WORLD  TRADE  
ORGANIZATION  WT/TPR/S/229/Rev.1 
5 May 2010  
 
(10-2488) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
ALBANIA 
 
Revision 
 
 
 
 
This report, prepared for the first Trade Policy Review of Albania, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Albania on its trade policies and 
practices. 
 
Any technical questions arising from this  report may be addressed to Mr. Angelo 
Silvy (tel: 022 739 5249) and Ms. Katie Waters (tel: 022 739 5067). 
 
Document WT/TPR/G/229 contains the policy statement submitted by Albania. 
 
 
 
 
   
 
 
 Albania WT/TPR/S/229/Rev.1 
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CONTENTS 
 
    Page 
SUMMARY   vii 
(1) E CONOMIC AND BUSINESS ENVIRONMENT  vii 
(2) T RADE REGIME  viii 
(3) I NVESTMENT REGIME  ix 
I. ECONOMIC ENVIRONMENT 1 
(1) O VERVIEW  1 
(2) O UTPUT AND EMPLOYMENT  1 
(3) F ISCAL POLICY  4 
(4) M ONETARY AND EXCHANGE RATE POLICY  6 
(5) B ALANCE OF PAYMENTS  9 
(6) D EVELOPMENTS IN TRADE AND INVESTMENT  10 
(i) Developments in merchandise trade 10 
(ii) Trade in services 11 (iii) Foreign direct investment 12 
(7) O
UTLOOK  12 
 A NNEX I.1 13 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 15 
 (1) O VERVIEW  15 
 (2) T RADE POLICY FORMULATION AND IMPLEMENTATION  15 
(i) Institutional framework 15 
(ii) Trade policy formulation, implementation, and objectives 19 
 (3) T RADE REGIME  19 
(i) World Trade Organization 19 
(ii) Regional trade agreements 22 
(iii) Aid for trade 26 
 (4) F OREIGN INVESTMENT REGIME  26 
III. TRADE POLICIES AND PRACTICES BY MEASURE 28 
(1) O VERVIEW  28 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  30 
(i) Procedures and documentation 30 (ii) Customs valuation 33 
(iii) Rules of origin 33 
(iv) Tariffs 34 (v) Other charges affecting imports 38 
(vi) Import prohibitions, restrictions, and licensing 41 
(vii) Contingency measures 43 (viii) Technical regulations and standards 46 
(ix) Sanitary and phytosanitary measures 50 
 
 WT/TPR/S/229/Rev.1 Trade Policy Review 
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    Page 
(3) M EASURES DIRECTLY AFFECTING EXPORTS  52 
(i) Procedures 52 
(ii) Export duties 53 (iii) Export prohibitions, re strictions, and licensing 53 
(iv) Duty and tax concessions, including subsidies 53 
(v) Export finance, insurance, and promotion 54 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  55 
(i) Legal framework for business 55 
(ii) Competition policy and price controls 56 (iii) State trading, state-owned enterprises, and privatization 60 
(iv) Incentives and other government assistance 63 
(v) Government procurement 66 (vi) Intellectual property rights (IPRs) 71 
IV. TRADE POLICIES BY SECTOR 82 
(1) O
VERVIEW  82 
(2) A GRICULTURE AND AGRI-FOOD 83 
(i) General features and policies 83 
(ii) Legal and policy making framework 84 
(iii) Border and related measures 86 
(iv) Export subsidies 86 (v) Domestic support measures 86 
(3) M
ANUFACTURING  87 
(4) S ERVICES  88 
(i) Introduction 88 
(ii) Telecommunications and related services 88 
(iii) Financial services 91 (iv) Transport services 99 
(v) Professional services 103 
REFERENCES   107 APPENDIX TABLES  111 Albania WT/TPR/S/229/Rev.1 
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TABLES 
    Page 
 I. ECONOMIC ENVIRONMENT  
I.1 Basic economic indicators, 2002-09 2 
I.2 Sectoral data on GDP and employment, 2002-08 4 
I.3 Fiscal accounts, General Government, FY 2002-09 5 
I.4 Main monetary indicators, 2002-09 7 I.5 Balance of payments, 2002-09 9 
I.6 Trade in services, 2004-08 11 
 ANNEX I.1 
I.1 Energy consumption, 2002-08         13 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
II.1 Notifications to the WTO, January 2000 to December 2009 20 
II.2 Overview of Albanian pr eferential trade agreements 24 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Structure of the tariff schedule, 2009 35 
III.2 Summary analysis of the MFN tariff, 2009 35 
III.3 Summary analysis of the preferential tariffs, 2009 37 
III.4 Excise taxes, 2009 39 
III.5 Products subject to import licen sing requirements, December 2009 42 
III.6 Laws, decisions, and orders governing implementation of the TBT   Agreement, December 2009 46 
III.7 Technical regulations  in place, December 2009 48 
III.8 Albania's membership in conven tions and treaties on intellectual  
 property rights, December 2009 73 
III.9 Overview of IPR protection, 2009 74 
IV. TRADE POLICIES BY SECTOR 
IV.1 Exports of agricultural products (WTO definition) by main trading 
 partners, 2008  84 
IV.2 Imports of agricultural products (WTO definition) by main trading 
 partners, 2008  86 
IV.3 Domestic support, 2000-08 87 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT  
AI.1 Merchandise exports and re-exports by group of products, 2002-08 113 
AI.2 Merchandise imports by group of products, 2002-08 114 
AI.3 Merchandise exports and re-exports by trading partner, 2002-08 115 
AI.4 Merchandise imports by trading partner, 2002-08 116 
IV. TRADE POLICIES BY SECTOR AIV.1 Summary of Albania's specific commitments under modes 1 to 3 
 in individual service sectors, 2010 117 
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SUMMARY 
 
1. Over the past decade Albania has 
maintained an ambitious programme of 
economic, legal and institutional reform.  In 
so doing, it has continued a remarkable process of transformation from a closed, centrally-planned economy in the early 1990s to one that is liberal, market-orientated 
and private-sector driven today.  Key forces 
shaping the pace and direction of change have been Albania's accession to the WTO in 2000 and, more recently, measures taken to achieve its priority objective of European Union membership.  Both processes have 
made a major contribution to transparency, 
predictability and coherence in policy making. 
2. Albania would gain from continuing 
and strengthening the process of reform, which has yielded such positive results.  Although 
certain sectors of the economy remain 
structurally weak, particularly energy and agriculture, positive developments in these areas have been observed recently.  Given the speed and extent of legislative changes, it is essential to continue to strengthen the judicial 
system and appeals processes for the effective 
implementation of new la ws.  Given Albania's 
increasing insertion in the global economy, and in the face of an anticipated fall in remittances from Albanians abroad, decreasing 
revenues from privatization, and an uncertain 
international economic environment, Albania 
may need to rely more on other sources of growth such as attracting green-field investment and on developing a stronger 
export base.   
(1) E
CONOMIC AND BUSINESS 
 E NVIRONMENT  
3. Albania's economy is characterized by 
a highly productive and growing services sector, a shrinking agriculture sector, and a 
very small manufacturing sector focused 
mainly on footwear and clothing production.   
4. Over 2002-08 Albania achieved solid 
economic growth, averaging 5.8% per year, driven by strong domestic demand and supported by significant foreign direct 
investment flows and remittances from workers abroad.  Per capita GDP in nominal terms more than doubled over the period, 
unemployment decreased, and human 
development indicators suggest considerable improvements.  While the global economic and financial crisis h as had a negative impact 
on the Albanian economy, evidence suggests 
that the effects have not been too severe, with 
GDP growing at over 4% in the twelve months to September 2009. 
5. Albania has maintained sound 
macroeconomic and fiscal policies and undertaken reforms to improve the business 
environment.  It has in creased tax revenue, and 
kept inflation low and within the targets established by the Central Bank.   
6. All steps to register a business have 
been consolidated and a National Registration 
Centre, which has been operational since 
2007, now provides a "one stop shop" solution for business registration.  Private-sector and civil-society input into policy making has been institutionalized through the Business Advisory Council.  There have also been new 
initiatives to encourage production and export 
by small and medium-sized enterprises. 
7. Albania has undertaken a 
comprehensive tax reform process to streamline and modernize its taxation regime, 
improve collection, and reduce scope for 
discretionary decisions and tax evasion.  As a result, the tax system is relatively flat.  The VAT remains the Government's main source of revenue.   
8. Almost all of Albania's trade is with 
other economies in the region and this is reflected in the regional trade agreements (RTAs) it has signed with the European Union, CEFTA 2006 countries, Turkey, and EFTA.  Under these RTAs, imports of 
manufactured products are mainly duty free, 
but liberalization of agricultural products is less ambitious.  Trade opportunities within the region are facilitated by similar rules of origin requirements and provisions on regional WT/TPR/S/229/Rev.1 Trade Policy Review 
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cumulation.  Although Italy has traditionally 
been Albania's main trading partner, Albania has increased and diversified its imports and exports, mainly to other countries in the 
region.   
9. While agriculture's importance in 
terms of contribution to GDP and employment have declined steadily, agriculture remains the main source of employment within the 
country.  The sector is characterized by small 
and fragmented farms, and organizational and 
infrastructural shortcomings.  Albania is a net food importer;  tariff protection and government support to the sector is low, and no export subsidies are provided.   
(2) T
RADE REGIME  
Market access 
10. Albania has been an active participant 
in the WTO since its accession in 2000:  It has an impressive record of making timely 
notifications.  This is particularly evident in 
the area of services.  Albania has never been involved in a dispute under WTO rules. 
11. Albania has an open trade regime 
underpinned by its extensive WTO commitments, and is not reliant on customs 
duties for government revenue.  Albania's 
overall simple average applied tariff was 5.2% in 2009, with a highest applied rate of 15%.  Its average bound tariff is 6.6%, and the highest bound rate is 20%.  All tariffs are 
ad valorem  and no tariff-rate quotas are 
applied.  The average applied tariff on agricultural products, at 8.8%, is higher than on non-agricultural products (4.2%).  Albania has taken GATS commitments in 111 of the 
160 services subsectors.  It is signatory to the 
Information Technology Agreement and has undertaken commitments on basic and value-added telecommunications services and committed to the regulatory principles in the Reference Paper.  
12. Customs procedures have been 
streamlined:  a centralized electronic system has reduced customs clearance times, the transaction value is used increasingly to 
determine customs value, and the use of minimum values or reference prices is prohibited.  However, exceptions to the use of 
the transaction value remain, partly reflecting 
concerns about under-invoicing.  
13. Albania applies few non-tariff 
measures.  There are no prohibited imports, except for products considered to be hazardous 
to public health, and import licensing is used 
mainly for SPS purposes, security, protection of the environment, and for compliance with obligations under intern ational conventions.  
The Albanian SPS and TBT regimes essentially follow those of the EU.  New 
legislation on anti-dumping and countervailing 
measures as well as safeguards was introduced in 2007.  However, no actions under these laws have been taken by Albania to date. 
14. No export taxes are applied and 
licences must be obtained for only a handful of 
mostly sensitive products.  Albania has in place some special customs regimes that contain specific provisions or treatment for exports or re-exports of goods processed in Albania.   
Key legislative developments: 
15. Over the review period, Albania has 
enacted a number of laws over that should help to sustain an efficiently functioning market economy as well as self-impose 
constraints on government spending. Together 
with legislative and regulatory reforms in other areas, these have been largely driven by Albania's desire to become more closely integrated into the European Union.  In 2006, 
Albania signed the Stabilization and 
Association Agreement (SAA) with the EU which, in addition to commitments to liberalise trade between the European Union and Albania, also contains provisions on the gradual alignment of Albania's current and 
future laws with the acquis communautaire .  
Albania submitted its application for EU membership on 28 April 2009, and the authorities have indicated that they hope negotiations may be completed by 2014.  In Albania WT/TPR/S/229/Rev.1 
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this reform effort, Albania has received 
considerable support from external donors, particularly the EU. 
16. The adoption of a law on competition 
protection in 2003, and the creation of 
the Competition Authority of Albania represent important steps towards enhancing competition, particularly given the reform efforts undertaken and the smallness of 
Albania's market, which could potentially lead 
to concentration in some sectors of the economy.   
17. Albania adopted new legislation on 
Government Procurement in 2006, which provides for open tendering on a competitive 
basis.  There are no domestic preferences or 
set-asides for domestic suppliers.  In an effort to increase transparency, since the beginning of 2009 all procurement procedures and transactions, with a few exceptions, must be 
done electronically.  This has enhanced 
competition and reduced procurement costs.  Albania is currently an observer to the GPA, but accession negotiations have been inactive for several years. 
18. Under the 2006 Law On State Aid, 
Albania has introduced strong disciplines for 
the provision of incentives (excluding agriculture and fisheries), which have been streamlined in recent years and are generally applied on a national-treatment basis.  Aid 
linked directly to the quantity of goods 
exported is prohibited, as is current expenditure linked to export activities, and aid contingent upon the use of domestic over imported goods.  Special provisions apply for 
small and medium-size enterprises.  Albania 
also maintains a programme of economic zones (industrial parks) that offers tax benefits;  nine zones ha ve been established or 
are under development 
19. Most of Albania's intellectual property 
laws were modified during its process of 
accession to the WTO.  More recently, new industrial property and copyright legislation has been passed, to conform to EU directives.  Also, measures to step up enforcement have been devised and are being implemented.  
Albania is currently drafting a National Strategy on Intellectual Property (NSIPR) for 2010-15, aimed at making Albanian IPR 
protection fully compliant with EU standards. 
(3) I
NVESTMENT REGIME  
20. As a result of the reforms undertaken. 
Albania is open to foreign investment, which is permitted on the same terms as for domestic 
investors, with an exception relating to land 
ownership.  Foreign participation in air and maritime cabotage is also restricted by law; however, there is little activity in practice.  
21. Foreign investments are not subject 
to conditions prior to authorization.  The right 
to private property is protected by 
the Constitution, and Albania is obliged by law to uphold international arbitration awards related to foreign-investment-related disputes.  Foreign direct investment totalled 
€675 million in 2008;  19% was linked to 
privatization of state-owned enterprises.   
22. The privatization process in Albania 
started in 1991 with land, small businesses, and small and medium-sized state-owned enterprises.  A strategy to privatize major 
companies of significant importance to the 
economy was put in place in 1998.  The approach for sectors considered strategic was first to deregulate them and unbundle activities, so as to prevent the emergence of 
market dominance, then engage in 
rationalizing the sector, and finally privatize.   
23. By the end of 2009, the vast majority 
of state enterprises had been privatized.  Privatization proceeds for the period 1992-
2009 were around US$800 million.  As at 
January 2010, the State had a share of 50% or more in 50 companies and statutory bodies; the most important is the oil company Abpetrol.  Albania does not maintain any state trading enterprises within the meaning of 
Article XVII of the GATT 1994.   
24. As part of its reform process, Albania 
has used privatization and encouraged WT/TPR/S/229/Rev.1 Trade Policy Review 
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investment to address some of the major 
weaknesses in its economy.  For example, with respect to transport infrastructure, the Government awarded a concession to a private 
consortium to build and manage Albania's 
international airport; and there are considerable investments both ongoing and planned to develop Albania's road and port infrastructure.  There are also a significant number of players and foreign investment in 
the key backbone services of banking and telecommunications.  Steps are also being taken to increase the reliability of Albania's 
energy supply through investments in new and 
alternative energy sources as well the privatization of the distribution arm of the state-owned electricity company.