Albania
Overall findings
Albania’s legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Albania’s international legal framework to exchange the information with all of Albania’s Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has deficiencies significant to the proper functioning of elements of the AEOI Standard. More specifically, the deficiencies relate to defining certain Entities subject to due diligence and the enforcement framework.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall determination on the legal framework: In Place But Needs Improvement
Conclusions on the legal framework
General context
Albania commenced exchanges under the AEOI Standard in 2020.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Albania:
enacted Law No. 4/2020 "For Automatic Exchange of Financial Accounts Information” as approved on 30.01.2020 and amended as approved on 29.07.2020; and
introduced Decision No. 613, Dated 29.7.2020 on the implementing provisions of Law No. 4/2020, "On Automatic Exchange of Financial Account Information".
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2019. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete due diligence procedures on High Value Individual Accounts by 31 December 2019 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2020.
With respect to the exchange of information under the AEOI Standard, Albania is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2020.
Detailed findings
The detailed findings for Albania are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex B).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Overall determination on the legal framework: In Place But Needs Improvement
Albania’s domestic legislative framework is in place and contains most of the key aspects of CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the due diligence procedures to be applied (SR 1.2) and the framework to enforce the requirements (SR 1.4). More specifically, Albania’s domestic legislative framework does not define the term Passive NFE in accordance with the requirements and does not include rules to prevent circumvention of due diligence and reporting obligations.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Albania has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Albania has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, Albania’s legislative framework does not define the term Passive NFE in line with the AEOI Standard. This element of the due diligence procedures is material to the proper functioning of the AEOI Standard.
Albania should amend its domestic legislative framework to ensure that the definition of Passive NFE incorporates certain Investment Entities located in a Nonparticipating Jurisdictions, as required by the AEOI Standard.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Albania has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Albania has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. More specifically, Albania’s legislative framework does not include rules to prevent all Financial Institutions, persons or intermediaries from adopting practices intended to circumvent the due diligence and reporting procedures as required.
This is a key element of the required enforcement framework and is therefore material to the proper functioning of the AEOI Standard
Albania should amend its domestic legislative framework to include rules to prevent all Financial Institutions, persons and intermediaries from adopting practices intended to circumvent the due diligence and reporting procedures, rather than just those on whom the AEOI Standard imposes an obligation.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Albania’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Albania’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Albania and that meet the required standard in relation to confidentiality and data safeguards). (SRs 2.1 – 2.3)
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Albania has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Albania put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Albania’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.