# EUR-Lex - 52014DC0331 - EN

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# 52014DC0331

**REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on Albania’s Progress in the Fight Against Corruption and Organised Crime and in the Judicial Reform /* COM/2014/0331 final */**

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REPORT FROM THE COMMISSION TO THE
COUNCIL AND THE EUROPEAN PARLIAMENT

on Albania’s Progress in the Fight Against
Corruption and Organised Crime and in the Judicial Reform

1.
Introduction

The
present Report is a response to the Council Conclusions of 17 December 2013
which stated:

"The
Council will examine, on the basis of a report to be presented by the
Commission, continued implementation of anti-corruption and judicial reform
strategies and of recently adopted relevant legislation as well as a continued
trend of pro-active investigations and prosecutions, including in the area of
organized crime. In the light of this report, and on the understanding that Albania builds on the encouraging progress made so far, the Council looks forward to a decision regarding
granting candidate status to Albania in June 2014, subject to endorsement by
the European Council."

In
line with the Council's request this report focuses primarily on the fight
against corruption and organized crime and judicial reform and highlights some
additional key developments in areas, which are important for Albania EU
integration. It covers the timeframe since the publication of the most recent
Progress Report[1],
and is based on information gathered and analysed by the Commission, including
input provided by the country, peer reviews and regular contacts with the Member States and international organisations.

During
the reporting period, the Albanian government has shown concrete action and continued
political will in the area of EU-related reform, covering a broad range of
issues. In November, government and opposition joined forces to adopt a
resolution on EU-integration. Since then both have continued to support
EU-integration, although further consensus building has been affected by an increasing
confrontational climate between the government and the opposition, which inter
alia withdrew from key votes in some parliamentary committees.

In
November the High-Level Dialogue (HLD) on the key priorities was launched to
provide support to Albania's EU integration process by focusing on key reform
priorities. At a second meeting of the HLD in early March Albania presented a roadmap, outlining Albania's medium-term efforts in meeting the key priorities
for the opening of accession negotiations. At this meeting both government and
opposition showed constructive commitment to EU-related reform.

2.
Recent Developments

The
new Civil Service Law (CSL) became effective on 26 February 2014
and its secondary legislation was adopted in time for its entry into force on 1
April. This is a major step forward to enhance professionalism and meritocracy
and fight politicisation, inefficiency and corruption across a wide range of
public sector bodies. Monitoring of implementation is essential. Since
October, the issues of dismissals and downgrading of staff mainly
due to disciplinary measures and restructuring in the public
institutions created political tension. Against this background the
government froze all new recruitments from March to July to allow for the new
CSL to become fully operational, thus trying to ensure a robust and transparent
recruitment process. Full respect of the applicable legislation and court
rulings is key.

The
Parliament has taken measures to strengthen its oversight role over independent
institutions. Yet, there have been controversies as regards the set-up,
appointment procedures and performance of a number of independent institutions
and authorities, which are accountable to Parliament. It is essential that the
applicable legislation is fully implemented and the professionalism of these
institutions enhanced. The election procedure of the heads and boards of these
institutions by simple majority in Parliament remains a matter of concern, as
this risks to affect their independence. Unlike in the case of the legislation
on the High Inspectorate for the Declaration of Assets and Conflict of Interest
(HIDAACI), new draft legislation would benefit from the review of international
experts. The Albanian government has requested a peer review to assess the
performance, structure and capacities of independent institutions in view of
strengthening their functioning and independence.

The
government continues to press for economic reform and for
enhanced economic governance, in order to re-launch growth and increase
competitiveness. A National Economic Council chaired by the Prime Minister with
the participation of the business community was set up to provide guidance and
coherence in economic reforms. Macroeconomic stability continues to be enhanced
by a sound monetary policy and inflation stays at low levels. The much-needed
fiscal consolidation will be facilitated by the loan agreement concluded with
the International Monetary Fund (IMF). It will enable the clearance of large
accumulated payment arrears over three years and foster substantial reforms
related to public finance management, taxation, pension system and energy. Reforms
have already resulted in increasing collection of revenues from taxation and
customs duties and investigations into Value Added Tax (VAT) evasion and fraud
schemes have been stepped up. The Economic and Fiscal Programme for 2014-2016
sets out the framework for supporting growth and macroeconomic stability and
identifies necessary structural reforms in some key areas, including enhancing
the rule of law, improving the business and investment environment and tackling
labour market problems.

Regarding
the crisis in Ukraine and CSFP alignement  Albania has aligned itself with all EU statements and positions.

3.
Anti-corruption policies

Since
October, the Albanian authorities have further strengthened the legal and
institutional anti-corruption framework. In November, a National
Coordinator for Anti-corruption (NCAC) was appointed who coordinates the
activities of state bodies and independent institutions, both at central and
local level. To facilitate this process, a network of anti-corruption focal
points in all line ministries and independent institutions has been
established. The focal points' mandate covers reporting to the NCAC, giving
guidance to relevant officials and monitoring the implementation of the
anti-corruption strategy in the respective institutions and ministries. In
April, the NCAC has finalized the National Anti-Corruption Strategy, which was
widely consulted with civil society and the private sector, and which remains
to be adopted. It needs to be followed up by comprehensive action plans.

Through
amendments to the Criminal Procedure Code (CPC) adopted in March, competences
for corruption offences by high-level state officials have been transferred,
with the exception of abuse of  office offences, to the Serious Crimes
Prosecution Office (SCPO) and the Serious Crimes Court (SCC). Active and
passive corruption of judges, prosecutors, justice officials, high-level state
officials, and locally elected representatives now fall within the jurisdiction
of the SCC, to move high-level corruption further into the spotlight. A
definition of 'high-level officials' and 'locally elected officials' remains to
be introduced in the legislation.

In
March the seizure or confiscation of illicit assets deriving from corruption
offences was made legally possible.

A
new law on access to information has been drafted in May, introducing
administrative sanctions as well as procedures for the examination of
complaints to the Commission for the Right to Information and Personal Data
Protection.

The
laws on asset declaration and conflict of interest, which were amended in April
2014, are currently in formal adoption procedure. The revised law on conflict
of interest extends the prohibition to enter into contractual relations with
public bodies to cover judges and prosecutors of first instance and appellate
level. Furthermore, the submission of false information is made a criminal
offence, which shows the
commitment to addressing conflict of interest. The law on asset declaration now
requires public officials to deposit assets exceeding  ALL 1.5 million (about
EUR 10,700) in a bank.

As
regards cooperation among law enforcement agencies
for both anti-corruption and organised crime, a Memorandum of Understanding was
signed between the Prosecutor General, Ministry of Interior and State
Intelligence Service in December aiming at establishing a common platform for
enhancing proactive investigations. Overall, the cooperation between the law
enforcement agencies needs to be enhanced, including a secure information
exchange system with a view to enhancing the efficiency of investigations.

In
April, the number of anti-corruption prosecutors in regional Prosecutor's
offices was increased from 22 to 33.

Regarding
the track record, the number of corruption cases referred to the
prosecution by the State Police has increased by 16% in the period from October
2013 to March 2014 compared to the same period of the previous year.
Convictions at District Courts decreased by 8% in the same period, whereas
convictions at Appeal Courts increased by 81%. Five corruption investigations
within the judicial system are on-going, and there has been one conviction in
the judicial system at appeal court level. Regarding high-state and locally
elected officials, five cases involving 25 defendants are pending before the court
and two cases are under investigation for abuse of office and other related
allegations. Overall, the number of investigations and convictions remains low,
especially with regard to high-level corruption cases. A high number of
investigations into corruption offences do not result in final convictions,
highlighting the need to reinforce the independence, efficiency and
accountability of the judiciary, and the need to strengthen the capacity of the
police and the prosecution.

To
address shortcomings in the efficiency of investigations and
cross-agency cooperation, monthly meetings chaired by the Prosecutor General
and the director general of the police have been set up in May. A number of
obstacles remain, such as provisions related to interceptions and surveillance,
time limits for investigations, admissibility of evidence before a court and,
overall, investigations continue to have a reactive nature. Investigating
capacities of law enforcement agencies need to be enhanced, including  tackling
of financial and economic crime. The current legal framework needs to include legal
provisions that allow the State Police to obtain information for investigative
purposes from public institutions and private bodies delivering public services,
and allowing for deterrent sanctions in case of non-compliance. Albania is also encouraged to include the offence of illicit enrichment, as a positive
signal. Further efforts are needed regarding sanctioning mechanisms in case of
non-compliance with inter-institutional Memoranda of Understanding (MoU).

The
High Inspectorate for the Declaration of Assets and Conflict of Interest (HIDAACI)
took steps to improve its performance in the first quarter of 2014. Among the cases
of hidden assets it has reported to the Prosecution the cases of three judges, one
prosecutor, one ambassador, and two inspectors. Overall, both HIDAACI and the
internal inspection bodies should carry out their mandate in a more pro-active
manner, focusing on inexplicable wealth through better risk assessment and cross-checking
own data with available asset declarations and conflict of interest statements.
Making available asset declarations to law enforcement and investigative bodies
is essential in this respect. The publication of asset declarations as foreseen
in the roadmap on the key priorities would enhance accountability and boost
efforts to uncover inexplicable wealth.

Overall,
there has been continued political will to act decisively in the prevention and
fight against corruption. The structural reforms that have been introduced
testify to an all-encompassing approach including a wide range of institutions.
The broad consultation process for the outline of the anti-corruption strategy
shows that the government aims to include a wide range of stakeholders. Cross-agency
work has been launched to enhance pro-active investigations, systematic risk
analysis and overcome obstacles in view of improving the efficiency of
investigations. To further advance decisively on its EU integration path, Albania
would need to focus on the enforcement of legislation regarding asset declarations
and conflict of interest, increase pro-active investigations and introduce
further measures to make investigations more efficient,
to continue building on its initial efforts, in
order to develop a solid track record of investigations, prosecutions and final
convictions in corruption cases. The deep judicial reform envisaged will also
be essential in the fight against corruption.

4.
Fight against Organised Crime

Since
October several organisational changes in the State Police and Prosecution
Office were introduced and key legislation is prepared for adoption, covering
the areas of police organisation and training and control of firearms. An open
competition for recruiting new staff for the State Police was launched in
March. Despite a difficult budgetary situation, the funds allocated for police
salaries have been increased by 10% in 2014. 39 police officers were dismissed
since September for disciplinary reasons. Regarding terrorism financed through
organized crime, a new anti-terrorist Unit has been set up within the State
Police.

The
police has organised successful operations, in the areas of fight against
narcotics, trafficking in human beings, money laundering and seizures of
explosives within the country and participated in similar operations abroad. In
the area of international police and judicial cooperation, the
Fourth Additional Protocol to the European Convention on Extradition was
ratified in January. A total of 25 rogatory commissions from EU Member States visited
  Albania from October 2013 until end of April 2014. In the same period 34
persons were extradited to Albania from EU Member States, while the Albanian
authorities extradited 49 persons to EU Member States. An Operational Protocol
was signed between the State Police and the Department of Public Safety of the
Ministry of Interior of Italy. Albania is working with Italy and Greece for setting up a joint police cooperation centre to control cross-border illicit
activities in Saranda. Regular meetings are held with liaison officers of
partner countries to exchange information on criminal assets investigations.

An
operational cooperation agreement with Europol, signed last December, has been
ratified by Albania on March 20. Exchange of information is facilitated by an
Albanian liaison officer posted at Europol. During the reporting period Albania participated in an international police operation, supported by Europol, for the
detection of stolen and trafficked vehicles. 24 perpetrators were prosecuted as
a result. The authorities should use more actively all available tools of international
cooperation and increase the deployment of joint investigation teams. The
capacities to use special investigative techniques should be strengthened as
regards the legal and procedural framework.

Regarding
the fight against trafficking in human beings, the Office of the
National Anti-Trafficking Coordinator (ONATC) has revitalised the national
referral mechanism, with an intensification of activities in the area of
prevention and awareness-raising, and is finalising the new national strategy
and action plan for 2014-2016. In 2014 the ONATC has been endowed with its own
budget for the first time. Three mobile units were established in Tirana, Vlora
and Elbasan, resulting in increased identifications of victims and potential
victims. Meetings of regional police with Serious Crimes Prosecution are held
on a monthly basis. Addressing forced labour and internal trafficking, the
Labour Inspectorate has started inspections of night clubs in cooperation with
Tirana Police. A special helpline for victims of trafficking became operational
in March and, since November 2013, they are able to obtain legal aid with a
reduction of 30% in lawyers' fees. The latest Criminal Code amendments on
trafficking in human beings should be applied with particular attention, the
structures responsible for their implementation strengthened, and the
investigation of internal trafficking cases intensified. The number of
convictions for trafficking in human beings remained low. Threat and risk
assessment capacities to identify victims of trafficking need to be
strengthened with a view to tackle this phenomenon proactively.

As
regards the fight against money laundering, in the period from October
2013 to mid-April 2014, compared to the equivalent period of last year, there
has been a slight increase of money laundering offenses referred by the police to
the prosecution with almost the same number of perpetrators. Nevertheless, the
number of convictions for money laundering remained low.

From
October 2013 until end of March, the State Police referred to the Serious
Crimes Prosecution Office 45 cases for initiation of criminal assets
investigations, a slight increase vis-à-vis the comparable period the year
before. Financial investigations need to be systematically applied and the
capacities to conduct them efficiently enhanced, which should lead to more
criminal assets being confiscated.

As
regards economic crime, a major police operation took place between
October and December 2013, targeted against illegal gambling establishments and
leading to the investigation of 720 criminal offences in the area of economic
crime and the seizure of important quantities of games of chance equipment of a
total value of EUR 8.5 million.
Seizures and confiscations of assets need to be used
systematically.

The
Inter-institutional Maritime Operations Centre's (IMOC) capacity to monitor
operational aspects of fighting against organised crime has increased through
the upgrading of 7 coastal radars, covering all national territorial waters.
The Total Information Management System, an online data base for information
exchange of law enforcement agencies, is fully functioning. Joint training for
operational skills of service personnel have taken place. Particular attention
is necessary as regards risk analysis of the expiration of the speedboat moratorium.

As
regards the fight against drugs, the National Plan against drug
cultivation is being implemented. From October 2013 to end of March 2014,
compared to the same period last year, drug seizures have continued, with seizures
of marijuana (18.8 t vs. 13.6 t) and cocaine (14.5 kg vs. 1.7 kg) increased and
seizures of heroine decreased (25.6 kg vs. 44.8 kg). Public destructions of
seized drugs took place in March,  April and May. In total, more operations led
to increased prosecutions for drugs trafficking in the same period. Investigations
in drug cases need to be systematically accompanied with parallel financial
investigations. Intensified systematic controls of the blue border are
necessary in order to close down drug trafficking routes. International
cooperation with Italy, Greece Germany, Belgium, USA and Kosovo[2] led to
the arrest of 51 suspects for international drug trafficking during the same
period, compared to 31 arrested in the same period last year. There is a need
to intensify the fight against drug trafficking networks through further
international cooperation, and the use of special investigation techniques,
based on threat assessment and with parallel financial investigations. Concrete
measures to eradicate narcotic plantations need to intensify. Measurable
performance indicators and expected deliverables need to be added to the
National Plan against drug cultivation.

Overall,
organisational changes were introduced and key legislation in the areas of
police organisation and training and control of firearms is prepared for
adoption. International police and judicial cooperation has intensified through
the implementation of extradition agreements. The national referral mechanism
against trafficking in human beings has been revitalised through increased
cooperation of the law enforcement authorities. Investigations have yielded some
positive results in the fight against drugs, trafficking in human beings and
money laundering. The fight against drugs cultivation needs to be intensified.
To further advance decisively on its EU integration path, Albania would need to
further develop its track record in the fight against organised crime through
increased inter-agency cooperation, enhanced efficiency of proactive
investigations and systematic use of financial investigations, strengthening
its international and regional cooperation, including with Europol, and
intensifying its efforts in tackling all forms of organised crime.

5.
Reform of the Judicial System

To
enhance the effectiveness of the judicial system, judicial reform
measures were announced          in January. Albania requested the cooperation
of the Venice Commission and a roadmap for the five key priorities, including
the reform of the judicial system, was developed. The process of drafting a
strategy for the period 2014-2020 was initiated. In February, an advisory
working group on the reform of the judicial system was established within the
Ministry of Justice.

In
March, Albania asked the Venice Commission to assess two sets of amendments to
the Codes of Civil and Criminal Procedure. One set of amendments empowers
judges to impose fines on lawyers who are repeatedly absent in civil and
criminal judicial hearings, whereas the second limits the types of appeals that
can be filed to the High Court.  These amendments aim at reducing the workload
of the courts and increasing their efficiency. It is intended that the
assistance of the Venice Commission will gradually extend to a wide range of
subjects.

In
line with the amended provisions of the Code of Civil Procedure, most civil
cases in the High Court are being reviewed by a panel of three judges. Further
measures are needed to make the functioning of the High Court more efficient.
These include harmonisation and publication of caselaw, amendments of the Code
of Criminal Procedure changing procedures applied at the High Court in relation
to the composition of panels reviewing criminal cases, the adoption of
provisions aimed at reducing the number of appeals, the completion of the
ongoing internal reorganisation of the Court, as well as filling the 3
remaining vacancies in the Court.

The
recent publication, for the first time, of a comprehensive list of judges with
an indication of their rank is a step towards increasing the transparency
of the system for the appointment, promotion and transfer of judges. The evaluation
of judges needs to be pursued in respect of the period 2007-2009 and subsequent
years. Additional measures are required to ensure that the procedures within
the High Council of Justice for the appointment, promotion and transfer of
judges are based exclusively on applicants' merits and other objective
criteria.

The
unified electronic case management system ICMIS, ensuring a random and transparent
allocation of cases to judges and instrumental to monitor the backlog of cases,
is not yet applied in all courts. This is particularly relevant to Tirana
District Court, the Serious Crimes Court, the Serious Crimes Court of Appeal
and the newly established Administrative Courts, where the system is not
operational.

Judicial
decisions should be made available to all practitioners and the general public.
Decisions should also be published in a searchable database, with their
respective reasoning and within a reasonable deadline, as well as in compliance
with the recommendations of the Commissioner for Data Protection.

The
amendments to the Code of Criminal Procedure regarding corruption offences by
high-level state officials (see section 3. Anti-corruption policies) introduce
the procedures regulating the lifting of their immunity. In the case of
ordinary judges, authorisation of the High Council of Justice upon request by a
prosecutor is required for personal and house search, as well as any form of
deprivation of liberty. For High and Constitutional Court judges, it is up to
the General Prosecutor to request the High Court to authorise the lifting of
immunity. Unlike ordinary judges and prosecutors, members of the High and
Constitutional Courts remain under the jurisdiction of the High Court for
corruption related offences.

Information
on six cases of suspected corruption within the judiciary has been sent by the
High Council of Justice to the General Prosecutor.

Since
October 2013, the Minister of Justice has initiated disciplinary proceedings
against 19 judges, which have been transmitted to the High Council of Justice
for examination. To date, the High Council of Justice has dealt with five of
these cases, dismissing one judge, transferring another judge to a court of a
lower level for two years, and issuing a warning for dismissal against 3
judges. In a separate case, the High Council of Justice suspended in December
2013 a judge from exercising his duties pending a final ruling. Proceedings
have been initiated by the Minister of Justice against two prosecutors. The
disciplinary system should be strengthened, the Minister of Justice's role in
the disciplinary procedure as well as within the High Council of Justice
reviewed, new immunity rules for magistrates effectively implemented, and a
track record of sanctions established.

As
regards efficiency, all six Administrative Courts, the
Administrative Court of Appeal and the Administrative College of the High Court
were set up as from November 2013.  The appointment of judges to these courts,
which are inter alia handling cases transferred from other courts, was made
following an examination.  The process of filling the nine remaining vacancies
in the five Administrative Courts outside Tirana and finalising the provision
of law clerks and court premises needs to be completed.

Following
the March 2014 decision of the Constitutional Court declaring unconstitutional
the April 2013 Law on Judicial Administration, it is necessary to fill this
legal gap and adopt provisions to regulate the work of courts and their staff.
According to the ruling, a qualified majority, as opposed to a simple majority,
would have been required for the Parliament to approve the Law in 2013.

As
regards access to justice, provisions amending the 2008 Law on
Legal Aid, in respect of exemption from judicial fees for certain categories of
citizens and the establishment of local legal aid offices (legal clinics),
should be implemented.

Overall,
  Albania has demonstrated its commitment to judicial reform, notably by
interacting with the Venice Commission to improve the independence,
accountability and professionalism of the system. Some efforts were made to
reduce the courts' backlog and workload in general, and enhance transparency
within the judiciary. Measures were taken to promote the accountability of
judges and prosecutors through the adoption of procedures regulating the
lifting of their immunity. A number of sanctions were adopted following
disciplinary procedures. To further advance decisively on its EU integration
path, Albania would need to rigourously pursue judicial reform, through
continued engagement with the Venice Commission, the adoption of significant
additional provisions to strengthen notably independence and accountability -
in line with the roadmap for the reform of the justice system - as well as
adequate implementation of adopted measures.

6.
Conclusion

Albania
has continued to implement and consolidate its EU-related reform measures, in
particular those relating to candidate status. There has been continued
political will to act decisively in the prevention and fight against corruption
and structural reforms testify to an all-encompassing approach including a wide
range of institutions. Important legislative reforms have been introduced in
the fight against organised crime and investigations have yielded positive
results in the fight against drug trafficking and other areas of serious and
organised crime. Albania has demonstrated its commitment to judicial reform,
notably by working with the Venice Commission to improve the independence,
accountability and professionalism of the system.

On
the basis of the findings of this Report, the Commission confirms its
recommendation that the Council should grant Albania candidate status.

It
is important that Albania’s systematic reform approach be continued as sustainable
results will be key for its further EU integration. This report already
identifies a number of key challenges essential for Albania to further advance
decisively in its EU-integration path.

In
the fight against corruption, to further advance decisively on its EU
integration path, Albania would need to focus on the enforcement of legislation
regarding asset declarations and conflict of interest, increase pro-active
investigations into corruption cases and introduce further measures to make
investigations more efficient, to continue building on its initial efforts, in
order to develop a solid track record of investigations, prosecutions and final
convictions in corruption cases. The deep judicial reform envisaged will also
be decisive in the fight against corruption.

In
the fight against organised crime, to further advance decisively on its EU
integration path, Albania would need to further develop its track record through
increased inter-agency cooperation, enhanced efficiency of proactive
investigations and systematic use of financial investigations, strengthening
its international and regional cooperation, including with Europol, and
intensifying its efforts in tackling
all forms of organised crime.

In
the reform of the judicial system, to further advance decisively on its EU
integration path, Albania would need to rigorously pursue judicial
reform through continued engagement with the Venice Commission, the adoption of
significant additional provisions to strengthen notably independence and
accountability - in line with the roadmap for the reform of the justice system
- as well as adequate implementation of adopted measures.

Moreover,
it is crucial that the reform process is accompanied by a re-invigorated and
consolidated political dialogue between government and opposition.
Compromise-based and constructive work in parliament is essential for the
sustainability of reforms, and
the establishment of a National Council for EU-integration, uniting all
stakeholders, is key for consensus across Albanian society.

The
key challenges identified in this report will be further elaborated in the
Commission's progress report of October 2014.

[1]The Commission's last
Enlargement
Package, including the Progress Report on Albania, was published on 16 October 2013.

[2] This
designation is without prejudice to positions on status, and is in line with
UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.