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.
Recommendations:
No recommendations made.
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.
Recommendations:
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.
Recommendations:
No recommendations made.
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
Recommendations:
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.