Corruption Joint Investigative Unit (JIU) to improve the investigation and prosecution of financial crimes, especially money laundering and corruption. The JIU formally began operations in September of 2007 and has shown very promising initial success, opening 222 cases in the first year of operation and successfully convicting the Deputy Minister of Transportation and the General Secretary of the Ministry of Labor on corruption charges. Other high-profile cases include the arrest of a prominent surgeon for accepting bribes to perform surgeries, the arrest of a prosecutor for agreeing to bribe a judge for the reduction of a defendant’s sentence, and the extensive investigation and arrest of 17 defendants in a wide-ranging ATM fraud scheme. OPDAT has supported the JIU throughout 2008 with an imbedded OPDAT anti-corruption legal advisor and an intensive program of training, along with equipment donation.
The Witness Protection (WP) Directorate in the Ministry of Interior continues to work with the U.S. and other members of the international community to strengthen the existing witness protection legislation. The WP Directorate has helped to protect a number of witnesses, and witness families, in trafficking and drug related homicide cases. During 2008, OPDAT and ICITAP provided extensive training support to the WP Directorate by sponsoring an in-country assessment and two week-long trainings on administrative procedures and physical protection techniques conducted by the Witness Security Division of the United States Marshals Service. In addition, OPDAT sponsored three high-ranking members of the Albanian Witness Protection Directorate and a Serious Crimes prosecutor to attend the third International Symposium on Witness Protection in October, 2008, in Lyon, France, where they had the opportunity to learn and interact with WP officials from over 30 countries.
The United States, through State/INL, continues to provide assistance for integrated border management, a key part of improving the security of Albania’s borders, providing specialized equipment, and the installation of the Total Information Management System (TIMS) at border crossing points. Part of the integrated border management initiative, formally approved by the Albanian Council of Ministers on 29 September 2007, included the establishment of an autonomous Border and Migration Department with direct command and control of all border policing resources answerable to one central authority. Other U.S., EU, and international assistance programs include support for customs reform, judicial training and reform, improving cooperation between police and prosecutors, and anticorruption programs. The USCG provided maritime law enforcement training to Albanian officers through two visits of a mobile training team. Albanian law enforcement authorities have provided the Italian police with intelligence that has led to the arrest of drug dealers and organized crime members, as well as the confiscation of heroin in Italy. Cooperation also continues with Italian law enforcement officials to carry out narcotics raids inside Albania.
The Road Ahead. The Albanian government has made the fight against organized crime and trafficking one of its highest priorities. Additionally, the police are taking an increasingly active role in counter narcotics operations. Albania’s desire to enter into the European Union and its entry in 2008 into NATO continues to push the GOA to implement and enforce reforms, but the fractional nature of Albanian politics and the slow development of Albanian civil society have hampered progress. The U.S., together with the EU and other international partners, will continue to work with the GOA to make progress on fighting illegal drug trafficking, to use law enforcement assistance effectively, and to support legal reform.
MONEY LAUNDERING:
Country Jurisdictions of Concern
ALBANIA
Albania
Albania is not considered an important regional financial or offshore center. As a transit country for trafficking in narcotics, arms, contraband, and humans, Albania remains at significant risk for money laundering. The major sources of criminal proceeds in the country are trafficking offenses, official corruption, and fraud. Albania continues to be a source country for human trafficking. Corruption and organized crime are likely the most significant sources of money laundering, but the exact extent to which these various illegal activities contribute to overall crime proceeds and money laundering is unknown. The European Commission’s (EC) November 2008 progress report on Albania identifies corruption, judicial deficiencies, politicization of the civil service, and organized crime as the biggest problems in Albania. The report also says money laundering, organized crime, and drug-trafficking are “serious concerns,” stating that Albania has made “limited progress” in its fight against organized crime and money laundering.
Criminals frequently invest tainted money in real estate and business development projects. Because of its high level of consumer imports and weak customs controls, Albania has a significant black market for certain smuggled goods such as tobacco, jewelry, and mobile phones. Organized crime groups use Albania as a base of operations for conducting criminal activities in other countries and often return their illicit gains to Albania.
Because Albania’s economy, particularly the private sector, remains largely cash-based, the proceeds from illicit activities are easily laundered in Albania. Albanian customs authorities report that organized criminal elements launder their illegal proceeds by smuggling bulk cash into and out of Albania by using international trade and fraudulent practices through import/export businesses. According to the Bank of Albania (the Central Bank), 23 percent of the money in circulation is outside of the banking system, compared to an average of ten percent in other Central and Eastern European transitioning economies. A significant portion of remittances enters the country through unofficial channels. It is estimated only half of total remittances enter Albania through banks or money transfer companies. The Central Bank estimates that in 2007, remittances comprised nearly 14 percent of Albania’s annual gross domestic product (GDP). Black market exchange is still present in the country. However, it is declining steadily as a result of concerted efforts by the Government of Albania (GOA) to impede such exchanges. The Bankers Association estimates about half of all financial transactions take place through formal banking channels. Similarly, the GOA estimates proceeds from the informal sector account for approximately 30-60 percent of Albania’s GDP. Although current law permits free trade zones, none are currently in operation.
The GOA is committed to fighting informality in the financial sector. There are 17 banks in Albania, and most of them have expanded both their national presence and the variety of services they offer. Electronic and automated teller machine (ATM) transactions are growing, especially in the urban areas, as more banks introduce this technology. ATM and debit and credit card usage expanded after the GOA decided to deliver public administration salaries through electronic transfers in 2005, and then compelled the private sector to follow suit in 2007. A May 2007 ruling also requires the private sector to channel at least 90 percent of its transactions through the banking sector. As of August 2008, 710,000 cards have been issued, almost entirely debit cards, but only a small number of people possess them and usage is primarily limited to a few large vendors.
Albania criminalizes money laundering through Article 287 of the Albanian Criminal Code of 1995, as amended. Albania’s original money laundering law is “On the Prevention of Money Laundering,” Law No. 8610 of May 17, 2000. In June 2003, Parliament approved Law No. 9084, which strengthens Law No. 8610 and improves the Criminal Code and the Criminal Procedure Code. Law No. 9084 redefines the legal concept of money laundering, revises its definition to harmonize it with international standards, outlaws the establishment of anonymous accounts, and permits the confiscation of accounts. The law also mandates the identification of beneficial owners and places reporting requirements on both financial institutions and individuals. According to the law, obliged institutions are required to report to Albania’s financial intelligence unit (FIU) all transactions exceeding $20,000 as well as those transactions that involve suspicious activity, regardless of amount. Currently, no law criminalizes negligence by financial institutions in money laundering cases.
In 2006, the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a Financial Action Task Force (FATF)-style regional body, conducted a mutual evaluation of Albania’s anti-money laundering/counterterrorist financing (AML/CTF) regime. In an attempt to address the many deficiencies identified by MONEYVAL, in May 2008, the Albanian Parliament passed Law No. 9917, “On Money Laundering and Terrorist Financing.” The law entered into force in September 2008. The new anti-money laundering (AML) law lowers the reporting threshold for cash transactions from $20,000 to $15,000. Law No. 9917 strengthens customer due diligence (CDD) requirements by requiring the identification of all customers regardless of the size of their transactions, mandating that reporting subjects maintain on-going due diligence of clients according to the know-your-customer (KYC) concept, and establishing the requirement to perform enhanced due diligence on a risk sensitive basis. The law also includes a better definition of “client” to include any natural or legal person that is party to a business relationship, and mandates that CDD measures apply in transactions where terrorist financing is suspected. The law also increases the number of reporting entities, clarifies record keeping requirements, and better defines the responsibilities of the FIU.
Covered transactions must be reported within 72 hours of their occurrence. Individuals and entities reporting transactions are protected by law if they cooperate with and provide financial information to the FIU and law enforcement agencies. Reportedly, however, leaks of financial disclosure information from other agencies have compromised client confidentiality.
The Central Bank has established a task force to confirm banks’ compliance with customer verification rules. It is the responsibility of the licensing authority to supervise intermediaries for compliance with AML regulations. For example, the Ministry of Justice is responsible for oversight of attorneys and notaries, and the Ministry of Finance (MOF) for accountants. Although regulations also cover nonbank financial institutions, enforcement remains poor in practice. There is an increasing number of suspicious transaction reports (STRs) coming from banks as that sector matures. A large number of STRs continue to come from tax and customs authorities and foreign counterparts.
Individuals must report to customs authorities all cross-border transactions that exceed approximately $10,000. Reportedly, Albania provides declaration forms at border crossing points but apparently only to those individuals who voluntarily make a declaration that would require completing the form. The law does not distinguish between an Albanian and a foreign visitor. However, customs controls on cross-border transactions lack effectiveness due to a lack of resources, poor training and, reportedly, corruption of customs officials.
Law No. 8610 establishes an administrative FIU, the General Directorate for the Prevention of Money Laundering (DPPPP), to coordinate the GOA’s efforts to detect and prevent money laundering. Under Law No. 9084, the FIU became a quasi-independent agency within the Ministry of Finance. Albania is in the process of preparing a new administrative law on FIU operations. Referred to as the “draft law,” it will clarify certain AML measures and elaborate on reporting requirements for obliged entities. As an administrative-type FIU, the DPPPP does not have law enforcement capabilities. The FIU receives reports from obligated entities, analyzes them, and then disseminates the results of its analysis to the Prosecutor’s Office. Despite improvements of facilities and equipment, the Albanian FIU continues to face many operational obstacles. The FIU’s capacity remains limited as staff turnover is a persistent problem, and coordination and cooperation with the Prosecutor’s Office remains problematic.
Since 2005, the FIU has referred to the Prosecutors Office 24 cases of both money laundering and terrorist financing, eight of which were reported during the first nine months of 2008. One case of money laundering has been prosecuted and currently there are two cases ready to be sent to the court. However, prosecution was declined for the rest. In January 2008, the first terrorist financing criminal case began in the First Instance Court for Serious Crimes. The case is against a Jordanian citizen accused of concealing funds allegedly intended to finance terrorism.
Albania’s law sets forth an “all crimes” definition for the offense of money laundering, however, the Albanian court system applies a difficult burden of proof. Albanian courts require a conviction for the predicate offense before issuing an indictment for money laundering. In an effort to increase money laundering prosecutions, in May 2007, Albania established the Economic Crimes and Corruption Joint Investigative Unit (ECCJIU) within the Tirana District Prosecutors Office. This unit focuses efforts and builds expertise in the investigation and prosecution of financial crimes and corruption cases by bringing together members of the General Prosecutors Office, the Albanian State Police’s Financial Crimes Sector, the MOF’s Customs Service and Tax Police, and Albanian intelligence services. The ECCJIU also cooperates with the FIU and the National Intelligence Service. The ECCJIU has responsibility for the prosecution of money laundering cases within the District of Tirana.
Albania passed comprehensive legislation against organized crime in 2004. Law No. 9284, the “anti-mafia law,” enables civil asset sequestration and confiscation provisions in cases involving organized crime and trafficking. The law applies to the assets of suspected persons, their families, and close associates. In cases where the value of the defendant’s assets exceeds the income generated by known legal activity, the law places the burden on the defendant to prove a legitimate source of income to support the volume of assets. During the first half of 2008, the Serious Crimes Prosecution Office rendered eight sequestration and confiscation decisions pursuant to the anti-mafia law. The properties sequestered include one hotel and $7,000 in cash. The properties confiscated include $13,000 in cash and bank accounts, seven vehicles, and a coffee bar. The Agency for the Administration of the Sequestration and Confiscation of Assets (AASCA) was created in 2004, and is charged with the responsibility of administering confiscated assets. So far the agency has failed to function in a meaningful fashion. However, in response to pressure from U.S. government officials, the agency has started to perform better and has effectively taken control over several properties.
Article 230/a of the Penal Code criminalizes terrorist financing. The financing of terrorism, or its support of any kind, is punishable by a term of imprisonment of at least 15 years, and carries a fine of $50,000 to $100,000. The Penal Code also contains additional provisions dealing with terrorist financing, including sections dealing with disclosing information regarding an investigation or identification to identified persons and conducting financial transactions with identified persons. In an effort to make Albania’s terrorist financing legislation comply more fully with international standards, the GOA, in 2007, amended its penal code to include a more specific definition for terrorist organizations. In addition, actions for terrorist purposes were identified and Albania’s jurisdiction in terrorist financing cases was extended to include both resident and nonresident foreign citizens.
In 2004, Albania enacted Law No. 9258, “On Measures against Terrorist Financing.” This law provides a mechanism for the sequestration and confiscation of assets belonging to terrorist financiers, particularly with regard to the United Nations (UN) updated lists of designees. While comprehensive, it lacks implementing regulations and thus is not fully in force. As of June 2008, the MOF claimed to maintain asset freezes against six individuals and 14 foundations and companies on the UN Security Council’s 1267 Committee’s consolidated lists of identified terrorist entities. In total, assets worth more than $10,000,000, belonging to six persons, five foundations and nine companies, remain sequestered, including 83 bank accounts containing more than $3,950,000; 18 apartments in an expensive high rise apartment building in the center of Tirana; and several other properties throughout Albania. The full extent of sequestered assets is unknown.
The MOF is the main entity responsible for issuing freeze orders. After the MOF executes an order, the FIU circulates it to other government agencies, which then sequester any discovered assets belonging to the UNSCR 1267 named individual or entity. The sequestration orders remain in force as long as the subject’s name remains on the list.
Albania is a party to the UN Convention for the Suppression of the Financing of Terrorism, the UN Convention against Transnational Organized Crime, the UN Convention against Corruption, and the 1988 UN Drug Convention. Albania is a member of MONEYVAL, and the FIU is a member of the Egmont Group. The FIU has signed memoranda of understanding with 31 countries, Turkey being the most recent.
Although there are continuing initiatives to improve Albania’s capacity to deal with financial crimes and money laundering, the lack of positive results and apparent inability to adequately address program deficiencies continue to hamper progress. In addition, although the new AML law was adopted in May 2008, it is difficult to evaluate the effectiveness of the new measures as implementing regulations have not yet been passed. The Government of Albania must provide the competent authorities adequate resources to administer and enforce the AML/CTF measures included in the May 2008 law. Albania also should incorporate into AML legislation specific provisions regarding negligent money laundering, corporate criminal liability, comprehensive customer identification procedures, and the adequate oversight of money remitters and charities. Albania should remove the requirement of a conviction for the predicate offense before a conviction for money laundering can be obtained. The FIU, prosecutors and the ECCJIU should enhance their effectiveness through improved cooperation with one another and outreach to other entities. The FIU should take steps to achieve effective analysis of the large volume of currency transaction reports and STRs received. The GOA should enact its draft law on FIU operations and promulgate implementing regulations for all applicable laws as soon as possible. The GOS should ensure that those charged with pursuing financial crime increase their technical knowledge to include modern financial investigation techniques. The GOA should provide its police force with the means to adequately maintain and retrieve its case files and records. The link between criminal intelligence and investigations remains weak as there is a lack of coordination between the prosecutors and the police. Investigators and prosecutors should implement case management techniques, and prosecutors and judges need to become more conversant with the nuances of money laundering. The GOA should devise implementing regulations for Law 9258 regarding sequestration and confiscation of assets linked to terrorist financing so that it can be fully effective. The GOA also should improve the enforcement and enlarge the scope of its asset seizure and forfeiture regime, including fully funding and supporting the AASCA.
Source: U.S Department of States
