Commission staff working document - Albania 2009 progress report accompanying the Communication from the Commission to the European Parliament and the Council - Enlargement Strategy and Main Challenges 2009-2010 {COM(2009) 533 final}
Date: 2009-10-14
Institutions: European Commission
Subjects: Albania, accession to the European Union, enlargement of the Union, pre-accession strategy, report

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COMMISSION OF THE EUROPEAN 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 PARLIAMENT AND THE COUNCIL 

Enlargement Strategy and Main Challenges 2009-2010 

{COM(2009) 533 final} 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

Introduction .................................................................................................................. 4 

Preface.......................................................................................................................... 4 

Context ......................................................................................................................... 4 

Relations between the EU and Albania........................................................................ 5 

Political criteria ............................................................................................................ 6 

Democracy and the rule of law .................................................................................... 6 

Human rights and the protection of minorities .......................................................... 12 

Regional issues and international obligations ............................................................ 18 

Economic criteria ....................................................................................................... 19 

The existence of a functioning market economy ....................................................... 19 

The capacity to cope with competitive pressure 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 

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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 

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COMMISSION STAFF WORKING DOCUMENT 

ALBANIA 2009 PROGRESS REPORT 

1. 

INTRODUCTION 

1.1. 

Preface 

Since March 2002, the Commission has reported regularly to the Council and Parliament on 
the  progress  made  by  the  countries  of  the  Western  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 basis of the economic criteria for membership; 

–  reviews  Albania’s  capacity  to  implement  European  standards,  that  is,  to  gradually 
approximate  its  legislation  and  policies  to  the  acquis,  in  line  with  the  Stabilisation  and 
Association Agreement and the European 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, legislation 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  contributions  from  the  government  of  Albania,  the 
EU Member States, European Parliament reports1 and information from various international 
and non-governmental organisations. 

The Commission draws detailed conclusions regarding 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 applied for EU membership in 
April. The Commission stands ready to prepare an Opinion on this application once requested 
by the Council. 

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2 

The rapporteur for Albania until 2009 was Mr. Libor Rouček. New rapporteur is Mr. Nikolaos Chountis 
Enlargement Strategy and Main Challenges 2009-2010 (COM (2009) 533 of 14.10.2009). 

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The  Stabilisation  and  Association  Agreement  (SAA)  between  Albania  and  the  EU  entered 
into  force  in  April  2009.  An  Interim  Agreement  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  commitments  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 Interim 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  authorities  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 Ministerial 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 Agreement. A Consultative 
Task  Force  (CTF)  meeting  took  place  in  December  2008,  focusing  on  political  accession 
criteria and rule of law issues. Working party/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  Chad  and  in  Central  Africa  (EUFOR).  As  a 
potential  candidate  for  EU  membership,  Albania  aligned  itself  with  116  CFSP  declarations 
from a total of 128 relevant declarations adopted 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 roadmap. Further efforts are required particularly in 
the  area  of  personalisation  and  distribution  of  biometric  passports,  border  and  migration 
management and the institutional framework to fight organized crime and corruption.  

Since  2007,  pre-accession  financial  assistance  to  Albania  is  provided  under  the  Instrument 
for Pre-Accession Assistance (IPA). The EC allocated a total of € 81.2 million in 2009. The 
Multi-Annual  Indicative  Planning  Document  (MIPD)  for  2009-2011 for  Albania  under  the 
IPA  was  adopted  in  July  2009.  Main  focus  areas  continue  to  be  justice  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 Delegation 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  was  signed  in  March  2009  and  the  implementation  of  the 

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Council Decision 2008/210/EC. 

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programme  has  started.  The  Financing  Agreements  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 expected to leverage investments of at least 
€1  billion,  co-financed  by  the  partner  financial  institutions.  The  country  will  benefit  from  a 
share  of  multi-beneficiary  funds  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  organisations  over  the  period 
2009-2011.  More  specifically,  €  1.5  million  of  IPA  support  is  earmarked  for  civil  society 
organisations  dealing  with  the  fight  against  corruption,  organised  crime  and  human 
trafficking,  with  environmental  protection  and  education  as  well  as  poverty  alleviation. 
Another  €  1.2  million  under  the  European  Initiative  for  Democracy  and  Human  Rights 
(EIDHR)  supports  actions  aimed  at  the  children,  women  and  minority  rights,  people  with 
disabilities and mental illnesses 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 Citizens programme, under memorandum of understanding 
signed respectively in June 2008 and February 2009. 

2. 

POLITICAL CRITERIA 

This section examines progress made by Albania towards meeting the Copenhagen political 
criteria, which require stability of institutions guaranteeing democracy, the rule of law, human 
rights and respect for and protection of minorities. It also monitors regional cooperation, good 
neighbourly  relations  with  enlargement  countries  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 approximating 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  the  highest  standards  for  democratic  elections. 
Tangible progress with regard to voter identification, legal framework and voting took place 
but the politicisation of technical processes, such as the vote count, remains to be addressed in 
future elections. 

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Electoral reform was completed with the adoption of the Electoral Code in December 2008. 
The main OSCE/ODIHR recommendations from previous elections were addressed as part of 
the  overall  electoral  reform.  However,  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. Overall, the political dialogue, 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 registry, 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.  The  new  parliament  convened  on  7  September 
and the new government was sworn in on 16 September. 

Parliament adopted a good number of laws to approximate 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  improved  overall.  There  has  been  a  significant 
decrease  in  the  number  of  ad  hoc  parliamentary  inquiry  committees.  The  parliamentary 
administration started to transcribe and publish 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  accountability.  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  oversight  over  the  executive.  To  progress  on 
approximation  of  legislation,  parliament  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 
legal 
approximation,  as  required  under  a  new  regulation  of  the  Council  of  Ministers.  However, 
further efforts are needed to enhance the role of parliament in monitoring the implementation 
of SAA obligations. 

includes  concordance 

tables  for 

legislation 

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Overall,  progress  can  be  noted  on  the  conduct  of  parliamentary  elections  which  were 
considered as meeting most international standards. The timely adoption of the Electoral Code 
and  preparation  of  improved  voters’  lists,  largely  meets  this  key  European  partnership 
priority.  However,  due  to  the  elections,  the  political  dialogue  between  political  parties 
deteriorated and this delayed progress on key reform areas. 

Government 

Following the June parliamentary elections, a new coalition government headed by outgoing 
Prime Minister Berisha from the Democratic Party (DP) was asked by President Topi to form 
a new government. In addition to the DP, the coalition 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 SMI, as the main coalition partner, secured the 
post  of  Deputy  Prime  Minister  and  Minister  of  Foreign  Affairs  as  well  as  the  Ministry  of 
Economy  and the Ministry of Health. The Republican  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  resigned  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 Integration, 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  continued  to  be  difficult  at  times.  A  tendency  by  the 
executive to exert control over independent institutions, in particular in the judiciary, raised 
concerns.  

The  lustration  law  was  adopted  by  parliament  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 Constitutional 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  the  establishment  of  inter-institutional  working 
groups for drafting sectoral strategies. 

Some measures have been taken to improve the monitoring and inter-agency coordination of 
SAA  commitments.  In  April,  an  Inter-Ministerial  Coordination  Committee  on  European 
Integration  was  established  to  strengthen  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  regarding  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  requirement  to  prepare  concordance  tables  in  draft 
legislation.  Moreover,  legislative  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. 

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Little  progress  has  been  made  in  the  implementation  of  the  National  Plan  for  the 
Implementation  of  the  SAA  and  a  reliable  database  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  commitments.  Capacity  for  inter-ministerial 
coordination remains weak. Administrative capacity to implement SAA commitments, a key 
European partnership priority, needs further strengthening 

The  National  Strategy  for  Development  and  Integration  (NSDI)  remains  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 performance indicators by sectors remain uneven. 

Government  planning  has  improved.  The  Government's  overall  Integrated  Planning  system 
(IPS)  has  built-in  links  on  key  sectors  for  European  Integration.  However,  central 
coordination capacity remains limited in terms of implementation.  

Overall,  Albania  has  continued  to  make  some  progress  in  strengthening  its  government 
structures with a view to addressing SAA commitments, 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 framework is largely in place through 
the  civil  service  law  but  its  implementation  remains  problematic.  The  strategy  for  public 
administration reform was adopted but implementation 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  use  of  EU  funds,  is 
insufficient.  An  adequate  human  resource  management  system  for  public  administration  is 
needed. 

Politically motivated turnover of public employees has continued, although to a lesser extent. 
The share of vacancies filled by temporarily contracted employees remains high, at 20% of all 
vacancies. This practice undermines the implementation of the Civil Service Law and creates 
an opening for politicisation of the administration. Recruitment in the civil service continues 
to take place through non-transparent procedures.  

The capacity of the Training Institute for Public Administration (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  administration  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, free 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. 

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Judicial system 

There  has  been  little  progress  in  completing  the  legal  framework  for  judicial  reform. 
Amendments  to  the  Law  on  the  General  Prosecutor'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 bylaws 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  administrative  capacity  of  the  HCJ  remains  weak. 
Attempts by the government to curtail the independence of the judiciary have politicised the 
debate about judicial reform and hampered progress. 

The General Prosecutor's  Office completed its investigation  on the explosion in 2008 at the 
ammunition depot in Gërdec. 29 indictments, including that of the then Minister of Defence, 
were  forwarded  to  the  High  Court.  The  trial  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  transparent  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 the Gërdec investigation (See 
also section 4.1.8). 

In November 2008, the Law on the private bailiff 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 November 2008. The State Advocacy Office is 
being established and recruitment has started. This body will defend and represent the State 
before  national  and  international  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 stemming 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 judiciary. Other rulings regarded complaints by economic operators 
such as diesel fuel import restrictions and market access for some mobile telephone operators.  

Judicial inspections continue to be mixed competencies between the HCJ and the Ministry of 
Justice.  Competencies  of  the  inspectorates  of  the  HCJ  and  those  of  the  Ministry  of  Justice 
remain to be clarified. Inspections by both inspectorates and disciplinary proceedings against 
judges often do not meet European standards and weaken the independence 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. However, adequate financial resources are needed to broaden the 
scope of specialised training programmes and to ensure sustainability. 

Concerning  judicial  infrastructure,  the  serious  crimes  court  building  in  Tirana  has  been 
completed, and the criminal section of the Tirana district court has been relocated, which has 

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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  district  courts  in  2007  have  been  reinstalled.  A 
computerised  case  management  system  for  both  civil  and  criminal  cases  is  installed  in  all 
courts. The Ministry of Justice started publishing case management statistics on its website. 
However, court procedures remain problematic in terms of efficiency and transparency. 

The budget for the judiciary has been increased in 2009. The management of the Office for 
the judicial budget has improved. However, the funding for the judiciary remains insufficient 
to ensure proper functioning of court administration. 

The number of cases of blood feud-related killings is decreasing due to improved prosecution 
of perpetrators and to the reconciliation efforts led 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  coordinated  strategy  dealing  with  blood  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  been  adopted.  The  justice  system  continues  to 
function poorly due to shortcomings in independence, transparency and efficiency, which are 
key European Partnership priorities to be addressed. A comprehensive strategy to improve the 
judicial system will be key to progress in this area. 

Anti-corruption policy 

The  government  has  undertaken  more  coordinated  efforts  to  fight  corruption  in  some  areas. 
Where  corruption  can  result  from  direct  contact  between  the  private  sector  and  the 
administration,  measures  aimed  at  reducing  personal  contacts  with  officials  were  taken. 
Measures  include  a  reduction  of  bureaucracy  and  reform  of  procedures  (e-procurement,  e-
taxation,  one-stop-shop  for  registration  and  licensing  of  businesses  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  Prevention  and  Combating  of  Corruption  2008-2013  was 
adopted in October 2008, followed by the adoption of an action plan in January 2009. Their 
implementation  has  started.  However,  realistic  implementation  mechanisms  and  timeframes 
are missing, together with monitorable indicators and adequate resources.  

Progress  can  be  noted  regarding  the  improvement  of  legislation  in  accordance  with  the 
Council of Europe Civil Convention 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 alleged corruption, regardless 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. 

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The lack of significant progress in the reform of the health sector has maintained the practice 
that adequate healthcare often depends on a bribe. Corruption remains high at almost all levels 
of the health sector. Adoption of a comprehensive health reform strategy will be key in this 
respect.  

The lack of transparency and the unclear legal basis in the area of property rights has favoured 
corrupt practices in this sector.  

The  transparency  of  party  financing  remains  a  matter  of  concern  to  be  addressed.  The 
Electoral Code requires that the Central Election Commission collects political party financial 
declarations;  it  lacks  however  the  proper  mechanisms  to  investigate  these  and  there  is  no 
reporting obligation for private 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  bodies  and  the  prosecution  remains  weak  due  to 
shortfalls in expertise, 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)  continued  to  perform  internal  control  duties  over  public 
administration.  However,  the  administrative  capacity  of  supervisory  and  auditing  bodies 
needs  further  strengthening  particularly  in  the  areas  of  conflict  of  interest  and  financing  of 
political parties.  

Overall,  Albania  has  continued  to  address  corruption,  a  key  European  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 strategic approach is needed 
in  fighting  corruption  by  putting  in  place  systems  of  accountability  in  public  administration 
and the judiciary and by increasing transparency. A convincing track record of verdicts and 
sanctions in corruption cases remains to be established, particularly for high level corruption. 
Corruption is prevalent in many areas and continues 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 children against sexual exploitation and sexual abuse 
in  April  2009.  However,  Albania  has  not  yet  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 judgements finding that Albania had 
violated  the  European  Convention  on  Human  Rights  and  related  protocols,  in  cases 
concerning the right to access to court and property rights, and the prohibition of degrading 

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treatment and unlawful detention. The total number of pending applications before the Court 
regarding  Albania  is  219.  However,  further  efforts  are  required  as  regards  the  execution  of 
judgements. 

Albania  has  an  adequate  legal  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-treatment and the fight against impunity, 
Albania  has  made  some  progress  to  combat  physical  abuse  of  prisoners.  Law  enforcement 
agencies  have  prosecuted  cases  of  ill-treatment  and  police  officers  have  been  dismissed  for 
misconduct.  The  mechanisms  for  monitoring  prison  conditions  have  improved  due  to 
extensive  prison  visits  by  the  People's  Advocate  acting  as  National  Prevention  Mechanism 
against Torture. However, allegations of excessive use of force during police custody remain 
an issue of concern. Further efforts are needed to train law enforcement officials and to limit 
the high turnover of trained prison staff.  

There  has  been  some  progress  in  the  prevention  of  torture  and  ill-treatment.  The  People’s 
Advocate  (Human  Rights  Ombudsman)  continued  to  play  an  active  role  in  investigating 
claims  of  violations  of  fundamental  rights  and  making  recommendations.  The  institution 
received a total of 2,862 complaints during the year 2008. Most of the complaints were related 
to  prisons,  police  and  property  rights.  The  People’s  Advocate  has  expressed  particular 
concern  over  the  conditions  in  pre-trial  detention  centres  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, witnesses, or vulnerable persons. The  State  Commission 
for legal aid has been appointed but is not yet operational. However, the appointment of the 
Legal  Aid  Commission  is  pending  and  implementation  has  not  started.  Further  efforts  are 
needed  to  improve  access  to  legal  aid  for  vulnerable  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  government  adopted  the  General  Rules  of  Procedure  of  Prisons, 
including  provisions  on  the  right  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  improve  living  conditions.  The  construction  of  a 
juvenile  rehabilitation  institution  in  Kavaja  and  a  new  pre-trial  detention  centre  in  Durrës 
were completed in June 2009. These two new centres should help to alleviate overcrowding. 
The  total  number  of  detainees  has  decreased.  However,  it  remains  well  above  capacity. 
General prison conditions remain below standard. Cases of bribery and excessive use of force 
in  Albanian  prisons  remain  to  be  addressed.  Progress  in  developing  rehabilitation  schemes, 
such as education, work and social programmes for detainees, will be key to progress in this 
area.  

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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 judiciary is progressing slowly.  

Overall,  progress  has  been  made  in  establishing  a  probation  service  and  in  improving  the 
prison and pre-trial detention system, but overcrowding continues and detention standards in 
older prisons remain poor. 

As  regards  freedom  of  expression,  investigative  journalism  has  contributed  to  reporting  of 
corrupt practices. However, some pressure was applied by the executive, mostly financially, 
but also through selective action against media operators. Some media outlets were evicted 
from  their  premises  owned  by  the  government.  Business  and  political  interests  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  that  during  the  official  campaign  period  the 
coverage  for  the  main  parties  was  balanced.  However  the  report  points  out  that  all 
broadcasters showed a bias towards either DP or SP. The public service 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 for TV digitalisation. 
However, the Law on electronic broadcasting remains to be adopted. The Law on public and 
private  radio  and  television  is  still  not  in  compliance  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 progress can be reported on the NCRT’s monitoring 
capacity. The NCRT has favoured the media linked 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  stalled.  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  overall  climate  for  the  media,  to  finalise  the 
digitalisation  strategy  and  to  adopt  key  legislation  on  broadcasting,  decriminalisation  of 
defamation, public information and transparency 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 establishment of the Civil Society Foundation entered 
into  force.  However,  greater  efforts  are  needed  to  foster  the  non-profit  sector  and  for 
consulting civil society organisations on legal and administrative reforms. The fiscal regime 
governing non-profit organisations remains 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 organisations on draft laws and to engage with 

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a  wide  range  of  stakeholders.  However,  there  are  no  formal  mechanisms  in  place  for  such 
consultations.  Coordination  mechanisms  to  enhance  civil  society  participation  in  policy 
making remain weak. 

As  regards  freedom  of  religion,  the  government  signed  an  agreement  with  the  three  main 
religious  communities  to  regulate  their  relations  with  the  state.  In  February,  the  National 
Strategy  for  the  Alliance  of  Civilisations  in  support  of  inter-cultural  and  inter-religious 
dialogue was adopted. Interfaith relations continue 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  reported.  The  Electoral  Code 
introduces a 30% gender quota. Political parties generally respected this quota in candidates’ 
lists for the parliamentary elections. The representation of women in parliament doubled from 
previous elections reaching 23 female deputies. However, some of the lists did not meet the 
quota. The Central Election Commission did not apply sanctions provided for in the Electoral 
Code in this respect.  

In  January  2009  the  National  Council  for  Gender  Equality  was  established.  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 implementation of the existing legal framework 
and policies is insufficient. Most of the bylaws implementing the Law on domestic violence 
have been adopted. A first public shelter for victims of domestic violence is being established. 
However,  domestic  violence  remains  widespread.  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 protect 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,  which  now  considers  the  use  of  children  for 
pornographic  materials  a  criminal  offence.  Measures  implementing  the  2008  Strategy  on 
Foster  Care  have  been  prepared  but  implementing  standards  and  adequate  resources  are 
missing.  As  regards  juvenile  justice,  progress  has  continued  in  the  implementation  of 
alternative measures to detention 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  and  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 children trafficked for sexual exploitation and forced 
labour.  Child  protection  units  are  in  place  at  the  local  level  as  part  of  a  referral  system  for 
children  at  risk.  However,  registration  of  children  is  not  fully  implemented,  particularly  in 
poor areas and in the Roma community. School dropout rates, street children and child labour 
continue  to  be  issues  of  serious  concern.  The  establishment  of  a  national  child  protection 

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system, including efficient reintegration mechanisms for children victims of exploitation and 
children left behind, would be key 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  legislation  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 lacking. 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  Convention  on  the  Rights  of  Persons  with 
Disabilities  and  its  optional  protocol.  The  Law  on  people  with  disabilities  remains  to  be 
adopted. The implementation of the 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  and  employers  associations.  However,  these 
organisations  continue  to  be  weak  and  fragmented,  due  to  the  predominance  of  small  and 
medium-sized enterprises and the large informal economy. Legal provisions denying the right 
to  strike  to  some  State  employees  persist,  which  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,  the  Law  on  Anti-discrimination  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  government  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  compensation,  were  finalised  for  the  entire  country.  The  Immovable 
Property  Registration  Office  (IPRO)  has  continued  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 process of legalisation. However, the 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, 

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property  restitution,  and  compensation  and  legalisation  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  consolidating  property  rights,  a  key  European 
Partnership  priority.  The  problems  relating  to  the  property  reform  require  a  wide-ranging 
approach  and  the  setting-up  of  a  comprehensive  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 rights and protection of minorities 

The Constitution provides for the protection of civil, economic, social and political rights of 
minorities and the law forbids discriminatory treatment. There are three recognised national 
minorities (Greek, Macedonian and Serbian-Montenegrin) and two ethno-linguistic minorities 
(Aromanian  and  Roma)  in  Albania.  The  Egyptian  community  is  seeking  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  develop  its  legislative  framework  with  a  view  to  improve  the 
implementation  of  the  Council  of  Europe  Framework  Convention  for  the  Protection  of 
minorities.  Agreements  were  signed  between  central  and  local  authorities  regarding  the 
display of traditional local names in minority languages. However, further efforts are needed 
to  defuse  intra-ethnic  tensions.  The  legal  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  participation  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  Committee  on  Minorities  remains  weak.  Its  role  as 
the  government  and  minority  representatives  requires  further 
intermediary  between 
strengthening  in  order  to  ensure  effective  participation  of  minorities  in  decision-making 
processes. 

Overall, progress has continued on the protection of minority rights but additional efforts are 
needed  to  ensure  that  members  of  all  minorities  can  fully  enjoy  their  cultural  rights.  The 
collection  of  updated  data  on  the  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 strategy was established in March. However, the 
implementation  of  the  National  Strategy  is  progressing  slowly.  Effective  coordination  of 
central  and  local  authorities  together  with  improved  cooperation  of  stakeholders  is  weak. 
There is no information on the budget allocated to the implementation of the strategy. Albania 
has not yet adopted the Action Plan for the Decade of Roma inclusion. 

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The  Ministry  of  the  Interior  launched  in  December  2008  a  project  to  register  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  children  are  particularly 
vulnerable to trafficking due to a lack of birth registration and low school enrolment rates.  

Overall,  the  Roma  minority  continues  to  face  very  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 bilateral immunity agreement 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 commitments relating to its membership of the Council of 
Europe. 

Regional cooperation and good neighbourly relations form an essential part of the process of 
moving  towards  the  European  Union.  Albania  continues  to  actively  participate  in  regional 
initiatives,  including  the  South-East  European  Cooperation  Process  (SEECP),  the  Regional 
Cooperation  Council  (RCC),  the  Central  European  Free  Trade  Agreement  (CEFTA),  the 
Energy Community Treaty and the European Common Aviation Area Agreement (ECAAA). 

Bilateral  relations  with  other  enlargement  countries  and  neighbouring  EU  Member 
States  continued  to  be  positive.  An  increased  number  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  implementation  of  the  visa-free  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  science  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  completed.  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 organised crime, corruption, illegal migration and 
drugs  trafficking  and  in  the  area  of  customs  have  been  concluded.  A  visa-free  bilateral 
agreement and a readmission agreement have been signed. 

Relations  with  Serbia  have  remained  stable,  although  they  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  margins  of  regional  and  international  events.  There 
have been ongoing contacts regarding judicial cooperation Economic cooperation progressed 

4 

Under UNSCR 1244/1999. 

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and  in  March  2009  a  Memorandum  on  Cooperation  was  signed  between  the  Serbian  and 
Albanian Chambers of Commerce.  

Albania  has  continued  to  develop  its  relations  with  Kosovo.  Intensification  of  high-level 
contacts and the signing of new 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, which 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  against  money  laundering  were  signed.  Agreements 
were signed with a view to abolish the bilateral visa regime. 

Relations with Italy continued to be very good and to develop with a number of joint projects 
in key sectors such as energy and agriculture. Italy 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 trading 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 Organisation (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 Albania, the Commission’s approach was guided by 
the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  which  stated  that 
membership  of  the  Union  requires  the  existence  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 Economic 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 availability of statistics. 
The  document  is  well  integrated  with  other  medium-term  planning  instruments  such  as  the 
Medium-Term Budget Programme 2009-2011 and the National Strategy for Development and 
Integration  2007-2013.  In  July  2009,  the  government  adopted  the  Medium-Term  Budget 
Programme 2010-2012. The regular use of these medium-term planning instruments indicates 
that  administrative  planning  and  implementation  capacity  has  improved.  Albania  completed 
its three year 2006-2009 PRGF/EFF5 programme with the IMF in January 2009 and so far has 

5 

Poverty Reduction and Growth Facility and Extended Fund Facility. 

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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 sustained 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 has 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  purchasing  power  parities  was  estimated  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 trade 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 substantially in 2008 but suffered a severe setback in 2009, 
partly  due to lower  international  demand for chromium 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,  partly  reflecting  the  impact  of  the  global 
financial  crisis,  partly  the  declining  trend  observed  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  continued  to  widen.  In  2008  net  capital  inflows 
covered the current account deficit and contributed 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 public 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 continued during the first half of 2009, partly driven 
by the privatisation process.  

The unemployment rate decreased 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  increase  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 labour market data continued to be poor. 

Price  stability  was  maintained.  The  annual  average  inflation  rate  rose  to  3.4%  during  2008 
from  2.9%  in  2007,  but  remained  within  the  Bank  of  Albania’s  target  range  of  2-4%.  The 
main  contributors  to  inflation  were  international  food  and  fuel  prices  as  well  as  domestic 

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energy prices. Inflationary pressure started fading out in the third quarter of 2008 in line with 
slowing money supply growth. The inflation rate continued its declining 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 subsiding inflationary pressures 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  liquidity  to  banks  at  its  current  policy 
rate. Deposit withdrawals reduced the stock of deposits 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 currencies in the first half of 2009 by 6.5% vis-à-
vis  the  euro  and  4.5%  vis-à-vis  the  US  dollar.  Overall,  monetary  policy  remained  sound, 
maintaining price stability and ensuring the liquidity of the banking sector after the outbreak 
of the crisis. Inflation remained within the target range. 

During 2008, the tax administration made further progress in both general revenue collection 
and administrative reforms. Tax revenues increased to 24.3% of GDP up from 23.2% of GDP 
in 2007. The application of the 10% flat personal income tax continued to produce effects in 
2008 and led to a sharp increase in income tax revenues. However, revenue collection at local 
government level remained low. Public expenditures 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  projects  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 particular case of the 
Durrës-Kukës road. Domestic public debt remained 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 continued to be expansionary in 2008, as in the previous year. Fiscal 
imbalances deteriorated, with the total budget deficit 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  contingency  line  of  approximately  2%  of  GDP,  to  be  used  to 
address  fiscal  downside  risks.  It  has,  however,  already  been  partly  used  to  fund  the  rise  of 
public wages as from May 2009. Fiscal revenues performed well during 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  revised  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  the  level  of  interest  rates  for 
business  and  consumer  loans  and  to  divert  savings  to  the  government  sector,  thereby 
hampering growth. The government relies in 2009 on privatisation revenues 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 banking 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. 

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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  economy  diminished  further  as  Albania  made  good 
progress  with  the  implementation  of  its  privatisation  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 were 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 registered 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 substantial progress was made on reform 
and  simplification  of  licensing.  In  February  2009  the  Urban  Planning  Law  was  amended 
reducing the time for issuing construction permits from 60 to 45 days. The documentation for 
issuing property titles for several thousands of applicants was prepared, but unresolved legal 
issues  with  regard  to  the  compensation  of  former  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  procedures  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, partly 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  Law  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 distributed according to the Law on Land and regional 
commissions  were  established  at  the  ‘prefecture’  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  strengthening  of  the  rule  of  law.  Limited  progress 
was made towards the establishment of clear, 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 rates charged by commercial banks for business and 
consumer loans continued to be driven by interest 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 

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before,  and  continued  to  increase  to  9.24%  by  end  of  June  2009.  As  a  consequence,  public 
financing  needs  effectively  continued  to  crowd  out  private  investment.  Overall,  banks 
continued  to  provide  the  full  range  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 areas related to credit 
risk  management,  capital  adequacy,  risk  management  by  subsidiaries  of  foreign  banks,  and 
risk management in the context of large exposure. To support liquidity in the banking system 
it  limited  amounts  that  foreign-owned  bank  subsidiaries  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  from  4%  in  March  2008  to  7.5%  in  the  first 
quarter of 2009. Business loans were on average more problematic than consumer loans, with 
a non-performing loans ratio of 7.6% by the end of 2008, up from 3.6% by the end of 2007. 
Also  profitability  indicators,  having  remained  solid  throughout  2008,  came  down  markedly 
during  the  first  quarter  of  2009.  Finally,  in  April,  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 half of 2009, as the international economic crisis 
started  showing  effects,  profitability  suffered  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  competitive  pressure  and  market  forces  within  the 
Union 

Existence of a functioning market economy 

Macroeconomic stability was maintained in a very challenging economic environment. There 
were improvements in the organisation and accessibility of the national land registry, which 
includes the registration of property; 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 rights, 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  were  trained  in  the  vocational  training 
schools  and  new  vocational  training  posts  were  opened  during  the  year  2008.  However, 
impact assessments of measures to improve the 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 private sector investment taking a 
slightly  smaller  share  of  29.8%  of  GDP,  down  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  investments  focused  on  road  infrastructure.  The  Vlora 
thermal  power  plant  is  not  yet  operational,  whilst  a  series  of  concession  agreements  for  the 
construction  of  hydro-power  electricity  generation  plants  were  approved.  Overall,  there  has 
been  substantial  investment  in  infrastructures,  notably  in  the  transport  sector,  although 
shortcomings remain.  

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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%  share  of  GDP  and  remained  the  largest  employer 
with  58%  of  the  working  population.  The  secondary  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 enforcement, 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  energy  supply  was  more  reliable  during  the  reporting  period. 
However,  Albania  is  still  mainly  dependent  on  hydro-electric  power  and  security  of  supply 
remains  uncertain.  The  energy  sector  continued  to  exhibit  high  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-power  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  subsidies,  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 were 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)  stood  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 continued to be Italy and Greece. Overall, the EU remained the 
main  trading  partner  of  Albania  in  2008,  and  trade  with  CEFTA  countries  increased. 
However, the poor sectoral diversification of trade leaves the economy vulnerable to sector-
specific shocks. 

4. 

EUROPEAN 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  Association  Agreement  and  the  European  Partnership 
priorities. It also analyses Albania’s administrative 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), corresponding to 88% of all the ENs adopted 

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by  the  European  Committee  for  Standardisation  (CEN)  and  the  European  Committee  for 
Electrotechnical  Standardisation  (CENELEC).  This  is  in  line  with  the  target  of  90%  set  for 
2009.  The  Directorate-General  for  Standardisation  (DGS)  provided  information  to  the 
business  community  on  the  Law  on  Consumer  Protection  and  the  Law  on  General  Product 
Safety  Essential  Requirements  for  Products  and  Conformity  Assessment,  and  has  continued 
raising awareness on the benefits of standardisation. Sales of standards grew during 2008, and 
continued  growing  in  the  first  half  of  2009.  The  DGS  continued  to  participate  in  CEN  and 
CENELEC activities as an affiliate member. Preparations 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 Standardisation 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 accredited bodies to 16. 
However,  amendments  drafted  to  further  approximate  the  Law  on  General  Product  Safety, 
Essential Requirements for Products and Conformity 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 conditions applicable to EA multilateral agreement 
signatories, was approved in August 2009.  

There  has  been  good  progress  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  became  a  member  of  the  European  Association  of 
National  Metrology  Institutes  (EURAMET)  focus  group  on  facilitating  national  metrology 
infrastructure  development  in  November  2008.  In  May  2009  Albania  became  an  associated 
member  of  WELMEC,  the  organisation  for  European  cooperation  in  legal  metrology.  Two 
calibration  laboratories  are  accredited  according  to  EN  ISO/IEC  17025  by  the  Albanian 
accreditation  body.  The  DGM  is  working  on  the  implementation  of  the  investment  plan  for 
the new areas of measurements, including buildings 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  surveillance  for  industrial  products.  However,  further 
efforts  are  required  to  step  up  the  market  surveillance  activities  of  the  Central  Technical 
Inspectorate  and  to  extend  the  scope  of  its  functions.  Current  administrative  capacity,  the 
actual  enforcement  of  technical  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 Ministry of Economy, Trade and Energy. 

There  has  been  some  progress  in  alignment  with  European  standards.  The  government 
adopted decisions on legislative approximation of technical regulations relating to machinery, 
lifts and to equipment and protective systems in potentially explosive atmospheres. There was 
also some progress as regards legislative alignment in the pharmaceutical sector. 

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There has been good progress on consumer protection. Implementing legislation on distance 
selling,  contracts  negotiated  away  from  business  premises  and  package  travel  was  adopted. 
The regulatory framework was improved and the 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  providers.  The  CPC's  five  members  include 
representatives  of  the  government  and  of  civil  society.  They  received  training  on  unfair 
commercial  practices  issues  in  July  2009.  The  Consumer  Protection  Coordination  Council 
was  also  established  as  a  consultative  body.  However,  the  consumer  protection  unit  in  the 
Ministry of Economy, Trade and Energy is understaffed, with only two civil servants, and its 
capacity remains poor. 

Overall, preparations in the area of free movement of goods are on track. Albania has made 
progress  in  approximating  its  legislation  to  European  standards.  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  provision  of  services  by  EU 
operators in Albania and the regime applicable to service providers established in Albania. No 
progress  can  be  reported  as  regards  the  recognition  of  professional  qualifications  and  its 
differentiation 
recognition  of  academic  qualifications.  The  Law  on 
Telecommunications and the Postal Service was amended in May 2009 to separate regulatory 
functions from policy making and from activities relating to the exercise of ownership in the 
postal  sector.  Regulatory  powers  are  vested  in  the  Electronic  and  Postal  Communications 
Authority. However, full liberalisation of the postal market has not yet been achieved. 

from 

the 

There has been some progress on financial services. In February and March 2009 the Bank of 
Albania (BoA) approved regulations on the licensing and activities of non-banking financial 
institutions  and  of  foreign  banks  and  branches  of  foreign  banks.  The  BoA  increased  its 
supervisory role by approving regulations on credit risk management, capital adequacy, and 
large  exposure  rules.  The  level  of  coverage  of  bank  deposits  by  the  deposit  guarantee  fund 
was  increased  as  a  response  to  the  financial  crisis.  The  BoA  increased  its  cooperation  with 
supervisory authorities of foreign banks having subsidiaries or branches in Albania. However, 
further efforts are required to formalise cooperation with all foreign authorities concerned and 
to continue strengthening the supervisory capacity of the BoA. Further approximation of the 
banking  legislation  to  the  EU  standards,  in  particular  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  dominate  the  market.  Two  private  pension  funds 
operate in Albania.  

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In January 2009 the government approved implementing legislation relating to the technical 
and mathematical provisions of insurance undertakings. The Financial Supervisory Authority 
(FSA)  approved  inter  alia,  regulations  on  the  bookkeeping  of  transactions,  on  the  licensing 
and  supervision  of  the  securities  exchange  and  on  the  licensing  of  brokerage  intermediary 
companies  and  investment  advisers.  The  Law  on  Motor  Third-Party  Liability  (MTPL)  was 
approved in February 2009. However, its provisions on the approval of tariffs by the FSA are 
not in line with EU standards. Further efforts in legislative approximation are required.  

The FSA became a full member of the International Organisation of Securities Commission 
(IOSCO). It also signed a Memorandum of Understanding on securities' supervision with the 
Austrian  Financial  Market  Authority.  The  supervisory  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 organisation 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 legislation 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 cheaper to set up companies. (See section 4.2.1 for further details). 
On-line company registration is possible, although technical difficulties remain as regards e-
signature. Uncertainties abut property ownership 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. Training on this law and on its implementation 
was organised, in cooperation with the Chambers of Commerce and Industry, for judges and 
the  business  community.  However,  further  efforts  towards  legislative  approximation  are 
required on cross-border mergers 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  that  the  audit  profession  be  made  subject  to  a  system  of 
public  oversight.  The  law  includes  provisions  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 audit profession has not yet been established. 
Further efforts are required to approximate Albanian legislation to EU standards, in particular 
as regards the provisions of the 4th and 7th Company Law Directives.  

Overall, preparations in the field of right of establishment and freedom 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  capital.  The  revised  regulation  addresses  the 
liberalisation  of  credits  and  loans  granted  by  natural  and  legal  residents  to  non-residents. 
However, certain restrictions remain to the liberalisation of capital movements required under 
the SAA, in particular as regards the acquisition of real estate by foreigners.  

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Some  progress  has  been  made  in  the  field  of  payment  systems.  The  number  of  credit  and 
debit cards in circulation continued to increase in 2008. The use of electronic cards increased 
and  efforts  were  made  to  facilitate  the  use  of  credit/debit  cards  and  electronic  payments. 
However, approximately 96% of banking transactions through electronic cards consist of cash 
withdrawals. Albania remains a predominantly cash-based economy. 

Overall, preparations in the area of free movement 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 with 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  being  revised  continuously  and  new 
profiles were prepared specifically for scanners. The physical inspections rate was reduced to 
approximately 20%, but it is still 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 reference prices is not in line with EU standards. The 
drafting of the Business and IT strategy 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 patents and trademarks became 
operational in the Directorate-General for Customs (DGC). A Memorandum of Understanding 
between the DGC and the Directorate for the Prevention of Money Laundering entered into 
force  in  July  2009.  However,  lack  of  operating  instructions  and  poor  performance  controls 
hinder proper implementation of customs legislation. Effective implementation of controls on 
intellectual property rights and dual-use goods at customs remains poor.  

As regards infrastructure, a joint border crossing point with Montenegro became operational 
in  June  2009.  Work  on  improving  the  infrastructure  at  10  border  crossing  points  started  in 
January 2009. New scanning detectors for radioactive 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 origin and on the use of 
scanning  equipment.  However,  there  is  no  comprehensive  training  strategy.  The  GDC 
operates  on  the  basis  of  the  2009  annual  action  plan  for  training.  Efforts  are  required  to 
enhance transparency of personnel policy and procedures. Customs officials 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 and practices and to strengthen operational and administrative 
capacity, including on internal audit.  

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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  control  and  collection.  The  staff  of  the  DGT  received 
training  on  tax  legislation  and  procedures,  including  training  for  trainers  on  services  to 
taxpayers.  An  Internal  Audit  manual  was  finalised  and  a  guide  for  taxpayers,  the  Taxpayer 
Card, has been compiled. The DGT approved strategic plans on tax inspection and collection 
with  the  aim  of  enhancing  the  fight  against  tax  evasion  and  fraud.  However,  further 
improvements in the legal framework and strengthening 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  and  tax  systems  closer  to  EU  standards  and  to  achieve  overall 
improvements in the reimbursement of VAT. No developments can be reported as regards the 
assessment  of  the  compliance  of  Albanian  tax  legislation  with  the  Code  of  Conduct  on 
Business  Taxation.  Increasing  consultations  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  analysis  module  was  developed.  The 
implementation of electronic tax procedures was extended and the number of taxpayers filing 
tax returns electronically increased. However, limited facilities offered by commercial banks 
hold back the development of electronic payment of taxes.  

Overall,  preparations  in  the  area  of  taxation  are  advancing.  The  performance  of  the  tax 
administration  is  improving.  However,  efforts  are  required  to  enhance  enforcement  of 
legislation,  to  improve  tax  collection,  and  to  bring  the  taxation  of  imports  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 has been established. Investigations and public 
hearings  were  held  on  anticompetitive  agreements  in  the  field  of  wheat  imports  and  flour 
production, as well as in the fuel and insurance 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 issued recommendations on the energy 
market.  The  ACA  lodged  an  appeal  with  the  High  Court  as  a  consequence  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  issues  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 

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in  the  first  four  months  of  2009  in  the  fields  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 new legislation has yet been adopted.  

There  has  been  further  progress  towards  meeting  the  SAA  state  aid  obligations.  The  State 
Aid legislation was amended in June 2009, introducing rules on state aid for risk capital and 
for  environmental  protection.  The  State  Aid  Department  (SAD)  and  the  State  Aid 
Commission  (SAC)  continued  reviewing  and  assessing  new  and  existing  aid  schemes.  This 
has resulted in the alignment of legislation related to tourism concessions, free zones and aid 
to  employment.  The  process  of  reviewing  existing  aid  schemes  and  their  compliance  with 
state  aid  legislation  is  reaching  completion.  The  government  approved  the  2008  state  aid 
report  in  June  2009.  A  regional  state  aid  map  has  been  drafted.  Albania  confirmed  its 
intention not to provide any state aid for the restructuring of the iron and steel industry. The 
SAD staff received training on state aid issues.  

Overall,  preparations  in  the  area  of  competition  are  advanced.  However,  further  efforts  are 
required to strengthen the institutional capacities for the enforcement of competition rules.  

4.1.6.  Public procurement 

There has been some progress in the area of public procurement. Legislation was approved in 
January  2009  introducing  the  obligation  for  contracting  authorities  to  use  electronic 
procurement. Contracting authorities have also to publish all procurement notices and tender 
dossiers on the website of the Public Procurement Agency (PPA). This has improved access 
to  information  and  reduced  procedural  costs.  The  PPA  provided  advice  and  support  to 
overcome the initial technical problems encountered. 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 all phases of the procurement process. 

The legislative framework has not changed substantially. Further approximation to the acquis 
is still required as regards utilities and concessions. Procedures for handling complaints still 
do  not  meet  internationally  recognised  standards.  An  independent  review  body  has  not  yet 
been established. Decisions on appeals continue to be taken by the PPA, which is responsible 
for interpreting the law and giving advice to contracting authorities.  

The  capacity  of  the  PPA  was  strengthened  through  relevant  training  activities,  including 
participation  in  seminars  organised  by  international  organisations.  However,  the  role  of  the 
PPA  as  the  central  coordinating  and  advisory  body  needs  strengthening.  The  PPA  provided 
training and information to contracting authorities and to the business community on public 
procurement  legislation  and  procedures.  However,  further  guidance  needs  to  be  made 
available  to  contracting  authorities  and  suppliers.  Efforts  are  required  to  improve  judges’ 
knowledge of public procurement legislation as well as its implementation.  

Overall,  preparations  in  the  area  of  public  procurement  are  advancing  moderately.  Further 
legislative approximation is required and implementation of legislation needs to be enhanced.  

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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  Copyright  Office  (ACO)  increased  from  one  to 
three. Preparations are underway for opening the first two regional copyright offices. Training 
for ACO staff was organised in cooperation with the World Intellectual Property Organisation 
(WIPO). However, the capacity of ACO remains weak. The planned network of 11 regional 
copyright offices has not yet been established.  

The Copyright Office continued its cooperation with the Directorate-General for Taxation and 
a new Memorandum of Understanding was signed in April 2009. However, compliance with 
Memoranda  of  Understanding  between  ACO  and  other  institutions  is  overall  poor  and 
hampers  practical  implementation  of  intellectual  property  rights.  The  number  of  complaints 
registered  for  copyright  violation  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 protects the rights of phonogram and video producers, 
became  operational.  However,  the  overall  administrative  and  operational  capacity  of  these 
societies  is  weak.  Training  was  provided  to  the  judiciary  on  intellectual  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 rights and their benefits 
remains low.  

There has been  progress  on industrial property rights. In December 2008 the government 
approved  implementing  legislation  for  registration  of  trademarks,  registration  of  patents  for 
inventions  and  utility  models,  and  registration  of  the  geographical  indication.  Electronic 
registration  procedures  have  been  put  in  place.  Work  for  the  ratification  of  the  European 
Patent Convention and of the Patent Law Treaty (PLT-WIPO) is well advanced. However, the 
ratification decisions are pending adoption by parliament.  

The  Directorate  for  Patents  and  Trademarks  (DPT)  organised  training  for  its  staff  in 
cooperation  with  WIPO  and  the  European  Patent  Office.  It  organised  awareness-raising 
activities  in  cooperation  with  the  chambers  of  commerce  and  strengthened  its  cooperation 
with  the  Directorate-General  for  Customs.  However,  its  staff  has  not  been  increased. 
Enforcement  of  industrial  property  rights  remains  poor.  The  number  of  infringement  cases 
brought to court increased slightly but it is still low. 

Overall,  preparations  in  the  field  of  intellectual  property  law  are  moderately  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 industrial property rights. Inter-
institutional cooperation will be of key importance in this regard. 

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4.1.8. 

Social policies, employment and public health policy 

There has been little progress in the field of social policies. A task force to review the existing 
labour law was established in February 2009 with representatives from the government and 
civil society, including trade unions and employers’ organisations. 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  Occupational  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 Opportunities (MLSAE) was upgraded  and entrusted with 
the  implementation  of  the  strategy  and  action  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  yet  been  adopted.  Enforcement  of  occupational 
health  and  safety  remains  poor  and  the  number  of  accidents  at  the  workplace  is  high, 
particularly in the construction, mining and mineral processing sectors The agricultural sector 
is  not  covered  by  the  labour  inspection  system.  Further  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. Collective agreements were signed in the public 
health  and  education  sectors.  However,  effective  collective  bargaining  remains  difficult  and 
individual contracts prevail over 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  implementation  is  being  prepared.  The  last  living 
standards measurement survey shows that the population under the absolute poverty threshold 
fell  from  18.5%  in  2005  to  12.4%  in  2008.  The  government  has  developed  mechanisms  to 
monitor  poverty  and  social  inclusion  at  national  level  but  the  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 social security electronic database, providing individual accounts of 
contributions,  calculation  of  benefits  and  administration  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 new  computerised information 
system became operational in the head office of the National Employment Service and in two 

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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  schemes  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 and training programmes)  

There has been some progress on public health policy. Parliament adopted the Law on Public 
Health Care in May 2009. However, the relevant implementing regulations are pending and 
the  national  health  sector  strategy  has  not  been  adopted.  New  legislation  was  adopted 
approximating  the  standards  in  the  field  of  blood  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 diseases the government carried out preparations 
to  tackle  the  A(H1N1)  pandemic.  The  first  alcohol  rehabilitation  centre  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 Elbasan and Shkodra and a new forensic psychiatric 
hospital was completed in Durrës. However, adequate psychiatric facilities for the mentally ill 
are  still  required.  Implementation  of  the  existing  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  reintegration  of  psychiatric 
patients require attention. Further efforts are required to develop 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 health care. Data 
collection and performance monitoring mechanisms require strengthening. Community-based 
services need to be further developed. 

Overall, preparations in the field of social policies, employment and public health policy are 
advancing moderately. Efforts are required 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 percentage of GDP. Teachers benefited more than 
other  groups  from  the  May  2009  14 %  average  increase  in  public-sector  salaries.  Local 
government  competencies  in  education  planning  and  fund  allocation  have  increased.  The 
school infrastructure improved with some schools and teaching laboratories being renovated. 
Preparations have started for the construction of four new VET centres and rehabilitation of 
another  four  is  underway.  Computerisation  of  schools  is  progressing  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  exams  (‘State  Matura’),  and  on  recognition  of 
secondary  education  diplomas.  Implementation  of  the  Law  on  Higher  Education  progressed 

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and the universities’ main steering bodies were elected in line with its provisions. The Agency 
for  Higher  Education  (AHE)  carried  out  performance  evaluations  as  part  of  the  overall 
evaluation of universities for state budget allocations. Albania made progress in reforming its 
higher education system according to Bologna action 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 skills 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) curricula have been prepared for specialisations 
in  social  services  and  information  and  communication  technology.  A  new  VET  structure 
directly  linked  to  the  draft  Albanian  Qualifications  Framework  (AQF)  is  scheduled  to  start 
with the 2009-2010 academic year. However, the 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 information activities and provided assistance 
to improve the quality of projects submitted by Albanian universities for participation in the 
Tempus programme. It screened 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 dedicated to research increased but its share of the total budget 
(0.22%) is still very low. There were improvements 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  studying  and/or  working  abroad  were  recruited  to  work  in 
universities  as  part  of  the  Brain  Gain  Programme.  As  an  associated  country  to  the  7th  EC 
Research  Framework  Programme,  Albania  increased  its  participation  and  was  successful, 
among  others,  in  research  projects  with  European  partners  in  the  areas  of  transport, 
infrastructures, health and international co-operation.  

However,  administrative  and  research  capacity  remains  weak.  Poor  definition  of 
responsibilities  and  of  funds  allocation  hinders  implementation  of  the  Law  on  Scientific 
Research that merged most scientific institutions with universities.  

Overall, preparations in the area of education and research are moderately advanced. 

4.1.10.  WTO issues 

Albania  continued  implementing  its  commitments  under  the  WTO.  Albania  carried  out  the 
needs  assessment  under  the  WTO  trade  facilitation  negotiations  and  maintains  close 
cooperation  with  the  European  Community  in  this  regard,  including  on  co-sponsoring  EC 
proposals. The secretariat for WTO issues continued its activities to enhance inter-ministerial 
cooperation on policy making.  

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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  finance  and  export  promotion.  However,  further 
efforts  are  required  as  regards  human  capital  development,  and  competitiveness  and 
technological capacity of SMEs. 

The National Business Registration 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 administration issues. The number of new enterprises registered at 
the NRC in 2008 reached 17,773 or 29% more than in 2007.  

The  government  continued  simplifying  licensing  procedures.  The  application  of  self-
declaration  and  of  the  "silence  is  consent  principle"  was  broadened.  The  Law  on  Licences, 
Authorisations and Permissions was adopted in February 2009. It provides for a new division 
of licenses into 12 broad fields and 49 categories. The National Licensing Centre, intended to 
function  as  a  one-stop-shop,  became  operational  in  June  2009.  104  of  the  170  licences 
identified have been abolished. Tax reforms continued to provide incentives 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 for 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, bringing definitions of SMEs closer to 
EU  standards.  The  use  of  electronic  tax  and  public  procurement  procedures  continued  to 
progress. The Law on Electronic Commerce entered 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 takeover bids are still pending adoption. Efforts are 
required  to  further  involve  the  business  community  in  the  legislative  and  policy-making 
processes.  

A € 30 million credit facility was launched in January 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  contracts  have  been  signed  for  the  development  of 
three parks only.  

Preparations  in  the  field  of  industry  and  SMEs  are  advancing.  Albania  has  continued 
improving the business-related regulatory framework. 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 has 86 staff and operates in all 12 
regions  of  the  country.  It  provides  a  good  starting  point  towards  the  establishment  of  an 

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IPARD Agency. Preparations for IPARD advanced with the appointment of the prospective 
Managing  Authority  in  June  2009.  However,  the  Rural  Development  Strategy  will  require 
substantial improvements to serve as a basis for the IPARD programme.  

The 2009 budget for the direct support scheme remains 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  measures  covered,  among  other  things,  drip 
irrigation, bio certification, mushroom culture and 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 material resources and organised 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  cooperation  between  producers  and  business  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 agriculture remains small. The 
trade deficit in agricultural products 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  established,  but  it  is  not  yet  operational  due  to 
staffing problems. In the food sector implementing legislation has been adopted mainly in the 
areas  of  import  requirements  for  animal  products  (certificates),  flavourings  and  food  for 
particular nutritional uses. Some progress can be reported on laboratory capacity, particularly 
as regards histamine and residues. However, legal limits for microbiological contamination of 
raw milk are still significantly less 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  registration  of  their  movements 
jeopardise the utility of the current database. The 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 substantially 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  and  veterinary  and  phytosanitary 
policy. The legal framework improved, but compliance 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  determination  of  the  size  of  fishing  nets.  Inter-institutional 
cooperation  improved  with  the  signature  in  November  2008  of  an  agreement  between  the 
Directorate for Fisheries Policies and the Coast Guard Command. The fisheries inspectorate 
was  reinforced  with  two  inspectors  and  with  mesh-size  measurement  equipment.  Its  staff 
received  additional  training.  Conservation  measures  were  introduced  in  the  Ohrid  and 
Shkodra lakes during the reproductive period of the Ohrid trout species.  

Albania continued to participate in the General 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 

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the  GFCM  area.  The  government  passed  legislation  on  the  log  book  and  log  books  were 
issued to fishing vessels over 10 metres long. Two tuna fishing vessels were equipped with 
Vessel Monitoring Systems (VMS). However, further efforts are required to establish a catch 
and landing data collection and processing system and to extend the VMS.  

Overall,  there  has  been  progress  in  the  area  of  fisheries  as  regards  inspection,  control  and 
international cooperation. Preparations are advancing moderately. 

4.2.3.  Environment 

to 

their  Transboundary  Fluxes 

There  has  been  limited  progress  in  the  area  of  horizontal  legislation.  Albania  adopted 
legislation in January 2009 to ratify the Protocol on Control of Emissions of Nitrogen Oxides 
the  1979  Geneva  Convention  on  Long-Range 
or 
Transboundary Air Pollution. Two public hearings were held with regard to the project for the 
construction of a thermal power plant in the Durrës area. Notifications of public hearings were 
published  on  the  website  of  the  Ministry  of  the  Environment,  Forest  and  Water 
Administration (MEFWA), the website of the Aarhus 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  market  share  of  high  sulphur  content  diesel. 
However, air  pollution levels remain  high, in particular  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 spots 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 established. Uncontrolled dumping and burning of waste 
still persists and is particularly acute in rural areas. Substantial efforts 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  still  affected  by  uncontrolled  discharges  of  solid 
waste.  The  national  strategy  for  water  supply  and  sewerage  has  not  been  adopted. 
Implementing  legislation  and  action  plans  for  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  territory  with  the  designation  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 biodiversity 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  Directive.  A  new  Law  on  Hunting  was  adopted  in 

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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 required to enhance inter-ministerial coordination to monitor the use 
of chemicals present on the market. There is no central register of chemicals and genetically 
modified organisms. 

No progress can be reported as regards environmental noise policies. 

Efforts  continue  to  be  required  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  cooperation  and  coordination  remain  poor.  Additional 
monitoring and inspection capacity continue to be required 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  reported  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  South  East  Europe  Core  Regional  Transport 
Network  and  in  the  South-East  Europe  Transport  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 Kosovo 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  was  restructured  to  allow  centralisation  of 
transport data and updating of the National Transport Plan, including investment programmes 
and  policies.  It  started  the  establishment  and  maintenance  of  a  central  transport  database. 
However, overall institutional capacities still require 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 implementing regulations bringing driving licence regulations closer 
to the EU standards. Electronic testing for the issuance of driving licences was assessed in a 
pilot centre and became the norm. There were fewer road accidents in 2008 than in 2007 and 
the number of accidents resulting in fatal casualties 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  charge  of  the  development,  management  and 
maintenance of the state-owned road network. The Road Asset Management System (RAMS) 
is  being  established,  including  country-wide  safety  surveys  and  routine  maintenance 
inspections. New maintenance guidelines have been developed. However, only 40% of total 

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road assets have been mapped. Performance-based contracts for road maintenance have been 
generalised and the share of the maintenance budget allocated to such contracts grew in 2009. 
However,  sustained  efforts  continue  to  be  needed  to  improve  road  maintenance.  Road 
signalling  requires  further  improving.  Illegal  constructions  along  the  roads  and  poor  driver 
discipline continue to pose problems for road safety. Preparations in the field of road transport 
are advancing moderately.  

There  has  been  little  progress  in  the  rail  transport  sector.  The  new  Regulation  for  the 
Albanian  Railway  Authority  was  approved  in  January  2009,  establishing  business  units  for 
passengers,  freight,  infrastructure  management  and  maintenance.  Service  units  were  also 
established  for  rolling  stock,  administration  and  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  been  adopted.  Funds  allocated  for  capital 
expenditures continued to decline. Preparations in the area of rail transport are lagging behind.  

There  has  been  some  progress  in  the  area  of  maritime  transport.  Parliament  approved  the 
Maritime Administration Law in April 2009. However, 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 port progressed, but preparations for the rehabilitation of the 
Vlora  port  are  lagging  behind.  The  government  has  taken  several  measures  to  improve  the 
technical condition of the maritime fleet. Ships older than 15 and 30 years will not be certified 
for transport of passengers and goods respectively. Pre-certification control procedures were 
improved and tax incentives were introduced to encourage renewal of the fleet. The staff of 
the  maritime  administration  received  training  on  flag  and  port  state  control  and  on  port 
security.  However,  substantial  efforts  are  still  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 standards and the Albanian 
flag is still listed as very high risk. Preparations 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  new  Air  Code  in  December  2008  and  the 
implementation  of  the  first  transitional  phase  of  the  European  Common  Aviation  Area 
Agreement  (ECAA)  continued.  A  working  arrangement  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 been 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. Preparations in the field of air transport 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  completion.  The  parliament  ratified  a  concession 
contract  for  the  construction  of  three  hydroelectric  plants  in  the  Devolli  river  with  a  total 
installed capacity of 320 MW. The process of approval of 27 concession agreements for the 

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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  plant.  The  establishment  of  a  National  Dispatch 
Centre is at an early stage. Albania continues to be an overall 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 priority. New legislation was adopted to support the fight against 
illegal  connections.  However,  overall  technical  and  non-technical  losses  increased.  Bill 
collection rates increased although efforts are still required in this regard including equipping 
all consumers with electricity meters. The electricity 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 regulatory 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 reported 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 total 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  consumption  of  energy  by  household  appliances. 
However,  no  further  progress  can  be  reported  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  Spent  Fuel  Management  and  on  the  Safety  of 
Radioactive  Waste  Management.  Efforts  are  still  required  as  regards  compliance  with  the 
acquis in the field of radiation protection. Proper attention regarding the prevention of illicit 
trafficking  of  nuclear  and  other  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 guarantee its independence.  

Overall, there has been progress in the field of energy. 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) 

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harmonised in December 2008 all existing licences with the authorisation scheme of the June 
2008  Law  on  Electronic  Communications.  The  reference  interconnection  offers  were 
approved and published in February 2009. A fourth mobile telephony 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 implementing regulations for the law 
on  electronic  communications  are  still  pending  adoption.  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-selection, number portability and unbundled access to the local loop. 
Tariff re-balancing has not been completed. The mobile 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  information  society.  Amendments  to  the  Criminal 
Code  and  the  Criminal  Procedure  Code  were  adopted  in  November  and  December  2008 
following  the  requirements  of  the  Convention  on  Cybercrime.  The  Law  on  Electronic 
Commerce  was  adopted  in  May  2009.  Implementing  regulations  were  also  adopted  for  the 
Electronic  Signature  Law.  The  National  Agency  for  the  Information  Society  (NAIS)  has 
started setting up a single government electronic network covering 65 institutions. The NAIS 
has actively promoted public awareness on the information society and has provided training 
to  IT  staff  of  the  public  administration.  However,  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  the  draft  strategy  for  the 
switchover  from  analogue  to  digital  broadcasting  and  launched  a  consultation  process  with 
state  institutions  and  broadcasting  operators.  The  draft  Broadcasting  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.  Measures  are  required  to 
ensure  sustainable  funding  for  the  public  service  broadcaster.  The  collection  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  Financial  Management  and  Control  (FMC)  and  the 
Inspection Law have not yet been adopted by parliament. The amendment of the 2007 Internal 
Audit Law to make it consistent with the overall PIFC framework is still outstanding.  

With regard to the institutional framework, the Central Harmonisation Unit for FMC has been 
operational since November 2008. The Central Harmonisation Unit for Internal 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.  Decentralised  internal  audit  units  have  been 

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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  line  with  the  INTOSAI  standards,  especially 
concerning the criteria for dismissal of the chairman and the remit and scope of audit. Further 
efforts are required to shift the SAI’s attention towards financial and systems-based audits. 

Overall, preparations in the area of financial 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  signed  between  INSTAT  and  the  Ministry  of  Agriculture  and  the 
High Inspectorate of Declaration 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 offices 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 classification of statistical regions equivalent 
to the NUTS classification has still not been developed. 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  national  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 the 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 statistical 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  Agriculture  and  INSTAT  has  improved  but  efforts  are 
still  required  to  bring  agriculture  statistics  closer  to  EU  standards.  Data  on  GDP  are  now 
compiled  by  a  recently  established  national  accounts  department.  Quarterly  GDP  was 
published for the first time in December 2008. However, further methodological and source 
data improvements are required for the alignment of the national accounts with ESA 95. 

Overall,  there  has  been  progress  towards  meeting  the  short-term  priorities  of  the  European 
Partnership in the area of statistics. Preparations are advancing but further improvements are 
necessary in key areas such as macroeconomic and business statistics. 

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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  document  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  standards.  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 from other sources is no longer used, 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  people  without  passports  so  they  could  vote.  For  the  June  2009 
elections,  special  measures  were  introduced  to  facilitate  the  distribution  of  ID  cards  to 
vulnerable  groups.  However,  further  efforts  are  required  to  guarantee  the  integrity  and 
security of personalisation and distribution procedures of biometric passports.  

Adequate  connection  between  the  civil  registry  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 are 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  further  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. Currently, the positive and negative lists are not fully 
harmonised with the EU visa list. In March 2009, an agreement was signed with Bosnia and 
Herzegovina  on  visa  liberalisation.  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. Albania has started to address 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 points, 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  stations.  Direct  access  to  the  MEMEX  information  system  on 
criminal  intelligence  at  border  crossing  points  is  missing.  Moreover,  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 implement the Law on State Border together with 
the integrated border management strategy and its updated action plan. Staffing levels in the 
border police force remain insufficient and the distribution of human resources along borders 

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43 

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does  not  adequately  target  high-risk  areas.  Efforts  have  been  made  to  improve  training  for 
border  police  officers,  but  a  long-term  training  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 border 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  Operations  Centre,  which  should  ensure  the  principle  of  civilian 
command and control of blue border management in line with the Ohrid commitments, is still 
pending.  Inter-agency  cooperation  between  authorities  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 gathers relevant statistical data but does not draw 
operational  conclusions  for  implementation  at  regional  and  local  level.  The  management  of 
data flows from the central level to the local levels needs to be improved. 

The construction of the Murriqan–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  the  area  of  border  management  have  been 
finalised  with  all  neighbouring  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 objectives in the field of border management. 
However,  further  efforts  are  required  to  ensure  improved  inter-agency  coordination  and  to 
provide adequate training, human resources 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  seekers  to  health  care,  family  reunion,  social 
protection, education and housing. 

The  new  law  ensures  that  appeals  against  decisions  of  the  Department  for  Citizenship  and 
Refugees (DCR) can be lodged directly before a court. Further efforts are needed to continue 
shortening appeal procedures and to provide training to DCR staff and judges on asylum and 
international protection, including the 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 

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experts.  However,  regular  training  of  the  border  police  and  coordination  with  the  DCR  is 
needed in order to ensure the effectiveness of the pre-screening procedure. During 2008, 13 
people applied for asylum, eight of whom received 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 integration of families or persons who were granted 
an international protection status remains an issue.  

Progress  can  be  reported  in  the  area  of  migration.  Albania  is  proceeding  with  the 
implementation  of  the  national  migration  strategy  and  its  action  plan.  An  inter-ministerial 
coordination mechanism to monitor their implementation has been established. 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 necessary 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  distinguishing  the  different  types  of  returnees  is 
not  available.  All  relevant  line  ministries  and  border  crossing  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 residence permits needs to start in order to 
improve  monitoring  and  risk  analysis.  Illegal  migration  from  Albania  continues  to  be  a 
significant problem, in particular on the border between Albania and Greece.  

The detection of illegal migrants by the border 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  requires  further  enhancing.  In  November  2008 
Albania,  Bosnia  and  Herzegovina,  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 system of advance notification.  

The  expulsion  of  illegally  resident  third-country  nationals  is  regulated  by  the  Law  on 
Foreigners, which is broadly in line with European standards. There is a possibility to appeal 
against  removal  orders.  The  number  of  refusals  of  entry  was  relatively  low  in  2008.  A 
detention centre for illegally residing third-country nationals is still under construction. 

Regarding  integration  policy,  a  more  proactive  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 measures on integration of foreigners are put into 
practice. 

Implementation of the readmission agreement between the European Community and Albania 
continued.  A  protocol  implementing  the  readmission  agreement  was  signed  with  Italy  in 
October  2008.  With  regard  to  non-EU  countries,  an  implementing  protocol  for  the 
readmission  agreement  with  Croatia  was  signed  in  February  2009  and  a  readmission 
agreement and its implementing protocol with Bosnia and Herzegovina in March 2009.  

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Overall,  progress  in  the  area  of  migration  has  continued.  Nevertheless,  further  efforts  are 
needed  to  implement  legislation  and  enhance  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 entered into force in September 
2008 and implementing legislation has been adopted. Further efforts are needed to incorporate 
international  standards  (FATF  recommendations,  UN  and  Council  of  Europe  Conventions) 
into national law. A strategy and an action plan 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 equipment. The number of suspicious transaction 
reports received by the FIU has changed significantly 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  financial  or  non-financial  institution  sends  suspicious 
transaction reports to the FIU.  

A Memorandum of Understanding between the FIU and the Directorate General of Customs 
entered into force in July 2009. The number and quality of the FIU inspections 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  coordination  with  the  Prosecutor  General’s  Office  remains 
problematic,  although  some  progress  can  be  reported  in  terms  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  more  efforts  to  raise  the  reporting  entities’ 
awareness of their obligations. 

Cooperation  between  different  law  enforcement  agencies  has  improved.  A  new  unit  dealing 
with cybercrime was established in June 2009. The Joint Investigation Unit (JIU) for the fight 
against  economic  crime  and  corruption  under  the  Tirana  General  Prosecutor’s  Office  has 
improved investigative capacity in this area and preparations are under way to replicate this 
structure in six regional prosecutor’s offices. However, the administrative capacity of the JIU 
remains to be enhanced and its role as a permanent 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  the  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 Assets (HIDAA) and the FIU.  

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46 

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Regarding  the  seizure  and  confiscation  of  criminal  assets,  the  scope  of  application  of  the 
legislation in this field is limited by a decision of the Supreme Court of 2007. The capacity of 
the  Agency  for  the  Administration  of  Sequestered  and  Confiscated  Assets  requires  further 
reinforcement.  The  effectiveness  of  national  structures  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  number  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 the 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 against drugs. Cannabis continues to be produced 
domestically  for  markets  in  Europe,  and  Albania  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  cultivation  was  adopted  in  April  2009  and  is  currently  under 
implementation,  in  cooperation  with  local  governments.  However,  certain  cultivation  areas 
such as the village of Lazarat remain inaccessible to the police. 

The police are taking an increasingly active role in counter-narcotics operations. During the 
reporting period, nine international operations were carried out. Progress has continued in the 
use  of  special  investigative  means  and  covert  evidence-gathering  methods.  The  amount  of 
drugs  seized  increased.  However,  the  implementation  of  the  national  strategy  against  drugs, 
covering  the  period  2004-2010,  is  proceeding  slowly  due  to  insufficient  financial  resources 
and a shortage of qualified staff.  

The exchange of information on drugs-related investigations between the central and regional 
police units and with other law enforcement agencies 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  disposal,  due  to  legal  and  practical  constraints. 
Consequently, there is a significant backlog of drugs in police storage overdue for disposal. 
Drug demand reduction strategies are implemented in the framework of the national strategy 
against  drugs.  However,  services  for  drug  addicts  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 concern, which requires further efforts. 

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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 process and better integration with the work of 
the Office of Internal Control is required. Disciplinary sanctions are not consistently applied. 
There  has  been  some  improvement  in  police  organisation  and  staffing,  although  the  overall 
management of police human resources is still unsatisfactory. An operational action plan for 
the implementation of the strategy on community 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 previously trained and competent staff has continued. Despite the 
number  of  training  courses  provided,  regular  training  activities  —  especially  for  the  first 
management  level  of  the  State  Police  and  for  police  officers  involved  in  the  use  of  special 
investigative measures — are required.  

The overall investigative capacity of the police remains weak. There 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 continue to be inadequate. 

Cooperation  between  the  State  Police  and  other  law  enforcement  agencies  and  with  the 
prosecution services and the judiciary remains insufficient and ineffective. Problems remain 
in cooperation at the operational level among the Police, the General Prosecutor and Customs. 
The  Judicial  Police  Law  is  not  yet  fully  implemented.  Implementation  of  the  South–East 
Europe Police  Cooperation Convention has continued. 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 government 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 thorough revision and approximation is needed especially in terms 
of clear definitions of arms, markings and traceability or deactivation. 

Overall, Albania is only starting to address some of its priorities in this area. However, further 
efforts  are  needed  to  increase  investigative  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  addressed.  A  specific  action  plan  to  implement  the 
national  strategy  against  organised  crime,  trafficking  and  terrorism  remains  to  be  adopted. 
Organised crime remains an issue of serious concern in Albania. 

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48 

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The  fight  against  organised  crime  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  investigative  capacity  of  the  police  and  prosecution 
remains weak. The establishment of joint investigation units to target organised crime groups 
and their assets, can help to improve cooperation between the relevant authorities.  

Regarding  the  implementation  of  the  Stolen  Vehicles  Action  Plan,  the  large  amount  of 
registrations  in  Albania  of  vehicles  stolen  in  other  countries  and  registration  of  vehicles 
without declaring their real value remain issues of concern. 

International cooperation to combat organised crime has continued both at bilateral level and 
via  Interpol.  A  new  Law  on  Mutual  Legal  Assistance  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  returned  to  Albania  and  six  people  were 
extradited  from  Albania.  Cooperation  agreements  against  organised  crime  were  signed  with 
Bosnia and Herzegovina, France, Kosovo, Denmark, Norway and Iceland. Cooperation with 
Eurojust remains informal as no cooperation agreement is yet in place.  

Some progress can be reported regarding measures to guarantee witness protection. Work is 
ongoing on a draft law on the protection of justice witnesses and collaborators. However, the 
lack of adequate witness protection 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.  Sustained  efforts  including  on  making  law  enforcement 
officials resistant to corruption and other forms of pressure from crime syndicates are needed 
in the fight against organised crime, which remains 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 fight against child trafficking and the protection 
of  child  victims  of  trafficking.  The  Office  of  the  National  Anti-trafficking  Coordinator 
(ONCAT)  has  carried  out  extensive  work  on  prevention  and  public  awareness-raising  to 
combat trafficking. Specialised training has been provided to relevant institutions at local and 
national level. The administrative capacity at the ONCAT has improved. However, given the 
extent  of  the  challenges  faced,  the  effective  implementation  of  both  strategies  requires 
additional human and financial resources.  

Albania  remains  a  country  of  origin  of  women  and  children  trafficked  for  the  purposes  of 
sexual  exploitation  and  forced  labour,  including  forced  begging,  although  there  has  been  a 
decline in the number of persons trafficked. Albania is no longer considered a major country 
of  transit.  Sex  trafficking  mainly  involves  women  and  girls,  whereas  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 referral mechanism. The database on victims of 
trafficking has been operational since September 2008. It allows on-line access to a common 
database  to  several  agencies  and  is  an  important  step  towards  providing  better  support  to 

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victims. As a result, the number 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 shelter, 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 training 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.  Internal  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 resources remain insufficient for the protection and 
reintegration of victims of trafficking. 

Overall, Albania is moderately advanced in its efforts to fight trafficking of human beings. 

With  regard  to  the  fight  against  terrorism,  no  progress  can  be  reported.  The  national 
counter-terrorism strategy has 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  personal  data  can  be  noted.  In  pursuance  of  the 
Personal Data Protection Law, the Office of the Commissioner for Data Protection has been 
established and the Commissioner has been appointed. The government adopted in February 
2009  a  decision  granting  its  premises  and  equipment.  The  internal  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 Protection Law is slow. Implementation measures 
concerning  notification  procedures  and  exemptions  are  still  pending.  Adequate  resources, 
including  training,  need  to  be  ensured  for  the  Commissioner  for  Data  Protection  office  to 
work effectively. A communication strategy on the law’s provisions is pending.  

Overall, Albania meets only partially its targets regarding data protection. 

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STATISTICAL ANNEX 

STATISTICAL DATA (as of 14 September 2009) 
Albania 

Basic data 
Population (thousand) 
Total area of the country (km²) 

National accounts 
Gross domestic product (GDP) (million national currency) 
GDP (million euro) 
GDP (euro per capita) 
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) 
SI: Employment growth (national accounts, % change on previous year) 
Labour productivity growth: GDP growth per person employed (% 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 
Industry 
Construction 
Services 

Final consumption expenditure, as a share of GDP (%) 
Gross fixed capital formation, as a share of GDP (%) 
Changes in inventories, as a share of GDP (%) 
Exports of goods and services, relative to GDP (%) 
Imports of goods and services, relative to GDP (%) 

Industry 
Industrial production volume index (2000=100) 

Inflation rate 
SI: Consumer price index (CPI), (total, % change on previous year) 

Balance of payments 
Balance of payments: current account total (million euro) 
Balance of payments current account: trade balance (million euro) 
Balance of payments current account: net services (million euro) 
Balance of payments current account: net income (million euro) 
Balance of payments current account: net current transfers (million euro) 

of which government transfers (million euro) 
Net foreign direct investment (FDI) (million euro) 

Note 

Note 

Note 

Note 

Note 

2008 
: 
: 
: 
: 
: 
: 
: 
: 
: 
: 

: 
: 
: 
: 
: 
: 
: 
: 
: 

1999 
2008 
3 170 
3 373 
28 750  28 750  28 750  28 750  28 750  28 750  28 750  28 750  28 750  28 750 

2000 
3 058b 

2001 
3 063 

2003 
3 103 

2005 
3 135 

2002 
3 084 

2004 
3 120 

2006 
3 149 

2007 
3 153 

2007 

2006 

2000 

2005 

2004 

2002 

2001 

1999 

2003 
471 578 523 043 583 369 622 711 694 098 750 785 814 797 882 209  971 222 
5 048 
1 622 
: 
: 
5.8 
: 
: 
: 
: 

5 881 
1 881 
: 
: 
5.7 
: 
: 
: 
: 

4 541 
1 477 
: 
: 
7.9 
: 
: 
: 
: 

3 945 
1 289 
: 
: 
6.7 
: 
: 
: 
: 

3 209 
1 051 
: 
: 
13.5 
: 
: 
: 
: 

7 858 
2 491 
: 
: 
6.0 
: 
: 
: 
: 

4 705 
1 521 
: 
: 
4.2 
: 
: 
: 
: 

6 561 
2 088 
: 
: 
5.7 
: 
: 
: 
: 

7 168 
2 275 
: 
: 
5.4 
: 
: 
: 
: 

25.8 
7.3 
6.0 
60.9 
92.7 
23.0 
0.7 
15.8 
32.2 

1999 
: 

1999 
-1.0 

1999 
-129 
-626 
96 
71 
330 
156 
39 

25.5 
7.8 
8.3 
58.5 
86.0 
31.7 
2.4 
17.9 
38.1 

2000 
: 

2000 
4.2 

2000 
-185 
-897 
12 
115 
586 
105 
157 

23.6 
7.3 
10.4 
58.6 
80.9 
38.4 
1.3 
18.4 
39.0 

2001 
: 

2001 
3.5 

23.4 
6.9 
12.0 
57.6 
86.0 
37.9 
0.8 
19.6 
44.3 

2002 
: 

2002 
1.7 

23.5 
8.7 
13.7 
54.0 
86.1 
40.5 
-1.8 
20.4 
45.1 

2003 
: 

2003 
3.3 

22.3 
10.0 
13.9 
53.8 
89.0 
37.2 
-3.8 
22.0 
44.4 

2004 
: 

2004 
2.2 

20.6 
10.6 
13.8 
55.0 
88.9 
37.0 
-1.2 
22.8 
47.5 

2005 
: 

2005 
2.0 

19.4 
11.1 
14.3 
55.2 
87.4 
39.0 
-2.8 
24.9 
48.5 

2006 
: 

2006 
2.5 

18.9 
9.3 
14.6 
57.2 
90.1 
38.6 
-2.1 
28.0 
54.6 

2007 
: 

2008 
: 

2007 
3.1 

2008 
2.2 

2001 
-316 
-1 149 
100 
150 
583 
31 
231 

2002 
-444 
-1 218 
-8 
116 
667 
41 
141 

2003 
-350 
-1 177 
-72 
132 
767 
53 
157 

2004 
-340 
-1 277 
-41 
138 
839 
61 
267 

2005 
-589 
-1 477 
-140 
131 
897 
61 
209 

2006 
-471 
-1 658 
-32 
209 
1 011 
43 
250 

2007 
-832 
-2 104 
13 
217 
1 043 
60 
: 

2008 
: 
: 
: 
: 
: 
: 
: 

EN 

51 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign direct investment (FDI) abroad (million euro) 

of which FDI of the reporting economy in EU-27 countries (million euro) 

Foreign direct investment (FDI) in the reporting economy (million euro) 

of which FDI of EU-27 countries in the reporting economy (million euro) 

Public finance 
General government deficit/surplus, relative to GDP (%) 
SI: General government debt, relative to GDP (%) 

Financial indicators 
Gross foreign debt of the whole economy, relative to GDP (%) 
Gross foreign debt of the whole economy, relative to total exports (%) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 
Money supply: M3 (M2 plus marketable instruments, million euro) 
Total credit by monetary financial institutions to residents (consolidated) (million euro) 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 
Deposit interest rate (one year), per annum (%) 
euro exchange rates: average of period - 1 euro = … national currency 
Effective exchange rate index (2000=100) 
Value of reserve assets (including gold) (million euro) 

External trade 
Value of imports: all goods, all partners (million euro) 
Value of exports: all goods, all partners (million euro) 
Trade balance: all goods, all partners (million euro) 
Terms of trade (export price index / import price index, 1998=100) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

Demography 
Natural growth rate: natural change (births minus deaths) (per 1000 inhabitants) 
Infant mortality rate: deaths of children under one year of age per 1000 live births 
Life expectancy at birth: male (years) 
Life expectancy at birth: female (years) 

Labour market 
Economic activity rate (15-64): share of population aged 15-64 that is economically active (%) 
SI: Employment rate (15-64): share of population aged 15-64 that is in employment (%) 

Share of male population aged 15-64 that is in employment (%) 
Share of female population aged 15-64 that is in employment (%) 

SI: Employment rate of older workers (55-64): share of population aged 55-64 that is in employment (%) 

Note 

Note 

1) 

2) 
3) 

Note 

Note 

Note 

0 
: 
39 
: 

1999 
-9.0 
53.7 

0 
: 
157 
: 

2000 
-7.6 
60.2 

0 
: 
231 
: 

2001 
-6.9 
58.5 

0 
: 
141 
: 

2002 
-6.1 
63.9 

0 
: 
157 
: 

2003 
-4.9 
61.5 

0 
: 
267 
: 

2004 
-5.1 
58.3 

0 
: 
209 
: 

2005 
-3.4 
55.3 

0 
: 
250 
: 

2006 
-3.3 
59.7 

0 
: 
466 
: 

2007 
: 
: 

2001 
17.2 
93.1 
1 113 
2 376 
3 069 
217 
: 
11.9 
7.8 

2000 
17.0 
94.9 
936 
1 995 
2 475 
175 
: 
24.0 
8.0 

1999 
16.1 
101.6 
701 
1 631 
1 993 
135 
: 
25.8 
9.1 

2003 
21.1 
103.5 
1 053 
2 542 
3 261 
369 
: 
10.5 
7.6 
146.960 132.580 128.470 132.360 137.510 127.670 124.190 123.080  123.630 
: 
908 

2002 
22.1 
112.5 
1 154 
2 453 
3 148 
292 
: 
16.0 
9.3 

2006 
16.9 
: 
2 011 
3 882 
5 478 
1 554 
: 
11.2 
5.5 

2004 
19.0 
86.5 
1 354 
3 066 
3 973 
548 
: 
13.7 
6.0 

2005 
16.6 
73.0 
1 833 
3 431 
4 654 
982 
: 
12.2 
5.6 

2007 
: 
: 
1 994 
4 068 
6 157 
2 326 
: 
13.6 
6.3 

: 
1 144 

: 
1 429 

: 
1 564 

: 
1 103 

: 
902 

: 
853 

: 
697 

: 
488 

1999 
1 083 
329 
-754 
106.8 
95.6 
82.8 

1999 
12.8 
12.2 
71.7 
76.4 

1999 
68.3 
55.7 
69.0 
42.3 
: 

2000 
1 179 
283 
-896 
100.2 
93.2 
80.7 

2000 
11.4 
11.9 
72.1 
78.6u 

2000 
66.2 
55.0 
66.0 
44.1 
: 

2001 
1 486 
340 
-1 145 
101.5 
91.3 
80.3 

2002 
1 590 
331 
-1 259 
99.9 
92.6 
77.0 

2003 
1 648 
395 
-1 252 
98.2 
93.8 
74.3 

2001 
12.5 
10.8 
72.1 
77.5 

2001 
62.3 
52.1 
64.0 
39.6 
: 

2002 
9.5 
10.2 
72.1 
77.9 

2002 
61.8 
52.1 
63.9 
39.7 
: 

2003 
9.3 
8.4 
72.1 
78.6 

2003 
60.1 
51.1 
62.6 
39.1 
: 

2004 
1 823 
479 
-1 344 
99.0 
90.9 
70.5 

2004 
8.1 
7.8 
72.1 
78.6 

2004 
58.8b 
50.3b 
61.2b 
38.9b 
: 

2005 
2 118 
906 
-1 212 
80.3 
93.2 
67.2 

2005 
7.2 
7.6 
72.1 
78.6 

2005 
57.8 
49.7 
60.0 
38.8 
: 

2006 
: 
: 
: 
100.6 
: 
: 

2006 
5.5 
7.4 
73.9 
78.0 

2006 
53.7 
48.7 
58.8 
38.1 
: 

2007 
: 
: 
: 
98.1 
: 
: 

2007 
5.9 
5.6 
: 
: 

2007 
67.4b 
56.4b 
63.6b 
49.3 
46.6 

: 
: 
: 
: 

2008 
: 
: 

2008 
: 
: 
: 
: 
: 
: 
: 
: 
: 
: 
: 
: 

2008 
: 
: 
: 
96.0 
: 
: 

2008 
: 
: 
: 
: 

2008 
: 
: 
: 
: 
: 

EN 

52 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employment by main sectors (%) 

Agriculture 
Industry 
Construction 
Services 

SI: Unemployment rate: share of labour force that is unemployed (%) 

Share of male labour force that is unemployed (%) 
Share of female labour force that is unemployed (%) 

Unemployment rate of persons < 25 years: share of labour force aged <25 that is unemployed (%) 
SI: Long-term unemployment rate: share of labour force that is long-term unemployed (%) 

Social cohesion 
Average nominal monthly wages and salaries (national currency) 
Index of real wages and salaries (index of nominal wages and salaries 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 
Number of passenger cars per 1000 population 
Number of subscriptions to cellular mobile telephone services per 1000 population 

Infrastructure 
Density of railway network (lines in operation, per 1000 km²) 
Length of motorways (thousand km) 

Innovation and research 
SI: Spending on human resources (public expenditure on education) relative to GDP (%) 
SI: Gross domestic expenditure on research & development, relative to GDP (%) 
SI: Percentage of households who have Internet access at home (%) 

Environment 
SI: Total greenhouse gases emissions, CO2 equivalent (tons, 1990=100) 
SI: Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP 2004) 
SI: Share of renewable energy in electricity consumption (%) 
SI: Road freight transport as a share of total inland freight transport (modal split of freight transport) (%) 

Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of hard coal and lignite (thousand TOE) 
Primary production of natural gas (thousand TOE) 

Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Electricity generation (thousand GWh) 

72.1 
7.7 
1.0 
19.2 
18.4 
16.4 
21.4 
: 
: 

71.8 
5.4 
1.2 
21.5 
16.8 
14.9 
19.3 
: 
: 

4) 
4) 
4) 

Note 

1999 
: 
: 

2000 
: 
: 

58.7b 
6.1b 
6.2b 
29.0b 
16.4 
14.2 
19.9 
: 
: 

2001 
: 
: 

57.7 
7.6 
6.1 
28.6 
15.8 
13.6 
19.1 
26.8 
: 

58.2 
7.2 
6.0 
28.5 
15.0 
12.9 
18.2 
: 
: 

58.5 
8.1 
5.5 
27.9 
14.4 
12.4 
17.5 
: 
: 

58.5 
7.9 
5.5 
28.1 
14.1 
12.1 
17.2 
: 
: 

58.0 
8.0 
5.7 
28.3 
13.8 
11.8 
16.8 
: 
: 

51.0 
9.7 
8.6 
30.6 
13.4 
14.3 
12.2 
20.1 
9.4 

: 
: 
: 
: 
: 
: 
: 
: 
: 

2002 
: 
: 

2003 
: 
: 

2004 
: 
: 

2005 
: 
: 

2006 
: 
: 

2007 
: 
: 

2008 
: 
: 

Note 

Note 

Note 

Note 

Note 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

1999 
27.3 
: 

1999 
: 
: 

1999 
3.3 
: 
: 

1999 
: 
435.9 
: 
: 

1999 
1 113 
323 
33 
14 
761 
1 874 
5.4 

2000 
37.4 
: 

2000 
13.9 
: 

2000 
3.1 
: 
: 

2000 
: 
400.5 
: 
: 

2000 
987 
314 
20 
12 
858 
1 845 
4.7 

2001 
43.6 
120.8 

2002 
48.2 
259.4 

2003 
56.4 
370.6 

2004 
60.9 
403.6 

2005 
62.2 
488.0 

2006 
71.4 
561.7 

2001 
14.3 
: 

2001 
3.3 
: 
: 

2001 
: 
386.5 
: 
: 

2001 
933 
335 
15 
8 
1 001 
1 934 
3.7 

2002 
15.0 
: 

2002 
3.0 
: 
: 

2002 
: 
356.3 
: 
: 

2002 
896 
308 
5 
8 
965 
1 861 
3.2 

2003 
15.0 
0.0 

2003 
3.1 
: 
: 

2003 
: 
370.6 
: 
: 

2003 
1 012 
359 
19 
12 
1 043 
2 055 
4.9 

2004 
15.1 
0.0 

2004 
3.2 
: 
: 

2004 
: 
384.0 
: 
: 

2004 
1 178 
443 
19 
9 
1 080 
2 258 
5.5 

2005 
15.0 
0.0 

2005 
3.2 
: 
: 

2005 
: 
366.5 
: 
: 

2005 
1 149 
418 
15 
10 
1 130 
2 279 
5.5 

2006 
13.9 
0.0 

2006 
3.1 
: 
: 

2006 
: 
328.9 
: 
: 

2006 
1 237 
500 
15 
10 
826 
2 156 
5.6 

2007 
89.1 
: 

2007 
13.9 
0.0 

2007 
3.2 
: 
: 

2007 
: 
306.6 
: 
: 

2007 
1 080 
564 
15 
16 
1 020 
2 130 
3.0 

2008 
91.4 
: 

2008 
13.9 
0.0 

2008 
: 
: 
: 

2008 
: 
: 
: 
: 

2008 
: 
: 
: 
: 
: 
: 
3.9 

EN 

53 

EN 

 
  
 
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agriculture 
Agricultural production volume index of goods and services (producer prices, previous year=100) 
Total utilised agricultural area (thousand hectare) 
Livestock: cattle (thousand heads, end of period) 
Livestock: pigs (thousand heads, end of period) 
Livestock: sheep and goats (thousand heads, end of period) 
Production and utilisation of milk on the farm (total whole milk, thousand tonnes) 
Crop production: cereals (including rice) (thousand tonnes, harvested production) 
Crop production: sugar beet (thousand tonnes, harvested production) 
Crop production: vegetables (thousand tonnes, harvested production) 

Note 

1999 
: 
1 144 
720 
99 
3 061 
907 
498 
40 
610 

2000 
: 
1 144 
728 
103 
3 045 
948 
566 
42 
620 

2001 
: 
1 139 
708 
106 
2 933 
984 
503 
39 
677 

2002 
: 
1 140 
690 
114 
2 773 
1 010 
519 
39 
669 

2003 
102.9 
1 121 
684 
132 
2 919 
1 060 
489 
50 
675 

2004 
105.1 
1 122 
654 
143 
2 739 
1 064 
499 
40 
678 

2005 
101.2 
1 077 
655 
147 
2 701 
1 076 
511 
40 
685 

2006 
: 
1 120 
634 
152 
2 770 
1 102 
508 
: 
688 

2007 
: 
1 121 
577 
147 
2 729 
1 016 
494 
: 
672 

2008 
: 
1 122 
541 
161 
2 620 
1 040 
609 
: 
715 

SI = Structural Indicator 
: = not available 
p = provisional 
e = estimate value 
b = break in series 
1) 
the national accounts concepts. 
2) 
3) 
4) 

Debt outstanding disbursed (DOD), cumulative stock covering external public debt and external publicly guaranteed debt, but excluding IMF credits. Total exports are calculated according to 

Average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity. 
Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 12-month maturity. 
Administrative data; unemployment refers to registered unemployment. 

EN 

54 

EN