EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 14.10.2009 
SEC(2009) 1337 
COMMISSION STAFF WORKING DOCUMENT 
 
ALBANIA 2009 PROGRESS REPORT  
 
  
accompanying the 
 
COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIA MENT AND THE COUNCIL 
 
Enlargement Strategy and Main Challenges 2009-2010
 
{COM(2009) 533 final} 
 
EN 2   EN TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
1.1. Preface................................................................................................................... ....... 4 
1.2. Context ................................................................................................................... ...... 4 
1.3. Relations between the EU and Albania........................................................................ 5 2. Political criteria .......................................................................................................... .. 6 
2.1. Democracy and the rule of law .................................................................................... 6 2.2. Human rights and the protection of minorities .......................................................... 12 2.3. Regional issues and international obligations............................................................ 18 3. Economic criteria ....................................................................................................... 19 3.1. The existence of a functioning market economy ....................................................... 19 3.2. The capacity to cope with competitive pre ssure and market forces within the Union
............................................................................................................................... ..... 23 
4. European standards .................................................................................................... 24 4.1. Internal market ........................................................................................................... 24 
4.1.1. Free movement of goods............................................................................................ 24 4.1.2. Movement of persons, services and right of establishment ....................................... 26 
4.1.3. Free movement of capital........................................................................................... 27 4.1.4. Customs and taxation ................................................................................................. 28 4.1.5. Competition............................................................................................................. ... 29 
4.1.6. Public procurement .................................................................................................... 30  
4.1.7. Intellectual property law ............................................................................................ 31 4.1.8. Social policies, employment and public health policy............................................... 32 4.1.9. Education and research .............................................................................................. 33 4.1.10. WTO issues ............................................................................................................. ... 34 
4.2. Sectoral Policies......................................................................................................... 35 
4.2.1. Industry and SMEs..................................................................................................... 35  
4.2.2. Agriculture and fisheries............................................................................................ 35 4.2.3. Environment............................................................................................................. .. 37 
4.2.4. Transport policy ........................................................................................................ . 38 
 
EN 3   EN 4.2.5. Energy .................................................................................................................. ...... 39 
4.2.6. Information society and media................................................................................... 40 4.2.7. Financial control....................................................................................................... .. 41 
4.2.8. Statistics .............................................................................................................. ....... 42 
4.3. Justice, freedom and security ..................................................................................... 43 4.3.1. Visa, border management, asylum and migration...................................................... 43 
4.3.2. Money laundering ...................................................................................................... 46  
4.3.3. Drugs................................................................................................................... ....... 47 
4.3.4. Police.................................................................................................................. ........ 48 
4.3.5. Fighting organised crime and terrorism ..................................................................... 48 4.3.6. Protection of personal data......................................................................................... 50 
 
EN 4   EN COMMISSION STAFF WORKING DOCUMENT 
ALBANIA 2009  PROGRESS REPORT  
1. INTRODUCTION  
1.1. Preface 
Since March 2002, the Commission has reported regularly to the Counc il and Parliament on 
the progress made by the countries of the We stern Balkans region. This progress report 
largely follows the same structure as in the previous years.  
The report: – briefly describes the relations between Albania and the Union; 
– analyses the situation in Albania in terms of the political criteria for membership; 
– analyses the situation in Albania on the basi s of the economic criteria for membership; 
– reviews Albania’s capacity to implement Eur opean standards, that is, to gradually 
approximate its legislation and policies to the acquis , in line with the Stabilisation and 
Association Agreement and the Eu ropean Partnership priorities. 
The period covered by this report is early October 2008 to mid September 2009. Progress is 
measured on the basis of decisions taken, legisl ation adopted and measures implemented. As a 
rule, legislation or measures which are under preparation or awaiting parliamentary approval 
have not been taken into account. This approach  ensures equal treatment across all reports and 
permits an objective assessment. 
The report is based on information gathered  and analysed by the Commission. In addition, 
many sources have been used, including contribu tions from the government of Albania, the 
EU Member States, European Parliament reports
1 and information from various international 
and non-governmental organisations. 
The Commission draws detailed conclusions rega rding Albania in its separate communication 
on enlargement2, based on the technical analysis  contained in this report. 
1.2. Context 
Albania is a potential candidate  for EU membership. Albania a pplied for EU membership in 
April. The Commission stands r eady to prepare an Opinion on th is application once requested 
by the Council. 
                                                 
1 The rapporteur for Albania until 2009 was Mr. Libor Rou ček. New rapporteur is Mr. Nikolaos Chountis 
2 Enlargement Strategy and Main Challenges 2009-2010 (COM (2009) 533 of 14.10.2009). 
 
EN 5   EN The Stabilisation and Association Agreement (SAA) between Albania and the EU entered 
into force in April 2009. An Interim Agreem ent had been in force since December 2006. 
Albania applied for EU membership in April 2009. 
1.3. Relations between the EU and Albania 
Albania is participating in the Stabilisation and Association Process . 
The SAA provides a framework of mutual commi tments on a wide range of political, trade 
and economic issues. Before the entry into force of the SAA,  trade-related provisions had 
been implemented since December 2006 under an In terim Agreement. A Protocol to the SAA 
to take account of the accession of  Bulgaria and Romania to the EU entered into force in April 
2009.  
The EU provides guidance to the Albanian au thorities on reform priorities through the 
European Partnership .3 Progress on these reform priorities is encouraged and monitored via 
the political and economic dialogue  with Albania. This dialogue takes place through the 
SAA structures. The first SA Council was held in May 2009. Six sectoral working 
groups/sub-committees have been held since November 2008. 
Before the entry into force of the SAA, a Minist erial Troika meeting with  Albania in February 
2009 focused on key political priorities, including regional issues. A joint committee met in 
December 2008 to oversee the proper functioning of the Interim Agreem ent. A Consultative 
Task Force (CTF) meeting took place in D ecember 2008, focusing on political accession 
criteria and rule of law issues. Working pa rty/subcommittee meetings  focused on economic, 
internal market and sectoral policies. 
Albania contributed 12 soldiers  to the EU-ALTHEA Mission in Bosnia and Herzegovina and 
63 soldiers to the peacekeeping mission in Ch ad and in Central Africa (EUFOR). As a 
potential candidate for EU me mbership, Albania aligned itsel f with 116 CFSP declarations 
from a total of 128 relevant declarations a dopted by the EU during the reporting period. 
The visa facilitation  and readmission agreements between Albania and the European 
Community continued to be implemented. In the framework of the visa liberalisation 
dialogue, Albania has made good progress in the areas  of justice, liberty and security, but has 
not yet met all the benchmarks set in the roadma p. Further efforts are re quired particularly in 
the area of personalisation and distribution of biometric pa ssports, border and migration 
management and the institutional framework to  fight organized crime and corruption.  
Since 2007, pre-accession financial assistance  to Albania is provide d under the Instrument 
for Pre-Accession Assistance (IPA). The EC a llocated a total of € 81.2 million in 2009. The 
Multi-Annual Indicative Planni ng Document (MIPD) for 2009-2011 for Albania under the 
IPA was adopted in July 2009. Main focus areas continue to be jus tice and home affairs, 
administrative capacity-building, economic and social development and democratic 
stabilisation as well as preparation for future management of EC Funds . Ongoing CARDS and 
IPA assistance is implemented by the EC Dele gation in Tirana. The management of aid on a 
decentralised basis is a medium-term objective for Albania. The Financing Agreement for the 
National Programme for 2008 wa s signed in March 2009 and the implementation of the 
                                                 
3 Council Decision 2008/210/EC. 
 
EN 6   EN programme has started. The Financing Agr eements for the cross-border cooperation 
programmes were signed in June 2009. 
In response to the economic crisis, an IPA crisis package  has been created, comprising €200 
million for the Western Balkan region which are e xpected to leverage investments of at least 
€1 billion, co-financed by the partner financial in stitutions. The country will benefit from a 
share of multi-beneficiary f unds for competitiveness, SMEs, energy efficiency and banking 
sector regulation. In addition, national IPA funds were programmed to boost the infrastructure 
investments. They contribute €14.5 million via the Infrastructure Project Facility for 
realisation of rural road and water projects. Furthermore, €7 million have been reallocated from the CARDS 2006 programme for the same purpose. 
As regards support for civil society , € 2.7 million has been earmarked under the Civil Society 
Facility for projects to enhance the capacity of civil society organi sations over the period 
2009-2011. More specifically, € 1.5 million of IP A support is earmarked for civil society 
organisations dealing with the fight agai nst corruption, organised crime and human 
trafficking, with environmental protection an d education as well as  poverty alleviation. 
Another € 1.2 million under the European In itiative for Democracy and Human Rights 
(EIDHR) supports actions aimed at the children, women and mi nority rights, people with 
disabilities and mental illne sses and access to justice. 
As regards Community programmes , Albania is participating in the 7th Research 
Framework programme under a memorandum of understanding signed in December 2007. 
The country is also participating in the Entrepreneurship and Innovation Framework 
Programme and in the Europe for Citizen s programme, under memorandum of understanding 
signed respectively in June 2008 and February 2009. 
2. P
OLITICAL CRITERIA  
This section examines progress made by Alba nia towards meeting the Copenhagen political 
criteria, which require stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protect ion of minorities. It also mon itors regional cooperation, good 
neighbourly relations with enlargement coun tries and Member States, and respect for 
international obligations. 
2.1. Democracy and the rule of law 
Parliament  On 29 January, parliament approved unanimously  a resolution calling on the Government to 
apply for EU membership. In the resolution, Albania committed to conducting free and fair 
parliamentary elections and to approxim ating its legislation with the EU.  
The parliamentary elections of 28 June were assessed by the OSCE Office for Democratic 
Institutions and Human rights (ODIHR) as meeting most OSCE  commitments whilst not fully 
realising Albania's potential to adhere to th e highest standards for democratic elections. 
Tangible progress with regard to voter identification, legal framework and voting took place 
but the politicisation of technica l processes, such as the vote c ount, remains to be addressed in 
future elections. 
 
EN 7   EN Electoral reform was completed with the adop tion of the Electoral Code in December 2008. 
The main OSCE/ODIHR recommendations from prev ious elections were a ddressed as part of 
the overall electoral reform. Ho wever, the culture of dialogue  between the main political 
parties deteriorated before the elections. This held back progress on key reform areas, such as 
the judiciary. The last session of parliament was unable to adopt key legislation due to a 
boycott by some political parties. Debates centred first on the adoption of the Electoral Code and then on the modalities for issuing ID cards . To voice protest against the draft Electoral 
Code, some parties engaged in hunger strikes. Ov erall, the political di alogue, a key European 
Partnership priority, needs to get back on track. 
Regarding preparations for the elections,  progress can be noted on completing the electoral 
infrastructure in line with recommendations from the OSCE/ODIHR. Improved voters' lists were compiled on the basis of the new civil regist ry, thus meeting to a large extent this key 
European Partnership priority.  
According to the new Electoral Code, only ID  cards or passports could be used as 
identification for voting purposes . The distribution of ID cards , to enable citizens without 
passports to vote, started in January 2009 and was largely completed. The cost of ID cards 
and the rate of distribution turned into one of the most contentious issue in the election 
process. On election day, there were  no major disputes about ID cards.  However , some parties 
claimed that inaccuracies in voter lists persisted.  
Albanian voters elected their new 140 members of parliament in 12 regions, according to the 
new regional proportional electoral system. Th e new parliament convened on 7 September 
and the new government was sworn in on 16 September. 
Parliament adopted a good number of laws to a pproximate the Albanian legislation to the EU 
acquis  but the adoption of some key laws was delayed due to the electoral campaign. The 
elections dominated the agenda of parliament. This resulted in little progress on key reform 
areas, such as the judiciary.  
Management capacities of parliament have im proved overall. There has been a significant 
decrease in the number of ad hoc parliamentary inquiry committees. The parliamentary administration started to transcribe and publis h proceedings of committee meetings. However, 
the implementation of parliament’s budget and of its internal financial rules has continued to 
suffer from a lack of transparency and account ability. On various occasions, procedures for 
recruitment have not been respected. This has had adverse effects on the quality of technical 
staff.  
Parliament only partially exercised its ove rsight over the executive. To progress on 
approximation of legislation, parlia ment will have to strengthen administrative capacities to 
perform its control functions over the legislative process.  
Parliament has not yet addressed the issue of introducing specific rules limiting the scope of 
the immunity of its members.  
The European Integration Committee (EIC) has continued to raise awareness on EU matters. 
The EIC checks whether draft legislation includes concordance tables for legal 
approximation, as required under a new regulati on of the Council of Ministers. However, 
further efforts are needed to enhance the role of parliament in monitoring the implementation 
of SAA obligations. 
 
EN 8   EN Overall , progress can be noted on the conduct of parliamentary elections which were 
considered as meeting most international standa rds. The timely adoption of the Electoral Code 
and preparation of improved voters’ lists, la rgely meets this key European partnership 
priority. However, due to th e elections, the political dial ogue between political parties 
deteriorated and this delaye d progress on key reform areas. 
Government 
Following the June parliamentary elections, a new coalition government  headed by outgoing 
Prime Minister Berisha from the Democratic Pa rty (DP) was asked by President Topi to form 
a new government. In addition to the DP, the co alition includes the Socialist Movement for 
Integration (SMI), the Republican Party (RP) and the Party for Justice and Integration. The 
new cabinet is made up of 14 ministers. The SM I, as the main coalition partner, secured the 
post of Deputy Prime Minister an d Minister of Foreign Affairs as well as the Ministry of 
Economy and the Ministry of Health. The Repub lican Party secured the post of Minister of 
Environment and Water Management for its party leader Fatmir Mediu. Mr. Mediu was 
Minister of Defence in the previous government and resigne d after the explosion of an 
ammunition dismantling plant in Gërdec in March 2008. The High Court dismissed charges 
against him in September following his re -election as member of parliament. 
Building on the 2009 work programme of the previous government, the new government 
programme gives priority to European Integratio n, raising living standards and social policies. 
The fight against organised crime and corruption, along with judicial reform, continue to be 
government priorities.  
Relations between state institutions continue d to be difficult at times. A tendency by the 
executive to exert control over i ndependent institutions, in partic ular in the judiciary, raised 
concerns.  
The lustration law was adopted by parliame nt in December 2008. Wider consultation and 
consensus would have been appropriate before  the law was adopted. The implementation of 
the lustration law was suspended by the Consti tutional Court and the law is under review.  
Horizontal coordination of EU matters has improved through the upgrading of European 
integration units in all line ministries and th e establishment of inter-institutional working 
groups for drafting sectoral strategies. 
Some measures have been taken to improve th e monitoring and inter-agency coordination of 
SAA commitments. In April, an Inter-Mini sterial Coordination Committee on European 
Integration was established to st rengthen the coordination role of the Ministry of European 
Integration (MoEI). At the MoEI, some progress has been made in increasing administrative 
capacity and in filling vacancies . The newly established department for translation of the 
acquis  has recruited 8 staff.  
There has been some progress re garding the translation of the acquis , such as the 
establishment of a database of translated acquis. In January, a decision on “legal 
approximation” was adopted including a requireme nt to prepare concordance tables in draft 
legislation. Moreover, legisla tive gap assessments have been completed for the political 
criteria and several sectors. Training efforts continued. The approximation of legislation with 
the acquis  remains a major challenge. 
 
EN 9   EN Little progress has been made in the im plementation of the National Plan for the 
Implementation of the SAA and a reliable da tabase on approximation of legislation is 
missing. The entry into force of the SAA in April was not matched by a strengthening of 
administrative capacity to monitor SAA commi tments. Capacity for inter-ministerial 
coordination remains weak. Administrative capa city to implement SA A commitments, a key 
European partnership priorit y, needs further strengthening 
The National Strategy for Development and In tegration (NSDI) rema ins the government's 
strategic framework, covering 36 sectoral strategies of which 24 have been adopted so far. 
The implementation of the SAA is set as a first priority under European integration in the NSDI. However, cost estimates and performa nce indicators by sectors remain uneven. 
Government planning has improved. The Governme nt's overall Integrated Planning system 
(IPS) has built-in links on key sectors for European Integration.  However, central 
coordination capacity remains limite d in terms of implementation.  
Overall , Albania has continued to make some progress in st rengthening its government 
structures with a view to addressing SAA comm itments, a key European Partnership priority. 
However, further strengthening of capacity, coordination and strategic planning for EU 
integration remains necessary. 
Public administration 
Little progress can be reported in this area. The legal framew ork is largely in place through 
the civil service law but its implementation remains problematic. The strategy for public 
administration reform was adopted but implemen tation has not started. Some measures were 
taken to improve human resource management, but the implementation of the new reward 
system for civil servants has been uneven. In terms of financing for public administration, 
some progress can be noted with the adoption of the new Organic Budget Law. However, the 
administrative capacity of the Department of Public Administration (DoPA) remains weak. 
Awareness on fraud issues among civil servants , including on the us e of EU funds, is 
insufficient. An adequate human resource mana gement system for public administration is 
needed. 
Politically motivated turnover of  public employees has continue d, although to a lesser extent. 
The share of vacancies filled by temporarily c ontracted employees remains high, at 20% of all 
vacancies. This practice undermines the implemen tation of the Civil Service Law and creates 
an opening for politicisation of the administrati on. Recruitment in the civil service continues 
to take place through non-t ransparent procedures.  
The capacity of the Training Inst itute for Public Administrati on (TIPA) has improved due to 
recruitment and training of managerial staff and heads of training centres. However, the role 
of the DoPA in ensuring implementation of the Civil Service Law, particularly in terms of 
political appointments, and the capacity of TIPA requires further strengthening 
Overall , the legal framework for public administra tion reform is in place but the lack of 
transparency and accountability in appointments remains a key European Partnership priority 
to be addressed. Further progress is needed to establish an independent, merit-based and 
professional civil service, fr ee of political interference.
 Full enforcement of the Civil Service 
Law and implementation of the Strategy for public administration reform will be key to progress in this regard. 
 
EN 10   EN Judicial system 
There has been little progress in completin g the legal framework for judicial reform. 
Amendments to the Law on the General Pros ecutor's Office (GPO) were adopted. These 
amendments clarify the career structure of the GPO and introduce improved recruitment and 
promotion criteria for prosecutors. However, a comprehensive long-term strategy to reform 
the judiciary is pending. The adoption of bylaw s to implement the Law on Judicial Power has 
progressed slowly. The Law on the High Council of Justice (HCJ) and the Law on 
administrative courts are pending. The admini strative capacity of the HCJ remains weak. 
Attempts by the government to curtail the indepe ndence of the judiciary have politicised the 
debate about judicial refo rm and hampered progress. 
The General Prosecutor's Office completed its i nvestigation on the explosion in 2008 at the 
ammunition depot in Gërdec. 29 indictments, incl uding that of the then Minister of Defence, 
were forwarded to the High Court. The tria l was postponed several times on procedural 
grounds and the High Court decided in September to suspend the case against former Defence 
Minister Mediu based on his immunity as Member  of Parliament. To ensure credibility in the 
fight against corruption, a fair and transparen t process to condemn all responsible persons, 
regardless of their position, is needed. Little  progress can be reported regarding the 
shortcomings in health and safety standards which were part of th e Gërdec investigation (See 
also section 4.1.8). 
In November 2008, the Law on the private baili ff service was adopted, allowing for private 
enforcement agents to carry out bailiff duties. The establishment of the twin-track (private and public) bailiff system will help in enforcing civil court rulings. However, implementation regulations for the service to  start operating are pending.  
The Law on State Advocacy was adopted in No vember 2008. The State Advocacy Office is 
being established and recruitment has started. This body will defend and represent the State before national and internationa l courts, including the European Court of Human Rights in 
Strasbourg. In December 2008, amendments to the Criminal Code dealing with cybercrime 
were adopted, reflecting the obligations stemmi ng from the ratification of the Convention on 
Cybercrime.  
Constitutional court rulings have been issued on  public administration matters and on the Law 
on the organisation of the judici ary. Other rulings regarded comp laints by economic operators 
such as diesel fuel import restrictions and ma rket access for some mobile telephone operators.  
Judicial inspections continue to  be mixed competencies between the HCJ and the Ministry of 
Justice. Competencies of the in spectorates of the HCJ and thos e of the Ministry of Justice 
remain to be clarified. Inspections by both in spectorates and disciplinary proceedings against 
judges often do not meet European standards an d weaken the independen ce of the judiciary. 
The adoption of the Law on the HCJ will be key in this respect. 
The School of Magistrates increased the amount of continuous education training programmes 
for judges and prosecutors. Howeve r, adequate financial resources  are needed to broaden the 
scope of specialised training progra mmes and to ensure sustainability. 
Concerning judicial infrastruc ture, the serious crimes court building in Tirana has been 
completed, and the criminal section of the Tirana  district court has been relocated, which has 
 
EN 11   EN helped alleviate overcrowding. However, court infrastructure remains poor. Sessions in 
judges’ offices continue to be common, and public access to court hearings remains a 
concern.  
The random electronic allocation of court cases to judges is working fairly well The judges 
affected by the abolition of eight small dist rict courts in 2007 have been reinstalled. A 
computerised case management system for both ci vil and criminal cases is installed in all 
courts. The Ministry of Justice started publis hing case management st atistics on its website. 
However, court procedures remain problematic  in terms of efficiency and transparency. 
The budget for the judiciary has been increase d in 2009. The management of the Office for 
the judicial budget has improved. However, the funding for the judiciary remains insufficient 
to ensure proper functioni ng of court administration. 
The number of cases of blood feud-related killin gs is decreasing due to improved prosecution 
of perpetrators and to the r econciliation efforts le d by civil society. Over  1000 families were 
disenfranchised for the elections because they could not leave their homes to apply for ID 
cards and/or vote. A coordina ted strategy dealing with bl ood feuds, including crimes 
committed under customary law, remains to be adopted.  
Overall , judicial reform in Albania remains at an early stage. Key pieces of legislation needed 
to complete the legal framework have not b een adopted. The justice system continues to 
function poorly due to shortcomings in independ ence, transparency and efficiency, which are 
key European Partnership priori ties to be addressed. A compre hensive strategy to improve the 
judicial system will be key to progress in this area.  
Anti-corruption policy 
The government has undertaken more coordinate d efforts to fight corruption in some areas. 
Where corruption can result from direct c ontact between the private sector and the 
administration, measures aimed at reducing pe rsonal contacts with officials were taken. 
Measures include a reduction of bureaucracy and reform of procedur es (e-procurement, e-
taxation, one-stop-shop for re gistration and licensing of bus inesses and e-government). 
Progress can be reported in the education sector, such as university entrance exams, which use 
an anonymous system to limit the scope for corruption.  
An Inter-sectoral Strategy on the Preventi on and Combating of Corruption 2008-2013 was 
adopted in October 2008, followed by the adopti on of an action plan in January 2009. Their 
implementation has started. However, realisti c implementation mechanisms and timeframes 
are missing, together with monitorable indicators and adequate resources.  
Progress can be noted regarding the improveme nt of legislation in  accordance with the 
Council of Europe Civil Convent ion against Corruption. In many other fields, efforts of the 
government to tackle corruption are stalling at  the strategy stage or are only selectively 
applied. Out of thirteen recommendations from the Council of Europe Group of States against 
corruption (GRECO) report on Albania, two recommendations regarding the rules on political 
parties financing remain to be addressed. 
Firm and transparent handling of cases of alle ged corruption, regardle ss of the position of the 
persons involved, will be important indicators for the independence of the judiciary. More political will is needed to uproot the culture  of impunity which continues to prevail. 
 
EN 12   EN The lack of significant progress in the reform of the health sector has maintained the practice 
that adequate healthcare often de pends on a bribe. Corruption remains high at almost all levels 
of the health sector. Adoption of a comprehensiv e health reform strategy will be key in this 
respect.  
The lack of transparency and th e unclear legal basis in the area of property rights has favoured 
corrupt practices in this sector.  
The transparency of party financing remain s a matter of concern to be addressed. The 
Electoral Code requires that the Central Electi on Commission collects pol itical party financial 
declarations; it lacks however the proper mechanisms to investigate these and there is no reporting obligation for pr ivate sector donations.  
Progress can be reported with the results obtained by the multidisciplinary Joint Investigative 
Unit (JIU) on economic crime and corruption. (See also section 4.3).  However, the 
investigative capacity of law enforcement bodi es and the prosecution remains weak due to 
shortfalls in expertis e, poor inter-agency coordination and investigative methods. Conviction 
rates in corruption cases remain low. 
The High Inspectorate for Declaration and Audit of Assets (HIDAA) has continued to publish 
an annual report including revenue declarations  from public officials aimed at combating 
conflict of interest. In March, a memorandum of cooperation was signed between the HIDAA 
and the Financial Intelligence Unit (FIU). The Department for Internal Administrative Control and Anti-Corruption (DIACA) c ontinued to perform internal  control duties over public 
administration. However, the administrative capacity of supervis ory and auditing bodies 
needs further strengthening partic ularly in the areas of conflict of interest and financing of 
political parties.  
Overall , Albania has continued to address corruption, a key Eur opean Partnership priority. 
The legal framework and inter-agency structures are in place but implementation remains uneven. The commitment of the authorities to combat corruption has not been backed by 
consistent implementation of legislation. A more systematic and strategi c approach is needed 
in fighting corruption by putting in place syst ems of accountability in public administration 
and the judiciary and by increasing transparenc y. A convincing track record of verdicts and 
sanctions in corruption cases remains to be esta blished, particularly for high level corruption. 
Corruption is prevalent in many areas and cont inues to be a particularly serious problem. 
2.2. Human rights and the protection of minorities 
Observance of international human rights law 
Albania has ratified most of the international and European  human rights instruments . It 
ratified the Optional Protocol to the UN Convention on the Rights of the Child on the 
involvement of children in armed conflict, in December 2008. It also ratified the Council of 
Europe Convention on the protection of childre n against sexual exploi tation and sexual abuse 
in April 2009. However, Albania has not ye t signed the UN Convention on the Rights of 
Persons with Disabilities, or the European Charter for Regional or Minority Languages. 
The European Court of Human Rights  delivered five judgement s finding that Albania had 
violated the European Convention on Human Rights and related protocols, in cases 
concerning the right to access to court and pr operty rights, and the prohibition of degrading 
 
EN 13   EN treatment and unlawful detention. The total number of pending a pplications before the Court 
regarding Albania is 219. Howeve r, further efforts are required as regards the execution of 
judgements. 
Albania has an adequate lega l framework to guarantee the promotion and enforcement of 
human rights . However, existing legislation is often not  enforced, especially in the field of 
prevention of torture and ill treatment, gender equality, child protection and discrimination. 
Civil and political rights 
With regard to the prevention of torture and ill-trea tment and the fight against impunity , 
Albania has made some progre ss to combat physical abuse of  prisoners. Law enforcement 
agencies have prosecuted cases of ill-treatme nt and police officers ha ve been dismissed for 
misconduct. The mechanisms for monitoring  prison conditions have improved due to 
extensive prison visits by the People's Advo cate acting as National Prevention Mechanism 
against Torture. However, allegations of exces sive use of force duri ng police custody remain 
an issue of concern. Further effo rts are needed to train law enfo rcement officials and to limit 
the high turnover of trained prison staff.  
There has been some progress in the prev ention of torture and ill-treatment. The  People’s 
Advocate  (Human Rights Ombudsman) continued to pl ay an active role in investigating 
claims of violations of fundamental right s and making recommendations. The institution 
received a total of 2,862 complain ts during the year 2008. Most of the complaints were related 
to prisons, police and property rights. The People’s Advocate has e xpressed particular 
concern over the conditi ons in pre-trial detention centre s and prisons. Further action is 
required to implement the recommendations of the People’s Advocate and the European Committee for the Prevention of Torture.  
Concerning access to justice , a Law on legal aid entered into  force in April 2009. It provides 
for free legal services to juveniles, witnesse s, or vulnerable persons . The State Commission 
for legal aid has been appointed but is not yet operational. Ho wever, the appointment of the 
Legal Aid Commission is pending and implemen tation has not started. Further efforts are 
needed to improve access to legal aid for vul nerable groups, such as victims of domestic 
violence, and some minorities , in particular the Roma. 
With regard to the prison system , parliament adopted in December 2008 the Law on prison 
police. In March 2009, the govern ment adopted the General Rules of Procedure of Prisons, 
including provisions on the ri ght of prisoners to employment and education. The 
establishment of minor's sections in the office of several prosecutors has encouraged the use 
of alternative sentencing of juveniles and relieved the burden on pre- trial detentions and 
prisons.  
Several prisons have been refurbished to im prove living conditions. The construction of a 
juvenile rehabilitation institution in Kavaja an d a new pre-trial detention centre in Durrës 
were completed in June 2009. These two new cent res should help to alleviate overcrowding. 
The total number of detainees has decreas ed. However, it remains well above capacity. 
General prison conditions remain below standard. Cases of bribery and ex cessive use of force 
in Albanian prisons remain to be addressed. Progress in developing rehabilitation schemes, 
such as education, work and so cial programmes for detainees, wi ll be key to progress in this 
area.  
 
EN 14   EN In December 2008, Parliament adopted amendments to the Criminal Code regarding 
alternatives to detention. To  implement this law, the Regulation on the probation service was 
adopted in March 2009. The probation service is  starting to operate but application of 
alternative sentencing by the judi ciary is progressing slowly.  
Overall, progress has been made in establis hing a probation servic e and in improving the 
prison and pre-trial detention sy stem, but overcrowding continue s and detention standards in 
older prisons remain poor. 
As regards freedom of expression , investigative journalism ha s contributed to reporting of 
corrupt practices. However, some pressure was applied by the executive,  mostly financially, 
but also through selec tive action against media operators. Some media outlets were evicted 
from their premises owned by the government. Bu siness and political in terests continue to 
influence the independent media, in terms of editorial independence and professional 
capacities.  
The media coverage of the electoral campaign was often biased. Regarding media coverage, 
the OSCE/ODIHR media monitoring indicated th at during the official campaign period the 
coverage for the main parties was balan ced. However the report points out that all 
broadcasters showed a bias towards either DP or SP. The public serv ice broadcaster has not 
fully guaranteed equal airtime to all political  parties. The National Council for Radio and 
Television (NCRT) has advanced preparations for the national strategy fo r TV digitalisation. 
However, the Law on electronic broadcasting re mains to be adopted. The Law on public and 
private radio and television is still not in co mpliance with international standards. Required 
amendments to the Criminal and Civil Codes to decriminalise libel and defamation and the implementation of the law on access to information are pending. 
In terms of administrative capacity, no progres s can be reported on the NCRT’s monitoring 
capacity. The NCRT has favoured the media linke d to the government. A fine imposed by the  
NCRT on a private TV broadcaster prompted the reaction of the People’s Advocate. This 
raises questions about the independence of the NCRT. 
The reform of the public broadcaster has st alled. The government’s continuing influence 
impacted negatively on the independence of the institution. The low collection rate of the 
licence fee remains a matter of concern. 
Overall, there has been only little progress on completing the legal framework on the media. 
More efforts are needed to improve the over all climate for the media, to finalise the 
digitalisation strategy and to adopt key legi slation on broadcasting, decriminalisation of 
defamation, public information and tr ansparency of media ownership. 
No restrictions on freedom of assembly and association  are to be reported.  
As regards  civil society organisations, progress can be noted. Civil society relations with the 
government improved. The law on the establishm ent of the Civil Society Foundation entered 
into force. However, greater efforts are need ed to foster the non-profit sector and for 
consulting civil society organisa tions on legal and administrative reforms. The fiscal regime 
governing non-profit organisations remain s unclear and needs to be clarified. 
Civil society is represented by many small NGOs which remain largely fragmented. The 
government has started to consult civil society or ganisations on draft laws and to engage with 
 
EN 15   EN a wide range of stakeholders. However, there are no formal mechanisms in place for such 
consultations. Coordination mechanisms to e nhance civil society participation in policy 
making remain weak. 
As regards  freedom of religion,  the government signed an ag reement with the three main 
religious communities to regulate their relations  with the state. In February, the National 
Strategy for the Alliance of Civi lisations in support of inter-cultural and inter-religious 
dialogue was adopted. Interfaith relations cont inue to be good. However, no progress has been 
made on solving the issue of property restitution to religious communities.  
Economic and social rights 
With regards to women’s rights , some progress can be re ported. The Electoral Code 
introduces a 30% gender quota. Political parties generally respected this  quota in candidates’ 
lists for the parliamentary elec tions. The representation of wome n in parliament doubled from 
previous elections reaching 23 female deputies. However, some of the lists did not meet the 
quota. The Central Election Commi ssion did not apply sanctions pr ovided for in the Electoral 
Code in this respect.  
In January 2009 the National Council for Gender Equality was establis hed. However, there 
continues to be low representation of women in high-level elected and appointed bodies both 
at central and local level.  
Gender equality is guaranteed by law but the imp lementation of the existing legal framework 
and policies is insufficient. Most of the byl aws implementing the Law on domestic violence 
have been adopted. A first public shelter for vict ims of domestic violence is being established. 
However, domestic violence remains widespre ad. Many incidents went unreported. Sound 
data is missing. Further measures are required to  strengthen the level of protection for women 
victims of domestic violence, including media awareness campaigns and specialised training 
for judges.  
Overall, some progress has been made to protec t women’s rights. However, further efforts are 
needed to effectively promote gender equality. Domestic violence remains a serious concern. 
The protection of women against all forms of violence needs to be considerably strengthened. 
Some progress took place as regards children's rights . In November 2008, parliament 
adopted amendments to the Criminal Code, wh ich now considers the use of children for 
pornographic materials a criminal offence. Measures implementing the 2008 Strategy on 
Foster Care have been prepared but implem enting standards and ad equate resources are 
missing. As regards juvenile ju stice, progress has continue d in the implementation of 
alternative measures to detenti on for juveniles. Up to 42% of all sentencing is for community 
service. The system for protection of children between 14 and 18 years of  age has improved in 
terms of legislative provisions, knowledge of professionals a nd in the use of alternative 
sentencing. However, the juvenile justice system  lacks responses and referral mechanisms for 
children under the age of 14 who commit a crime.  
Albania remains a country of origin for childre n trafficked for sexual exploitation and forced 
labour.  Child protection units are in place at the loca l level as part of a referral system for 
children at risk. However, registration of child ren is not fully implemented, particularly in 
poor areas and in the Roma co mmunity. School dropout rates, st reet children and child labour  
continue to be issues of serious concern. Th e establishment of a national child protection 
 
EN 16   EN system, including efficient reintegration mechan isms for children victims of exploitation and 
children left behind, would be ke y to progress in this area.  
Overall, some progress has continued in the area  of children’s rights. However, further efforts 
are needed to fully implement existing legisl ation and policies to ensure effective child 
protection. 
As regards socially vulnerable and people with disabilities , following protest campaigns by 
NGOs, the government has improved some of the disability benefit packages. However, the 
existing legislation and administrative measures are not fully enforced. Statistics on people 
with disabilities are lacki ng. Access to employment continues to be problematic. 
The legal framework regarding the protection of  people with disabilities remains to be 
completed. Albania has not signed the UN C onvention on the Rights of Persons with 
Disabilities and its optional protocol. The Law on people with disabilities remains to be 
adopted. The implementation of th e national strategy on people with  disabilities has remained 
slow. New urban planning measures were adopted  to improve accessibility to individuals with 
disabilities, but implementation has not started.  
No significant changes can be  reported in the field of labour and trade union rights . The 
law allows the creation of trade unions a nd employers associations. However, these 
organisations continue to be weak and frag mented, due to the predominance of small and 
medium-sized enterprises and the large inform al economy. Legal provisi ons denying the right 
to strike to some State employees persist, wh ich is not in line with the European Social 
Charter. The position of trade unions and employers' organisations remains weak. Preparations for the social dialogue remain at an early stage. 
Concerning anti-discrimination policies, discrimination based on gender, race, language or 
religion is prohibited by law. However, th e Law on Anti-discrimi nation prepared in 
consultation with civil society has not been adopted yet.  Discriminatory practices against 
women and some minority groups such as Roma are widespread. There are no longer active 
lesbian, gay, bisexual and transgender (LGBT) organizations operating in the country. LGBT 
persons are subject to intolerance. The govern ment has not taken any action to develop an 
action programme to counter discrimination, including on grounds of sexual orientation and 
gender identity. 
There has been little progress in consolidating property rights . The land valuation maps, an 
essential basis for compensati on, were finalised for the en tire country. The Immovable 
Property Registration Office (IPRO) has continue d initial property registration in different 
parts of the country but the process is not completed. A complete inventory of State land 
earmarked for compensation remains to be completed. Unresolved legal issues with regard to the compensation of former owners continued to  hamper progress. The number of court cases 
stemming from disputed property rights has further increased.  
The Agency for legalisation of informal zones (ALUIZNI) increased its staff from 350 to 900 
in order to speed up the proce ss of legalisation. However, th e process remains non transparent 
and few legalisation requests have been processed. By the end of 2008, the Property 
Registration and Compensation Agency (PRCA) paid €4 million compensation to some former owners. Other legal amendments, were adopted in a piece-meal and uncoordinated manner. Considerable further efforts are needed regarding the first registration of real estate, 
 
EN 17   EN property restitution, and compensation and lega lisation of informal constructions. The 
adoption of a comprehensive strategy accompanied by an action plan will be key in this area. 
Overall , there has been little progress in conso lidating property rights, a key European 
Partnership priority. The probl ems relating to the property re form require a wide-ranging 
approach and the setting-up of a comprehens ive legal and institutional framework. 
Uncertainties about property rights continue to hamper development of a functional land 
market and keep foreign investment below potential. 
Minority rights, cultural right s and protection of minorities 
The Constitution provides for the protection of ci vil, economic, social and political rights of 
minorities and the law forbids discriminatory tr eatment. There are three recognised national 
minorities (Greek, Macedonian  and Serbian-Montenegrin) and two ethno-linguistic minorities 
(Aromanian and Roma) in Albania. The Egyptia n community is seeki ng the status of an 
ethno-cultural minority. With regard to cultural rights , the European Charter for Regional or 
Minority Languages remains to be adopted.  
Albania has continued to deve lop its legislative framework with a view to improve the 
implementation of the Council of Europe Fr amework Convention for the Protection of 
minorities. Agreements were signed between central and local authorities regarding the 
display of traditional local names in minority la nguages. However, furt her efforts are needed 
to defuse intra-ethnic tensions. The lega l framework on minority protection, including 
territorial limitations, education policy and the distinction between categories, needs to be 
clarified based on updated statistical data. There continues to be no accurate data on 
minorities. The next population census, while respecting international standards on data 
protection, will be key to address this issue. 
The Civil Service Law provides for the particip ation of minorities in public administration, 
the armed forces and the police.  Efforts have been made to  recruit persons belonging to 
minorities, particularly Roma, in the police.  However, minority representation remains 
limited.  
The institutional capacity of the State Comm ittee on Minorities remains weak. Its role as 
intermediary between the government and minority representatives requires further 
strengthening in order to ensure effective participation of minorities in decision-making processes. 
Overall, progress has continued on the protection of minority rights but a dditional efforts are 
needed to ensure that member s of all minorities can fully enjoy their cultural rights. The 
collection of updated data on th e size of minorities is key to development of a national 
minority policy. The legal framework on minority protection needs to be further developed 
and clarified. 
Concerning the Roma  minority, some progress can be reported. An inter-ministerial working 
group for the implementation of the national stra tegy was established in March. However, the 
implementation of the National Strategy is pr ogressing slowly. Effe ctive coordination of 
central and local authorities t ogether with improved cooperati on of stakeholders is weak. 
There is no information on the budget allocated to the implemen tation of the strategy. Albania 
has not yet adopted the Action Plan for the Decade of Roma inclusion. 
 
EN 18   EN The Ministry of the Interior launched in Dece mber 2008 a project to re gister the Roma, of 
whom up to 50% have no ID cards. In view of  the general elections, the Government issued 
ID cards for the Roma at no cost and used mobile units to distribute them. However, 
registration is not completed and requires more  attention. Roma child ren are particularly 
vulnerable to trafficking due to a lack of birt h registration and low school enrolment rates.  
Overall , the Roma minority continues to face ve ry difficult living conditions, poverty and 
discrimination, particularly regarding access to education, social protection, health care, 
employment and adequate housing. 
2.3. Regional issues and international obligations 
Albania still maintains the 2003 b ilateral immunity agr eement with the United States granting 
exemptions from the jurisdiction of the International Criminal Court . This does not comply 
with the EU Common Positions on the integrity of  the Rome Statute or the related EU guiding 
principles on bilateral immunity agreements. Albania needs to align with the EU position. 
Albania is still being monitored by the Parliamentary Assembly of the Council of Europe , to 
verify fulfilment of obligations and commitment s relating to its membership of the Council of 
Europe. 
Regional cooperation and good neighbourly relations fo rm an essential part of the process of 
moving towards the European Union. Albania c ontinues to actively participate in regional 
initiatives, including the Sout h-East European Cooperation Process (SEECP), the Regional 
Cooperation Council (RCC), the Central Europ ean Free Trade Agreement (CEFTA), the 
Energy Community Treaty and the European  Common Aviation Area Agreement (ECAAA). 
Bilateral relations with other enlargemen t countries and neighbouring EU Member 
States  continued to be positive. An increased numb er of bilateral activities and visits have 
been held with the countries of the region. 
Albania has maintained good relations with the former Yugoslav Republic of Macedonia  and 
cooperation has continued to grow. The implem entation of the visa-f ree bilateral travel 
agreement has started  and the agreement on joint patrolling of common borders entered into force 
Relations with Montenegro  have intensified and exchanges have increased, including the 
signing of agreements on cooperation in scie nce and technology and in culture, and the 
adoption of measures in fighting organised crime. The construction of the joint border 
crossing point at Muriqan/Sokobine was comp leted. Albania has further developed its good 
relations with Croatia.  The country's relations with Bosnia and Herzegovina  have intensified 
and agreements on cooperation in fighting orga nised crime, corruption, illegal migration and 
drugs trafficking and in the area of custom s have been concluded. A visa-free bilateral 
agreement and a readmission agreement have been signed.  
Relations with Serbia  have remained stable, although th ey were affected by Albania’s 
recognition of the independence of Kosovo4. There have been no bilateral political visits, but 
there were senior-level meetings on the margin s of regional and intern ational events. There 
have been ongoing contacts regarding judicial  cooperation Economic cooperation progressed 
                                                 
4 Under UNSCR 1244/1999. 
 
EN 19   EN and in March 2009 a Memorandu m on Cooperation was signed between the Serbian and 
Albanian Chambers of Commerce.  
Albania has continued to de velop its relations with Kosovo . Intensification of high-level 
contacts and the signing of ne w agreements, including those on free movement of people, and 
the opening of common border and customs points have taken place. The construction works 
for the motorway linking Durrës to Kukës, whic h will eventually link Kosovo to Albania, are 
well advanced. 
Political, economic and cultural relations with Turkey  have continued to intensify. 
Agreements on cooperation in the fight agains t money laundering were  signed. Agreements 
were signed with a view to abol ish the bilateral visa regime. 
Relations with Italy continued to be very good and to deve lop with a number of joint projects 
in key sectors such as energy and agriculture. It aly continues to rank as Albania’s first partner 
in terms of trade and commercial exchanges . Relations with  Greece  remained very good. 
Greece remained Albania’s second largest tradi ng partner. In 2009, the two countries signed 
important bilateral agreements in areas such as energy, seasonal employment and justice and 
home affairs.   
Albania became a member of the North Atlantic Treaty Orga nisation (NATO) in April 2009. 
Overall , Albania has continued to foster positive relations with its regional partners, thus 
contributing to regional stability. 
3. ECONOMIC CRITERIA  
In examining economic developments in Albani a, the Commission’s ap proach was guided by 
the conclusions of the European Council in Copenhagen in June 1993, which stated that 
membership of the Union requires the existe nce of a functioning market economy and the 
capacity to cope with competitive pressure  and market forces within the Union. 
3.1. The existence of a functioning market economy 
Economic policy essentials In February, Albania submitted its third Ec onomic and Fiscal Programme for 2008-2011. The 
programme presents a coherent set of economic  policies and aims at  consolidating public 
finances. Albania’s medium-term macroeconomic  and fiscal framework was revised in May 
in order to update the external assumptions and better reflect the impact of the global 
economic crisis. The 2009 growth estimate was revised downwards. The programme reflects an improved budget and project planning capacity, as  well as better availabi lity of statistics. 
The document is well integrated with other medium-term planning instruments such as the Medium-Term Budget Programme 2009-2011 and th e National Strategy for Development and 
Integration 2007-2013. In July 2009, the government adopted the Medium-Term Budget Programme 2010-2012. The regular us e of these medium-term pla nning instruments indicates 
that administrative planning and implementa tion capacity has improved. Albania completed 
its three year 2006-2009 PRGF/EFF
5 programme with the IMF in January 2009 and so far has 
                                                 
5 Poverty Reduction and Growth Facility and Extended Fund Facility. 
 
EN 20   EN not requested a new programme . Overall , consensus on the fundamentals of a market-oriented 
economy was maintained.  
Macroeconomic stability 
The Albanian economy recorded strong and sustai ned growth of 8% in 2008 and, according to 
the authorities’ data, of 6% in the first quarter of 2009, mainly driven by large public 
investments in the road network. Private sector  activity benefited from strong, albeit slowing, 
credit growth, and from improved stability of  the energy supply. So far, the international 
financial and economic crisis ha s resulted in lower demand for Albanian exports, a fall in net 
inflows of monetary transfers in the form of  remittances, and a marked slowdown in credit 
growth. Per capita GDP in purch asing power parities was esti mated at 25% of the EU-27 
average in 2008, up from 24% in 2007. Overall , the Albanian economy continued to grow, 
albeit at a slower pace. 
The current account deficit widened in 2008 to 14.5% of GDP, up from 10.5% of GDP in 
2007, reflecting a further deterioration of the tr ade deficit and a decline of remittances. The 
trade deficit in 2008 increased to 27.2% of GDP from 26.5% of GDP in 2007. Partly due to 
the massive public road works, imports of capital goods increased by 29% as compared to 2007. Consumption goods imports decreased by 6% in 2008. Albanian exports continued to 
show strong dependency on apparel industries,  which accounted for 43% of total exports. 
Exports of mining products grew substantiall y in 2008 but suffered a severe setback in 2009, 
partly due to lower international demand for ch romium and nickel. In the first half of 2009 
exports fell by 21% year-on-year , and the exports-over-imports  coverage ratio fell to 25.5%, 
down from 30.8% in the first half of 2008. Remittances were down by around 16% in 2008 
compared to 2007, amounting to 9.2% of GDP, par tly reflecting the impact of the global 
financial crisis, partly the declining trend obser ved over the past years. Latest data for the 
second quarter 2009 point to a further decrease of remittances of 4% compared to the same 
period in 2008.  
External imbalances remained high and cont inued to widen. In 2008 net capital inflows 
covered the current account deficit and contribute d to the foreign reserves' increase. Net FDI 
increased by about 42%, reaching the level of  7% of GDP, up from 5.9% in 2007, with an 
increasing share of greenfield  investment. During the first half of 2009, a tender for a 
syndicated loan of up to €250 million was awarded to a consortium of foreign banks. If fully 
drawn, the loan would finance about 30% of pu blic investment in 2009. The public external 
debt ratio increased to 18.4%  of GDP in 2008 from 15.4% of GDP in 2007. Corporate foreign 
financing remained negligible. Albania preserved a sufficient level of international reserves at 
around 4.2 months of imports. Overall , strong capital inflows more than financed a large 
current account deficit in 2008, and they continue d during the first half of 2009, partly driven 
by the privatisation process.   
The unemployment rate decrease d slightly to 12.7%  by the end of 2008, down from 13.2% by 
the end of 2007. Public wages increased by 8.8% in 2008, whereas the average wage in the private sector increased by 15.1%. A further incr ease in public sector  wages and pensions 
took place in May 2009. Overall , there were some improvements in labour market outcomes. 
However, unemployment remained high and la bour market data continued to be poor.  
Price stability was maintained. The annual av erage inflation rate rose to 3.4% during 2008 
from 2.9% in 2007, but remained within the Ba nk of Albania’s target  range of 2-4%. The 
main contributors to inflation were international food and fuel  prices as well as domestic 
 
EN 21   EN energy prices. Inflationary pressu re started fading out in the th ird quarter of 2008 in line with 
slowing money supply growth. The inflation rate continued its d eclining trend during the first 
three months of 2009, reaching 1.6% in March, and thereafter slightly resumed and stabilised 
at 2.2% in July and August. In view of subsid ing inflationary pressure s and as a reaction to 
the international financial crisis , the Bank of Albania reduced its  basic policy rate from 6.25% 
to 5.75% in January and started providing unlimited li quidity to banks at  its current policy 
rate. Deposit withdrawals redu ced the stock of de posits by 8.2% between September 2008 and 
April 2009. Thereafter, deposits started growing again as of May 2009. The increase of the 
state deposit insurance to 100% coverage of  deposits of up to 25 million lek (about €20,000) 
was a stabilising element. Albania continued to pursue a free floating foreign exchange 
regime. In 2008, the lek appreciated by 0.7% and 7.2%, respectively, against the euro and the 
US dollar, while it depreciated against both cu rrencies in the first half of 2009 by 6.5% vis-à-
vis the euro and 4.5% vi s-à-vis the US dollar. Overall , monetary policy remained sound, 
maintaining price stability and ensuring the liquidity of the ba nking sector after the outbreak 
of the crisis. Inflation remain ed within the target range.  
During 2008, the tax administration made further progress in both general revenue collection 
and administrative reforms. Tax revenues incr eased to 24.3% of GDP up from 23.2% of GDP 
in 2007. The application of the 10 % flat personal income tax c ontinued to produce effects in 
2008 and led to a sharp increase in income tax revenues. However, reve nue collection at local 
government level remained low. Public expe nditures in 2008 increased  to 32.3% of GDP due 
to accelerated capital expenditures, reaching 8.6% of GDP in 2008 after 5.8% of GDP in 
2007, mainly reflecting public investment project s such as the Durrës-Kukës road. 98% of 
budgeted capital expenditures was actually spent, signalling improved project planning and 
implementation capacity. However, there were also costs overruns in the pa rticular case of the 
Durrës-Kukës road. Domestic public debt rema ined at 36.7% of GDP, whereas foreign public 
debt increased to 18.4% of GDP as compared  to 15.4% in 2007. Higher interest payments 
partly reflected the strategy to lengthen the maturity structure of Albania’s public debt.  
The fiscal policy stance continue d to be expansionary in 2008, as in the pr evious year. Fiscal 
imbalances deteriorated, with the total budget defic it increasing to 5.5% of GDP in 2008. The 
2009 budget initially projected a deficit of 4.2 % of GDP, based on a GDP  growth rate of 
4.8%. The budget includes a contin gency line of approximately 2% of GDP, to be used to 
address fiscal downside risks. It  has, however, already been par tly used to fund the rise of 
public wages as from May 2009. Fis cal revenues performed well du ring the first five months 
of 2009, with total revenues up 8.1% in annual terms. Nevertheless, since the 2009 budget 
had originally been based on a more favourable macro-fiscal framework, total revenues were 
6% behind schedule. As a consequence a re vised budget was prepared in summer and 
approved by the Parliament in September, with  an increased deficit of 6.4% of GDP for 2009. 
The financing of fiscal deficits  continued to put a floor under th e level of interest rates for 
business and consumer loans and to divert savings to the governme nt sector, thereby 
hampering growth. The government relies in 200 9 on privatisation reve nues and borrowing to 
finance the deficit, to an extent that does not appear sustainable over the medium-term. 
Overall , fiscal policies continued to sustain growth but will need to be reassessed to ensure 
long-term sustainability of public finance . 
Overall , macro-economic stability has been maintained, as the crisis has had only a limited 
impact on the country. Monetary policy reacted to the changes in the economic environment 
and ensured liquidity of the ba nking system, while contributing to low inflation and exchange 
rate stability. On the fiscal side however , while budget planning improved, significant budget 
imbalances remained an element of vulnerability. 
 
EN 22   EN Interplay of market forces 
The private sector employed about 83% of the workforce in 2008, reflecting a slight increase 
versus 2007. State participation in the econom y diminished further as Albania made good 
progress with the implementation of its priv atisation agenda. In December 2008, the oil 
refinery company ARMO was sold for € 128 million. The remaining state-owned shares in 
the mobile telecommunication company AMC we re sold for € 40 million in February 2009. 
76% of the shares in the distribution arm of energy company KESH were sold for € 102 
million in April partly implementing a key European Partnership priority. A fourth mobile communication company was licensed in April 2009 for € 7.2 million. In May 2009, the World Bank approved a Partial Risk Guarantee of  €60 million for the privatisation of KESH’s 
distribution arm. Overall , the government made good progress in reducing the level of state 
ownership in the economy.  
Market entry and exit 
The National Registration Centre became fully operational and register ed close to 18,000 new 
businesses in 2008, an increase of 29% over 2007. The one-stop-shop national centre for 
licensing took up its operations in June 2009, and substant ial progress was made on reform 
and simplification of licensing. In February  2009 the Urban Planning Law was amended 
reducing the time for issuing construction perm its from 60 to 45 days. The documentation for 
issuing property titles for several thousands of  applicants was prepar ed, but unresolved legal 
issues with regard to the compensation of form er owners continued to hamper this process. 
No cases of implementation of the Bankruptcy Law were reported. Overall,  good progress 
was made to further facilitate market entry. However, bankruptcy pr ocedures are still not 
used, which hampers the efficiency of market mechanisms.  
Legal system 
The role of courts in the enforcement of contracts remains limited and the legal system at 
large lacks authority and public acceptance, par tly due to perceived levels of corruption and 
weak administrative capacity. Informal methods of contract enforcement, by-passing the legal 
system, continued to be widespread. In January 2009, the government introduced the obligation to use online public procurement procedures, but the La w on Administrative 
Courts has not yet been approved by parliament. Administrative procedures have impaired the 
implementation of the Tax Amnesty Law. By the end of 2008, a State Commission was 
established to verify all property titles dist ributed according to the Law on Land and regional 
commissions were established at the ‘prefectur e’ level to verify the cases, further slowing 
down land ownership transactions. Overall , the legal system did not contribute as required to 
the enforceability of contracts and to the stre ngthening of the rule of law. Limited progress 
was made towards the establishment of cl ear, well defined land property rights.  
Financial sector development 
After the privatisation of the remaining 40% of state-owned shares in United Bank of Albania, 
the banking sector is totally private-owned. External borrowing by the banking sector stood at 
8.6% by the end of 2008 and increased further during the first half of 2009. Bank lending to 
the private sector increased in 2008 to 34.4%  of GDP, which still leaves financial 
intermediation at a low level. The interest ra tes charged by commercial banks for business and 
consumer loans continued to be driven by inte rest paid on government securities. The average 
yield of 12-month Treasury bills stood at 8.8%  at the end of 2008, up from 8.4% a year 
 
EN 23   EN before, and continued to incr ease to 9.24% by end of June 2009. As a consequence, public 
financing needs effectively continue d to crowd out private investment. Overall , banks 
continued to provide the full ra nge of business loans. However,  the share of other financial 
intermediaries remained low. 
The Bank of Albania stepped up its supervision of the banking sector in ar eas related to credit 
risk management, capital adequacy, risk manage ment by subsidiaries of foreign banks, and 
risk management in the context of large exposur e. To support liquidity in the banking system 
it limited amounts that foreign-owned bank subs idiaries can deposit with their parent 
institutions. As the international economic crisis started showing effects on the export sector, the share of non-performing loans increased fro m 4% in March 2008 to  7.5% in the first 
quarter of 2009. Business loans were on average mo re problematic than consumer loans, with 
a non-performing loans ratio of  7.6% by the end of 2008, up fr om 3.6% by the end of 2007. 
Also profitability indicators , having remained solid thr oughout 2008, came down markedly 
during the first quarter of 2009. Finally, in Ap ril, the banking sector, taken as a whole, 
recorded its first net financial loss in several years. Overall , the banking sector remained well-
capitalised and liquid. However, in the first ha lf of 2009, as the intern ational economic crisis 
started showing effects, profitability suffere d as non-performing loans increased, and banks 
started to tighten criteria for awarding credit thus dampening credit growth.  
3.2. The capacity to cope with competitiv e pressure and market forces within the 
Union 
Existence of a functioning market economy Macroeconomic stability was main tained in a very challenging economic environment. There 
were improvements in the organisation and acce ssibility of the national land registry, which 
includes the registration of propert y; the reliability of the credit registry was further improved, 
and no severe energy supply shortages were observed over the last year. Overall , there has 
been good progress towards establishing a functioning market economy. However, 
uncertainty about property right s, poor contract enforcement and outstanding shortcomings in 
the rule of law remained main obstacles. 
Human and physical capital 
The government continued its strategy to improve  the quality of human capital, the so-called 
‘brain gain’ initiative. Persons holding university  degrees at either masters or PhD level were 
offered premiums on top of public salaries, with degrees earned at  universities abroad 
allowing for higher premiums. 8,000 young people we re trained in the vocational training 
schools and new vocational trai ning posts were opened du ring the year 2008. However, 
impact assessments of measures to improve th e functioning of the labour market are impaired 
by the absence of reliable labour statistics.  
Gross fixed capital investment stood at 39.1% of GDP, with privat e sector investment taking a 
slightly smaller share of 29.8% of GDP, do wn from 30.5% in 2007. Net FDI increased by 
about 42%, reaching the level of 7% of GDP, up from 5.9% in 2007, with an increasing share 
of greenfield investment. Public investment s focused on road infrastructure. The Vlora 
thermal power plant is not yet operational, whils t a series of concession agreements for the 
construction of hydro-power electricity  generation plants were approved. Overall , there has 
been substantial investment in infrastructur es, notably in the tran sport sector, although 
shortcomings remain.   
 
EN 24   EN Sectoral and enterprise structure 
The changes in relative shares of agriculture, industry and services were similar to previous 
years. Roughly half of Albanian GDP is produced  in the service sector. Agriculture continued 
to downsize but still represented a 16.3% shar e of GDP and remained the largest employer 
with 58% of the working population. The seconda ry sector expanded on the back of large 
infrastructure works. The large informal sector is fuelled by weaknesses in tax and 
expenditure policies, as well as in law enforcem ent, including the fight against corruption and 
organised crime. Reducing its size remained an important challenge and government efforts to 
address high levels of informality continued by reducing taxes for businesses and employers’ social contributions. The en ergy supply was more reliable  during the reporting period. 
However, Albania is still mainly dependent on hydro-electric power an d security of supply 
remains uncertain. The energy s ector continued to exhibit hi gh rates of technical and non-
technical losses. The energy market became also more competitive with the privatisation of 
ARMO. A number of concessions  were awarded for new hydro-pow er plants as well as to 
build wind farms. Overall,  restructuring of the energy sector  progressed. However, security of 
electricity supply remains uncertain. 
State influence on competitiveness 
Direct subsidies in the form of transfers from  the budget remained negligible (0.2% of GDP in 
2008 and 2009). With regards to indirect subsidie s, electricity tariffs are not yet at cost 
recovery levels and the debt of the privatised  Distribution Systems Operator was transferred 
to publicly owned KESH. Overall , state interventions we re kept within bounds.  
Economic integration with the EU 
The openness of the Albanian economy continued to increase. The sum of imports and 
exports (conventionally defining openness) stoo d at more than 82% of GDP in 2008. Total 
foreign trade increased by 16% compared to 2007. Both imports (+15.3%) and exports 
(+16.5%) of goods and services grew during 2008, albeit at lower rates than in 2007. 
Albania’s main trade partners co ntinued to be Italy and Greece. Overall,  the EU remained the 
main trading partner of Albania in 2008, a nd trade with CEFTA countries increased. 
However, the poor sectoral dive rsification of trade leaves th e economy vulnerable to sector-
specific shocks. 
4. E
UROPEAN STANDARDS  
This section examines Albania’s capacity gradually to approximate its legislation and policies 
to the acquis related to the internal market, sectoral policies and justice, freedom and security, 
in line with the Stabilisation and Associa tion Agreement and the European Partnership 
priorities. It also analyses Albania’s administ rative capacity. In each sector, the Commission’s 
assessment covers progress achieved during the reporting period and summarises the 
country’s overall level of preparations. 
4.1. Internal market 
4.1.1.  Free movement of goods 
Progress has continued in the field of standardisation . By the end of August 2009 Albania 
had adopted 15,029 European Standards (ENs), co rresponding to 88% of all the ENs adopted 
 
EN 25   EN by the European Committee for Standardisa tion (CEN) and the European Committee for 
Electrotechnical Standardisation (CENELEC). This is in line w ith the target of 90% set for 
2009. The Directorate-General for Standardis ation (DGS) provided information to the 
business community on the Law on Consumer  Protection and the Law on General Product 
Safety Essential Requirements for Products an d Conformity Assessment, and has continued 
raising awareness on the benef its of standardisation. Sales of  standards grew during 2008, and 
continued growing in the first half of 2009. Th e DGS continued to participate in CEN and 
CENELEC activities as an affiliate member. Prep arations for the fulfilment of the conditions 
for full membership in CEN and CENELEC are in  progress. However, the supervisory board 
provided for in the February 2008 Law on Standa rdisation to monitor the work of the DGS 
has not yet been established.  
There has been some progress on conformity assessment . Six new conformity assessment 
bodies were accredited up to June 2009, bringing the total number of ac credited bodies to 16. 
However, amendments drafted to further approximate the Law on General Product Safety, Essential Requirements for Products and Conf ormity Assessment to the new horizontal acquis  
of July 2008 have not yet been adopted.  
There has been good progress in the area of accreditation . The decision on the internal 
functioning of the Directorate- General for Accreditation ( DGA) adopted in October 2008 
provides for further approximation to the European standards  and establishes the legal basis 
for the new Accreditation Board. However, the Board has not yet been set up. The DGA's application for a bilateral agreement with the European Cooperation for Accreditation (EA) in 
the field of testing laboratories, under the cond itions applicable to EA multilateral agreement 
signatories, was approved in August 2009.  
There has been good progr ess in the field of metrology . New technical regulations were 
approved on the requirements for measuring instruments. The Directorate-General for 
Metrology (DGM) adopted a human resource development programme and continued 
providing training to its staff. The DGM becam e a member of the European Association of 
National Metrology Institutes  (EURAMET) focus group on f acilitating national metrology 
infrastructure development in November 2008. In May 2009 Albania became an associated 
member of WELMEC, the orga nisation for European cooperation in legal metrology. Two 
calibration laboratories are accredited accord ing to EN ISO/IEC 17025 by the Albanian 
accreditation body. The DGM is working on the impl ementation of the investment plan for 
the new areas of measurements, including buildi ngs and equipment, as part of the 2008-2012 
national strategy on Metrology.  
There has been some progress on market surveillance . The government took some measures 
to implement the strategy on market surveill ance for industrial products. However, further 
efforts are required to step up the market surv eillance activities of the Central Technical 
Inspectorate and to extend the scope of its functions. Current administrative capacity, the actual enforcement of techni cal regulations and cooperation among market surveillance 
bodies remain poor. Further efforts are required to  increase the human resources of the Market 
Surveillance Directorate in the Mi nistry of Economy, Trade and Energy. 
There has been some progress in alignment with European standards. The government 
adopted decisions on legislativ e approximation of technical regul ations relating to machinery, 
lifts and to equipment and protective systems in  potentially explosive atmospheres. There was 
also some progress as regards legislativ e alignment in the pharmaceutical sector. 
 
EN 26   EN There has been good progress on consumer protection . Implementing legisl ation on distance 
selling, contracts negotiated away from busin ess premises and package travel was adopted. 
The regulatory framework was improved and th e Consumer Protection Commission (CPC), a 
decision-making body, was established in April 2009 and has started to address the first 
dispute between consumers and service pr oviders. The CPC's five members include 
representatives of the government and of ci vil society. They received training on unfair 
commercial practices issues in July 2009. Th e Consumer Protection Coordination Council 
was also established as a consultative body. Ho wever, the consumer protection unit in the 
Ministry of Economy, Trade and Energy is unders taffed, with only two ci vil servants, and its 
capacity remains poor. 
Overall , preparations in the area of free moveme nt of goods are on tr ack. Albania has made 
progress in approximating its le gislation to European standa rds. However, considerable 
efforts are still required to further align the body of legislation to European standards, as well as to strengthen administrative capacity  for the implementation and enforcement of 
legislation.  
4.1.2.  Movement of persons, services  and right of establishment 
There has been little progress on movement of persons . The Law on Foreigners entered into 
force in December 2008 but regulations required  for its implementation are still pending. No 
progress can be reported on the coordination of social security  and the conclusion of bilateral 
agreements with EU Member States.  
Little progress can be reported on  provision of services . Preparations have  not started on the 
distinction between the regimes applicable to the cross-border provisi on of services by EU 
operators in Albania and the regime applicable to  service providers estab lished in Albania. No 
progress can be reported as regards the reco gnition of professional qualifications and its 
differentiation from the recognition of  academic qualifications. The Law on 
Telecommunications and the Postal Service wa s amended in May 2009 to separate regulatory 
functions from policy making and fr om activities relating to the ex ercise of ownership in the 
postal sector. Regulatory powers are vested in the Electronic and Postal Communications 
Authority. However, full liberalisation of th e postal market has not yet been achieved.  
There has been some progress on financial se rvices. In February and March 2009 the Bank  of 
Albania (BoA) approved regulations on the lic ensing and activities of  non-banking financial 
institutions and of foreign banks and branch es of foreign banks. The BoA increased its 
supervisory role by approving regulations on cr edit risk management, capital adequacy, and 
large exposure rules. The leve l of coverage of bank deposits  by the deposit guarantee fund 
was increased as a response to the financial crisis. The BoA increase d its cooperation with 
supervisory authorities of foreign banks having s ubsidiaries or branches in Albania. However, 
further efforts are required to formalise coopera tion with all foreign authorities concerned and 
to continue strengthening the supervisory capacity of the Bo A. Further approximation of the 
banking legislation to the EU standards, in part icular to the Capital Requirements Directive 
and to the Basel II framework, is still required.  
Little progress can be reported as regards insurance services  and occupational pension funds. 
Obligatory insurance schemes continue to dom inate the market. Two private pension funds 
operate in Albania.  
 
EN 27   EN In January 2009 the government approved implemen ting legislation relating to the technical 
and mathematical provisions of insurance undert akings. The Financial Supervisory Authority 
(FSA) approved inter alia , regulations on the bookk eeping of transactions , on the licensing 
and supervision of the securities exchange an d on the licensing of brokerage intermediary 
companies and investment advisers. The Law on Motor Third-Party Liability (MTPL) was 
approved in February 2009. Howe ver, its provisions on the approval of tariffs by the FSA are 
not in line with EU standards. Further effo rts in legislative appr oximation are required.  
The FSA became a full member of the Interna tional Organisation of Securities Commission 
(IOSCO). It also signed a Memorandum of Unders tanding on securities' supervision with the 
Austrian Financial Market Authority. The su pervisory capacity of the FSA is being 
strengthened by establishing an  electronic reporting platform for insurance and pension 
markets. However, further efforts are required to ensure that the FSA has adequate capacity to 
cope with a growing market. Its approved organi sation chart still has provision for additional 
posts. The new office premises allocated to the FSA are not yet available.  
There has been good progress on the right of establishment . Company registration and 
licensing reform has continued. New legislatio n adopted in February  and May 2009 and the 
establishment of the National Licensing Centre in June reduced administrative barriers and 
made it faster, simpler and ch eaper to set up companies. ( See section 4.2.1 fo r further details ). 
On-line company registration is possible, alt hough technical difficulties remain as regards e-
signature. Uncertainties abut property owners hip continue to discourage establishment. 
There has been progress in the area of company law . Model statutes for commercial 
companies and a commentary have been prepared  to facilitate implementation of the April 
2008 Law on Entrepreneurs and Companies. Trai ning on this law and on its implementation 
was organised, in cooperation with the Chambe rs of Commerce and Industry, for judges and 
the business community. However, further effo rts towards legislative approximation are 
required on cross-border me rgers and takeover bids.  
There has been progress on accounting and auditing . A new Law on the Accountancy and 
Auditing Profession was adopted in March 2009. It  defines the companies that have to audit 
their annual accounts and requires th at the audit profession be ma de subject to a system of 
public oversight. The law includes provision s for the certification of accountants and 
registration of auditors and accountants. However,  the relevant implementing regulation is not 
yet adopted. The public oversight body for the a udit profession has not yet been established. 
Further efforts are required to approximate Albani an legislation to EU st andards, in particular 
as regards the provisions of the 4th and 7th Company Law Directives .  
Overall , preparations in the field of  right of establishment and fr eedom to provide services are 
advancing slowly.  
4.1.3.  Free movement of capital 
There has been some progress on free movement of capital . The revision of the Regulation 
on Foreign Exchange Activity adopted by the Bank of Albania in September 2009 simplifies 
procedures related to the movement of cap ital. The revised regulation addresses the 
liberalisation of credits and loans granted by natural and legal reside nts to non-residents. 
However, certain restrictions remain to the liberalisation of capita l movements required under 
the SAA, in particular as regards the ac quisition of real esta te by foreigners.  
 
EN 28   EN Some progress has been made in the field of payment systems . The number of credit and 
debit cards in circulation con tinued to increase in 2008. The us e of electronic cards increased 
and efforts were made to facilitate the use of credit/debit cards and electronic payments. 
However, approximately 96% of banking transacti ons through electronic cards consist of cash 
withdrawals. Albania remains a pr edominantly cash-based economy. 
Overall , preparations in the area of free move ment of capital are advancing slowly. 
4.1.4.  Customs and taxation 
There has been some progress in the area of customs . Albania continued to take measures to 
ensure timely implementation of the SAA tariff reductions. The Combined Nomenclature 2009 for the classification of goods in trade wi th the EU was applied as from January 2009.   
Computerisation continued to progress. The migration to ASYCUDA World was completed 
in June 2009. Risk assessment criteria and profiles are bein g revised continuously and new 
profiles were prepared specifica lly for scanners. The physical in spections rate was reduced to 
approximately 20%, but it is s till high by EU standards. However, further developments are 
required to make the risk analysis system more  effective and manageable and to enhance the 
use of the transaction value. The use of referen ce prices is not in line with EU standards. The 
drafting of the Business and IT stra tegy has not yet been finalised.  
In August 2009 Albania became a member of  the Istanbul Convention on Temporary 
Admission. However, the subsequent agreement with a Guarantor National Association has 
not yet been signed and the implementation of ATA Carnet Procedures is still pending. The 
number of authorised customs warehouses  reached 40 at the end of August 2009. The 
government issued the decision to  establish a free economic zone  in the area of Vlora. An 
anti-trafficking directorate and a section for  the protection of patent s and trademarks became 
operational in the Directorate-General for Cu stoms (DGC). A Memorandum of Understanding 
between the DGC and the Directorate for the Prevention of Money La undering entered into 
force in July 2009. However, lack of operating instructions and poor performance controls 
hinder proper implementation of customs legisla tion. Effective implementation of controls on 
intellectual property rights and dual- use goods at customs remains poor.  
As regards infrastructure, a joint border crossi ng point with Montenegro became operational 
in June 2009. Work on improvi ng the infrastructure at 10 bor der crossing points started in 
January 2009. New scanning detectors for radioac tive materials have been put into operation. 
However, no developments can be reported as  regards the improvement of the Tirana 
Customs House.  
The staff of the customs administration received  training on rules of or igin and on the use of 
scanning equipment. However, there is no  comprehensive traini ng strategy. The GDC 
operates on the basis of the 2009 annual action plan for traini ng. Efforts are required to 
enhance transparency of personnel policy and pr ocedures. Customs offici als still do not have 
civil servant status.  
Overall , preparations in the field of customs are advancing, but further efforts are needed on 
approximation to EU standards a nd practices and to strengthen ope rational and administrative 
capacity, including on internal audit.  
 
EN 29   EN Some progress can be reported on taxation . Tax collection increased in 2008 and the trend 
continued in the first half of 2009. However,  the overall collection rate is still low, 
particularly at local government level.  
The reform of the tax administration  improved its performance, in particular at central level. 
The new structure of the Directorate-General for Taxation (DGT) is based on tax management 
functions rather than on specific tax contro l and collection. The staff of the DGT received 
training on tax legislation and procedures, including training fo r trainers on services to 
taxpayers. An Internal Audit manual was fina lised and a guide for taxpayers, the Taxpayer 
Card, has been compiled. The DGT approved st rategic plans on tax inspection and collection 
with the aim of enhancing the fight agains t tax evasion and fraud. However, further 
improvements in the legal framework and streng thening of operational capacity are required 
to reduce the large size of  the informal economy.  
Excise and VAT legislation was amended and VAT reimbursement was speeded up, mainly 
for export-oriented companies. However, the taxation of imported used cars and the VAT 
regime applied to imported printed materials are not in line with the SAA. Further efforts are 
required to bring the excise a nd tax systems closer to EU st andards and to achieve overall 
improvements in the reimbursement of VAT. No developments can be re ported as regards the 
assessment of the compliance of  Albanian tax legislation with the Code of Conduct on 
Business Taxation. Increasing cons ultations with the business community and civil society 
organisations is important to avoid uncertainties resulting from frequent changes to the legislative framework.  
Computerisation of tax offices  continued to progress with only four regional tax offices 
pending to be incorporated into  the integrated tax system. A business and IT strategy was 
developed, the IT sector was reorganised and a risk analys is module was developed. The 
implementation of electronic tax procedures wa s extended and the number of taxpayers filing 
tax returns electronically increased. However, limited facilities offered by commercial banks 
hold back the development of el ectronic payment of taxes.  
Overall , preparations in the area of taxation ar e advancing. The performance of the tax 
administration is improving. However, efforts are required to enhance enforcement of legislation, to improve tax collection, and to br ing the taxation of impo rts of used cars and 
printed materials into line with the SAA.  
4.1.5.  Competition 
Good progress was made in the area of antitrust . The system of public hearings in antitrust 
proceedings has improved and a unit for fines ha s been established. Investigations and public 
hearings were held on anticompetitive agreemen ts in the field of wheat imports and flour 
production, as well as in the fuel and insuran ce markets. The Albanian Competition Authority 
(ACA) continued analysing cases of mergers and acquisitions. It carried out an enquiry into 
the energy and banking sectors and in November 2008 issu ed recommendations on the energy 
market. The ACA lodged an appeal with th e High Court as a cons equence of diverging 
decisions of the courts of first and second instance on the fines imposed on two mobile 
telephony companies for abuse of dominant position.  
ACA staff received training on is sues related to economic markets, energy sector, vertical 
restrains and competition law. The ACA was also active in competition advocacy in 
cooperation with the chambers of commerce and industry. Seven complaints were registered 
 
EN 30   EN in the first four months of 2009 in the fi elds of telecommunications, pharmaceuticals and 
procurement.  
The Law on Competition is being revised to further approximate it to EU standards. The ACA 
is drafting the regulatory framework on issues relating to fines and leniency, de minimis  
agreements, horizontal and vertical agreements  and mergers, as well as on its internal 
investigation procedures. However, no ne w legislation has yet been adopted.  
There has been further progr ess towards meeting the SAA  state aid  obligations. The State 
Aid legislation was amended in June 2009, introduc ing rules on state aid for risk capital and 
for environmental protection. The State Ai d Department (SAD) and the State Aid 
Commission (SAC) continued revi ewing and assessing new and ex isting aid schemes. This 
has resulted in the alignment of legislation re lated to tourism concessions, free zones and aid 
to employment. The process of reviewing ex isting aid schemes and their compliance with 
state aid legislation is reaching completi on. The government approved the 2008 state aid 
report in June 2009. A regional state aid map has been drafted. Al bania confirmed its 
intention not to provide any state aid for the re structuring of the iron and steel industry. The 
SAD staff received traini ng on state aid issues.  
Overall , preparations in the area of competition are advanced. However, further efforts are 
required to strengthen the institutional capacit ies for the enforcement of competition rules.  
4.1.6.  Public procurement 
There has been some progress in  the area of public procuremen t. Legislation was approved in 
January 2009 introducing the obligation for c ontracting authorities to use electronic 
procurement. Contracting authorities have also  to publish all procurem ent notices and tender 
dossiers on the website of the Public Procur ement Agency (PPA). This has improved access 
to information and reduced procedural cost s. The PPA provided advice and support to 
overcome the initial technical problems encounter ed. However, there are still some exceptions 
to the use of electronic procedures. Efforts need  to continue to extend them to all types of 
public procurement. Electronic procedures aim at reducing the scope for corruption although 
further efforts are still required in al l phases of the procurement process. 
The legislative framework has not changed s ubstantially. Further approximation to the acquis  
is still required as regards util ities and concessions. Procedures for handling complaints still 
do not meet internationally r ecognised standards. An inde pendent review body has not yet 
been established. Decisions on a ppeals continue to be taken by the PPA, which is responsible 
for interpreting the law and giving ad vice to contracting authorities.  
The capacity of the PPA was strengthened thr ough relevant training activities, including 
participation in seminars organised by internat ional organisations. However, the role of the 
PPA as the central coordinating and advisory  body needs strengthening. The PPA provided 
training and information to contracting author ities and to the business community on public 
procurement legislation and procedures. Howe ver, further guidance needs to be made 
available to contracting author ities and suppliers. Efforts ar e required to improve judges’ 
knowledge of public procurement legisla tion as well as its implementation.  
Overall , preparations in the area of public proc urement are advancing moderately. Further 
legislative approximation is required and implemen tation of legislation needs to be enhanced.  
 
EN 31   EN 4.1.7.  Intellectual property law 
There has been some progress on intellectual property rights . Parliament adopted the Law 
on accession to the European Convention on Cinematographic Co-production in December 2008. However, the 2005 Law on Copyright is not yet compliant with European standards and 
the draft national strategy on intellectual and industrial property is still pending adoption.  
The number of inspectors of the Albanian Co pyright Office (ACO) increased from one to 
three. Preparations are underway for opening th e first two regional copyright offices. Training 
for ACO staff was organised in cooperation w ith the World Intellectual Property Organisation 
(WIPO). However, the capacity of ACO rema ins weak. The planned network of 11 regional 
copyright offices has not yet been established.  
The Copyright Office continued its cooperation with the Direct orate-General for Taxation and 
a new Memorandum of Understanding was signed  in April 2009. However, compliance with 
Memoranda of Understanding between ACO a nd other institutions is overall poor and 
hampers practical implementation of intellectua l property rights. The number of complaints 
registered for copyright viola tion increased from 45 in 2008 to  100 during the first half of 
2009, but few cases are brought to court and the level of fines remains low. The number of 
collective management societies rose from two to  four as AKDIE, which protects the rights of 
artists and performers, and AMI, which protec ts the rights of phonogram and video producers, 
became operational. However, the overall admi nistrative and operational capacity of these 
societies is weak. Training was provided to th e judiciary on intellectu al property rights but 
further efforts are still required to enhance the qualifications and experience of the courts in 
this field. General awareness of the protection of  intellectual property righ ts and their benefits 
remains low.  
There has been progress on industrial property rights . In December 2008 the government 
approved implementing legislation for registrati on of trademarks, registration of patents for 
inventions and utility models , and registration of the ge ographical indication. Electronic 
registration procedures have b een put in place. Work for th e ratification of the European 
Patent Convention and of the Patent Law Treaty (PLT-WIPO) is  well advanced. However, the 
ratification decisions are pe nding adoption by parliament.  
The Directorate for Patents and Trademarks (DPT) organised traini ng for its staff in 
cooperation with WIPO and the European Pate nt Office. It organi sed awareness-raising 
activities in cooperation with the chambers of commerce and streng thened its cooperation 
with the Directorate-General for Customs. Ho wever, its staff has not been increased. 
Enforcement of industrial prope rty rights remains poor. The num ber of infringement cases 
brought to court increased slig htly but it is still low. 
Overall , preparations in the field of intellectual  property law are modera tely advanced with 
regard to both legislation and enforcement. The capacity of ACO and the DPT remains weak. 
Insufficient inspection capacity, the low level of fines and the lack of appropriate experience 
and qualifications among the judiciary still hamper  enforcement. Considerable further efforts 
are required to fulfil the SAA obligations on intellectual and i ndustrial property rights. Inter-
institutional cooperation will be of  key importance in this regard. 
 
EN 32   EN 4.1.8.  Social policies, employment  and public health policy 
There has been little pr ogress in the field of social policies . A task force to review the existing 
labour law  was established in Februa ry 2009 with representative s from the government and 
civil society, including trade unions and employers’ organisati ons. However, a draft revised 
law has not yet been finalised. 
There has been progress in the area of health and safety at work . In May 2009 the government 
adopted the National Strategy for Occupatio nal Health and Safety 2009-2013 and its 
accompanying action plan. The Occupational Health  and Safety section of the Ministry of 
Labour, Social Affairs and Equal Opportunitie s (MLSAE) was upgraded and entrusted with 
the implementation of the strategy and actio n plan. An internal audit department was 
established in the State Labour Inspectorate (SLI) in April 2009. The first of the 24 local 
inspectorates planned to strengthen the SLI was established in April 2009.  However, the draft 
Law on Health and Safety at Work has not ye t been adopted. Enforcement of occupational 
health and safety remains poor and the numb er of accidents at the workplace is high, 
particularly in the construction,  mining and mineral processing s ectors The agricultural sector 
is not covered by the labour inspection system. Fu rther efforts are required to increase the 
human, physical and financial resources of the SLI and to improve the transparency of its 
personnel policy. Moreover, very little progress can be reported regarding the shortcomings in 
health and safety standards which came to light after the explosion in 2008 of the ammunition depot at Gërdec. ( See also section2.1 ) 
Social dialogue  is still at a developing stage. Collectiv e agreements were signed in the public 
health and education sectors. However, effective collective bargaining remains difficult and individual contracts prevail ov er collective employment agreements. The lack of employers’ 
associations limits collective bargaining to the enterprise level in the private sector. The 
involvement of trade unions and employers’ organisations in the policy-making process 
remains weak. ( See also section 2.2 ) 
Implementation of the social protection and  social inclusion  strategy for 2008-2013 is in 
progress and a plan for monitoring its implem entation is being prep ared. The last living 
standards measurement survey shows that the population under the abso lute poverty threshold 
fell from 18.5% in 2005 to 12.4% in 2008. The government has developed mechanisms to monitor poverty and social incl usion at national level but th e first annual report 2008-2009 
has not yet been delivered. ( For anti-discrimination see section 2.2 ) 
There has been some progress in the field of social protection . The Social Insurance Institute 
is refurbishing its archives and has started to register data electronically. Work is in progress for establishing a national soci al security electronic database , providing individual accounts of 
contributions, calculation of benefits and admi nistration of payments. The Social Security 
Institute has also started a database for the self-employed in the agricultural sector. The 
budget allocated to social protection in the 2009 budget increased and reached 7.7% of GDP. 
However, further efforts are required to ensure  sustainability of social protection policies, 
including the pension reform  currently being drafted.  
There was some progress as regards employment policy . Unemployment decreased, although 
at 12.7% on the first quarter of 2009 it still remains high. A ne w computerised information 
system became operational in the head office of  the National Employment Service and in two 
 
EN 33   EN regional offices. However, further efforts are required to extend it nation-wide and to 
strengthen overall the capacity of the employment service. Monitoring and assessment of the impact of the existing employment promotion sc hemes are still lacking. Further efforts are 
required to improve labour market data. ( See sections 3.1, 3.2 and 4.1.9 for further details on 
vocational education an d training programmes )  
There has been some progress on public health policy . Parliament adopted the Law on Public 
Health Care in May 2009. However, the rele vant implementing regulations are pending and 
the national health sector strategy has not been adopted. New legi slation was adopted 
approximating the standards in the field of bl ood transfusion to those of the EU. Albania 
ratified the WHO Framework on Tobacco Control.  However, further efforts are required to 
develop legislation on tobacco advertising and products and to enforce the ban on smoking in 
public places. In the field of communicable dise ases the government carried out preparations 
to tackle the A(H1N1) pandemic. The first al cohol rehabilitation centr e was opened in the 
Tirana University hospital. 
There has been limited progress in the field of mental health, but much more is needed. New 
homes for the mentally ill were opened in Elba san and Shkodra and a new forensic psychiatric 
hospital was completed in Durrës. However, adequa te psychiatric facilities  for the mentally ill 
are still required. Implementation of the existi ng mental health legislation and policies is 
weak. The budget for mental health remains low and resources available to mental health 
hospitals are generally poor. The legal status and the social reintegr ation of psychiatric 
patients require attention. Further efforts are required to devel op community-based services as 
an alternative to institutionalised care and to address specific needs of children and juveniles 
with mental health problems. 
Administrative capacity in the field of public health remains weak. Substantial efforts are 
required to upgrade the quality of services and to guarantee overall  access to heal th care. Data 
collection and performance monitoring mechanis ms require strengthen ing. Community-based 
services need to be further developed. 
Overall , preparations in the field of social policies, employmen t and public health policy are 
advancing moderately. Efforts are re quired to promote social cohesion.  
4.1.9.  Education and research 
There has been progress in the field of education . The education budget  for 2009 increased 
although it remained at the 2008 level as a percen tage of GDP. Teachers benefited more than 
other groups from the May 2009 14 % average in crease in public-sector salaries. Local 
government competencies in education planni ng and fund allocati on have increased. The 
school infrastructure improved with some schools and teachi ng laboratories being renovated. 
Preparations have started for the construction of four new V ET centres and rehabilitation of 
another four is underway. Computerisation of schools is progressi ng although long-term 
funding for on-line access still needs to be determined. 
The extension of compulsory education to nine  years became effective during the academic 
year 2008-2009. The government approved the 2009-2013 national strategy for pre-university 
education. It also approved legislation on the implementation of the reform of the final 
secondary education and university entry ex ams (‘State Matura’), and on recognition of 
secondary education diplomas. Implementati on of the Law on Higher Education progressed 
 
EN 34   EN and the universities’ main steeri ng bodies were elected in line with its provisions. The Agency 
for Higher Education (AHE) carried out perfor mance evaluations as part of the overall 
evaluation of universities for st ate budget allocations. Albania made progress in reforming its 
higher education system according to Bologna actio n lines, in particular as regards the degree 
system and the level of student participation in quality assurance. Universities were given more flexibility in administering their budget.  However, further development of teachers’ 
professional qualifications and skil ls is still required. Further efforts are required in the areas 
of institutional autonomy and good governance of higher education institutions efforts, international participation in quality assurance, and recognition of prior learning. 
New vocational education and training (VET) curri cula have been prepared for specialisations 
in social services and information and communication technology. A new VET structure 
directly linked to the draft Albanian Qualifi cations Framework (AQF) is scheduled to start 
with the 2009-2010 academic year. However, th e Law on the AQF has not yet been adopted. 
Synergies between VET and the labour market  remain weak. Assessment and monitoring of 
the impact of training programmes require strengthening. 
The National Tempus Office (NTO) organised in formation activities an d provided assistance 
to improve the quality of projects submitted by Albanian universities for participation in the 
Tempus programme. It screen ed and monitored 7 projects. 
The Memorandum of Understanding for Albania' s participation in the Europe for Citizens 
programme entered into force in April 2009.  
There has been some progress in the area of research . The National Strategy for Science and 
Innovation 2009-2015 was adopted and the Agency  for Research, Technology and Innovation 
was established. The budget dedica ted to research increased but  its share of the total budget 
(0.22%) is still very low. There were improveme nts on indicators and criteria to fund national 
research programmes as well as on mobility of  researchers. The government allocated a fund 
of excellence in 2008 to stimulate the research studies of PhD candidate students. In March 
2009, 61 Albanian nationals studyi ng and/or working abroad we re recruited to work in 
universities as part of the Brain Gain Progr amme. As an associated country to the 7
th EC 
Research Framework Programme, Albania incr eased its participation and was successful, 
among others, in research projects with Eur opean partners in the areas of transport, 
infrastructures, health and international co-operation.  
However, administrative and research cap acity remains weak. Poor definition of 
responsibilities and of funds allocation hinders implementa tion of the Law on Scientific 
Research that merged most scientif ic institutions w ith universities.  
Overall , preparations in the area of education and research are moderately advanced. 
4.1.10.  WTO issues 
Albania continued implementing its commitme nts under the WTO. Albania carried out the 
needs assessment under the WTO trade faci litation negotiations and maintains close 
cooperation with the European Community in this regard, includi ng on co-sponsoring EC 
proposals. The secretariat for WTO issues contin ued its activities to e nhance inter-ministerial 
cooperation on policy making.  
 
EN 35   EN 4.2. Sectoral Policies 
4.2.1.  Industry and SMEs 
Progress has been good in the field of industry and SMEs . Albania’s implementation of the 
European Charter for Small Enterprises has improved overall and in particular on company 
registration, regulatory reform, access to fina nce and export promotion. However, further 
efforts are required as regards human cap ital development, and competitiveness and 
technological capacity of SMEs. 
The National Business Registratio n Centre (NRC) strengthened its capacity and extended its 
network of service desks. By  the end of August 2009 there were 31 business registration 
desks throughout Albania. The staff of these service desks received training on registration 
procedures and on public administ ration issues. The number of ne w enterprises registered at 
the NRC in 2008 reached 17,773 or 29% more than in 2007.  
The government continued simplifying licensi ng procedures. The a pplication of self-
declaration and of the "silen ce is consent principle" was broadened. The Law on Licences, 
Authorisations and Permissions was adopted in February 2009. It provide s for a new division 
of licenses into 12 broad fields  and 49 categories. The Nationa l Licensing Cent re, intended to 
function as a one-stop-shop, became operatio nal in June 2009. 104 of the 170 licences 
identified have been abolished. Tax reforms cont inued to provide incentiv es for entrepreneurs. 
The amended Law on Social Insurance which entered into force in May 2009 reduced the 
employer’s social insurance contribution from 20% to 15%. However, the reference salary 
scheme and reference number of employees fo r each business category continued to be used 
for tax purposes due to the large size of the informal economy. 
The Law on SMEs was amended in December 2008, br inging definitions of SMEs closer to 
EU standards. The use of electronic tax and public procurement pro cedures continued to 
progress. The Law on Electronic Commerce entere d into force in June  2009. However, there 
has been no progress in the implementation of the Bankruptcy Law, and administrative 
procedures have impaired implementation of the September 2008 Law on Tax Amnesty. The 
draft laws on administrative courts and on takeove r bids are still pending adoption. Efforts are 
required to further involve the business comm unity in the legislative and policy-making 
processes.  
A € 30 million credit facility was launched in Ja nuary 2009 to facilitate access to bank loans 
for SMEs. By the end of 2008 the government had approved the establishment of seven 
industrial parks. However, concession contract s have been signed for the development of 
three parks only.  
Preparations in the field of industry and SMEs are advancing. Al bania has continued 
improving the business-related regulatory fram ework. However, technological and innovation 
capacities remain weak.  
4.2.2.  Agriculture and fisheries 
Some progress was achieved in the area of agriculture  and rural development policy . The 
Agency for Agriculture and Rural Development was set up as the paying agency to manage 
direct support to agriculture and rural areas. The Agency ha s 86 staff and operates in all 12 
regions of the country. It provides a good star ting point towards the establishment of an 
 
EN 36   EN IPARD Agency. Preparations for IPARD advanced  with the appointment of the prospective 
Managing Authority in June 2009. However, th e Rural Development Strategy will require 
substantial improvements to serve as  a basis for the IPARD programme.  
The 2009 budget for the direct support scheme re mains stable at € 7 million. Direct support to 
farmers resulted in an increase in plantations of permanent crops such as fruit, olive and citrus 
trees and vineyards. Other direct support m easures covered, among other things, drip 
irrigation, bio certification, mushroom culture a nd snail breeding. There have been efforts to 
improve quality and marketing overall. The dairy industry is modernising and consolidating, 
including several initiatives to  improve processing facilities. The Agriculture Information 
Centres received additional ma terial resources and organi sed promotion activities.  
However, land fragmentation continues to hamper efficient farming and results in low 
productivity and incomes. Uncertainties about property rights hinder the development of a 
functioning land market. Structural weaknesses such as poor infrastructure and marketing 
systems, lack of cooperati on between producers and busine ss sectors and insufficient 
knowledge about food quality and safety standards hold back the development of the agricultural sector. The share of  the total budget allocated to ag riculture remains small. The 
trade deficit in agricultural pr oducts continued to increase.  
Overall, the agricultural sector remains weak. It lacks competitiveness and has difficulties 
facing competition from imported goods.  
There has been limited progress in the area of food safety and veterinary and phytosanitary 
policy . The National Food Authority was establishe d, but it is not yet operational due to 
staffing problems. In the food sector implementi ng legislation has been adopted mainly in the 
areas of import requirements for animal produc ts (certificates), fl avourings and food for 
particular nutritional uses. Some progress can be reported on laborator y capacity, particularly 
as regards histamine and residues. However, le gal limits for microbiol ogical contamination of 
raw milk are still significantly le ss stringent than EU standards. 
A very limited amount of legislation was adopted in the veterinary sector. The identification 
of bovines is not yet finalised  and deficiencies in the re gistration of their movements 
jeopardise the utility of the current database. Th e current registration of small ruminants is not 
used for epidemiological purposes. No progress can  be reported in the animal welfare sector. 
The legislative framework remained substantia lly unchanged in the phytosanitary sector. Only 
a few legislative acts were adopted, mainly in  the area of plant protection products. Overall, 
there has been little progress in the areas of food safety a nd veterinary and phytosanitary 
policy. The legal framework improved, but co mpliance with EU standards remains poor. 
There has been some progress in the area of fisheries . The government approved regulations  
on fishing devices and on the determin ation of the size of fishing nets.  Inter-institutional 
cooperation improved with the signature in November 2008 of an agreement between the Directorate for Fisheries Polic ies and the Coast Guard Comma nd. The fisheries inspectorate 
was reinforced with two inspectors and with  mesh-size measurement equipment. Its staff 
received additional training. Conservation me asures were introduced in the Ohrid and 
Shkodra lakes during the reproductive pe riod of the Ohrid trout species.  
Albania continued to participate in the Gene ral Fisheries Commission for the Mediterranean 
(GFCM) and the International Commission for the Conservation of Atlantic Tunas (ICCAT). 
Albania submitted to the GFCM Secretariat the list of authorised vessels that can operate in 
 
EN 37   EN the GFCM area. The government passed le gislation on the log book and log books were 
issued to fishing vessels over 10 metres long. Tw o tuna fishing vessels were equipped with 
Vessel Monitoring Systems (VMS). However, furthe r efforts are required to establish a catch 
and landing data collection and processi ng system and to extend the VMS.  
Overall , there has been progress in the area of fi sheries as regards inspection, control and 
international cooperation. Prepara tions are advancing moderately. 
4.2.3.  Environment 
There has been limited pr ogress in the area of horizontal legislation . Albania adopted 
legislation in January 2009 to ra tify the Protocol on Control of Emissions of Nitrogen Oxides 
or their Transboundary Fluxes to the 1979 Geneva Convention on Long-Range 
Transboundary Air Pollution. Two public hearings were  held with regard to the project for the 
construction of a thermal power plant in the Durr ës area. Notifications of public hearings were 
published on the website of th e Ministry of the Envir onment, Forest and Water 
Administration (MEFWA), the website of the Aa rhus Centre and local newspapers. However, 
the new draft Law on Environmental Protection, which incorporates a number of important 
Directives such as IPPC, LCP, Seveso II, public participation and the Water Framework 
Directive, has not yet been adopted. The new draft law on Environmental Impact Assessment 
is also pending adoption. 
No progress can be reported as regards air quality . Monitoring of air quality continued in 
main cities but it is hindered by poor  monitoring equipment and methodology. The 
government has taken measures to reduce the ma rket share of high sulphur content diesel. 
However, air pollution levels remain high, in pa rticular as regards PM10 particulate matter, 
and there are no specific long-term policies to abate air pollution and reduce emissions from 
the vehicle fleet and industry.  
There has been some progress in the area of waste management . The rehabilitation of toxic 
hot spots progressed and 35 new untreated hot spot s have been identified. The construction of 
new landfills is underway. However, legislative development is lagging behind. A strategy for 
waste management has not yet been establishe d. Uncontrolled dumping and burning of waste 
still persists and is particularly acute in rura l areas. Substantial effort s are required to reduce 
waste generation and promote recycling.  
There has been some progress as regards water quality . Two waste water treatment plants 
became operational, work on another one was completed and three more are under 
construction. However, surface waters are sti ll affected by uncontrolled discharges of solid 
waste. The national strategy for water supply and sewera ge has not been adopted. 
Implementing legislation and action plans fo r legislative approximation to the Water 
Framework Directive and the Nitrates and Urban Waste Water Directives are pending 
adoption.  
There was some progress on nature protection . The total coverage of protected areas 
increased to 12.58% of the terr itory with the desi gnation of the ‘Bredhi Hotoves-Dangelli’ 
ecosystem as a national park. In January 2009 the government approved a decree on the 
criteria for the establishment of the biodivers ity inventory and monitoring network. The Law 
on the Protection of Wild Fauna adopted in October 2008 improved the approximation of the 
legislative framework to the Wild Birds Dir ective. A new Law on H unting was adopted in 
 
EN 38   EN May 2009. However, efforts are still required to meet the environmental commitments of the 
Energy Community Treaty. Preparations in  this field are advancing moderately. 
There was no progress as regards industrial pollution control and risk management . 
No developments can be reported in the area of chemicals and genetically modified 
organisms . Efforts are requi red to enhance  inter-ministerial coordination to monitor the use 
of chemicals present on the market. There is no  central register of ch emicals and genetically 
modified organisms. 
No progress can be reported as regards environmental noise  policies. 
Efforts continue to be re quired to strengthen the administrative capacity  of all institutions 
involved in environmental policy making and to  implement the 2008 cross-cutting strategy for 
the environment. Inter-institutional coopera tion and coordination remain poor. Additional 
monitoring and inspection capaci ty continue to be requi red at regional level.  
Overall , there have been some positive legislative developments but implementation and 
enforcement remain weak. Preparations in the field of environment are advancing slowly but 
remain at an early stage for a number of sectors. 
4.2.4.  Transport policy 
Progress can be report ed in the area of trans-European transport networks . Albania has 
continued to actively participate in the implementation of the 2004 Memorandum of 
Understanding for the development of the So uth East Europe Core  Regional Transport 
Network and in the South-East Europe Tran sport Observatory (SEETO), particularly by 
updating and implementing the multi-annual plan for 2009-2013. The construction works for the Durrës-Kukës motorway, which will link Kos ovo to the Adriatic Sea, are well advanced. 
Road work continued on corridor  VIII and in the North-South axis. However, there has been 
no progress as regards rail infrastructure.  
The revised Action Plan for the implementation of the Transport Sector  Strategy was adopted 
in March 2009. The Institute for Transport wa s restructured to allow centralisation of 
transport data and updating of the National Tr ansport Plan, in cluding investment programmes 
and policies. It started the es tablishment and maintenance of a central transport database. 
However, overall institutional capac ities still requir e strengthening.  
Albania continued granting unrestricted access through its territory to Community transit 
traffic in line with the SAA.  
There was some progress as regards road transport . In October 2008 the government 
approved a decision on the Highway Code introducing an audit of the safety system on roads. 
In June 2009 it adopted implem enting regulations bringing driv ing licence regulations closer 
to the EU standards. Electronic testing for the issuance of driving licen ces was assessed in a 
pilot centre and became the norm. There were fe wer road accidents in 2008 than in 2007 and 
the number of accidents resulting in fatal casual ties decreased. These trends continued in the 
first half of 2009. The government approved legislation in May 2009 for the establishment of the Albanian Road Authority, which is in ch arge of the development, management and 
maintenance of the state-owned road network. The Road Asset Management System (RAMS) 
is being established, includi ng country-wide safety surv eys and routine maintenance 
inspections. New maintenance guidelines have been developed. However, only 40% of total 
 
EN 39   EN road assets have been mapped. Performance-base d contracts for road maintenance have been 
generalised and the share of the maintenance bu dget allocated to such contracts grew in 2009. 
However, sustained efforts continue to be needed to improve road maintenance. Road 
signalling requires further impr oving. Illegal constr uctions along th e roads and poor driver 
discipline continue to po se problems for road safety. Preparati ons in the field of road transport 
are advancing moderately.  
There has been lit tle progress in the rail transport  sector. The new Regulation for the 
Albanian Railway Authority wa s approved in January 2009, es tablishing business units for 
passengers, freight, infrastructure management and maintenance. Service units were also 
established for rolling stock, administration an d internal support. However, the rail action 
plan required by the 2007 addendum to the Memorandum of Understanding on the Core Regional Transport Network has not yet b een adopted. Funds allocated for capital 
expenditures continued to decline.  Preparations in the area of ra il transport are lagging behind.  
There has been some progress in the area of maritime transport . Parliament approved the 
Maritime Administration Law in April 2009. Howeve r, implementing legislation still needs to 
be adopted on flag and port state control, the register of shipping and the register of seafarers.  
The rehabilitation of the Durrës po rt progressed, but pr eparations for the rehabilitation of the 
Vlora port are lagging behind. The government ha s taken several measures to improve the 
technical condition of the maritime fleet. Ships ol der than 15 and 30 years will not be certified 
for transport of passengers and goods respectivel y. Pre-certification cont rol procedures were 
improved and tax incentives were  introduced to encourage renewa l of the fleet. The staff of 
the maritime administration received traini ng on flag and port state control and on port 
security. However, substantial efforts are sti ll required in order to improve maritime safety 
and security. Rates of detention pursuant to the Paris Memorandum of Understanding on Port 
State Control have improved slightly but remain  very high by EU standa rds and the Albanian 
flag is still listed as very high risk. Prepara tions on maritime transport are not very advanced. 
There has been no progress on combined transport .  
There has been progress in the field of air transport, including in the area of air traffic 
management. Parliament approved the ne w Air Code in December 2008 and the 
implementation of the first transitional pha se of the European Common Aviation Area 
Agreement (ECAA) continued. A working arrange ment with the European Aviation Safety 
Agency was signed in July 2009. However, further efforts, including on the adoption of the acquis  as per the ECAA commitments and the amendment of the new Air Code, are still 
needed. Albania's participation in the Single European Sky Committee and in the 
Implementation of the Single European Sky in South Eastern Europe (ISIS) Programme will be beneficial in this regard. There have b een delays in implementing the August 2007 action 
plan to improve the Civil Aviation Authority's (CAA) safety oversight of Albania’s airlines. 
Legislation drafted on the status  of the CAA as well as on its  structure and organisation has 
not yet been adopted. Preparati ons in the field of air transp ort are advancing moderately.  
4.2.5.  Energy 
The government continued its efforts to improve security of supply . The construction of the 
Vlora thermal power plant is nearing comple tion. The parliament ratified a concession 
contract for the construction of  three hydroelectric pl ants in the Devolli river with a total 
installed capacity of 320  MW. The process of approval of 27 concession agreements for the 
 
EN 40   EN construction of small hydro power plants with a total installed capacity  of about 290 MW is 
ongoing with four concessions already approved.  Work is in progress on the 400 kV Elbasan–
Podgorica interconnection line. However, no progress can be reported regarding the 
rehabilitation of the Fier thermal power plan t. The establishment of a National Dispatch 
Centre is at an early stage. Albania continues to be an overa ll net importer of electricity and 
still relies too much on hydro- electric power. Its interconnection capacity remains limited. No 
developments can be reported as regards oil stocks . They continue to cover 60 days’ average 
consumption.  
There has been some progress in the field of the internal energy market . The government 
privatised the distribution arm (DSO) of the electricity company KESH, partly implementing 
a key European partnership prio rity. New legislation was adopte d to support the fight against 
illegal connections. However, overall techni cal and non-technical losses increased. Bill 
collection rates increase d although efforts are still required in  this regard in cluding equipping 
all consumers with electricity meters. The electric ity price is not yet at cost recovery levels.  
The Energy Regulatory Entity (ERE) continued to monitor the market and new legislation 
was adopted extending ERE’s re gulatory powers to the gas sector. However ERE’s decision-
making capacities and independence require further strengthening.  
Work on a draft plan for the development of the gas sector and gas market in Albania is under 
way. However, no progress can be reported on the revision and implementation of the 
National Energy Strategy. 
Some progress can be re ported in the area of energy efficiency and renewable energy . The 
government took measures towards the development of the sector by issuing licences for the construction of seven wind farms with a tota l installed capacity of about 1360 MW and one 
140 MW biomass thermal power station. Parliament adopted a new Law in April 2009 on labelling and product information on the cons umption of energy by household appliances. 
However, no further progress can be reporte d on the implementation of the 2005 Energy 
Efficiency Law.  
There has been little progress in the field of nuclear safety and radiation protection . 
Legislative amendments were made putting the National Agency for Natural Resources in charge of drafting legislation on nuclear power in consultation with the International Atomic 
Energy Agency. However, Albania has not yet signed the Convention on Nuclear Safety and 
the Joint Convention on the Safety of Spen t Fuel Management and on the Safety of 
Radioactive Waste Management. Efforts are s till required as regards compliance with the 
acquis  in the field of radiation protection. Proper  attention regarding th e prevention of illicit 
trafficking of nuclear and othe r radioactive materials is of  key importance. The nuclear 
regulatory authority remains weak in terms of  both technical capacity and staff. Further 
efforts are required to guar antee its independence.  
Overall , there has been progress in the field of en ergy. However, the sector remains weak and 
the security of electricity supply is still uncertain. Preparations in the area of energy are moderately advanced.  
4.2.6.  Information society and media 
There was little progress in the area of electronic communications and information 
technologies . The Regulatory Authority for Postal and Electronic Communications (AKEP) 
 
EN 41   EN harmonised in December 2008 all existing licences w ith the authorisation scheme of the June 
2008 Law on Electronic Communications. The re ference interconnection offers were 
approved and published in Febr uary 2009. A fourth mobile te lephony operator was licensed 
through a special decision procedure in April 2009. However, an electronic communications 
strategy and policy paper has not yet been approved and implem enting regulations for the law 
on electronic communications are still pending adop tion. Market liberalisation is still at an 
early stage and is held back by lack of implementation of competition safeguards such as carrier selection and pre-select ion, number portability and un bundled access to the local loop. 
Tariff re-balancing has not been completed. The m obile retail tariff regulation is still in place.  
The administrative capacity of AKEP was increased with additional staff and specific 
training. However, internal conflicts within its Governing Council have  hindered its decision-
making process bringing regulatory development to a standstill. There is still insufficient 
capacity at the Ministry of Transport,  Public Works and Telecommunications.  
Overall, preparations in the area of electronic communications are advancing moderately.  
There has been progress on information society services . In January 2009, the government 
approved the inter-sector strategy for the info rmation society. Amendments to the Criminal 
Code and the Criminal Procedure Code were  adopted in November and December 2008 
following the requirements of the Conven tion on Cybercrime. Th e Law on Electronic 
Commerce was adopted in May 2009. Implementi ng regulations were al so adopted for the 
Electronic Signature Law. The National Agency  for the Information Society (NAIS) has 
started setting up a single government electron ic network covering 65 institutions. The NAIS 
has actively promoted public awareness on the in formation society and has provided training 
to IT staff of the public administration. Howe ver, there has been no progress as regards 
legislation on conditional access. Preparations in the field of information society services are 
advancing  (See section 4.3.6 for additional details on data protection ). 
There has been very limited progress as regards audiovisual policy . In November 2008  the 
National Council for Radio and Television (NCRT) finalised th e draft strategy for the 
switchover from analogue to digital broadcasti ng and launched a consultation process with 
state institutions and broad casting operators. The draft Broa dcasting Law was finalised in 
April 2009 but implementation of the Action Plan on media reform agreed with the European 
Commission and the Council of Europe needs to  be stepped up. Measur es are required to 
ensure sustainable funding for the public servic e broadcaster. The colle ction of licence fees 
remains low ( See also section 2.2 ). 
4.2.7.  Financial control 
There has been some progress in the area of public internal financial control  (PIFC). A new 
PIFC policy paper for 2009-2014 was adopted in  June 2009. However, the legal framework 
remains incomplete, as the Law on Financ ial Management and Control (FMC) and the 
Inspection Law have not yet been adopted by pa rliament. The amendmen t of the 2007 Internal 
Audit Law to make it consistent with the ove rall PIFC framework is  still outstanding.  
With regard to the institutional framework, th e Central Harmonisation Unit for FMC has been 
operational since November 2008. The Central Harm onisation Unit for Intern al Audit is also 
fully operational, but its internal structure needs revision. Managerial accountability and 
subsequent development of FMC systems are still at an early stage. Efforts need to continue 
to increase managers’ awareness of PIFC. Decen tralised internal audit units have been 
 
EN 42   EN established and are staffed in all ministries as  well as in some government agencies. However, 
many of them continue to perform mainly inspection and control tasks rather than internal audit in line with international standards.  
There has been some progress on external audit . The State Audit Institution (SAI) adopted 
the Strategic Development Plan for 2009-2013 at  the beginning of 2009. However, the SAI 
Law still requires amending to bring it into li ne with the INTOSAI st andards, especially 
concerning the criteria for dismissal of the chai rman and the remit and scope of audit. Further 
efforts are required to shift the SAI’s attenti on towards financial and systems-based audits. 
Overall , preparations in the area of financ ial control are advancing moderately. 
4.2.8.  Statistics 
There has been progress in the development of statistical infrastructure . The budget of the 
Institute of Statistics (INSTAT)  for 2009 increased by about 21% compared with 2008 and 16 
additional staff were hired in 2009. A new and more efficient organisational structure of 
INSTAT has been implemented. New Memoranda  of Understanding on the exchange of 
statistical data have been si gned between INSTAT and the Mini stry of Agriculture and the 
High Inspectorate of Declarati on and Audit of Assets (HIDAA) . Progress has been made in 
establishing a metadata system. However, the necessary IT infrastructure between INSTAT 
headquarters and its regional o ffices has not yet been set up. 
Some progress can be reported in the field of classifications and registers . Preparatory work 
for the introduction of NACE Rev. 2 (Statistical Classification of Economic Activities in the European Community) has started. However, a clas sification of statistical  regions equivalent 
to the NUTS classification has still not been de veloped. The business register requires further 
regular updating in terms of content and coverage.  
Progress has been made in preparing the ground for censuses. The preliminary work has been 
carried out for the agricultural and business censuses. The preparations for the population 
census are on track. A donor coordination meeting was held and a census unit was set up at INSTAT. The government established the na tional census commission. However, the 2001 
Law on the Population Census has not yet been revised and a census coordinator has not yet 
been appointed. Further efforts to facilitate th e exchange of information between INSTAT and 
the civil registration offices will be of  key importance for an efficient census . 
Some progress was made with regard to sectoral statistics . Some  major surveys have been 
carried out in line with the multiannual statis tical programme. INSTAT  conducted the living 
standards measurement survey, the new labour force survey, the demographic and health 
survey, the structural business survey and the household budget survey. The exchange of 
information between the Ministry of Agricult ure and INSTAT has im proved but efforts are 
still required to bring agriculture statistics closer to EU standards. Data on GDP are now compiled by a recently established nationa l accounts department. Quarterly GDP was 
published for the first time in December 2008. However, further methodological and source 
data improvements are required for the alignm ent of the national accounts with ESA 95. 
Overall , there has been progr ess towards meeting the short-term priorities of the European 
Partnership in the area of statistics. Prepara tions are advancing but further improvements are 
necessary in key areas such as m acroeconomic and business statistics. 
 
EN 43   EN 4.3. Justice, freedom and security 
4.3.1.  Visa, border management, asylum and migration 
Some progress has been made in the area of visa policy and in the wider framework of the 
visa liberalisation dialogue.  
Progress has been made as regards the documen t security. The process of distributing ID 
cards and biometric passports is well underway. The security features of these documents are 
in line with the relevant ICAO and EU sta ndards. In January 2009 ID cards distribution 
started based on the data of the civil registry electronic database. However, proper control is 
needed to ensure that data fr om other sources is no longer us ed, and that adequate human and 
financial resources are allocated for functioning and security. As of 26 June, over 1 million ID 
cards were distributed to pe ople without passports so they  could vote. For the June 2009 
elections, special measures were introduced to facilitate the distribut ion of ID cards to 
vulnerable groups. However, further efforts ar e required to guarantee  the integrity and 
security of personalisation and distributi on procedures of biometric passports.  
Adequate connection between the civil regi stry system and the Total Information 
Management System (TIMS) needs to be ensured. In June, issuance of the old, non-biometric passports has stopped. By mid September 2009, 118 772 biometric passports were distributed. 
Training programmes for officials dealing with  passports and visas ar e insufficient, including 
on anti-corruption.  
The Law on Foreigners entered into force in  December 2008 and the government adopted the 
implementing legislation in May 2009, but furt her harmonisation is required. The new law 
limits the issuance of visas at the border to very specific cases only. Albania operates a visa-
free regime for all EU Member States. Currentl y, the positive and negativ e lists are not fully 
harmonised with the EU visa list. In March 2009, an agreement was signed with Bosnia and 
Herzegovina on visa liberalisati on. Security features need to  be in place to allow the 
development of an e-visa system in line with EU standards. Also, necessary infrastructure, 
financial and human resources are required for the establishment of an e-visa centre. 
Overall , progress in the area of visa policy has continued. However, further efforts are 
required for alignment with European standards. Al bania has started to addr ess its priorities in 
this area, but further work is required. 
There has been some progress in the field of border management . TIMS is available at 18 of 
the 26 border crossing poi nts, at all eight regional Border  and Migration Police Directorates 
and at two surveillance stations. However, there is  insufficient sharing and analysis of the data 
collected via TIMS and further efforts are needed to install the system at all BCPs and at 
border and migration police stat ions. Direct access to the MEMEX information system on 
criminal intelligence at borde r crossing points is missing. More over, direct access to the 
Interpol database for police stations and border crossing points on lost and stolen passports is 
not yet available. 
Further efforts are required to effectively im plement the Law on State Border together with 
the integrated border management strategy and its updated action plan. St affing levels in the 
border police force remain insufficient and the distribution of human resources along borders 
 
EN 44   EN does not adequately target high -risk areas. Efforts have been made to improve training for 
border police officers, but a long-term traini ng policy, providing for continuous training as 
well as additional specialised training focusing on border management skills, has yet to be 
developed. 
Substantial investment has been made in borde r infrastructure and equipment in recent years 
and continues at present. Further investment in these areas is still needed. The management of 
existing resources requires improvement. An  Inter-Ministerial Committee on Integrated 
Border Management has been established, assisted by a Technical Secretariat.  
A clear division of competences between the Border and Migration Police (BMP) and the 
Coast Guard with regard to law enforcement at  sea and blue border surveillance is needed. 
The BMP has the lead role in blue border management. The establishment of the Inter-
Institutional Maritime Opera tions Centre, which should ensu re the principle of civilian 
command and control of blue border management in  line with the Ohrid commitments, is still 
pending. Inter-agency cooperation between aut horities involved in border surveillance, 
including between the border police and customs authorities, has to be further improved. 
Further efforts are required to strengthen risk analysis and situational awareness of the border 
police. The Risk Analysis Unit of the BMP gath ers relevant statistical data but does not draw 
operational conclusions for implementation at re gional and local level. The management of 
data flows from the central level to the local levels needs to be improved. 
The construction of the Murriqa n–Sukobine joint border crossing point with Montenegro has 
been completed and was inaugurated in June 2009. The construction of a joint border crossing 
point at Xhepisht Trebishtit with the former Yugoslav Republic of Macedonia is ongoing. Agreements on cross-border cooperation in th e area of border management have been 
finalised with all neighbouri ng countries and a sufficient legal basis for cross-border 
cooperation activities exists. A technical working arrangement with FRONTEX was signed in 
February 2009. 
Overall , Albania continues to partially meet its ob jectives in the field of border management. 
However, further efforts are required to ensu re improved inter-agency coordination and to 
provide adequate training, human res ources and equipment at border posts. 
Good progress can be reported with regard to asylum . The Law on Asylum was revised in 
January 2009 in order to incorporate European and international standards. However, a range 
of implementing measures still needs to be  adopted to complete the legal framework, 
particularly regarding access for asylum seeker s to health care, family reunion, social 
protection, education and housing. 
The new law ensures that appeals against deci sions of the Department for Citizenship and 
Refugees (DCR) can be lodged dire ctly before a court. Further e fforts are needed to continue 
shortening appeal procedures a nd to provide training to DCR staff and judges on asylum and 
international protection, including th e provisions of the new law.  
The DCR is responsible for managing the asylum procedure and entitled to take decisions of 
first instance on asylum claims. Its staff has received extensive training from international 
 
EN 45   EN experts. However, regular training of the bor der police and coordina tion with the DCR is 
needed in order to ensure th e effectiveness of the pre-sc reening procedure. During 2008, 13 
people applied for asylum, eight of whom recei ved refugee status. In August 2009, there were 
99 refugees in Albania. The facilities of the national reception centre for asylum seekers in 
Babrru have been upgraded and are in good condition.  
Overall , Albania continues to meet its objectives partially in the asylum area. The new Law 
on Asylum is not fully implemented. The integra tion of families or pe rsons who were granted 
an international protection st atus remains an issue.  
Progress can be reported in the area of migration . Albania is proceeding with the 
implementation of the national migration strate gy and its action plan. An inter-ministerial 
coordination mechanism to monitor their impl ementation has been es tablished. The new Law 
on Foreigners entered into force in December 2008. It introduces distinctions among residence permits depending on the length of stay and includes provisions on carrier's 
liability. However, a sufficient budget is n ecessary to maintain progress in the area. 
Progress has been made regarding the monitoring of migration flows, as  migration statistics 
are now recorded in TIMS. However, data dist inguishing the different types of returnees is 
not available. All relevant li ne ministries and border crossi ng points are supposed to work 
with the system, but in practice they do not , because of the lack of access to TIMS. 
Implementation of the sub-modules on visas and re sidence permits needs to start in order to 
improve monitoring and risk an alysis. Illegal migration from  Albania continues to be a 
significant problem, in particular on th e border between Albania and Greece.  
The detection of illegal migrants by the borde r police continued to improve: in 2008, 14,362 
people were apprehended at the borders. However,  the number of officials assigned to the 
Regional Directorates for Borders and Migration is not sufficient to tackle illegal migration. 
Border surveillance and efforts to detect falsified travel documents requires strengthening. Cooperation with neighbouring countries requ ires further enhancing. In November 2008 
Albania, Bosnia and Herzegovi na, Croatia, Montenegro, the former Yugoslav Republic of 
Macedonia and Serbia signed a memorandum of understanding on sharing data on illegal 
migration and on the regional syst em of advance notification.  
The expulsion of illegally resident third-coun try nationals is regulated by the Law on 
Foreigners, which is broadly in line with European standards. Th ere is a possibility to appeal 
against removal orders. The number of refusa ls of entry was rela tively low in 2008. A 
detention centre for illegally residing third-country nationals  is still under construction. 
Regarding integration policy, a more proactiv e approach is required towards both legally 
residing immigrants and returnees. Immigrants do not benefit from an integrated system of 
financial and social support, and no specific meas ures on integration of fo reigners are put into 
practice. 
Implementation of the readmission agreement be tween the European Community and Albania 
continued. A protocol implementing the read mission agreement was signed with Italy in 
October 2008. With regard to  non-EU countries, an implementing protocol for the 
readmission agreement with Croatia was si gned in February 2009 and a readmission 
agreement and its implementing protocol with Bosnia and Herzegovina in March 2009.  
 
EN 46   EN Overall , progress in the area of migration has c ontinued. Nevertheless, further efforts are 
needed to implement legislation and enha nce administrative capacity and institutional 
cooperation. Efforts to combat illegal  migration need to be stepped up.  
4.3.2.  Money laundering 
Moderate progress can be reported in the fight  against money laundering, which continues to 
be a major problem.  
The Law on Money Laundering and Financing of Terrorism entere d into force in September 
2008 and implementing legislation has been adopte d. Further efforts are ne eded to incorporate 
international standards (FATF recommendations , UN and Council of Europe Conventions) 
into national law. A strategy and an action pl an on the prevention of money laundering have 
not yet been adopted. 
The technical and administrative capacity of the General Directorate for the Prevention of 
Money Laundering (Financial Intelligence Unit — FIU) has been improved through the provision of additional staff, training and IT e quipment. The number of suspicious transaction 
reports received by the FIU has changed signifi cantly between the years, and no upward trend 
can be detected. However, the number still remains low. Reporting is uneven because except for commercial banks nearly no other financia l or non-financial institution sends suspicious 
transaction reports to the FIU.  
A Memorandum of Understanding between the FI U and the Directorate General of Customs 
entered into force in July 2009. The number and quality of the FIU insp ections has increased. 
However, the overall capacity of the FIU remains limited, especially with regard to high-level criminal groups and high-value suspicious transactions. Continuous high staff turnover 
hampers its efficiency and c oordination with the Prosecuto r General’s Office remains 
problematic, although some progr ess can be reported in term s of the number of cases 
submitted by the FIU to the latter, particularly since lowering the reporting threshold for cash transactions. However, there is scope for mo re efforts to raise the reporting entities’ 
awareness of their obligations. 
Cooperation between different law enforcemen t agencies has improved. A new unit dealing 
with cybercrime was established in June 2009. Th e Joint Investigation Unit (JIU) for the fight 
against economic crime and corruption under th e Tirana General Prosecutor’s Office has 
improved investigative capacity in this area an d preparations are under way to replicate this 
structure in six regional prosecu tor’s offices. However, the administrative capacity of the JIU 
remains to be enhanced and its role as a perm anent investigative structure clarified. The lack 
of adequate coordination among the judiciary,  the police and other security authorities 
continues to result in unprocessed intelligence. Salaries for employees of law enforcement agencies remain low. Specialized training for th e staff of relevant institutions needs to be 
continued. 
A memorandum on cooperation was signed in March 2009 between the High Inspectorate of 
Declaration and Audit of Asse ts (HIDAA) and the FIU.  
 
EN 47   EN Regarding the seizure and confiscation of crimin al assets, the scope of application of the 
legislation in this field is limited by a decisi on of the Supreme Court of 2007. The capacity of 
the Agency for the Administration of Sequester ed and Confiscated Assets requires further 
reinforcement. The effectiveness of national st ructures responsible for the confiscation of 
assets needs to be enhanced and a robust track record on confiscation and recovery of criminal 
assets established. The procedures concerning the seizure and confiscation of proceeds of 
crime need to be further clarified.  
There has been a significant decrease in the nu mber of reported illicit currency exchange 
cases, due to increased police operations and preventive activities in this area and the 
increased number of licensed operators.  
Overall , Albania continues to be at an early stage to address its objectives in this area. It is 
making only moderate progress in the fight against money laundering. The legislative 
framework still needs to be completed with th e adoption of relevant bylaws and cooperation 
between police and judiciary needs to be enhanced.  
4.3.3.  Drugs 
There has been limited progress in the fight ag ainst drugs. Cannabis cont inues to be produced 
domestically for markets in Europe, and Alba nia remains a transit country for narcotics 
traffickers moving from Central Asia to destinations in Western Europe. 
Albania is making efforts to curb  the production of drugs more effectively. An action plan for 
the prevention of cannabis cult ivation was adopted in Apr il 2009 and is currently under 
implementation, in cooperation with local gov ernments. However, certain cultivation areas 
such as the village of Lazarat remain inaccessible to the police. 
The police are taking an increas ingly active role in counter-n arcotics operations. During the 
reporting period, nine international operations we re carried out. Progres s has continued in the 
use of special investigative means and cove rt evidence-gathering methods. The amount of 
drugs seized increased. However, the implemen tation of the national strategy against drugs, 
covering the period 2004-2010, is proceeding slow ly due to insufficient financial resources 
and a shortage of qualified staff.  
The exchange of information on drugs-related in vestigations between the central and regional 
police units and with other law enforcement agen cies is hindered by the lack of direct access 
to the MEMEX information system by the regional police units and other law enforcement authorities. Further improvement  in inter-agency coordination as well as cooperation with 
foreign law enforcement authorities is required.  
Deficiencies remain in the area of drug dispos al, due to legal and practical constraints. 
Consequently, there is a signifi cant backlog of drugs in poli ce storage overdue for disposal. 
Drug demand reduction strategies are implemente d in the framework of the national strategy 
against drugs. However, services for drug a ddicts are mainly available in Tirana through 
programmes run by NGOs.  
Overall , Albania is starting to address its priorities  in the fight against drugs. Drug trafficking 
remains an issue of serious concer n, which requires further efforts. 
 
EN 48   EN 4.3.4.  Police 
Some progress can be reported in the area of police reform. 
The implementation of the State Police Law has shown positive effects on law enforcement. 
The rules of procedure of the State Police were adopted in December 2008. However, staff 
transfers and dismissals continue to take place in breach of the State Police law.  
Strengthening of the complaints and discipline pr ocess and better integration with the work of 
the Office of Internal Control is required. Disc iplinary sanctions are not  consistently applied. 
There has been some improvement in police organisation and staffi ng, although the overall 
management of police human resources is still unsatisfactory. An opera tional action plan for 
the implementation of the strategy on commun ity policing was adopted in November 2008 to 
cover the period 2008-2010. 
Further efforts are required as regards the recruitment, retention and training of police 
officers. High turnover of previ ously trained and competent st aff has continued. Despite the 
number of training courses provided, regular training activities — esp ecially for the first 
management level of the State Police and for po lice officers involved in the use of special 
investigative measures — are required.  
The overall investigative capacity  of the police remains weak. Th ere is limited awareness of 
using an intelligence-led approach on a national scale and limited use of criminal intelligence 
tools. The regional police offices now have electronic access to the MEMEX information 
system. Crime statistics c ontinue to be inadequate. 
Cooperation between the State Police and othe r law enforcement agen cies and with the 
prosecution services and the judiciary remains insufficient and ineffective. Problems remain 
in cooperation at the operationa l level among the Police, the Ge neral Prosecutor and Customs. 
The Judicial Police Law is not yet fully im plemented. Implementation of the South–East 
Europe Police Cooperation Convention has conti nued. Following the entry into force of the 
strategic cooperation agreement with Europol, the signature of an operational cooperation 
agreement is pending.  
Following the explosion in 2008 at Gërdec, the gove rnment has started to address the question 
of stockpiles of old ammunitions. However, management and disposal of small arms, explosives and the remnants of war remains a serious problem in Albania. The current 
legislation covering control and access to weapons  and explosives is not in compliance with 
the European standards. A thor ough revision and approximation is needed especially in terms 
of clear definitions of arms, marki ngs and traceability or deactivation. 
Overall , Albania is only starting to a ddress some of its priorities in  this area. However, further 
efforts are needed to increase investig ative capacity, enhance cooperation with the 
prosecution and the judiciary in particular , and improve human resources management. 
4.3.5.  Fighting organised crime and terrorism 
Limited progress has been made in the fight against organised crime . It remains a key 
European Partnership priority to be addre ssed. A specific action plan to implement the 
national strategy against organised crime, tra fficking and terrorism remains to be adopted. 
Organised crime remains an issue of serious concern in Albania. 
 
EN 49   EN The fight against organised cr ime continues to be hampered  by the lack of effective 
cooperation at operational level between law enforcement bodies, the judiciary and the 
prosecution. Case reporting and investigations  coordination between Prosecutor and Police, 
continue to be issues of concern. The inves tigative capacity of the police and prosecution 
remains weak. The establishment of joint inves tigation units to target organised crime groups 
and their assets, can help to improve coope ration between the rele vant authorities.  
Regarding the implementation of the Stolen Vehicles Action Plan, the large amount of 
registrations in Albania of vehi cles stolen in other countries  and registration of vehicles 
without declaring their real va lue remain issues of concern. 
International cooperation to combat organised cr ime has continued both at bilateral level and 
via Interpol. A new Law on Mutual Legal A ssistance is pending. The number of wanted 
citizens who have been traced and returned to  Albania has increased. In 2008, 87 extraditions 
to Albania took place. Efforts have been made to  trace wanted Albanian  citizens abroad. From 
October 2008 to June 2009, 37 people were re turned to Albania and six people were 
extradited from Albania. Cooperation agreements  against organised crime were signed with 
Bosnia and Herzegovina, France, Kosovo, Denmar k, Norway and Iceland. Cooperation with 
Eurojust remains informal as no cooperation agreement is yet in place.  
Some progress can be reported re garding measures to guarantee witness protection. Work is 
ongoing on a draft law on the protection of justi ce witnesses and collaborators. However, the 
lack of adequate witness pr otection remains problematic and hinders investigations. 
Overall , Albania continues to be at  an early stage in the fight  against organised crime. A 
number of considerable weaknesses remain – inadequate witness protection and cooperation 
of relevant agencies in particular. Sustai ned efforts including on making law enforcement 
officials resistant to corrupti on and other forms of pressure from crime syndicates are needed 
in the fight against organised crime, which rema ins a matter of serious concern and affects the 
rule of law and the business environment. 
There has been some progress in combating trafficking of human beings . Albania has 
continued to implement the national strategy for the fight against trafficking in human beings 
2008-2010 and the associated strategy for the figh t against child trafficking and the protection 
of child victims of trafficking. The Office of the National Anti-tr afficking Coordinator 
(ONCAT) has carried out extensive work on prevention and public awareness-raising to 
combat trafficking. Specialised training has been  provided to relevant in stitutions at local and 
national level. The administrative capacity at  the ONCAT has improved. However, given the 
extent of the challenges faced, the effectiv e implementation of both strategies requires 
additional human and financial resources.  
Albania remains a country of or igin of women and children tr afficked for the purposes of 
sexual exploitation and forced labour, includin g forced begging, although there has been a 
decline in the number of persons trafficked. Al bania is no longer considered a major country 
of transit. Sex trafficking mainly involve s women and girls, wh ereas forced begging 
particularly affects Roma children.  
Considerable efforts have been made to improve the identification of victims of trafficking as 
well as the functioning of the national victim re ferral mechanism. The database on victims of 
trafficking has been operational since Septem ber 2008. It allows on-lin e access to a common 
database to several agencies and is an impor tant step towards prov iding better support to 
 
EN 50   EN victims. As a result, the numbe r of identified victims rose five-fold to 108 persons in 2008. 
The number of convictions for human trafficking offences increased from 7 in 2007 to 26 in 
2008. 
Government funding for the provision of shelte r, housing and other assistance has increased. 
Coordination between central, regional and local levels and with NGOs has improved, 
although further efforts are required. However, divisions of tasks and responsibilities of 
relevant bodies are not clearly defined. Further tr aining is required for all levels of the police 
and for the social services in order to  properly identify victims of trafficking. 
Cooperation protocols in the fight against trafficking in human beings have been signed with 
the former Yugoslav Republic of Macedonia. Inte rnal trafficking is on the rise. Additional 
technical and human resources at the borders, including female social workers and border 
guards, are needed. Human and financial resour ces remain insufficient for the protection and 
reintegration of victims of trafficking. 
Overall , Albania is moderately advanced in its e fforts to fight traffick ing of human beings. 
With regard to the fight against terrorism , no progress can be reported. The national 
counter-terrorism strategy ha s not been adopted yet.  
Overall , counter-terrorism efforts remain at early stages. 
4.3.6.  Protection of personal data 
Some progress in the area of protection of pers onal data can be noted. In pursuance of the 
Personal Data Protection Law, the Office of th e Commissioner for Data Protection has been 
established and the Commissioner has been appointed. The govern ment adopted in February 
2009 a decision granting its premis es and equipment. The intern al regulation and code of 
ethics of the Commissioner's Office have been  adopted, and the review of personal data 
complaints has already started. 
However, the implementation of the Data Prot ection Law is slow. Implementation measures 
concerning notification procedures and exemptions are still pending . Adequate resources, 
including training, need to be ensured for the Commissioner fo r Data Protection office to 
work effectively. A communication strate gy on the law’s provisions is pending.  
Overall , Albania meets only partially its targets regarding data protection. 
 
EN 51   EN STATISTICAL ANNEX  
STATISTICAL DATA (as of 14 September 2009)            
Albania            
            
Basic data Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Population (thousand)  3 373 3 058b 3 063 3 084 3 103 3 120 3 135 3 149 3 153 3 170 
Total area of the country (km²)  28 750 28 750 28 750 28 750 28 750 28 750 28 750 28 750 28 750 28 750 
            
National accounts Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Gross domestic product (GDP) (million national currency)  471 578 523 043 583 369 622 711 694 098 750 785 814 797 882 209 971 222 : 
GDP (million euro)  3 209 3 945 4 541 4 705 5 048 5 881 6 561 7 168 7 858 : 
GDP (euro per capita)  1 051 1 289 1 477 1 521 1 622 1 881 2 088 2 275 2 491 : 
GDP (in Purchasing Power Standards (PPS)  per capita)  : : : : : : : : : : 
SI: GDP (in PPS per capita, EU-27=100)  : : : : : : : : : : 
SI: Growth rate of GDP (national currency, at constant prices , % change on previous year)  13.5 6.7 7.9 4.2 5.8 5.7 5.7 5.4 6.0  : 
SI: Employment growth (national accounts, % change on previous year)  : : : : : : : : : : 
Labour productivity growth: GDP growth per person employ ed (% change on previous year)  : : : : : : : : : : 
SI: Unit labour cost growth (national accounts, % change on previous year)  : : : : : : : : : : 
SI: Labour productivity (GDP in PPS per person employed, EU-27=100)  : : : : : : : : : : 
Gross value added by main sectors (%)                      
Agriculture  25.8 25.5 23.6 23.4 23.5 22.3 20.6 19.4 18.9 : 
Industry  7.3 7.8 7.3 6.9 8.7 10.0 10.6 11.1 9.3 : 
Construction  6.0 8.3 10.4 12.0 13.7 13.9 13.8 14.3 14.6 : 
Services  60.9 58.5 58.6 57.6 54.0 53.8 55.0 55.2 57.2 : 
Final consumption expenditure, as  a share of GDP (%)  92.7 86.0 80.9 86.0 86.1 89.0 88.9 87.4 90.1 : 
Gross fixed capital formation, as a share of GDP (%)  23.0 31.7 38.4 37.9 40.5 37.2 37.0 39.0 38.6 : 
Changes in inventories, as a share of GDP (%)  0.7 2.4 1.3 0.8 -1.8 -3.8 -1.2 -2.8 -2.1 : 
Exports of goods and services, relative to GDP (%)  15.8 17.9 18.4 19.6 20.4 22.0 22.8 24.9 28.0 : 
Imports of goods and services, relative to GDP (%)  32.2 38.1 39.0 44.3 45.1 44.4 47.5 48.5 54.6 : 
            
Industry Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Industrial production volume index (2000=100)  : : : : : : : : : : 
            
Inflation rate Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
SI: Consumer price index (CPI), (tot al, % change on previous year)  -1.0 4.2 3.5 1.7 3.3 2.2 2.0 2.5 3.1 2.2 
            
Balance of payments Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Balance of payments: current account total (million euro)  -129 -185 -316 -444 -350 -340 -589 -471 -832 : 
Balance of payments current account: trade balance (million euro)  -626 -897 -1 149 -1 218 -1 177 -1 277 -1 477 -1 658 -2 104 :  
Balance of payments current account: net services  (million euro)  96 12 100 -8 -72 -41 -140 -32 13 : 
Balance of payments current account: net income (million euro)  71 115 150 116 132 138 131 209 217 : 
Balance of payments current account: net current tr ansfers (million euro)  330 586 583 667 767 839 897 1 011 1 043 : 
of which government transfers (million euro)  156 105 31 41 53 61 61 43 60 : 
Net foreign direct investment (FDI) (million euro)  39 157 231 141 157 267 209 250 : : 
 
EN 52   EN Foreign direct investment (FDI) abroad (million euro)  0 0 0 0 0 0 0 0 0 : 
of which FDI of the reporting economy in EU- 27 countries (million euro)  : : : : : : : : : : 
Foreign direct investment (FDI) in the reporting economy (million euro)  39 157 231 141 157 267 209 250 466 : 
of which FDI of EU-27 countries in the reporting economy (million euro)  : : : : : : : : : : 
            
Public finance Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
General government deficit/surplus, rela tive to GDP (%)  -9.0 -7.6 -6.9 -6.1 -4.9 -5.1 -3.4 -3.3 : : 
SI: General government debt, relative to GDP (%)  53.7 60.2 58.5 63.9 61.5 58.3 55.3 59.7 : : 
            
Financial indicators Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Gross foreign debt of the whole economy, relative to GDP (%)  16.1 17.0 17.2 22.1 21.1 19.0 16.6 16.9 : : 
Gross foreign debt of the whole economy, relative to total exports (%) 1) 101.6 94.9 93.1 112.5 103.5 86.5 73.0 : : : 
Money supply: M1 (banknotes, coins, overnight deposits,  million euro)  701 936 1 113 1 154 1 053 1 354 1 833 2 011 1 994 : 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro)  1 631 1 995 2 376 2 453 2 542 3 066 3 431 3 88 2 4 068 : 
Money supply: M3 (M2 plus marketable instruments, m illion euro)  1 993 2 475 3 069 3 148 3 261 3 973 4 654 5 478 6 157 : 
Total credit by monetary financial institutions to resident s (consolidated) (million euro)  135 175 217 292 369 548 982 1 554 2  326 : 
Interest rates: day-to-day money rate, per annum (%)  : : : : : : : : : : 
Lending interest rate (one year), per annum (%) 2) 25.8 24.0 11.9 16.0 10.5 13.7 12.2 11.2 13.6 : 
Deposit interest rate (one year), per annum (%) 3) 9.1 8.0 7.8 9.3 7.6 6.0 5.6 5.5 6.3 : 
euro exchange rates: average of period - 1 euro = … nat ional currency  146.960 132.580 128.470 132.360 137.510 127.670 124.190 123.080  123.630 : 
Effective exchange rate index (2000=100)  : : : : : : : : : : 
Value of reserve assets (inc luding gold) (million euro)  488 697 853 902 908 1 103 1 144 1 429 1 564 : 
            
External trade Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Value of imports: all goods, all partners (million euro)  1 083 1 179 1 486 1 590 1 648 1 823 2 118 : : : 
Value of exports: all goods, all partners (million euro)  329 283 340 331 395 479 906 : : : 
Trade balance: all goods, all partners (million euro)  -754 -896 -1 145 -1 259 -1 252 -1 344 -1 212 : : : 
Terms of trade (export price index  / import price index, 1998=100)  106.8 100.2 101.5 99.9 98.2 99.0 80.3 100.6 98.1 96.0 
Share of exports to EU-27 countries in value of total exports (%)  95.6 93.2 91.3 92.6 93.8 90.9 93.2 : : : 
Share of imports from EU-27 countries in value of total imports (%)  82.8 80.7 80.3 77.0 74.3 70.5 67.2 : : : 
            
Demography Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Natural growth rate: natural change (births minus deaths) (p er 1000 inhabitants)  12.8 11.4 12.5 9.5 9.3 8.1 7.2 5.5 5.9 : 
Infant mortality rate: deaths of children under one year of age per 1000 live births  12.2 11.9 10.8 10.2 8.4 7.8 7.6 7.4 5.6 :  
Life expectancy at birth: male (years)  71.7 72.1 72.1 72.1 72.1 72.1 72.1 73.9 : : 
Life expectancy at birth: female (years)  76.4 78.6u 77.5 77.9 78.6 78.6 78.6 78.0 : : 
            
Labour market Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Economic activity rate (15-64): share of  population aged 15-64 that is economically active (%)  68.3 66.2 62.3 61.8 60.1 58.8b 57.8 53.7 67.4b : 
SI: Employment rate (15-64): share of population aged 15-64 that  is in employment (%)  55.7 55.0 52.1 52.1 51.1 50.3b 49.7 48.7  56.4b : 
Share of male population aged 15-64 that is in employment (%)  69.0 66.0 64.0 63.9 62.6 61.2b 60.0 58.8 63.6b : 
Share of female population aged 15-64 that is in employment (%)  42.3 44.1 39.6 39.7 39.1 38.9b 38.8 38.1 49.3 : 
SI: Employment rate of older workers (55-64): share of population aged 55-64 that is in employment (%)  : : : : : : : : 46.6 : 
 
EN 53   EN Employment by main sectors (%)                      
Agriculture  72.1 71.8 58.7b 57.7 58.2 58.5 58.5 58.0 51.0 : 
Industry  7.7 5.4 6.1b 7.6 7.2 8.1 7.9 8.0 9.7 : 
Construction  1.0 1.2 6.2b 6.1 6.0 5.5 5.5 5.7 8.6 : 
Services  19.2 21.5 29.0b 28.6 28.5 27.9 28.1 28.3 30.6 : 
SI: Unemployment rate: share of labour force that is unemployed (%) 4) 18.4 16.8 16.4 15.8 15.0 14.4 14.1 13.8 13.4 : 
Share of male labour force that is unemployed (%) 4) 16.4 14.9 14.2 13.6 12.9 12.4 12.1 11.8 14.3 : 
Share of female labour force that is unemployed (%) 4) 21.4 19.3 19.9 19.1 18.2 17.5 17.2 16.8 12.2 : 
Unemployment rate of persons < 25 years: share of labour fo rce aged <25 that is unemployed (%)  : : : 26.8 : : : : 20.1 : 
SI: Long-term unemployment rate: share of labour force t hat is long-term unemployed (%)  : : : : : : : : 9.4 : 
            
Social cohesion Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Average nominal monthly wages and salaries ( national currency)  : : : : : : : : : : 
Index of real wages and salaries (index of nominal wages and sa laries divided by the CPI) (2000=100)  : : : : : : : : : : 
SI: Early school-leavers: share of population aged 18-24 having not completed upper secondary education 
and not currently in education or training (%)  : : : : : : : : : : 
            
Standard of living Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Number of passenger cars per 1000 population  27.3 37.4 43.6 48.2 56.4 60.9 62.2 71.4 89.1 91.4 
Number of subscriptions to cellular mobile telephone serv ices per 1000 population  : : 120.8 259.4 370.6 403.6 488.0 561.7 : : 
            
Infrastructure Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Density of railway network (lines in operation, per 1000 km²)  : 13.9 14.3 15.0 15.0 15.1 15.0 13.9 13.9 13.9 
Length of motorways (thousand km)  : : : : 0.0 0.0 0.0 0.0 0.0 0.0 
            
Innovation and research Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
SI: Spending on human resources (public expenditure on education) relative to GDP (%)  3.3 3.1 3.3 3.0 3.1 3.2 3.2 3.1 3.2 : 
SI: Gross domestic expenditure on research & development, relative to GDP (%)  : : : : : : : : : : 
SI: Percentage of households who have Internet access at home (%)  : : : : : : : : : : 
            
Environment Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
SI: Total greenhouse gases emissions, CO2 equi valent (tons, 1990=100)  : : : : : : : : : : 
SI: Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP 2004)  435.9 400.5 386.5 356.3 370.6 384.0 366.5 32 8.9 306.6 : 
SI: Share of renewable energy in electric ity consumption (%)  : : : : : : : : : : 
SI: Road freight transport as a share of total inland freight tr ansport (modal split of freight transport) (%)  : : : : : : : :  : : 
            
Energy Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Primary production of all energy products (thousand TOE)  1 113 987 933 896 1 012 1 178 1 149 1 237 1 080 : 
Primary production of crude oil (thousand TOE)  323 314 335 308 359 443 418 500 564 : 
Primary production of hard coal and ligni te (thousand TOE)  33 20 15 5 19 19 15 15 15 : 
Primary production of natural gas (thousand TOE)  14 12 8 8 12 9 10 10 16 : 
Net imports of all energy products (thousand TOE)  761 858 1 001 965 1 043 1 080 1 130 826 1 020 : 
Gross inland energy consumption (thousand TOE)  1 874 1 845 1 934 1 861 2 055 2 258 2 279 2 156 2 130 : 
Electricity generation (thousand GWh)  5.4 4.7 3.7 3.2 4.9 5.5 5.5 5.6 3.0 3.9 
 
EN 54   EN  
SI = Structural Indicator 
: = not available p = provisional 
e = estimate value 
b = break in series 1) Debt outstanding disbursed (DOD), cumulative stock coveri ng external public debt and external publicly guaranteed debt, but excluding IMF credits. Total exports  are calculated according to 
the national accounts concepts. 
2) Average weighted rate applied on new 12-month loans  over the respective month, on 12-month maturity. 
3) Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 12-mont h maturity. 
4) Administrative data; unemployment  refers to registered unemployment.             
Agriculture Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Agricultural production volume index of goods and services (producer  prices, previous year=100)  : : : : 102.9 105.1 101.2 : : : 
Total utilised agricultural area (thousand hectare)  1 144 1 144 1 139 1 140 1 121 1 122 1 077 1 120 1 121 1 122 
Livestock: cattle (thousand heads, end of period)  720 728 708 690 684 654 655 634 577 541 
Livestock: pigs (thousand heads, end of period)  99 103 106 114 132 143 147 152 147 161 
Livestock: sheep and goats (thousand heads, end of period)  3 061 3 045 2 933 2 773 2 919 2 739 2 701 2 770 2 729 2 620 
Production and utilisation of milk on the farm (total wh ole milk, thousand tonnes)  907 948 984 1 010 1 060 1 064 1 076 1 102 1  016 1 040 
Crop production: cereals (including  rice) (thousand tonnes, harvested production)  498 566 503 519 489 499 511 508 494 609 
Crop production: sugar beet (thousand tonnes, har vested production)  40 42 39 39 50 40 40 : : : 
Crop production: vegetables (t housand tonnes, harvested production)  610 620 677 669 675 678 685 688 672 715