Albania -- Sanctions Compliance Regulatory Overview

Albania, as an aspiring member of the European Union and a member of various international bodies, aligns its financial regulatory framework, including anti-money laundering and counter-terrorism financing (AML/CFT) measures, with international standards set by the Financial Action Task Force (FATF) and the EU. This directly impacts Virtual Asset Service Providers (VASPs).

While Albania does not have a unique "crypto-specific" sanctions list, VASPs operating in Albania are subject to the country's comprehensive AML/CFT framework, which mandates compliance with international sanctions regimes.

1. Legal Framework for Cryptocurrency and Sanctions Compliance in Albania

1. Law No. 90/2020 "On Financial Markets Based on Distributed Ledger Technology" (DLT Law):

   • This is Albania's primary legislation for regulating virtual assets and VASPs.
   • Article 5(c) explicitly states that VASPs are subject to the Law on Anti-Money Laundering and Counter-Terrorism Financing, thus bringing them squarely under the scope of sanctions compliance.
   • Reference: Law No. 90/2020 (Albanian Official Gazette, available via Albanian Parliament or Ministry of Finance, often referenced in legal summaries). An English summary can often be found through legal firms operating in Albania.
     • General reference to Albanian legal portal: Qendra e Publikimeve Zyrtare (QBZ) - Official Publishing Centre (search for "Ligj Nr. 90/2020").

2. Law No. 111/2019 "On Anti-Money Laundering and Counter-Terrorism Financing" (AML/CFT Law):

   • This is the cornerstone of Albania's AML/CFT regime, applying to all "obliged entities," which now include VASPs by virtue of the DLT Law.
   • Key Obligations: This law requires obliged entities to:
     • Apply customer due diligence (CDD) and enhanced due diligence (EDD) for higher-risk cases.
     • Monitor transactions for suspicious activity.
     • Report suspicious transactions (STRs) to the General Directorate for the Prevention of Money Laundering (GDPML).
     • Implement internal controls, risk assessments, and staff training.
     • Implement asset freezing measures in accordance with UN Security Council Resolutions and relevant international sanctions.
   • Reference: Law No. 111/2019 (often referenced in legal summaries).
     • General reference to Albanian legal portal: Qendra e Publikimeve Zyrtare (QBZ) - Official Publishing Centre (search for "Ligj Nr. 111/2019").

2. OFAC/EU/UN Sanctions Compliance Requirements for VASPs

Albanian VASPs, like traditional financial institutions, are required to comply with international sanctions regimes that Albania has adopted or is otherwise bound by:

• UN Sanctions: Albania, as a UN member state, is legally obliged to implement all UN Security Council Resolutions, which include sanctions against specific individuals, entities, and countries (e.g., related to terrorism financing, proliferation, human rights abuses). These are implemented into national law or through decrees by the Council of Ministers.
  • UN Consolidated Sanctions List: https://www.un.org/securitycouncil/sanctions/information
• EU Sanctions: As an EU candidate country, Albania closely aligns its foreign policy and legal framework with the EU. This means it largely adopts and implements sanctions imposed by the European Union. EU sanctions can target individuals, entities, and entire sectors in non-EU countries.
  • EU Sanctions Map / Consolidated List: https://www.sanctionsmap.eu/
• OFAC Sanctions (U.S. Department of the Treasury's Office of Foreign Assets Control): While OFAC sanctions are primarily U.S. law, they have significant extraterritorial reach.
  • Albanian VASPs that conduct transactions in USD, interact with U.S. persons or entities, use U.S.-based software/services (e.g., blockchain analytics tools, custodial services), or have any other nexus to the U.S. financial system, must comply with OFAC sanctions. Failure to do so can result in severe penalties from the U.S. government.
  • OFAC Specially Designated Nationals (SDN) List: https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists

3. Sanctioned Entity Screening Obligations

VASPs in Albania are required to:

• Screen all customers (individuals and entities) against relevant sanctions lists (UN, EU, OFAC SDN, and any lists published by the Albanian authorities implementing these). This applies during onboarding (CDD) and throughout the customer relationship (ongoing monitoring).
• Screen transactions: Monitor transactions for any links to sanctioned individuals, entities, or jurisdictions. This often involves using blockchain analytics tools that can identify addresses associated with sanctioned entities.
• Identify Beneficial Ownership: Ascertain the ultimate beneficial owners (UBOs) of corporate customers and screen them against sanctions lists.
• Implement Freezing Mechanisms: Immediately freeze any virtual assets or funds belonging to, or controlled by, sanctioned individuals or entities, and report this to the GDPML without delay.
• Prohibit engagement: Refrain from engaging in any transactions or business relationships with sanctioned parties.

4. Geographic Restrictions

Geographic restrictions for Albanian VASPs stem directly from the implemented UN, EU, and OFAC sanctions regimes. This typically includes:

• Prohibition on engaging with entities or individuals located in comprehensively sanctioned jurisdictions: Examples often include North Korea, Iran, Cuba, Syria, and specific regions within other countries (e.g., Crimea, certain parts of Russia and Ukraine).
• Restrictions on specific sectors or types of transactions: Even in non-comprehensively sanctioned countries, certain sectors (e.g., defense, energy, finance) or transactions might be restricted under targeted sanctions.

VASPs must have robust geo-blocking and IP address monitoring capabilities, alongside wallet address screening, to prevent transactions originating from or destined for these restricted areas.

5. Penalties for Violations

The AML/CFT Law No. 111/2019, along with potentially other criminal legislation, outlines severe penalties for non-compliance, including:

• Administrative Fines: Significant financial penalties can be imposed on VASPs for failing to implement adequate AML/CFT controls, including sanctions screening and reporting failures. These fines can range from thousands to hundreds of thousands of Euros, depending on the severity and recurrence of the violation.
• License Revocation: The Bank of Albania (as the licensing and supervisory authority for DLT entities) can revoke the operating license of a VASP for serious or repeated breaches of AML/CFT and sanctions compliance obligations.
• Criminal Penalties: Individuals responsible for severe violations (e.g., facilitating money laundering or terrorism financing, willful evasion of sanctions) can face imprisonment. Corporate entities can also face criminal charges and substantial fines.
• Reputational Damage: Non-compliance can lead to significant reputational harm, loss of customer trust, and difficulty in obtaining banking or partnership services.

6. Country-Specific Sanctions Lists for Crypto

Albania does not maintain a separate, independent "country-specific sanctions list" specifically targeting crypto entities or activities, distinct from its implementation of UN and EU sanctions.

Instead, the General Directorate for the Prevention of Money Laundering (GDPML) is the financial intelligence unit (FIU) responsible for overseeing AML/CFT compliance and ensuring the implementation of international sanctions in Albania. They act as the central authority for receiving suspicious transaction reports and disseminating information regarding sanctioned parties.

• General Directorate for the Prevention of Money Laundering (GDPML): http://www.gdpml.gov.al/ (Often lists relevant legislation and guidance, though primarily in Albanian).

Conclusion

VASPs operating in Albania face stringent compliance requirements derived from Albania's national AML/CFT law (Law No. 111/2019) and the DLT Law (Law No. 90/2020). These laws mandate adherence to international sanctions regimes, including those from the UN, EU, and practically, OFAC. Comprehensive customer and transaction screening, robust internal controls, and vigilant monitoring for sanctioned entities and geographic restrictions are essential to avoid severe legal and financial penalties.

Disclaimer: This information is for general informational purposes only and does not constitute legal advice. For specific compliance guidance, it is highly recommended to consult with legal professionals specializing in Albanian financial law and international sanctions.