Albania -- Travel Rule Implementation Regulatory Overview

Albania has proactively implemented a regulatory framework for virtual assets, which includes the adoption of the FATF Travel Rule requirements.

Status of FATF Travel Rule Implementation in Albania

1. Whether Adopted: Yes, the FATF Travel Rule requirements are incorporated into Albanian law primarily through:

• Law No. 110/2020 "On financial markets based on DLT (blockchain technology)" (often referred to as the "Blockchain Law"). This law establishes the legal framework for virtual assets and virtual asset service providers (VASPs).
• Law No. 9917/2008 "On preventing money laundering and financing of terrorism" (as amended), which is the overarching AML/CFT legislation that VASPs are now obliged to comply with under Law No. 110/2020.

The Blockchain Law mandates that VASPs apply the measures required by the AML/CFT Law, effectively extending the Travel Rule (FATF Recommendation 16) to virtual asset transactions.

2. Effective Date: Law No. 110/2020 was passed in September 2020 and became effective in June 2021. This made Albania one of the first countries globally to establish a comprehensive legal framework for virtual assets.

3. Threshold Amounts: Albania's legislation generally aligns with FATF recommendations regarding thresholds. While Law No. 110/2020 itself doesn't explicitly detail transaction thresholds within its text, it refers to the broader AML/CFT Law No. 9917/2008.

Based on FATF Recommendation 16 and common implementation practices:

• Cross-border transfers: The Travel Rule typically applies to transactions exceeding €1,000 / USD 1,000 (or its equivalent in Albanian Lek - ALL). For these transactions, both originator and beneficiary information must be collected and transmitted.
• Domestic transfers: FATF guidance recommends that information be collected and transmitted for all domestic transfers, regardless of amount, though some jurisdictions apply thresholds. Given Albania's commitment to FATF compliance, VASPs should assume that all transfers are subject to scrutiny for AML/CFT purposes.
• Customer Due Diligence (CDD): Enhanced CDD measures are generally required for transactions exceeding €15,000 (or its equivalent in ALL), as per the broader AML/CFT framework.

4. Which VASPs are Covered: Law No. 110/2020 provides a broad definition of "Virtual Asset Service Provider" (VASP), covering entities that perform, as a business, one or more of the following activities for or on behalf of another natural or legal person:

• Exchange between virtual assets and fiat currencies.
• Exchange between one or more forms of virtual assets.
• Transfer of virtual assets.
• Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
• Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

This definition is comprehensive and aligns with FATF's scope, ensuring a wide range of crypto businesses are regulated.

5. Technical Implementation Requirements: Albanian legislation, like most national laws, does not prescribe specific technical solutions for implementing the Travel Rule. Instead, it mandates the outcome: that VASPs must be able to collect, store, and transmit the required originator and beneficiary information accurately, securely, and in real-time or near real-time, to the counterparty VASP or relevant authorities upon request.

VASPs operating in Albania are expected to:

• Implement robust Know Your Customer (KYC) processes to identify and verify the identity of their customers.
• Utilize technology solutions (e.g., those offered by industry consortia like TRISA, TRAVEL, Sygna, VerifyVASP) that facilitate the secure and compliant exchange of Travel Rule data with other VASPs.
• Maintain records of transaction information and customer data for the prescribed period (typically 5 years).
• Report suspicious transactions to the General Directorate for the Prevention of Money Laundering (GDPML).

6. Penalties for Non-compliance: Non-compliance with AML/CFT obligations, including the Travel Rule, can lead to significant penalties, as outlined in Law No. 110/2020 and Law No. 9917/2008. These can include:

• Administrative fines: Substantial financial penalties can be imposed by the Financial Supervisory Authority (AFSA), which is the licensing and supervisory authority for VASPs.
• Suspension or revocation of licenses: VASPs failing to comply may have their operating licenses suspended or revoked, effectively forcing them to cease operations.
• Criminal charges: In cases of severe or intentional breaches, particularly those linked to money laundering or terrorist financing, individuals and legal entities can face criminal prosecution, resulting in imprisonment and further substantial fines.
• Reputational damage: Non-compliance can severely damage a VASP's reputation and trust among customers and partners.

References and URLs:

• Law No. 110/2020 "On financial markets based on DLT (blockchain technology)":

  • While finding a direct official English translation of the full law can be challenging, its existence and key provisions are widely referenced. The Albanian Financial Supervisory Authority (AFSA) oversees its implementation.
  • AFSA's general information on the framework (may not link directly to the law text): https://www.afsa.gov.al/en/
  • A legal analysis of the law: https://www.dlapiper.com/en/albania/insights/publications/2020/10/albania-passes-comprehensive-law-on-blockchain-technology/

• Law No. 9917/2008 "On preventing money laundering and financing of terrorism" (as amended):

  • This is the general AML/CFT law that VASPs must comply with.
  • Reference via General Directorate for the Prevention of Money Laundering (GDPML), which is the FIU for Albania: https://www.gdpml.gov.al/ (Their site generally details AML/CFT framework).

• FATF Recommendations:

  • FATF Guidance for Virtual Assets and VASPs: https://www.fatf-gafi.org/publications/virtualassets/guidance-virtual-assets-vasps.html (Provides context for the Travel Rule).

Key Takeaway: Albania has a comprehensive legal framework in place for virtual assets, and VASPs operating within its jurisdiction are legally required to comply with AML/CFT obligations, including the FATF Travel Rule, for both domestic and cross-border transactions, with specific thresholds for information collection aligning with international standards.