On 2nd December 2021, the Albanian Parliament adopted the Law no. 120/2021 on Amendments and supplements to the Law no.9917, dated 19.05.2008 on Prevention of Money Laundering and Financing of Terrorism (the “AML Law”) (the “Amendments”). The Amendments are effective from 5th January 2022.
The Amendments fully approximate the AML Law with the EU acquis (i.e. EU Directive 2015/849, dated 20 May 2015) and addresses the recommendations of the Financial Action Task Force as well as the findings of Moneyval for Albania. Below you may find a summary of some of the most important changes to the AML Law.
Amended definition of politically exposed person, family members, and associates
The Amendments introduce a new definition of “Politically Exposed Persons” as well as of the “family members of politically exposed persons” and “persons associated in close personal, working or business relations with the politically exposed person”.
According to the new definition the middle-ranking management or junior-ranking officials, regardless whether are or not obliged to make the declaration on assets under the legislation in force are not considered as politically exposed persons. In addition according to the Amendments the persons determined as “politically exposed persons” shall be considered as such up to three years after the release from their functions.
New definition of beneficial owner
In order to be coherent, the Amendments make reference for the definition of “Beneficial Owner” to the Law on “Register of Beneficial Owners”.
Amendments and re-categorization of the obliged entities under the AML Law
The Amendments have added new services for which certain categories such as lawyers, notaries and other professionals and entrepreneurs are considered obliged entities under the AML Law.
In addition, the Amendments categorize as obliged entities the auditors, chartered accountants, fiscal advisors as well as any other person who commits to provide, directly or through other persons with whom have material assistance relationship, assistance, or advice for fiscal matters either as primary business or professional activity.
Establishing business relations without the presence of the client
Under the Amendments the obliged entities are entitled, upon the approval by the highest management level, to establish business relations without the necessity of the other party (customer/client) physical presence, provided that after the combined risk assessment of client, products, geographical distribution of services and distribution channels, the risk level for money laundering and terrorism financing results to be low.
Enhanced customer due diligence measures for transactions with high-risk countries
In compliance with the EU Directive, the obliged entities are obliged to apply specific enhance due diligence measures in relation to business relationships or transactions which include high-risk countries as per their assessment of the risk level.
New penalties for serious contraventions
In addition to the current sanctions provided by the law, the following sanctions will be applicable to obliged entities:
In case when the breaches under the AML Law and its sub legal acts are serious, repetitive, systematic or a combination therein, the maximum penalty that might be imposed to the obliged entities is up to two folds of the amount gained by committing the breach, provided that the gain can be determined or up to ALL 125,000,000 in cases where it cannot be determined or is smaller.
In addition to the penalties and measures defined in the AML Law, for the cases when the breaches of the AML Law and the other sub legal acts applicable to it, are committed by banks, non-banking financial institutions or exchange bureaus, a penalty up to 10 percent of the annual turnover as per the last year approved consolidated financial statements including the financial statements of the subsidiaries shall be imposed. If the 10 percent of the annual turnover is less than ALL 625,000,000, the responsible authority is entitled to impose the penalty at the amount up to ALL 625,000,000.
KPMG team remains at your disposal for any inquiries you may have or assistance needed.
For information
Juliana Mateeva
Partner
Legal Advisory Services
Tel.: +359 2 9697 600
Arjola Goxhaj
Manager
Legal Advisory Services
Tel.: +355 42274 524