COMMISSION STAFF WORKING DOCUMENT Analytical Report     accompanying the  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL  Commission Opinion on Albania 's application for membership of the European Union   {COM(2010) 680 final}
Date: 2010-11-09
Institutions: European Commission
Subjects: Albania, EC opinion, accession criteria, accession to the European Union, impact study

EN 

EN 

  EN 

 
EUROPEAN COMMISSION 

Brussels, 9.11.2010 
SEC(2010) 1335 final 

COMMISSION STAFF WORKING DOCUMENT 

ANALYTICAL REPORT  

accompanying the 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

Commission Opinion on Albania 's application for membership of the European Union 

{COM(2010) 680 final} 

EN 

  EN 

 
 
  
 
 
 
 
 
 
 
TABLE OF CONTENTS 

A. 

a) 

b) 

c) 

B. 

1. 

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

Application for membership ........................................................................................ 4 

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

Contents of the Analytical Report................................................................................ 8 

Criteria for membership ............................................................................................... 9 

Political criteria ............................................................................................................ 9 

1.1. 

Democracy and the rule of law .................................................................................... 9 

1.1.1.  The parliament ........................................................................................................... 10 

1.1.2.  The executive ............................................................................................................. 12 

1.1.3.  Public Administration ................................................................................................ 15 

1.1.4. 

Judicial system (See also Chapter 23 — Judiciary and fundamental rights) ............. 17 

1.1.5.  Anti-corruption policy (See also Chapter 23 — Judiciary and fundamental rights).. 21 

1.1.6.  Civilian oversight of security forces .......................................................................... 23 

1.2. 

1.3. 

1.4. 

2. 

2.1. 

2.2. 

Human rights and the protection of minorities (See also Chapter 23 – Judiciary and 
fundamental rights) .................................................................................................... 24 

Regional issues and international obligations ............................................................ 33 

General Evaluation..................................................................................................... 35 

Economic Criteria ...................................................................................................... 37 

Economic developments ............................................................................................ 38 

Assessment in terms of the Copenhagen Criteria ...................................................... 39 

2.2.1.  The existence of a functioning market economy ....................................................... 39 

2.2.2.  Capacity to cope with competitive pressure and market forces within the Union..... 45 

2.3. 

General evaluation ..................................................................................................... 49 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

Ability to assume the obligations of membership...................................................... 49 

Chapter 1: Free movement of goods .......................................................................... 50 

Chapter 2: Freedom of movement for workers .......................................................... 53 

Chapter 3: Right of establishment and freedom to provide services ......................... 55 

Chapter 4: Free movement of capital ......................................................................... 56 

Chapter 5: Public procurement................................................................................... 58 

Chapter 6: Company law............................................................................................ 60 

EN 

2 

  EN 

3.7. 

3.8. 

3.9. 

Chapter 7: Intellectual property law........................................................................... 61 

Chapter 8: Competition .............................................................................................. 63 

Chapter 9: Financial Services..................................................................................... 64 

3.10.  Chapter 10: Information society and media ............................................................... 66 

3.11.  Chapter 11: Agriculture and rural development......................................................... 68 

3.12.  Chapter 12: Food safety, veterinary and phytosanitary policy .................................. 71 

3.13.  Chapter 13: Fisheries.................................................................................................. 73 

3.14.  Chapter 14: Transport policy ..................................................................................... 75 

3.15.  Chapter 15: Energy .................................................................................................... 77 

3.16.  Chapter 16: Taxation.................................................................................................. 79 

3.17.  Chapter 17: Economic and Monetary Policy ............................................................. 81 

3.18.  Chapter 18: Statistics.................................................................................................. 82 

3.19.  Chapter 19: Social Policy and employment ............................................................... 83 

3.20.  Chapter 20: Enterprise and industrial policy.............................................................. 87 

3.21.  Chapter 21: Trans European Networks ...................................................................... 88 

3.22.  Chapter 22: Regional policy and coordination of structural instruments .................. 90 

3.23.  Chapter 23: Judiciary and fundamental rights ........................................................... 93 

3.24.  Chapter 24: Justice, freedom and security ................................................................. 98 

3.25.  Chapter 25: Science and research ............................................................................ 103 

3.26.  Chapter 26: Education and Culture .......................................................................... 104 

3.27.  Chapter 27: Environment ......................................................................................... 106 

3.28.  Chapter 28: Consumer and health protection........................................................... 110 

3.29.  Chapter 29: Customs Union ..................................................................................... 112 

3.30.  Chapter 30: External relations.................................................................................. 114 

3.31.  Chapter 31: Foreign, Security and Defence Policy.................................................. 116 

3.32.  Chapter 32: Financial Control.................................................................................. 117 

3.33.  Chapter 33: Financial and budgetary provisions...................................................... 119 

3.34.  General Evaluation................................................................................................... 120 

Statistical Annex .................................................................................................................... 122 

EN 

3 

  EN 

A. 

a) 

INTRODUCTION 

Application for membership 

Albania presented its application  for membership of the  European Union on 28 April 2009. 
On  16  November  2009,  the  Council  of  the  European  Union  requested  the  Commission  to 
submit its opinion on this application, in line with the procedure laid down in Article 49 of the 
Treaty  on  European  Union,  which  states:  ‘Any  European  State  which  respects  the  values 
referred to in Article 2 and is committed to promoting them may apply to become a member of 
the  Union.  The  European  Parliament  and  national  parliaments  shall  be  notified  of  this 
application. The applicant state shall address its application to the Council, which shall act 
unanimously after consulting the Commission and after receiving the consent of the European 
Parliament,  which  shall  act  by  a  majority  of  its  component  members.  The  conditions  of 
eligibility agreed upon by the European Council shall be taken into account.’  

Article  2  states  that  ‘the  Union  is  founded  on  the  values  of  respect  for  human  dignity, 
freedom,  democracy,  equality,  the  rule  of  law  and  respect  for  human  rights,  including  the 
rights of persons belonging to minorities. These values are common to the Member States in a 
society  in  which  pluralism,  non-discrimination,  tolerance,  justice,  solidarity  and  equality 
between women and men prevail.’ 

This  is  the  legal  framework  within  which  the  Commission  submits  its  Opinion1  and  the 
present analytical report.  

The Feira European Council in June 2000 had acknowledged that Western Balkan countries 
participating  in  the  Stabilisation  and  Association  Process  were  'potential  candidates'  for  EU 
membership.  The  European  perspective  of  these  countries  was  further  confirmed  by  the 
Thessaloniki  European  Council  in  June  2003  which  endorsed  the  "Thessaloniki  Agenda  for 
the  Western  Balkans”.  This  agenda  remains  the  cornerstone  of  the  EU  policy  towards  the 
region.  

The European Council of December 2006 renewed the EU's commitment "that the future of 
the Western Balkans lies in the European Union" and reiterated that "each country's progress 
towards the European Union depends on its individual efforts to comply with the Copenhagen 
criteria  and  the  conditionality  of  the  Stabilisation  and  Association  Process.  A  country's 
satisfactory  track-record  in  implementing  its  obligations  under  a  Stabilisation  and 
Association Agreement (SAA), including trade related provisions, is an essential element for 
the  EU  to  consider  any  membership  application".  At  the  Sarajevo  EU-Western  Balkans 
ministerial  meeting  on  2  June  2010,  the  EU  reiterated  its  unequivocal  commitment  to  the 
European perspective of the Western Balkans and that the future of these countries lies in the 
European Union.  

In line with the Treaty requirements, the current assessment is made in terms of the conditions 
of eligibility laid down by the European Council. In Copenhagen in June 1993, the European 
Council concluded that:  

"Accession  will  take  place  as  soon  as  a  country  is  able  to  assume  the  obligations  of 
membership by satisfying the economic and political conditions required. 

1 

COM(2010) 680 of 09.11.2010 

EN 

4 

  EN 

                                                 
Membership requires: 

that the candidate country has achieved stability of institutions guaranteeing democracy, the 
rule of law, human rights and respect for and protection of minorities; 
the  existence  of  a  functioning  market  economy,  as  well  as  the  capacity  to  cope  with 
competitive pressure and market forces within the Union; 
the  ability  to  take  on  the  obligations  of  membership  including  adherence  to  the  aims  of 
political, economic and monetary union". 

The Union’s capacity to absorb new members, while maintaining the momentum of European 
integration, is also an important consideration in the general interest of both the Union and the 
candidate countries. 

In  December  1995,  the  Madrid  European  Council  referred  to  the  need  "to  create  the 
conditions for the gradual, harmonious integration of [the applicant] countries, particularly 
through  the  development  of  the  market  economy,  the  adjustment  of  their  administrative 
structures and the creation of a stable economic and monetary environment." 

The Stabilisation and Association Process (SAP) conditionalities were defined by the Council 
on 31 May 1999 and included co-operation with the International Criminal  Tribunal  for  the 
Former  Yugoslavia  (ICTY)  and  regional  co-operation.  These  conditions  are  a  fundamental 
element  of  the  SAP  and  are  integrated  into  the  Stabilisation  and  Association  Agreement 
(SAA) with Albania, which entered into force in April 2009. 

In  December  2006,  the  European  Council  agreed  that  'the  enlargement  strategy  based  on 
consolidation,  conditionality  and  communication,  combined  with  the  EU's  capacity  to 
integrate new members, forms the basis for a renewed consensus on enlargement'.  

In  the  present  Opinion,  the  Commission  analyses  Albania's  application  on  the  basis  of  the 
country’s capacity to meet the criteria set by the Copenhagen European Council of 1993 and 
the  conditionality  of  the  Stabilisation  and  Association  process.  Albania's  track-record  in 
implementing  its  obligations  under  the  Stabilisation  and  Association  Agreement  (SAA), 
including trade related provisions, is also examined. 

In line with the renewed consensus on enlargement, this analytical report also provides initial 
impact  estimates  with  regard  to  key  policy  areas  and  sectors  (freedom  of  movement  of 
workers,  agriculture  and  rural  development,  regional  policy  and  financial  and  budgetary 
provisions). The Commission provides more detailed impact assessments for these key policy 
areas at later stages of the pre-accession process. In addition, an accession treaty for Albania 
would involve a technical adaptation of the EU institutions in the light of the Treaty on the 
European Union.  

b) 

Relations between the EU and Albania 

Following the first multi-party elections, the European Community established relations with 
the country in June 1991. In 1992, a Trade and Cooperation Agreement between the EU and 
Albania entered into force. The country became eligible for funding under the  EU financial 
assistance programme in December 1991. Economic cooperation was enhanced in 1999, when 
Albania started to benefit from Autonomous Trade Preferences from the EU. As from 2000, 
Albanian products benefited from duty-free access to the EU market.  

EN 

5 

  EN 

A  Stabilisation  and  Association  Agreement  (SAA)  between  the  EU  and  Albania2  was 
signed in June 2006 and entered into force in April 2009, superseding the Interim Agreement 
on  trade  and  trade-related  aspects,  which  entered  into  force  in  December  2006.  Political 
dialogue meetings at ministerial level between the EU and Albania have been held since 2001. 

The  entry  into  force  of  the  Stabilisation  and  Association  Agreement  marked  a  qualitatively 
new stage in bilateral relations, entailing significant new obligations and engagement for the 
country  in  the  areas  of  justice,  freedom  and  security,  free  movement  of  workers,  right  of 
establishment and free movement of capital and services as well as on transport, audiovisual 
field  and  telecommunications.  Furthermore,  the  Stabilisation  and  Association  Agreement 
provides for close cooperation between the EU and Albania in a number of EU policy areas. 
In most areas cooperation focuses mainly on priorities related to the EU acquis in the relevant 
field,  with  Albania  committing  to  gradually  introduce  EU  acquis  in  its  legislation  and  to 
cooperate with the EU on joint policy objectives.  

Albania  has,  overall,  smoothly  implemented  its  obligations  under  the  Stabilisation  and 
Association Agreement since the launch of the Interim Agreement. Albania has contributed to 
the sound functioning of the various joint institutions. The Joint Committee established under 
the  Interim  Agreement  met  in  2006,  2007  and  2008,  and  its  related  Working  Parties  met  in 
2007,  2008  and  2009.  Meetings  of  the  Stabilisation  and  Association  Council  took  place  in 
May 2009 and May 2010. The first meeting of the Stabilisation and Association Committee 
was held in March 2010. Subcommittee meetings were held in 2009 and 2010. 

Annual inter-parliamentary meetings between representatives of the European Parliament and 
the  Parliament  of  Albania  have  been  held  since  1993.  The  European  Parliament  adopted  a 
resolution on Albania in July 2010.3 

Albania  participates  in  the  multilateral  economic  dialogue  between  the  Commission,  EU 
Member  States  and  potential  candidate  countries  in  the  context  of  the  pre-accession  fiscal 
surveillance. Since 2006, it prepares an annual Economic and Fiscal Programme (EFP), which 
aims  at  preparing  the  potential  candidate  countries  for  participation  in  the  multilateral 
surveillance  and  economic  policy  co-ordination  procedures  currently  in  place  in  the  EU  as 
part of the Economic and Monetary Union. 

The  first  European  Partnership  with  Albania  was  adopted  by  the  Council  in  2004.  In 
February 2008 the Council adopted a new European partnership with Albania4.  

In the framework of the visa liberalisation dialogue, Albania has made important progress in 
the different areas of the roadmap. The Commission therefore presented a proposal on lifting 
the  visa  obligation  for  the  citizens  of  Albania  on  27  May  2010,  which  was  subject  to  the 
fulfilment of outstanding criteria. The proposal was adopted by the European Parliament on 7 
October and by the Council on 8 November 2010. An agreement on readmission between the 
European Union and Albania is in force since 2006. 

Albania became a full member of the Energy Community of South East Europe following the 
entry into force of the Energy Community Treaty on 1 July 2006. The Treaty aims at creating 
a regionally integrated energy market for electricity and natural gas, as part of the wider EU 

2 
3 
4 

OJ L 107, 28.4.2009, p.166. 
The rapporteur for Albania is Mr Nikolaos Chountis.  
OJ L 080, 19.03.2008 p. 1. 

EN 

6 

  EN 

                                                 
market.  Albania  signed  the  European  Common  Aviation  Area  (ECAA)  agreement  in  June 
2006. 

The Albanian National Strategy for Development and Integration (2007-2013) represents the 
key  strategic  policy  document  of  the  Albanian  Government  outlining  its  long-term  national 
development  and  EU  integration  objectives.  The  Strategy  comprises  a  synthesis  of  the 
medium and long-term sector and inter-sector strategies. The majority of the sector strategies 
include  action  plans,  laying  out  specific  deadlines  for  the  accomplishment  of  concrete 
activities in each sector within the period 2007- 2013.  

The European Union is by far the most important trading partner of Albania. In 2009, the 
EU accounted for 80% of the total Albanian foreign trade volume. 

Albania's  exports  to  the  EU  amounted  to  about  86%  of  the  country's  total  exports  in  2009, 
being of a value of €595 million. Albania's main  exports are metals and minerals, textiles and 
footwear, processed agricultural products and beverages, and building materials. 

In  2009,  73.1%  of  Albania's  total  imports  came  from  the  EU,  being  of  a  value  of  €2,166 
million. EU exports to Albania include goods under inward processing regime such as textiles 
and  footwear,  metal  products,  furniture  and  electronic  goods,  which  are  nearly  entirely  re-
exported  to  EU  Member  States.  Other  imported  goods  of  significance  from  the  EU  are 
machinery and equipment, electricity, pharmaceuticals as well as tobacco and cigarettes.  

The trade deficit of Albania with the EU amounted to €1,571 million in 2009.  

Albania joined the WTO in 2000 and has been a CEFTA member since 2007.  

Albania benefits from EU financial assistance since 1991. Overall, between 1999 and 2010 
the  EU  committed  over  €565.7  million  to  Albani a.  From  1999  to  2006,  Albania  benefited 
from EU CARDS assistance worth €259.6 million.  Since 2007, CARDS has been replaced by 
the  Instrument  of  Pre-Accession  (IPA)  programme,  under  which  Albania  has  received 
assistance worth €306.1 million from 2007 to 2010.  

The  CARDS  programmes  in  Albania  supported  democratic  stabilisation,  good  governance 
and institution building, administrative capacity and justice and home affairs, economic and 
in  Community 
social  development,  environment,  and 
Programmes. 

the  participation  of  Albania 

In  2007-2010,  the  IPA  programmes  focus  on  key  political  criteria  areas  such  as  judicial 
reform, police and penitentiary infrastructures, civil service and public administration reform, 
parliament,  fundamental  rights,  as  well  as  civil  society.  In  the  area  of  the  economic  criteria 
and  the  EU  membership  criteria,  IPA  assistance  concentrates  on  small  and  medium  size 
intellectual  property  rights,  environmental 
enterprises,  education, 
infrastructure, transport (local/rural roads), employment and social inclusion, and food safety. 

taxation,  statistics, 

Albania  participates  in  three  cross  border  cooperation  programmes  at  "internal  borders" 
within  the  Western  Balkans  (Montenegro,  the  former  Yugoslav  Republic  of  Macedonia, 
Kosovo5;  in  one  bilateral  cross  border  cooperation  programme  with  an  EU  Member  State 
(Greece); and in several multilateral programmes (including EU Member States), e.g. in the 

5 

under UNSCR 1244/1999 

EN 

7 

  EN 

                                                 
ERDF European Trans-National Programmes South East European Space and Mediterranean 
Space, as well as in the Adriatic regional programme. 

IPA assistance is centrally managed by the EU Delegation. Albania is preparing accreditation 
for  management  of  IPA  funds.  IPA  assistance  builds  on  a  number  of  strategic  documents, 
such as the European Partnership and the SAA priorities; these are reflected in Multi-annual 
Indicative Planning Documents and the Multi-annual Indicative Financial Frameworks. 

A Framework Agreement between the European Community and Albania on participation in 
EU  Programmes  was  ratified  in  May  2005.  Albania  participates  actively  in  three  EU 
Programmes: the 7th Framework Programme (FP7) for research, technological development 
and  demonstration  activities  (2007-2013),  the  Entrepreneurship  and  Innovation  specific 
Programme  (EIP)  of  the  Competitiveness  and  Innovation  Framework  Programme  (2007-
2013) and the Europe for Citizens Programme. IPA funds are used to meet part of the costs of 
participation in all three programmes.  

c) 

Contents of the Analytical Report 

The  analytical  report  takes  account  of  the  conclusions  of  the  European  Council  in 
Copenhagen in 1993 and subsequent European Council conclusions. The report:  

Describes the relations between Albania and the Union; 
Analyses  the  situation  in  respect  of  the  political  conditions  established  by  the  European 
Council (democracy, rule of law, human rights, protection of minorities);  
Assesses  the  country’s  situation  and  prospects  in  respect  of  the  economic  conditions 
established  by  the  European  Council  (functioning  market  economy,  capacity  to  cope  with 
competitive pressure); 
Addresses the question of the capacity of the country to adopt the obligations of membership, 
i.e. the total body of EU legislation as expressed in the Treaty, the secondary legislation, as 
well as the policies of the Union (acquis of the European Union); 
In  line  with  the  December  2006  European  Council  conclusions,  provides  initial  impact 
estimates in the fields of freedom of movement for workers (chapter 2), agriculture and rural 
development (chapter 11), regional policy and coordination of structural instruments (chapter 
22),  and  financial  and  budgetary  provisions  (chapter  33).  These  have  been  identified  as  the 
main policy areas likely to require particular attention in case of Albanian accession.  

In assessing Albania's situation in respect of the economic criteria and its capacity to assume 
the  obligations  of  the  acquis,  the  Commission  has  also  estimated  the  progress  which  could 
reasonably  be  expected  in  the  years  ahead,  before  eventual  accession, taking  account  of  the 
fact that the acquis itself will continue to develop.  

The  Commission  has  drawn  on  a  number  of  information  sources:  answers  given  by  the 
Albanian  authorities  to  a  detailed  questionnaire  and  additional  follow-up  questions,  expert 
missions, consultations with the EU Delegation in Albania, reporting by the Member States’ 
Embassies  in  Tirana,  assessments  by  international  organisations  (including  the  Council  of 
Europe,  OECD,  OSCE,  IMF,  World  Bank),  as  well  as  local  and  international  non-
governmental organisations. 

This  Opinion  has  been  prepared  following  a  methodology  similar  to  that  used  in  previous 
Opinions  with  some  adaptations  reflecting  the  elements  including  the  2006  'renewed 
consensus  on  enlargement'.  The  Commission  organised  a  number  of  expert  missions  in 
Albania concentrated mainly in the field covered by the political criteria. This methodology 

EN 

8 

  EN 

allowed  for  a  solid  assessment  of  administrative  capacities  of  Albanian  institutions,  of  the 
way  legislation  is  implemented  and  helped  to  better  identify  remaining  challenges  and 
priorities for future action. The Commission has analysed both the present situation and the 
medium-term  prospects.  For  the  purpose  of  this  Opinion  and  without  prejudging  any  future 
date of accession, the medium-term perspective has been defined as a period of five years. 

B. 

CRITERIA FOR MEMBERSHIP 

1. 

POLITICAL CRITERIA 

The European Council in Copenhagen in 1993 set a number of political criteria for accession 
to  be  met  by  applicant  countries.  A  country  must  have  achieved  ‘stability  of  institutions 
guaranteeing  democracy,  the  rule  of  law,  human  rights  and  respect  for  and  protection  of 
minorities’. In the case of the Western Balkans the conditions defined by the Stabilisation and 
Association Process are also a fundamental element of EU policy, which will be assessed in 
this  report.  These  include  regional  cooperation,  good  neighbourly  relations  and  compliance 
with international obligations. 

The political criteria established in Copenhagen are derived from the fundamental values on 
which  the  EU  is  founded,  as  set  out  in  Article  2  of  the  Treaty  on  European  Union.  These 
principles  are  emphasised  in  the  Charter  of  Fundamental  Rights  of  the  European  Union. 
Article  6(1)  of  the  Treaty  states  that:  ‘The  Union  recognises  the  rights,  freedoms  and 
principles set out in the Charter of Fundamental Rights of the European Union of 7 December 
2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value 
as the Treaties’.  

The  assessment  set  out  below  examines  the  main  ways  in  which  public  authorities  are 
organised and operate, and the situation with regard to the protection of fundamental rights. It 
is not confined to a formal description but seeks to ascertain the way in which democracy and 
the rule of law actually function in practice.  

1.1. 

Democracy and the rule of law 

Parliamentary  democracy  was  established  in  Albania  following  the  March  1991  elections. 
These  elections were  preceded  by  electoral  law  changes  in  December  1990  and  January-
February 1991 which provided for political pluralism. 

In  April  1991,  Albania’s  new  multiparty  legislature  passed  the  Law  on  major  constitutional 
provisions. This was in effect an interim constitution and laid the foundation for the modern 
democratic state. 

The  current  Constitution  was  adopted  in  November  1998  by  referendum.  The  constitution 
provides the basis for a parliamentary republic, a unitary and indivisible state based on free 
elections. It recognises fundamental freedoms and human rights, not least political pluralism, 
freedom of expression and religion, and respect for minorities, as well as prohibiting the death 
penalty.  According  to  the  Constitution,  the  governance  system  is  based  on  the  division  and 
balance  of  powers  among  the  legislative,  executive  and  judiciary.  The  constitutional 
institutions are in place. 

EN 

9 

  EN 

The  Constitution  has  been  amended  twice,  in  2007  and  2008.  In  2007,  small  changes  were 
made including lengthening the term of office of local government bodies and increasing the 
number of Central Electoral Commission members. More substantial changes  were made in 
April 2008. These included changing the electoral system from a mixed majority proportional 
to  a  regional  proportional  system,  amending  the  procedure  for  electing  the  President  of  the 
Republic,  removing  the  Central  Election  Commission  (CEC)  from  the  Constitution  as  a 
constitutional body, limiting the previously indefinite term of office of the Prosecutor General 
to five years, and changing some parliamentary rules.  

The Constitutional Court has asserted increasing independence since 2005. In several cases, it 
has  invalidated  or  suspended  approved  laws.  In  the  course  of  2007–2010,  33  laws  were 
subjected  to  constitutional  review:  18  were  found  partially  unconstitutional,  2  entirely 
the  petition  on  grounds  of 
unconstitutional,  and 
unconstitutionality. One of the recent pivotal decisions of the Court was holding the so-called 
'lustration law', which was judged to violate the separation of powers, to be unconstitutional. 

the  Court  rejected 

in  13  cases 

The Constitution sets out an adequate framework for a democracy run in accordance with the 
rule  of  law.  However,  there  are  a  number  of  cases  in  which  decisions  and  rulings  of  the 
Constitutional  Court  have  been  seriously  challenged  or  even  disregarded  by  governmental 
institutions.  

Overall,  the  Albanian  Constitution  sets  out  a  reasonable  framework  for  a  democracy  run  in 
accordance  with  the  rule  of  law.  The  Constitutional  Court  has  asserted  increasing 
independence  since  2005.  However,  respect  for  the  Constitution  has  in  a  number  of  cases 
been  challenged  by  governmental  institutions  notably  by  calling  into  question  or  even 
disregarding constitutional court decisions and rulings.  

1.1.1.  The parliament 

Albania has a unicameral parliamentary system. Parliament (the assembly or Kuvendi) is the 
highest body of state power and currently consists of 140 members elected by direct, universal 
suffrage. It is elected every four years. In 2008, the Albanian electoral system changed from a 
mixed (100 first-past-the-post constituency seats and 40 national proportional representation 
seats)  to  a  regional  proportional  system  (140  proportional  representation  seats  filled  from 
party lists in regions corresponding to existing administrative boundaries). The aim of these 
reforms was to make the political system more stable, to simplify the electoral machinery and 
to reduce the personalisation of electoral contests. 

The June 2009 legislative elections were assessed by the OSCE/ODIHR as an improvement 
on  past  practices  and  as  meeting  most  international  standards.  However, shortcomings were 
identified  and  a  number  of  recommendations  were  made  for  future  elections.  The  report 
stressed  that  the  elections  demonstrated  tangible  progress,  in  particular  with  regard  to  the 
voter  registration  and  identification  process,  the  legal  framework,  voting,  counting  and 
adjudication of election disputes. Nonetheless, the report added that the elections did not fully 
achieve  the  highest  standards  and  that  the  politicisation  of  vote  counting  and  tabulation 
undermined citizens’ confidence in the process. Shortcomings also included non-transparent 
party financing and flawed media coverage.  

Parliament's organisation and functioning are governed by rules of procedure adopted by the 
majority of its members. Parliamentary sessions  are usually open to the public. The leading 
bodies  of  parliament  are  the  Speaker,  the  Parliamentary  Bureau  and  the  Conference  of 

EN 

10 

  EN 

Chairmen  of  the  parliamentary  groups.  Other  bodies  include  standing  committees,  sub-
committees,  special  committees,  investigative  committees,  the  Council  for  Rules,  Mandates 
and Immunities and the Council for Legislation. Parliament also has a Standing Committee on 
European Integration, which is currently chaired by the opposition. 

Parliament exercises a legislative role. The right to take a legislative initiative rests with the 
Council  of  Ministers,  every  Member  of  Parliament,  as  well  as  on  petition  when  signed  by 
20,000 registered voters. A draft law goes first to the parliamentary committee for review and 
then  to  plenary  session  for  voting.  Parliament,  at  the  request  of  the  Council  of  Ministers  or 
one fifth of its members, may deliberate and adopt a draft law by expedited procedure. The 
rules  of  procedure  also  provide  for  a  system  of  verification  of  compliance  of  Albanian 
legislation with the EU acquis. 

Under the Constitution, parliament exercises oversight over the executive and the institutions 
established  and  voted  for  by  parliament.  The  rules  of  procedure  provide  for  a  number  of 
instruments  to  ensure  its  oversight  role,  including  investigative  committees,  interpellations, 
question  and  answer  sessions,  motions  for  debates,  motions  of  confidence,  motions  of  no 
confidence, reporting and petitions. 

A considerable number of laws have been passed by parliament in view of necessary social 
and  economic  reforms  and  to  align  Albanian  legislation  with  the  EU  acquis.  However,  the 
quality  of  legislation  passed  has  not  always  been  of  an  adequate  standard.  Parliamentary 
committees  often  work  under  severe  time  pressure.  There  are  substantial  differences  in 
workload between the committees, with the legal committee being particularly overburdened. 
Involvement of relevant interest groups in parliamentary hearings and consultations is limited. 
The  assembly’s  legislative  agenda  is  decided  upon  by  the  Conference  of  Chairmen,  which 
includes  the  parliamentary  group  chairmen  but  not  the  individual  committee  chairs.  As  a 
consequence, there have been conflicts between the committees' work plan and the assembly's 
legislative agenda. The position of parliamentary speaker has been misused, in particular by 
exerting  disproportionate  influence  on  the  process  of  establishing  the  legislative  agenda  by 
frequently  imposing  short-term  decisions  as  opposed  to  joint  decisions  of  the  conference  of 
chairmen. 

Despite constitutional provisions, there is a lack of effective parliamentary oversight over the 
executive and parliament does not function as an independent institution. Interpellations and 
question times are rarely used and written questions are hardly ever submitted. There is a very 
strong culture of partisan politics polarising stances in parliament, which hampers the proper 
functioning  of  the  assembly  and  its  committees.  Investigative  committees  have  often  been 
forums for party political quarrels, rather than instruments for parliamentary oversight. They 
have rarely produced results and thus have had limited impact on government policies. There 
is little consensus among the parties in parliament about its functioning and standards.  

Parliamentary  work  both  on  passing  legislation  and  oversight  functions  has  for  years  been 
strongly marked by difficult and often unconstructive political dialogue. Since the June 2009 
elections, parliamentary work has  been overshadowed and obstructed by political stalemate. 
The opposition Socialist Party has boycotted the work of parliament for long periods since the 
elections, calling for transparency and investigation of alleged irregularities in the elections. 
The  government  for  its  part  has  not  shown  readiness  to  compromise  on  proposals  for 
overcoming the political deadlock made by the Socialist party. As a result, political dialogue 
has  further  deteriorated,  being  highly  confrontational  and  unproductive  or  else  outright  non 
existent. The political stalemate and obstruction of parliament amplifies the existing weakness 

EN 

11 

  EN 

in parliamentary oversight. The two opposing camps consisting of the government parties and 
the  Socialist  Party  have  more  than  one  year  after  the  elections  not  yet  overcome  their 
disagreements. This despite involvement from many parties, including the major parties in the 
European Parliament and the international community, aimed at paving the way for a solution. 

The  political  stalemate  is  damaging  the  functioning  of  democracy  in  Albania  and  hindering 
important  reforms,  which  are  necessary  for  the  country’s  progress  on  the  path  towards  EU 
integration and the rule of law. Key pieces of legislation requiring a qualified majority (three 
fifths  of  all  votes)  could  not  be  approved.  Electoral  reform  necessary  in  view  of  upcoming 
local  government  elections  is  substantially  delayed.  This  political  situation  risks  a  profound 
and  lasting  polarisation  of  the  political  class  with  serious  consequences  in  terms  of  its 
capacity  for  compromise  and  finding  consensus  on  key  reforms.  Constructive  cross-party 
dialogue  is  necessary  to  ensure  a  smooth  functioning  of  Parliament  based  on  its  rules  of 
procedure. 

Parliament’s structures  are  relatively  weak and many activities are carried out on an  ad hoc 
basis  rather  than  in  line  with  established  procedures.  Politicisation  of  parliament's 
administrative  and  expert  staff  is  detrimental  to  the  overall  organisation  of  activities. 
Moreover, staff capacities are limited and there is frequent turnover.  

Overall,  Albania  is  a  parliamentary  democracy  based  on  a  constitutional  and  legislative 
framework,  which  is  largely  in  line  with  European  principles  and  standards.  However, 
parliament does not function properly as an independent institution and accordingly does not 
exercise  effectively  and  efficiently  its  oversight  and  control  function  over  the  government. 
Political  culture  is  not  conducive  to  constructive  political  dialogue.  Since  the  June  2009 
elections, parliamentary work has been hampered by political stalemate between the majority 
parties  and  the  Socialist  Party,  which  is  in  opposition.  OSCE-ODIHR  recommendations  on 
the  2009  elections  and  their  follow-up  need  to  be  fully  addressed  with  a  view  to  upcoming 
elections. 

1.1.2.  The executive 

The President of the Republic is elected by parliament, by a qualified majority of three fifths 
of  140  votes  in  the  three  first  rounds  and  by  simple  majority  in  the  last  two  rounds.  The 
President has a limited executive role. The President promulgates laws adopted by parliament 
and has the right to return them to the plenary for reconsideration. He is the Commander in 
Chief of the armed forces. The President appoints the Prime Minister on the proposal of the 
party  or  coalition  of  parties  that  has  the  majority  of  seats  in  the  Assembly,  he  appoints  and 
dismisses  ministers  on  a  proposal  by  the  Prime  Minister  and  he  appoints  and  dismisses 
ambassadors and other diplomatic representatives. The President chairs the High Council of 
Justice. He appoints the members of the Constitutional Court and High Court with the consent 
of parliament. 

The current President, Mr Bamir Topi, was elected in July 2007 for a five-year period. He has 
a constitutional role as a guarantor of consensus, promoting party dialogue and compromise. 
However, on some of the major issues of public debate including the political stalemate since 
2009, the effective role of the President of the Republic has remained limited. In 2010, some 
of  the  President's  proposed  appointments  for  the  Constitutional  Court  and  the  High  Court 
failed to receive the consent of parliament. 

EN 

12 

  EN 

The Council of Ministers (CoM) is the basic executive body. Within 10 days of appointment 
by  the  President,  the  Prime  Minister  presents  the  political  programme  of  the  Council  of 
Ministers, together with its composition, to parliament for approval. 

The  current  government  is  led  by  Prime  Minister  Sali  Berisha.  He  was  reappointed  by 
parliament  in  September  2009  following  the  June elections  and  the  formation  of  a  coalition 
government  between  the  Democratic  Party  of  outgoing  PM  Berisha  and  the  Socialist 
Movement for Integration of Ilir Meta. There is one Deputy Prime Minister (Ilir Meta, who is 
also Minister of Economy) and 14 ministers, one of whom is female. 

With  regard  to  the  government's  main  task  of  law-making,  the  main  planning  tool  is  the 
annual Analytical Legislative Programme (ALP). Before approval, the Programme is checked 
against the main priorities in the National Strategy for Development and Integration and the 
Stabilisation  and  Association  Agreement,  although  this  linkage  is  not  systematic,  and  a 
substantial  number  of  laws  put  forward  by  line  ministries  in  recent  years  had  not  been 
included  in  the  ALP.  This  reflects  the  government's  excessive  and  short-term  ambitions  for 
the legislative  agenda. There is a mechanism  for coordination of work planning in different 
institutions but it works insufficiently in practice.  

Inter-ministerial  consultation  on  draft  legislation  is  required  by  law.  It  is  up  to  the  line 
minister  to  organise  inter-ministerial  groups  and  to  invite  experts  to  discuss  drafts  laws. 
However, participants in inter-ministerial groups do not always have a mandate to negotiate 
agreements on behalf of their ministries, which reduces the effectiveness of such procedures. 
There  is  a  formal  requirement  to  involve  external  consultation;  however,  broad-based 
consultations with the participation of representatives from interest groups are rarely carried 
out.  

In general, capacities for legislative drafting in line  ministries and  administrative bodies are 
weak. One of the specific weaknesses is that insufficient attention is given to implementation. 
This,  in  addition  to  limited  consultation  with  interest  groups  and  specialists,  as  well  as  the 
government's over-ambitious legislative agenda and limited parliamentary scrutiny, results in 
several pieces of legislation being of low quality. 

Proper implementation of, and respect for, legislation have been affected by its poor quality. 
Furthermore,  implementation  is  hampered  at  times  by  the  lack  of  full  understanding  of  the 
social and political role of laws by relevant public sector institutions; these disregard certain 
legal provisions as a result. There have been cases in which respect for legislation and the rule 
of law have been put into question by the government, with Constitutional court decisions and 
rulings being challenged or even disregarded. 

The  government  has  invested  in  an  Integrated  Planning  System  (IPS),  which  embodies  the 
principles that the government should have a clear and coherent set of policy priorities that are 
linked  to  the  budget  process.  The  most  influential  forum  for  ministerial  discussions  on 
priorities  and  key  sector  strategies  is  the  Strategic  Planning  Committee,  an  inter-ministerial 
committee  chaired  by  the  Prime  Minister,  which  is  focusing  increasingly  on  the  linkage 
between  policies/priorities  and  budgetary  matters.  Despite  positive  developments  in  this 
regard, the coherence between the IPS, the ALP and budgeting remains weak. 

The  Ministry  of  European  Integration  (MEI)  was  established  in  2004  with  the  core  task  to 
coordinate  European  integration  work  in  the  government.  Directorates  for  EU  integration 
were also established in relevant line ministries. 

EN 

13 

  EN 

In  order  to  streamline  and  improve  coordination  of  the  European  integration  process,  the 
Albanian government established the Inter–Institutional Coordinating Committee, chaired by 
the  Minister  for  European  Integration  and  composed  of  the  deputy  ministers  or  secretaries 
general  of  each  line  ministry,  as  well  as  officials  of  relevant  central  institutions.  The 
Committee meets at least once a month. 

More  specifically,  permanent  inter-ministerial  working  groups  covering  various  acquis 
chapters  were  established  ahead  of  the  Opinion  questionnaire  process.  A  new  European 
Secretariat was established within the MEI to coordinate the work of these groups. The MEI 
together with the working groups have managed the process of replies to the questionnaire in 
a satisfactory manner. 

The Albanian Constitution provides that local governments are founded on the principle of 
decentralisation and exercise their powers in accordance with the principle of local autonomy. 
The  Constitution  incorporates  the  basic  principles  of  the  European  Charter  of  Local  Self-
Governance ratified by Albania in 1999. 

Communes and municipalities are the basic units of local governance. Communal, municipal, 
and regional councils regulate and manage local issues within their jurisdiction. They exercise 
property rights, administer their revenue independently and are entitled to engage in economic 
activity, collect revenue and spend the funds necessary for fulfilling their duties. They are also 
entitled, pursuant to the law, to levy local taxes and set their level.  

The heads of communes and municipalities may be dismissed by the government in cases of 
serious breaches of duty. The government also appoints prefects to check the legality of acts 
adopted  by  local  government.  Prefects  also  exercise  financial  control  over  these  bodies, 
although the relationship between them is not one of subordination. The cooperation between 
local government and government appointed prefects overall functions smoothly. 

Despite much debate regarding the decentralisation process, few of the measures planned in 
the local government and decentralisation strategy 2007-2010 were implemented. The transfer 
of some competences was made at short notice and often without adequate preparation. The 
Law on territorial planning and amendments thereto raised issues regarding potential conflicts 
with the existing regional and local structures.  

The deterioration of the political atmosphere at national level has affected relations between 
central  and  local  government.  It  has  also  affected  the  activities  of  the  association  of  local 
government representatives. A second association was created by local elected officials of the 
opposition. 

Overall, Albania has an institutional system of government institutions that broadly function, 
although  with  some  deficiencies.  These  concern  in  particular  the  low  quality  of  legislative 
drafting and the limited process of policy consultation with third parties. This in turn leads to 
serious  shortcomings  in  the  implementation  and  respect  for  legislation.  The  cases  of  non-
respect of constitutional court decisions by government in recent years and the politicisation 
of the vote on the President's Constitutional Court appointments are of concern. The President 
has not been able to fulfil his constitutional role as a guarantor of consensus, promoting party 
dialogue and compromise. Albania’s local government system is in line with the principles of 
the European Charter of Local Self-Governance. The cooperation between local government 
and  government  appointed  prefects  overall  functions  smoothly.  Planned  decentralisation 

EN 

14 

  EN 

measures in recent years have not been implemented. Lack of constructive political dialogue 
at central level has affected relations between the central and local level. 

1.1.3.  Public Administration 

The  Albanian  Constitution,  the  Law  on  the  organisation  and  functioning  of  the  Council  of 
Ministers,  and  other  special  laws  on  the  organisation  and  functioning  of  institutions 
subordinate  to  the  Council  of  Ministers/Prime  Minister,  or  line  ministers,  provide  for  the 
establishment  and  functioning  of  central  institutions  of  the  public  administration.  This 
legislation defines their mission, scope, powers, activity, and manner of funding. Institutions 
created  in  this  way  include:  political  institutions  (parliament),  judicial  institutions  (courts), 
independent  institutions  (Ombudsman,  High  Commissioner  for  Data  Protection,  High  State 
Control  Office,  Civil  Service  Commission,  etc.)  and  administrative  institutions  (Department 
of  Public  Administration,  Department  of  Internal  Control  and  Anti-corruption,  sectoral 
inspectorates, Public Procurement Advocate, prefects).  

As  there  is  no  unified  system  and  law  on  the  general  organisation  and  functioning  of  the 
public administration, there is a risk of fragmentation between different pieces of legislation. 
These  put  in  place  administrative  bodies  and  establish  for  each  public  administrative  body 
individual  provisions  on  issues  of  responsibility,  accountability  and  competences,  without 
having to follow general rules at state administration level. 

The  status  of  civil  servants  is  regulated  by  the  Law  on  civil  service  of  1999  as  well  as  by 
several pieces of secondary legislation. The Labour Code is also applicable to civil servants as 
supplementary  legislation;  it  covers  many  areas  related  to  working  conditions  in  the  civil 
service. The Labour Code is the basic law for public employees who are not civil servants. As 
provided  by  the  civil  service  law,  the  civil  service  in  Albania  is  basically  a  position-based 
system with some elements of a career mechanism. Such a system is subject to higher risks of 
politically motivated staff turn-over than in a fully career-based system. The total number of 
public employees is about 90,000, including 15,000 in local and regional administrations. Of 
these, only about 5,000 are civil servants. 

The  civil  service  law  regulates  civil  servant  recruitments.  These  are  organised  for  each 
vacancy  at  a  time,  even  though  each  institution  has  to  communicate  its  forecasts  for  new 
recruitments a year in advance. The law provides for open competitions as the only means of 
recruiting civil servants. Most stages of open competitions are transparent. However, the final 
stage  and  the  recruitment  decision  is  left  exclusively  to  the  discretion  of  the  line  manager 
concerned. An exception to the rule of open competitions is temporary employment. Over the 
last few years there has been a relatively high share (on average more than 20%) of vacancies 
filled by employees under temporary contracts. Most staff recruited on a temporary basis tend 
to be confirmed subsequently in open competitions. The government has issued an order on 1 
October  2010,  which  aims  at  limiting  the  use  of  temporary  contracts  for  employment;  this 
decision and its implementation need to be verified in practice. There has in general been a 
high  turnover  of  civil  servants  in  recent  years  due  to  politicisation  of  recruitment  practices. 
The  existing  position-based  career  system  has  provided  for  the  possibility  to  make  civil 
servants redundant as a result of restructuring of ministries by incoming new ministers. These 
practices undermine the procedures and principles under the civil service law for merit-based 
appointments and lower the overall capacity of public administration. 

EN 

15 

  EN 

The civil service law lays down procedures for horizontal mobility and for promotion through 
competition  of  civil  servants.  However,  these  procedures  have  been  applied  rarely  in  recent 
years. 

Since 2006 the government has been implementing a policy to increase salaries in the public 
service,  applying  different  rates  according  to  the  sectors  (the  largest  increases  were  in  the 
education and healthcare sectors). Salary increases have continued in 2009 and 2010 despite 
global  pressures  for  budgetary  restraints,  which  helps  to  reduce  the  income  gap  between 
public and private sector and staff turn-over as a result. 

There is a Code of Ethics dating from 2003 which is binding on civil servants. However, part 
of  the  Code  of  Ethics  is  eschewed  as  not  legally  enforceable  because  some  concepts  are 
contradictory. The Code also regulates some procedures for dealing with conflicts of interest. 
Submitting  conflict  of  interest  declarations  is  a  requirement  strictly  enforced  by  the 
Department of Public Administration (DoPA), but the correctness of such declarations is not 
checked. 

The  strategy  for  public  administration  reform  (PAR)  and  corresponding  action  plan  of 
September 2009 aim to address shortcomings in the functioning of the public administration; 
they specifically include review of the civil service law and institutional strengthening of the 
legislation.  The  necessary 
management  authorities 
amendments to the civil service law need to be undertaken in a cooperative environment with 
involvement  of  all  stakeholders.  It  will  require  political  will  and  political  consensus  on  the 
need for and scope of public administration reform, as the law requires a qualified majority in 
parliament. 

the  civil  service 

implementing 

Two  institutions  are  responsible  for  managing  and  monitoring  the  management  of  the  civil 
service at state level. Department of Public Administration has the task of managing the civil 
service  in  central  institutions,  while  in  independent  institutions  the  respective  human 
resources units  exercise this function.  DoPA also has a central role in public administration 
reform.  The  Civil  Service  Commission  (CSC)  supervises  the  legality  of  management 
decisions  concerning  the  civil  service  and  decides  on  appeals  by  civil  servants  in  all  areas 
connected  with  the  civil  service  law.  In  addition,  the  Training  Institute  for  Public 
Administration (TIPA) is in charge of training civil servants. 

The  administrative  resources  and  organisational  capacity  of  DoPA  are  insufficient  and 
accordingly  need  strengthening  in  the  light  of  its  dual  task  of  overseeing  the  PAR  and 
monitoring implementation of the civil service law. Raising and maintaining the institutional 
capacity of the Civil Service Commission, as well as insuring better enforcement of the CSC 
decisions by the state administrative bodies are of particular importance for the enforcement 
of the rights and duties of Albanian civil servants. 

There are no specific administrative courts in Albania. Judicial review of administrative acts 
is carried out by the administrative sections within the first instance courts, in accordance with 
the  provisions  of  the  Civil  Procedure  Code.  Appeals  against  decisions  of  the  first  instances 
can  be  lodged  according  to  general  procedural  rules,  to  appeal  courts  and  the  High  Court. 
However,  the  existing  mechanisms  for  judicial  review  of  administrative  acts  are  quite  often 
inefficient.  A  draft  law  intended  to  form  the  basis  for  administrative  courts  in  Albania  is 
pending adoption in Parliament by qualified majority. 

EN 

16 

  EN 

The  High  State  Control  (HSC)  is  the  supreme  audit  institution  (SAI)  in  Albania  (see  also 
chapter 32 on financial control). The constitution provides the HSC with a broad remit and the 
mandate  to  carry  out  different  types  of  audits.  The  HSC  is  a  member  of  EUROSAI  since 
1993.  As  the  HSC  is  not  legally  required  to  audit  all  government  entities  annually,  current 
resources  are  broadly  satisfactory.  In  the  long  term  the  SAI  needs  to  develop  its  capacity 
further.  Reporting  to  the  Parliament  and  the  follow-up  of  audit  recommendations  by  state 
institutions need to be improved. 

The  Law  on  the  Ombudsman  (People's  Advocate)  gives  the  Ombudsman’s  Office  the 
mission to safeguard the rights, freedoms and lawful interests of individuals from unlawful or 
improper  actions  or  failure  to  act  by  institutions  of  the  public  administration  and  private 
bodies  acting  on  behalf  of  the  state.  Moreover,  the  Ombudsman’s  Office  monitors  the 
implementation of laws on transparency and internal control, including the Law on access to 
public 
timely 
recommendations  in  its  areas  of  competence.  However,  these  are  insufficiently  put  into 
practice by government institutions. Its work is hampered by lack of resources and lately by 
budget reductions and the pending election of the new Ombudsman. (See also Section 1.2 on 
human rights and minorities) 

information.  The  Ombudsman’s  Office  has  provided 

solid  and 

Overall, the general administrative law framework and the civil service system are mostly in 
line with European principles and standards, although some gaps exist. Proper implementation 
of the legal framework remains a concern as does the lack of transparency and accountability 
in  appointments  and  the  politicisation  of  the  public  administration.  Political  will  and  strong 
efforts are necessary for the full implementation of the civil service law and progress with the 
public  administration  reform  strategy,  which  are  necessary  for  the  establishment  of  a  civil 
service that is independent, professional and based on merit. The pending election of a new 
Ombudsman  as  well  as  the  insufficient  respect  of  this  institution's  recommendations  is  of 
concern. 

1.1.4. 

Judicial system (See also Chapter 23 — Judiciary and fundamental rights)  

The judicial system is based on the Constitution of 1998, and is organised in three instances, 
courts of first instance, courts of appeal and the High Court. Albania has 22 first-instance 
courts,  six  appeal  courts,  one  first-instance  serious  crime  court,  one  serious  crimes  appeal 
court, and one High Court.  

Judges of first instance and appeal courts are appointed by the President of the Republic on a 
proposal from the High Council of Justice. The President appoints the members of the High 
Court with the consent of parliament (by simple majority). The President and members of the 
High Court hold office for nine years without the right to reappointment. The High Court is 
the final national instance in civil and criminal cases. In addition, it has original jurisdiction 
when adjudicating criminal charges against the President of the Republic, the Prime Minister, 
members  of  the  Council  of  Ministers,  MPs,  judges  of  the  High  Court,  and  judges  of  the 
Constitutional Court. Being the highest instance of the judiciary in Albania, the High Court 
plays a specific role in ensuring unified application of case-law. 

The Constitutional Court is composed of nine judges, who are appointed for a single term of 
nine  years  by  the  President  of  the  Republic  with  the  consent  of  parliament  (by  simple 
majority). The court decides on the conformity of laws as well as other regulations, such as 
international agreements, with the Constitution. Where judges consider a law unconstitutional, 

EN 

17 

  EN 

they suspend the proceedings and send the question to the Constitutional Court. Decisions of 
the Constitutional Court are binding on all courts. 

The  Constitutional  Court  has  asserted  increasing  independence  since  2005,  by  issuing 
decisions  that  on  several  occasions  annulled  legislative  acts  passed  by  majority.  However, 
there are concerns, amplified by the current political deadlock, over the politicisation of the 
consent  vote  in  parliament  of  the  President's  appointment  of  judges  to  the  Constitutional 
Court. This risks jeopardising the impartiality and independence of this institution. 

The  High  Council  of  Justice  consists  of  the  President  of  the  Republic,  the  President  of  the 
High Court, the Minister of Justice, three members elected by parliament (by simple majority) 
and  nine  judges  of  all  levels  elected  by  the  National  Judicial  Conference.  Elected  members 
stay  in  office  for  five  years.  The  Council  is  responsible  for  the  protection,  appointment, 
transfer, dismissal and professional evaluation of judges of first instance and appeal.  

Replacements of judges in  the  High  Council are currently blocked by the suspension  of the 
Law on the National Judicial Conference. Amendments to this law need to be adopted by a 
qualified (three-fifths) majority in parliament. 

The  High  Council  of  Justice  does  not  have  competence  over  the  High  Court,  which  is 
politically  appointed  and  has  an  extraordinary  position  within  the  judicial  system.  The 
exclusion of the highest instance court from the arrangements applicable to the lower courts 
weakens the independence of the judiciary as a whole.  

The  Prosecutor’s  Office  conducts  criminal  investigations,  brings  prosecutions  to  court  on 
behalf of the state and performs other duties laid down by law. Prosecutors are organised and 
operate as a centralised body attached to the judicial system. In the exercise of their powers, 
prosecutors are subject to the Constitution and the laws. 

The General Prosecutor is appointed by the President of the Republic with the simple majority 
consent  of  parliament,  for  a  five-year  term,  with  the  right  to  be  reappointed.  The  other 
prosecutors  are  appointed  by  the  President  of  the  Republic  on  a  proposal  by  the  General 
Prosecutor.  The  prosecutor’s  office  operates  according  to  instructions  given  by  the  General 
Prosecutor,  as  a  centralised  structure  which  includes  the  General  Prosecutor’s  Office,  the 
Prosecutorial Council as well as the prosecutor’s offices within the judicial system.  

The  Prosecutorial  Council  is  composed  of  six  prosecutors  and  one  representative  of  the 
Minister of Justice and carries out advisory functions, assisting the General Prosecutor. The 
prosecutorial system is highly centralised and hierarchical. It is considered to belong neither 
to the judiciary nor to the executive. The autonomy of prosecutors is guaranteed in the trial 
phase,  but  is  limited  in  the  investigative  phase,  which  impairs  its  efficiency.  A  pro-active 
approach  to  investigations  and  more  widespread  use  of  modern  investigation  methods  are 
both  lacking.  The  General  Prosecutor’s  Office  has  undertaken  steps  to  improve  its 
functioning,  with  the  approval  of  several  internal  orders  regarding  its  internal  organisation. 
Nonetheless, further efforts are needed to implement the new regulations. The independence 
and  accountability  of  the  prosecutorial  system  is weakened in particular by  the  fact that the 
General  Prosecutor’s  appointment  depends  on  the  simple  majority  consent  of  parliament; 
moreover, there is a lack of sound evaluation and inspection systems for prosecutors. 

The  School  of  Magistrates  is  in  charge  of  initial  and  continuous  training  of  judges  and 
prosecutors.  Admission  to  the  School  is  subject  to  a  public  competition  with  written  and 
anonymous  exams.  The  best  candidates  from  the  written  competition  have  the  right  to 

EN 

18 

  EN 

commence the initial training of three years towards obtaining the title of magistrate based on 
a decision by the Leading Council of the Magistrates’ School. This system is helping overall 
to  improve  the  qualification  of  magistrates  and  to  increase  the  transparency  of  recruitment 
procedures. 

The principle of independence of the judiciary is provided for in the Constitution and relevant 
legislation. The duration of the office of judges (except  Constitutional Court judges) cannot 
be  limited;  their  pay  and  other  benefits  cannot  be  lowered.  However,  there  are  important 
obstacles  to  effective  independence.  The  politicisation  of  the  appointment  of  judges  to  the 
High  and  Constitutional  Courts  undermines  the  neutrality  and  independence  of  these 
institutions.  

The  independence  and  calibre  of  the  judiciary  is  also  weakened  by  the  lack  of  sound 
evaluation  systems  for  judges  as  well  as  by  the  lack  of  merit-based  appointments  and 
transfers. Appointments to the first and subsequent positions of judges in the district courts and 
the appeal courts are made by the President of the Republic on proposals by the High Council 
of Justice. Conditions and competitive procedures for selection are laid down by law. One of 
the criteria for first appointment is that candidates must have graduated from the Magistrates’ 
School.  However,  10%  of  all  judges  may  be  appointed  without  having  completed  the 
Magistrates’ School, the only criteria being that they must have previously worked as a judge. 
Promotions and transfer appointments to higher courts are based on evaluation systems, which 
lack  transparency  as  well  as  a  systematic  and  consistent  application.  In  addition,  when 
proposing  candidates  for  appointment,  transfers  or  directive  posts,  the  Council  does  not 
provide any reasons for its decision. There are for candidates no procedures or provisions for 
an appeal against  decisions or for  a  judicial review. The latter is also due to the absence of 
administrative  courts,  the  establishment  of  which  is  foreseen  through  a  draft  law,  which  is 
pending  qualified  majority  in  parliament.  Such  a  lack  of  accountability,  transparency  and 
possibility of appeal creates risks of political interference and corruption. 

Courts  have  a  separate  budget  which  they  propose  pursuant  to  the  law  and  administer 
themselves. However, budgetary appropriations for the judiciary overall remain insufficient. 

Accountability of the judiciary is ensured by inspections undertaken by two institutions. The 
inspectorate of the High Council of Justice carries out inspections both on own initiative and 
based on complaints from citizens. It also undertakes professional assessments/evaluations of 
judges every three years. The Ministry of Justice conducts inspections of first-instance courts 
and  appeal  courts  focusing  on  the  organisation  and  work  of  judicial  services  and  judicial 
administration, according to specific thematic or territorial programmes.  

However, there is overlap and lack of coordination between the two inspectorates. Both the 
Ministry  of  Justice  and  the  HCJ  have  competencies  and  apply  procedures  that  do  not  fully 
comply with European standards regarding inspections of judges and courts. The evaluation 
of judges lacks transparency. The initiative for disciplinary procedures is in the sole hands of 
the  Minister  of  Justice,  without  any  balance  or  control.  Due  to  the  fact  that  the  absence  of 
disciplinary  procedures  is  a  key  element  for  judicial  careers,  there  is  a  concrete  risk  of 
interference  from  the  government  in  this  key  area.  As  a  result,  accountable  and  efficient 
inspection  systems  and  disciplinary  proceedings  for  judges  are  not  in  place.  In  addition, 
preventive measures against corruption in the judiciary are insufficient. 

The principle of equality before the law and the right to trial by impartial courts is foreseen by 
the  Constitution.  The  Code  of  Judicial  Ethics  was  introduced  by  the  National  Judicial 

EN 

19 

  EN 

Conference in 2000 and has been overseen by it since then. A computerised case management 
system and random allocation of cases in both criminal and civil proceedings are in place in 
most  judicial  offices.  However,  problems  with  the  random  allocation  of  cases  persist  in 
practice  notably  due  to  a  lack  of  consistent  approach  in  all  courts,  and  a  lack  of  necessary 
guidance  and  training.  Further  efforts  are  needed  to  have  a  fully  uniform  and  harmonised 
integrated case management system functioning and used in all courts. 

The  judiciary  suffers  from  problems  of  transparency  and  efficiency.  There  are  serious 
obstacles to the investigation of corruption cases in the judiciary notably due to the fact that, 
by law, judges enjoy full immunity. The immunity of judges can only be lifted on a decision 
of  the  High  Council  of  Justice,  which  substantially  reduces  the  effectiveness  of  possible 
investigation  (See  also  Section  1.1.5  on  corruption).  Court  management  is  poor  due  to  the 
lack of human and financial resources, in particular in first-instance district courts. There is no 
sound and adequate organisation and training of court administrators. Unreasonable delays in 
judicial  proceedings  are  of  concern  as  is  the  high  backlog  of  cases.  Court  proceedings  are 
slow  and  the  number  of  trial  sessions  for  a  case  is  high.  In  addition,  proceedings  are  often 
delayed  or  outright  stalled  by  defendants.  Working  conditions  in  courts  remain  poor  and 
hearings often take place in judges’ offices, hampering transparency and efficiency. Concerns 
over the security of judges persist. Currently, the Ministry of Justice is preparing amendments 
to the Civil Procedure Code and the Civil Code aimed at tackling these deficiencies.  

There is corruption in the judiciary, risks to the independence of judges, as well as a lack of 
transparency and accountability of many procedures and a lack of efficiency in general of the 
justice system. As a consequence, public perception indicators highlight a very low level of 
trust in the judiciary. High-profile cases are rare and where they are prosecuted, they mostly 
do  not  lead  to  convictions.  There  have  been  cases  where  the  General  Prosecutor’s  Office 
completed  the  investigation  but  the  trial  was  delayed  on  procedural  grounds  and  eventually 
suspended because of the immunity of the defendant. Such inertia contributes to the overall 
perception that high-level figures are not prosecuted on the grounds of political and economic 
power. 

Albania has undertaken reforms in the judiciary in recent years including both improving the 
justice  infrastructure  and  drafting  legislation  aligned  with  European  standards.  However, 
Albania  lacks  a  comprehensive  long-term  reform  strategy  for  the  judiciary.  In  this  respect, 
consensus  and  inter-institutional  cooperation  on  the  need  for  judicial  reforms  are  important. 
The lack of relevant resources at the policy and technical level within the Ministry of Justice 
hampers  the  effective  implementation  of  reforms  in  the  sector.  Coordination  with  the  High 
Council  of  Justice  on  judicial  reform  has  been  insufficient.  Furthermore,  adequate 
consultation  mechanisms  and  assessments  of  the  financial  and  institutional  impact  of 
legislation are not always implemented. There can be confusion about the initiator and drafter 
of  laws  in  the  justice  sector.  In  December  2009,  the  Ministry  of  Justice  created  a  working 
group  to  prepare  the  justice  sector  strategy.  Important  pieces  of  legislation  to  complete  the 
legal  framework  have  not  been  adopted,  including  the  Laws  on  the  National  Judicial 
Conference, on administrative justice and on judicial administration. In particular, the law on 
administrative  justice  should  be  finalised  and  passed  in  a  reasonable  timeframe,  in  order  to 
fulfil the existing gaps in this area. 

The right to defence counsel is not mandatory in a very wide range of cases. This is a concern. 
The  quality  of  services  provided  by  lawyers  is  frequently  considered  insufficient  by  judges. 
There are numerous cases of lawyers using delaying tactics in court cases such as not showing 
up at hearings, without facing disciplinary procedures from the Chamber of Advocates. 

EN 

20 

  EN 

Enforcement  of  decisions  is  weak,  in  particular  in  cases  where  state  institutions  are  the 
defendants.  The  European  Court  of  Human  Rights  in  Strasbourg  has  ruled  on  several 
occasions against Albania for non-enforcement of its judgments. The law on the new bailiff 
services,  approved  in  2008,  has  still  not  fully  entered  into  effect.  The  private  bailiff  system 
has  not  yet  started  to  function  and  no  sound  case  management  for  bailiffs  is  in  place. 
Provisions  of  relevant  and  financial  resources  from  the  state  budget  for  the  execution  of 
decisions  against  state  bodies  could  also  improve  the  enforcement  of  decisions.  The  recent 
appointment  of  the  State  Commission  for  Legal  Aid  is  a  positive  development  to  promote 
access  to  justice  and  will  lead  to  enforcement  of  implementation  of  the  Law  on  legal  aid 
which was adopted in 2008.  

Overall, Albania lacks a tradition of judicial independence. It needs to continue the process of 
reforming  the  judiciary,  including  the  adoption  of  a  comprehensive  judicial  reform  strategy 
and  key  pending  laws  and  the  establishment  of  a  sustained  track  record  of  implementation 
demonstrating  the  independence  and  efficiency  of  the  judiciary.  It  will  need  to  address  the 
lack  of  independence,  transparency  and  accountability  in  the  appointment,  transfer  and 
evaluation  of  judges  as  well  as  necessary  improvements  to  the  system  for  inspecting  the 
judiciary. The fact that the parliament votes on the appointment of judges to the High Court 
and Constitutional Court entails strong risks of politicisation and hence of a weakening in the 
independence  of  the  institutions.  Adequate  human  and  financial  resources  as  well  as 
infrastructure conditions are needed to ensure the efficient functioning of courts. Albania also 
needs to address corruption in the judiciary, taking into consideration all the relevant aspects, 
including salaries, immunity, security, and the politicisation of key appointments. 

1.1.5.  Anti-corruption policy (See also Chapter 23 — Judiciary and fundamental rights) 

In  recent  years,  Albania  has  undertaken  coordinated  efforts  to  establish  a  legal  and 
institutional  framework  for  fighting  corruption  in  certain  fields.  However,  corruption  is 
prevalent in many areas and is a particularly serious problem. 

Albania  has  adopted  several  anti-corruption  measures  and  laws.  The  Criminal  Code 
criminalises the main forms of corruption and the Criminal Procedure Code includes key tools 
for fighting corruption, including special investigative measures. Amendments to the Criminal 
Code introduced provisions on public sector bribery as well as completely new provisions on 
private sector bribery and trading in influence. 

In  2008,  an  intersectoral  strategy  on  preventing  and  combating  corruption  was  adopted.  A 
general  action  plan  to  implement  the  strategy  is  drafted  each  year  and  endorsed  by  an 
interministerial  working  group.  The  2010  action  plan  is  more  specific  and  includes 
measurable  indicators,  which  should  facilitate  implementation  and  monitoring.  Individual 
plans are also adopted by line ministries and their implementation is part of an overall annual 
reporting system.  

The Department for Internal Administrative Control and Anti-Corruption (DIACA) performs 
internal  controls  on  the  administration  and  is  the  administrative  body  in  charge  of 
coordinating the activities decided by the inter-ministerial working group.  

Albania has a Law on the declaration and auditing of civil servants’ assets and a Law for the 
prevention  of  conflicts  of  interest  while  engaged  in  public  work.  The  High  Inspectorate  for 
Declaration  and  Audit  of  Assets  (HIDAA)  is  in  charge  of  receiving  and  verifying  the  asset 
declarations of public officials and checking that their positions are compatible with the Law 

EN 

21 

  EN 

on conflicts of interest. HIDAA can take administrative measures against civil servants failing 
to submit their declarations and can notify the prosecutor’s office in case of non-compliance 
with  the  laws.  HIDAA  is  starting  to  produce  satisfactory  results;  however,  further 
improvement of cooperation with law enforcement and prosecution offices is needed to make 
full use of analysis and investigations into asset declarations. 

In  the  Ministry  of  the  Interior,  an  Internal  Control  Service  (ICS)  has  been  established  to 
investigate corruption cases in the police. It has produced some results. Several traffic police 
officers have been investigated and dismissed for taking bribes.  

Joint  Investigative  Units  (JIUs)  for  economic  crimes  and  corruption  were  established.  They 
are based in Tirana and six other cities and are intended to improve the coordination efforts of 
law  enforcement  agencies.  The  JIUs  are  composed  of  police  staff  from  the  prosecutor’s 
offices, the state, customs and tax police and other relevant institutions.  

E-procurement systems have been introduced in the public administration in order to reduce 
personal  contacts  between  contracting  authorities  and  bidders  and  therefore  reduce 
opportunities  for  bribery.  Reforms  have  been  introduced  in  the  education  sector  (e.g. 
electronic database for enrolments and anonymous entry exams) and health sector (e.g. new 
regulation on the referral system) in a bid to step up the fight against corruption in these areas. 
However,  newly  introduced  measures  and  policies  will  have  to  prove  their  effectiveness  in 
practice. 

Despite  an  improved  legal  and  institutional  framework,  corruption  across  many  sectors  and 
institutions remains at high levels, with certain sectors and areas particularly affected, notably 
the  judiciary,  the  health  sector  and  property  rights,  but  also  public  procurement  and  party 
funding. 

There  are  gaps  in  the  legal  framework  for  the  fight  against  corruption.  Cases  of  bribery  of 
foreign public officials are not covered by the Criminal Code. More importantly, even if the 
immunity granted to a large group of public officials (MPs, ministers and judges) is meant to 
increase  their  independence,  it  has  proven  to  be  a  serious  obstacle  to  the  investigation  of 
corruption,  which  increases  the  risk  for  this  phenomenon.  Immunity  can  only  be  lifted  by 
Parliament  or  High  Council  of  Justice  decisions.  This  is  complicated,  time-consuming, 
prevents efficient investigation and is rarely successful.  

There are gaps in the institutional set-up for the fight against corruption. DIACA’s capacities 
for playing a coordination role in the context of the strategy and action plan are limited due to 
lack of resources. Monitoring of implementation of the action plan by DIACA and corruption 
reporting  and  statistics  in  particular  are  insufficient.  In  general,  the  entire  sector  of 
administrative  inspections  is  a  matter  of  concern  in  terms  of  vulnerability  to  corruption  and 
capacity to ensure integrity and transparency in administrative practice. The Internal Control 
Service  of  the  Police  has  produced  results  mainly  on  petty  corruption  cases.  Cooperation 
between the different institutions involved in fighting corruption outside the JIUs needs to be 
further strengthened. Resources for fighting corruption remain limited. This includes the low 
salaries of prosecutors and judges, the number of qualified staff but also limited resources for 
investigation and proper court practice.  

An  increasing  number  of  corruption  cases  have  been  investigated  and  prosecuted,  but 
conviction rates remain very low. There is no track-record of investigation, prosecution and 

EN 

22 

  EN 

conviction of high-level corruption cases. The immunity of judges is lifted only rarely. These 
factors consolidate the general prevailing culture of impunity. 

Despite  ministerial  involvement  in  the  anti-corruption  task  force  and  working  group,  and 
outspoken  high-level  political  commitment,  the  actual  results  of  the  fight  against  corruption 
do not live up to expectations. 

Outside  the  central  institutional  levels,  there  is  a  lack  of  general  awareness  of  the  legal 
framework and mechanisms in place to fight corruption. Also, the lack of public knowledge 
of  the  duties  of  certain  institutions  and  the  rights  of  citizens  (e.g.  health  sector,  judiciary) 
exacerbates the feeling of inevitability of corruption, particularly in certain areas. 

Overall,  Albania  has  made  efforts  in  recent  years  to  establish  a  legal  and  institutional 
framework for fighting corruption and has produced some initial results. However, corruption 
is prevalent in many areas and is a particularly serious problem. Albania needs to complete 
the  legal  framework  addressing  GRECO  recommendations  and  concerns  over  the  unlimited 
immunity of certain public officials. Efficient implementation of the anti-corruption strategy 
and  action  plan  needs  to  be  demonstrated  and  a  proven  track  record  of  convictions  in 
corruption  cases  established  at  all  levels.  Areas  of  particular  concern  are  the  judiciary,  the 
health sector, property rights and funding of political parties. 

1.1.6.  Civilian oversight of security forces 

Civilian control over the armed and security forces and intelligence services is regulated by a 
comprehensive legal and policy framework including the constitution and laws regulating the 
different  forces.  Parliament  is  the  highest  authority  for  civilian  control  over  armed  and 
security  forces  and  intelligence  services.  Other  important  institutions  with  control  functions 
provided by law include the president, the prime minister, the High State Control, the Office 
of the General Prosecutor, the Ombudsman, and the General Inspector. 

Security  forces  in  Albania  are  divided  into  three  main  categories:  the  armed  forces,  police 
forces and security services. 

As  regards  the  armed  forces;  the  General  Staff  Headquarters,  the  Albanian  Joint  Forces 
Command,  the  Albanian  Support  Command  and  the  Albanian  Training  and  Doctrine 
Command are all under the purview of the Ministry of Defence. These all have military status 
and include a number of civilian employees.  

The  police  forces  are  composed  of:  the  Albanian  State  Police,  which  is  the  national  police 
force, tasked with the maintenance of public order and the fight against crime; the Municipal 
Police  Forces,  which  serve  under  the  authority  of  local  government  entities  and  the 
Republican Guard which is a constabulary force tasked with protecting government property 
and  dignitaries  and  which  has  military  status  and  powers  of  arrest.  There  are  inspectorates 
within  line  ministries,  the  members  of  which  have  the  attributes  of  Judicial  Police  officers 
(competent to identify and process violations of laws and reporting to the Public Prosecutor). 

The security services are divided between the Internal Security Service, which is tasked with 
confronting  national  security  threats,  and  the  Military  Intelligence  Service,  which  deals 
primarily with external security threats. 

Parliamentary  oversight  over  the  security  sector  is  executed  through  several  committees 
within  parliament,  with  the  Security  Committee  and  the  Laws  Committee  being  the  most 

EN 

23 

  EN 

relevant ones. They conduct periodic hearings of officials on security sector issues. However, 
the  capacity  of  these  committees  and  their  legal  powers  to  perform  effective  oversight 
functions  in  a  system  of  checks  and  balances  are  insufficient.  In  addition,  while  political 
direction  or  the  development  of  security  policies  is  indeed  within  the  remit  of  ministers, 
political interference with the security sector still exists and extends to the lower grades of the 
hierarchy. 

Overall,  civilian  control  over  the  armed  and  security  forces  and  intelligence  services  is 
regulated by a comprehensive legal and policy framework, which establishes the parliament 
as highest oversight institution. Parliamentary oversight over the security sector suffers from 
weaknesses and political interference. 

1.2. 

Human rights and the protection of minorities (See also Chapter 23 – Judiciary 
and fundamental rights) 

Observance of international human rights law 

Respect  for  human  rights  and  the  protection  of  minorities  are  enshrined  in  the  Constitution 
and  in  a  number  of  legislative  provisions.  Albania  has  ratified  most  human  rights 
instruments;  these  are  part  of  the  internal  judicial  system  and  are  directly  applicable  after 
publication in the Official Journal. Albania joined the Council of Europe in 1995, and ratified 
the  European  Convention  on  Human  Rights  in  1996.  To  date,  the  European  Court  of 
Human Rights (ECtHR) has delivered 29 judgments concerning Albania. The Court mainly 
found  breaches  of  the  right  to  a  fair  trial  within  a  reasonable  time,  the  right  to  an  effective 
remedy and the right to peaceful enjoyment of possessions. As of September 2010, there were 
287 cases pending before the ECtHR regarding Albania.  

As regards the promotion and enforcement of human rights, the Office of the Ombudsman 
(the People's Advocate) is the main domestic human rights institution. It has played an active 
role in monitoring the human rights situation in the country, and has contributed to enhancing 
the accountability of state institutions. The Ombudsman is elected by parliament by qualified 
majority.  Due  to  the  ongoing  political  stalemate,  election  of  the  new  Ombudsman  has  been 
pending since February 2010. The main fields in which the Ombudsman has intervened relate 
to property disputes, police abuse, undue length of judicial proceedings, non-enforcement of 
judgments  in  civil  cases  and  unfair  dismissals.  He  has  also  repeatedly  expressed  particular 
concern over inadequate conditions in prisons, pre-trial detention centres and police stations, 
corruption  in  the  judiciary  and  difficult  living  conditions  of  the  Roma  minority.  The 
Ombudsman’s  recommendations  are 
into  practice  by  government 
institutions. His annual report to parliament has been vehemently criticised by some MPs. The 
work of the Office is hampered by lack of resources and recent significant budget reductions 
are  a  matter  of  concern.  These  constraints  have  meant  that  the  Ombudsman  has  only 
marginally  used  his  ex  officio  power.  The  independence  of  this  body  needs  to  be  ensured 
through appropriate allocation of resources.  

insufficiently  put 

The institutional framework on human rights has been reinforced through the creation of an 
equality  body.  In  accordance  with  the  Law  on  protection  from  discrimination,  passed  in 
February 2010, the Commissioner for protection from discrimination, was appointed in April 
2010.  The  Commissioner  has  the  authority  to  receive  complaints  relating  not  only  to  the 
public sector, but also to the private sector and individuals and has the power to impose fines 
for breaching the law. However, the Office is not yet fully operational.. An adequate funding 

EN 

24 

  EN 

of  the  Office  is  essential  to  ensure  its  capacity  to  examine  complaints  and  to  undertake 
awareness-raising activities to implement the principle of equal treatment. 

Trainings on issues relating to human rights have taken place, in particular for police officers, 
however, awareness and sensitivity to human rights issues on the part of the administration, 
the judiciary and law enforcement authorities need to be reinforced. 

Civil and political rights 

The protection of the right to life is enshrined in the Constitution. Albania ratified Protocol 
No 13 to the European Convention on Human Rights abolishing the death penalty under all 
circumstances in 2007. The number of blood feud killings has decreased, due notably to better 
policing.  Specific  criminalisation  of  blood  feuds  and  blood  feud  killings,  the  creation  of 
specialised  police  units  and  the  establishment of  a  high-level  Coordination  Committee  have 
been important steps in this field. However, the incidence of these killings continues to result 
in the families concerned being self-isolated due to fear of reprisals, thus depriving children of 
basic  rights  such  as  inclusive  education.  The  government  has  taken  measures  to  improve 
access  to  education  of  isolated  children  notably  through  its  "second  chance"  programme. 
Additionally,  several  NGOs  have  been  active  in  this  field,  providing  support  to  affected 
families  and  contributing  to  increased  awareness  of  the  need  to  eradicate  this  phenomenon. 
Collection of reliable data on blood feud killings is required in order to measure the extent of 
the problem and address it adequately. Community education, outreach and measures aimed 
at reconciliation of families are also needed.  

Albania has made efforts to ensure access to justice with the adoption in December 2008 of 
the  Law  on  legal  aid,  under  which  free  legal  services  in  civil,  criminal  and  administrative 
proceedings are to be provided to different categories of persons. However, challenges remain 
in  this  area.  The  members  of  the  State  Commission  for  legal  aid  have  been  appointed,  and 
have started work, although with much delay, thus hampering the effective implementation of 
the  law.  The  substantial  increase  in  judicial  administration  fees  introduced  in  March  2010 
risks  limiting  access  to  justice  for  the  economically  underprivileged,  particularly  since 
individuals  benefiting  from  the  free  legal  aid  scheme  are  not  exempt  from  the  payment  of 
court fees.  

The prison system and pre-trial detention in Albania have been considerably improved since 
the  transfer  of  responsibility  from  the  Ministry  of  the  Interior  to  the  Ministry  of  Justice  in 
2007. Investments have been made to develop penitentiary facilities and new administrative 
measures  taken  to  improve  food  quality  and  the  frequency  of  outdoor  breaks,  resulting  in 
improved  living  conditions.  Vocational  training  is  available  for  detainees  in  15  of  the  21 
penitentiary  institutions,  with  570  persons  following  such  courses,  notably  juveniles. 
Overcrowding  has  been  reduced,  in  particular  through  the  introduction  of  alternative 
sentencing and a probation system.  

Nonetheless, penitentiary centres continue operating permanently above capacity and overall 
conditions remain below standards, especially in some of the older prisons, pre-trial detention 
centres  and  police  stations.  Further  efforts  are  needed  to  reach  international  and  European 
standards in the treatment of persons deprived of their liberty. In this respect, inspections of 
the activity of penitentiary institutions need to be further strengthened and the training system 
for prison officers further developed. Also, the excessive use and length of pre-trial detention 
is worrying, especially in the case of juvenile offenders. Access to adequate medical services, 
particularly psychological and psychiatric care, is not always available. Measures need to be 

EN 

25 

  EN 

taken  for  the  appropriate  treatment  of  detainees  with  mental  health  disorders  and  their 
placement in an adequate psychiatric institution needs to be ensured.  

Albania  has  taken  measures  to  combat  torture  and  ill-treatment  by  the  police  and  prison 
staff, and to prosecute perpetrators. The country is party to the UN Convention against torture 
and other cruel, inhuman or degrading treatment or punishment and its optional protocol and 
it  ratified  the  European  Convention  for  the  prevention  of  torture  and  inhuman  or  degrading 
treatment  or  punishment  in  1996.  Following  recommendations  by  the  Ombudsman,  a  legal 
definition  of  the  crime  of  torture  was  included  in  the  Criminal  Code  (Article  86).  Internal 
controls  have  been  introduced  within  the  prison  system  to  prevent  and  detect  cases  of 
excessive use of force. Capacity-building training sessions have been delivered to prison staff, 
in  cooperation  with  NGOs.  In  June  2010  the  Directorate  General  for  Prisons  renewed  the 
memorandum signed with certain NGOs granting them access to penitentiary institutions.  

The  National  Prevention  Mechanism,  created  in  2008  within  the  Ombudsman’s  Office,  is 
responsible  for  monitoring  places  of  detention  and  treatment  of  persons  deprived  of  their 
liberty. The Ombudsman has competence over places of detention and pre-trial detention but 
also military bases, hospitals for quarantine, transit halls of airports and psychiatric facilities. 
However,  the  Office  is  underfunded  and  does  not  have  the  necessary  social,  forensic, 
psychological  and  psychiatric  expertise,  which  is  often  offered  by  NGOs.  The  issue  of  ill-
treatment remains a concern as cases of physical and psychological ill-treatment are still being 
reported, in particular in police custody. Despite increased visibility, such cases are still often 
resolved with administrative rather than penal sanctions. Further measures need to be taken to 
implement  recommendations  of  the  Ombudsman  and  of  the  European  Committee  for  the 
Prevention of Torture.  

The Albanian government has adopted strategies encompassing concrete measures regarding 
prevention  of  trafficking  in  human  beings,  protection  and  assistance  to  victims,  and 
prosecution  of  perpetrators.  The  Office  of  the  National  Anti-trafficking  Coordinator 
implements  the  strategy,  and  works  to  increase  public  awareness  in  order  to  prevent  people 
trafficking. Focus has been put on identification of victims and the functioning of the national 
victim  referral  mechanism.  The  government  cooperates  with  NGOs  for  the  provision  of 
assistance  to  victims  of  trafficking  and  provision  of  funds  for  NGO-run  shelters.  However, 
despite a decline in numbers, Albania still remains a country of origin for persons trafficked 
for  sexual  exploitation  and  forced  labour.  Internal  trafficking  constitutes  an  issue  of  serious 
concern. Improved coordination among relevant authorities and intensified cooperation with 
NGOs  is  needed  to  increase  detection  and  referral  of  victims.  The  effective  prosecution  of 
perpetrators needs to be ensured through the development of proactive investigation methods 
and safety guarantees for victims who testify in court proceedings.  

The right to privacy is guaranteed by the Constitution and the Criminal Code; protection of 
personal data is ensured by the Law on the protection of personal information. Pursuant to 
this  law,  the  Office  of  the  Commissioner  for  Data  Protection  was  set  up  with  the  aim  of 
reviewing complaints related to personal data. Implementation of the law needs consolidation. 

Freedom of expression (including the media) is guaranteed by the Constitution and relevant 
laws. The media in Albania is pluralistic and presents a high number of different outlets. Most 
newspapers, radio- and TV-stations are concentrated in the capital, with some recent attempts 
at  developing  local  media.  Political  influences  over  the  media  and  their  use  as  propaganda 
tools by political parties or influential businessmen create conditions for biased reporting and 
self-censorship  of  journalists.  The  climate  in  which  the  media  operates  remains  an  issue  of 

EN 

26 

  EN 

concern  as  it  impedes  the  development  of  editorial  independence.  Political  and  economic 
pressures and occasional threats, added to the informality of work contracts, and the lack of 
adequate education and training, have a negative effect on professional standards.  

The  courts’  application  of  disproportionate  and  sometimes  selective  fines  against  media 
outlets in cases involving politicians is an issue of concern. Increased transparency regarding 
media ownership would clarify political and business implication in the sector. Provisions on 
libel and defamation in the Criminal Code have yet to be repealed. However, a moratorium 
called  by  the  Prime  Minister  preventing  government  officials  from  filing  lawsuits  against 
journalists  for  defamation  is  respected.  The  independence  of  the  public  broadcaster  and  the 
National Council on Radio and Television (NCRT) is insufficient.  

The Albanian Constitution and the Electoral Code guarantee the right to vote and stand for 
election  for  all  persons  having  reached  the  age  of  18  years.  Reforms  of  the  Electoral  Code 
have changed voter identification rules, introducing the obligation to present an identity card 
or  a  valid  passport  rather  than  a  birth  certificate.  Delays  in  the  delivery  of  identity  cards 
impeded  some  citizens  from  exercising  their  right  to  vote  during  the  last  parliamentary 
elections.  The  lack  of  civil  registration  of  many  persons  belonging  to  the  Roma  minority 
prevents them from participating in the democratic process. 

As  regards  freedom  of  assembly  and  association,  the  Constitution  and  legislation  provide 
for the right to organise collectively for any lawful purpose. Civil society actors operate in a 
non-restrictive environment and registration of new organisations is not impeded by the state 
authorities.  Progress  has  been  made  on  building  networks  of  organisations  dealing  with 
domestic violence, Roma, child trafficking, lesbian, gay, bisexual and transgendered persons 
and people with disabilities, among others. However, notwithstanding the enhanced visibility 
of  some  civil  society  organisations,  the  sector  still  remains  relatively  weak,  suffering  from 
insufficient  technical  and  financial  resources  and  dependence  on  international  donor 
assistance. Only a limited number of NGOs have strong organisational capacity and most lack 
solid management structures.  

Despite  the  adoption  of  the  Charter  for  Civil  Society,  involvement  of  civil  society 
organisations in policy making and parliamentary hearings and consultations is limited, thus 
undermining their counterbalancing power and role in democratic scrutiny. Civic engagement 
of the Albanian public remains limited and NGOs are sometimes regarded with mistrust. The 
fiscal regulatory framework for non-profit organisations needs to be further clarified through a 
consultative process with all relevant stakeholders. An Agency for the support of civil society 
tasked to allocate state funding to non-profit organisations has been established and the first 
call for proposals has been launched.  

Freedom of religion is constitutionally guaranteed in Albania. Interfaith relations are based 
on  mutual  respect  and  tolerance.  Although  Albania  has  no  official  state  religion,  the  largest 
religious  communities  (Sunni,  Bektashi,  Orthodox  and  Roman  Catholic)  enjoy  a  greater 
degree  of  official  recognition  (prioritised  restitution  of  property,  tax  exemptions)  than  other 
religious  groups.  Agreements  regulating  their  relations  have  been  signed  between  the 
government and the main religious communities, thus granting them access to state funding. 
Substantial  efforts  are  needed  to  resolve  the  issue  of  restitution  of  property  belonging  to 
religious communities. 

Economic and social rights 

EN 

27 

  EN 

As  regards  anti-discrimination  policies,  Albania  adopted  a  Law  on  protection  from 
discrimination  in February  2010.  This  law was drafted in cooperation with the  international 
community and civil society; it regulates the implementation and enforcement of the principle 
of equal treatment in connection with a non-exhaustive list of grounds including gender, race, 
disability and sexual orientation. The law also provides for the establishment of the Office of 
the  Commissioner  for  Protection  from  Discrimination  (see  above).  The  Albanian  Criminal 
Code  provides  that  hate-based  motivation  of  an  offence  constitutes  a  specific  aggravating 
factor. Lesbian, gay, bisexual and transgendered persons (LGBT) are protected under the new 
anti-discrimination legislation. However, despite increased awareness of LGBT issues and the 
emergence  of  a  community  supported  by  NGOs,  discrimination  and  intolerance  remain 
widespread.  There  have  been  cases  of  violence,  particularly  targeting  the  transgender 
community.  Respect  for  the  fundamental  rights  and  freedoms  of  LGBT  people  needs  to  be 
guaranteed  by  the  authorities,  in  particular  the  Commissioner  for  Protection  from 
Discrimination. 

As  regards  women’s  rights,  Albania  has  taken  significant  measures  to  strengthen  the  legal 
and  institutional  framework  on  gender  equality  and  fighting  domestic  violence.  Albania  is 
party to the UN Convention on the elimination of all forms of discrimination against women. 
A national strategy on gender equality and the eradication of domestic violence was adopted 
for 2007-2010. A National Council on Gender Equality was set up, as well as a network of 
gender  equality  employees  in  line  ministries  and  municipalities.  A  new  mechanism  for 
monitoring and evaluation of gender equality and violence against women, set out in adopted 
instructions of the Ministry of labour, social affairs and equal opportunities, will provide for 
the  collection  of  disaggregated  data  and  follow  the  effective  implementation  of  the  Law  on 
gender  equality  in  society.  A  30%  gender  quota  has  been  introduced  by  this  law  and  the 
Electoral Code, in order to boost participation of women in  politics.  The implementation of 
this  quota  is  verified  by  the  Central  Electoral  Commission.  In  the  last  general  elections, 
although  the  main  parties  followed  the  letter  of  the  law,  in  many  cases  its  spirit  was  not 
respected  as  women  were  relegated  to  unelectable  positions.  Despite  these  shortcomings, 
these  legislative  changes  led  to  an  increase  in  the  number  of  women  in  parliament  (from 
around 7% to 16%).  

Nonetheless, women are severely under-represented in parliament, top government posts and 
in  decision-making  positions  in  the  local  administration  and  public  undertakings.  Women 
continue  to  be  discriminated  against  in  terms  of  access  to  employment,  education  and 
property. This is due in particular to insufficient allocation of human, technical and financial 
resources for effective implementation of laws and strategies. The gender wage gap needs to 
be addressed, notably through improved oversight by the Labour Inspectorate. Further efforts 
are  needed  to  promote  the  economic  security  and  empowerment  of  women.  Gender 
mainstreaming  at  all  levels  of  the  educational  system  is  essential  to  change  traditional 
attitudes and raise awareness of women’s rights.  

Domestic violence is a persistent phenomenon that affects numerous families in Albania and 
is an issue of serious concern. The introduction of the Law on measures against violence in 
family relations and the related strategy led to significant increases in the number of incidents 
being  reported  to  the  police  and  protection  orders  being  delivered.  Special  units  for  dealing 
with such  cases have been set up  in police  stations at regional level and many police, court 
and other officials have received training on the issue of domestic violence. However, cases 
continue  to  be  largely  under-reported  and  insufficiently  investigated  and  prosecuted, 
especially  in  rural  areas.  Relatively  few  complaints  lead  to  criminal  prosecutions,  as  it  is 

EN 

28 

  EN 

generally  the  duty  of  the  victim  to  initiate  this  procedure.  The  duty  only  falls  upon  the 
prosecutor to initiate a prosecution in cases that result in death, serious injury or threats to life.  

The  protection  of  women  and  other  victims  against  all  forms  of  violence  needs  to  be 
considerably  strengthened.  Victims'  access  to  justice  needs  to  be  guaranteed,  in  particular 
through  granting  of  free  legal  assistance,  as  provided  for  in  the  amendments  to  the  Law  on 
measures  against  violence  in  family  relations.  Enforcement  of  protection  orders  through 
allocation of additional resources and training for police officers on the handling of such cases 
is  necessary.  Coordination  of  the  state  authorities  and  other  stakeholders  dealing  with 
domestic  violence  cases,  including  civil  society  organisations,  needs  to  be  enhanced,  in 
particular  through  provision  of  public  funds  for  NGO-run  shelters  in  regions.  Allocation  of 
appropriate  resources  for  the  management  of  the  new  national  centre  for  rehabilitation  of 
victims  of  domestic  violence  is  key  to  ensure  protection  of  victims.  Social  reintegration  of 
victims requires increased attention, including through the allocation of public resources for 
training, employment and access to long-term housing for abused women. 

Albania has ratified the relevant international conventions relating to children’s rights. The 
national  strategy  for  children  2006-2010  aims  to  fulfil  the  obligations  under  the  UN 
Convention on the Rights of the Child. A national strategy for the fight against trafficking in 
children  adopted  in  July  2008  supplements  the  national  strategy  against  human  trafficking. 
Child Rights Units are progressively being established in all 12 Regional Councils and Child 
Protection Units exist in 15 local government units to promote and monitor children’s rights. 
The  Law  on  civil  status  removes  the  45-day  deadline  for  registration  of  births  which  has 
resulted  in  a  temporary  decline  in  the  number  of  unregistered  children,  in  particular  Roma. 
Albania adopted a foster care strategy in 2008 aimed at the de-institutionalisation of children 
without  parental  care.  The  juvenile  justice  system  has  been  reformed,  including  through 
implementing  alternatives  to  detention  for  juvenile  offenders,  setting  up  new  court  sections 
and building a new detention centre for juveniles in Kavaja.  

Despite  these  achievements  a  number  of  issues  of  concern  remain.  Albania  still  lacks  a 
functional  child  protection  system  at  national  level.  The  adoption  of  an  integral  law  on 
children’s  rights  establishing  a  national  referral  mechanism  will  be  essential  for  further 
progress in this area. Allocation of sufficient resources at central and local level is essential to 
ensure comprehensive social protection for families. There is no system of child allowances in 
place.  Shelter  for  children  in  need,  notably  those  above  the  age  of  15,  is  mostly  being 
provided by NGOs. Street children and child labour are issues of particular concern requiring 
more systematic attention from the authorities. The lack of civil registration and low school 
enrolment make Roma children particularly vulnerable to human trafficking and child labour. 
Support for families and identification of children at risk of losing parental care are crucial to 
avoid children entering care. Violence against children in Albania is an issue of concern. Due 
to delays in the judicial process, many juvenile offenders spend their entire sentence in pre-
trial detention, thus breaching the principle that detention of children pending trial should be a 
measure of last resort. The Albanian juvenile justice system does not include provisions for 
children under the age of criminal responsibility, set at 14. 

Governmental expenditure for education in Albania is insufficient and recent cuts are a cause 
for  concern.  Albanian  legislation  provides  for  9  years  of  compulsory  education.  School 
infrastructure  remains  below  standard,  with  a  substantial  number  of  schools  still  lacking 
sanitation facilities and heating systems. Despite efforts to tackle it, corruption continues to be 
an issue in the educational system.  

EN 

29 

  EN 

The  situation  of  the  socially  vulnerable  and  persons  with  disabilities  in  Albania  is  still 
problematic.  Living  conditions  have  improved,  poverty  levels  have  steadily  decreased,  and 
considerable  measures  have  been  taken  towards  implementation  of  the  cross-cutting  social 
inclusion  strategy  for  the  period  2007-2013.  However,  due  to  limited  financial  and  human 
resources, government structures at central and local level are still not fully able to respond to 
the needs of marginalised and vulnerable groups. Although a system of economic aid intended 
to support the poorer sections of the population was set up by the Law on economic aid, the 
mechanism needs revising, in order to target not only households but also individuals in need 
and to expand the categories of women eligible to be ‘heads of households’.  

Albania  signed  the  UN  Convention  on  the  Rights  of  Persons  with  Disabilities  in  December 
2009. The government has started reviewing the national legislation in this field with a view 
to its ratification. The legislative framework still has some gaps which need to be remedied 
through a participatory and transparent process focusing on the needs of disabled persons. The 
national strategy on persons with disabilities adopted for the period 2004-2014 and aimed at 
improving  living  conditions  through  accessibility,  support  services,  employment  and 
education,  is  insufficiently  implemented.  The  special  legal  status  awarded  to  the  blind, 
paraplegic,  tetraplegic  and  work  invalids,  in  the  absence  of  an  integral  law  covering  all 
categories  of  disabled  persons,  leads  to  concerns  over  the  risk  of  discrimination  and 
differentiated  treatment.  Limited  measures  exist  to  support  disabled  persons;  however,  the 
means  available  are  still  insufficient.  Persons  with  disabilities  suffer  from  insufficient  and 
inadequate health, education, social and employment services, leading to a heightened risk of 
social  exclusion.  Children  are  often  educated  in  special  institutions  because  of  the  lack  of 
capacity  of  the  educational  system  to  integrate  learners  with  disabilities,  thus  denying  them 
the  right  to  inclusive  education.  The  level  of  inclusion  of  persons  with  disabilities  in  the 
labour market remains very low, and quotas introduced by the Law on employment promotion 
are generally not enforced.  

As regards mental health, Albania has launched a process of de-institutionalisation of persons 
with  mental  disabilities  and  started  developing  community-based  care  homes.  Appropriate 
regulation of admission to psychiatric institutions and monitoring of patients’ situations need 
to be addressed by the Albanian authorities. Further action is required to improve conditions 
in  institutional  healthcare  settings,  including  access  to  educational  facilities.  Appropriate 
accommodation  in  adequate  forensic  psychiatric  facilities  for  offenders  with  mental 
disabilities is necessary.  

Albania  has  ratified  the  8  core  labour  rights  conventions  of  the  International  Labour 
Organisation  (ILO),  as  well  as  the  revised  European  Social  Charter.  The  right  to  create 
independent trade unions and employer associations is guaranteed. Yet the large scale of the 
informal economy means that these organisations are still weak. Social dialogue is still at an 
early  stage  and  needs  to  be  reinforced.  The  Labour  Code  recognises  the  right  to  bargain 
collectively at enterprise and sector level, but effective collective bargaining remains difficult 
and  agreements  are  hard  to  enforce.  Strengthening  of  the  mandate  of  the  National  Labour 
Council, as the main tripartite consultation body, is needed. The Law on trade unions’ assets 
nationalising  the properties inherited from the former Communist union, while approved  by 
parliament, was finally overturned by the Constitutional Court in April 2010. The conditions 
for  prohibiting  the  right  to  strike  for  civil  servants  need  to  be  amended  in  order  to  comply 
with international commitments. Despite the ratification of ILO conventions on minimum age 
and on the worst forms of child labour, employment of children remains an issue of serious 
concern, as a number of children leave school to  work,  sometimes  in  dangerous  conditions. 

EN 

30 

  EN 

Labour inspections need to be stepped up to fight this trend. (See also Chapter 19 — Social 
policy and employment) 

Since the fall of Communism in the early 1990s, Albania has undergone a significant reform 
process concerning property rights. These include the re-establishment of private immovable 
property, the reintroduction of civil law principles and transactions and the acknowledgement 
of ownership rights of those that had been unjustly expropriated during Communism. 

Legislative  and  institutional  measures  were  taken  in  three  main  interrelated  areas:  property 
registration,  restitution  and  compensation,  and  legalisation.  A  number  of  laws  were  passed 
such as the Law on registration of immovable properties in 1994 (last amended in 2007), the 
Law on the verification of the legal validity of property titles on arable land in 2008, the Law 
on  restitution  and  compensation  of  property  in  2004  (initial  law  of  1993),  and  the  Law  on 
legalisation,  urban  planning  and  integration  of  informal  buildings  in  2006  (initial  law  of 
2004).  The  Immovable  Property  Registration  Office  was  established  to  undertake  initial 
property registration across the country. The Property Restitution and Compensation Agency 
was  set  up  to  prepare  the  restitution  of  expropriated  land  and  property  and  to  provide 
compensation  in  case  restitution  is  not  possible.  The  Agency  for  legalisation  of  informal 
zones was established as the coordinating body for issuing legalisation permits.  

However, legislation was often developed in a piecemeal and uncoordinated manner, leading 
to a very complex legal framework often challenged for its legitimacy and fairness by people 
concerned.  The  property  issue  remains  unresolved.  Difficulties  include  an  artificially  high 
number  of  agencies  operating  in  an  uncoordinated,  often  inefficient  and  sometimes 
overlapping  way,  an  improperly  functioning  land  registry  system  in  addition  to  widespread 
corruption. 

Albania’s courts suffer from a backlog of property disputes that often go through all instances, 
sometimes  several  times.  The  ensuing  systemic  problem  of  the  non-enforcement  of  final 
domestic  judgments  and  administrative  decisions  ordering  restitution  of  properties  or 
compensation  of  former  owners  is  of  serious  concern.  Cases  relating  to  a  breach  of  the 
principle of due process in property disputes constitute the largest amount of petitions to the 
European  Court  of  Human  Rights  against  Albania.  The  lack  of  enforcement,  especially  of 
claims against the state, is particularly worrying. These are, among other things, caused by the 
inefficiency  of  the  bailiffs  in  enforcing  court  decisions,  the  lack  of  necessary  funds  and  the 
lack of an effective remedy system. 

The  situation  in  Albania  has  reached  a  level  of  complexity  which  in  some  cases  puts  the 
principle of respect for human rights into question. Chronically unresolved disputes and legal 
uncertainty over title to land hinder economic and land market development, hamper foreign 
investment, undermine citizens’ confidence in democracy and tie up courts.  

Albania needs to tackle the manifold problems in the ailing immovable property sector as a 
matter  of  urgency.  These  problems  require  a  comprehensive  approach  and  strong  political 
support in order to improve the current situation by meeting constitutional requirements and 
those of public international law, and balancing interests and needs of different interest groups 
in society aimed at preventing conflicts and social unrest in the long run. Clear property titles 
and legal certainty are essential prerequisites for prosperous development of the country and 
attracting foreign investment.  

Respect for and protection of minorities, cultural rights 

EN 

31 

  EN 

The Constitution provides for the protection of the civil, economic, social and political rights 
of minorities. Albania has no specific framework law on minorities. The country historically 
defines  minority  groups  in  its  territory  as  three  "national"  (Greek,  Macedonian  and 
Montenegrin)  that  have  a  kin  state,  and  two  "ethno-linguistic"  minorities  (Aromanian  and 
Roma). There is officially no distinction in access to rights for persons of national and ethno-
linguistic minorities, however, there is differentiation in practice, notably as regards access to 
public  education  in  minority  languages.  Clarification  of  the  distinction  between  different 
national  and  ethno-linguistic  minorities  would  help  avoid  differentiated  treatment  for  the 
persons  belonging  to  the  latter  category.  The  Egyptian  community  seeks  recognition  as  an 
ethno-linguistic  minority  and  the  Bosniak  community  as  a  national  minority.  Inter-ethnic 
relations are generally good, although there has recently been a violent incident leading to the 
death  of  a  Greek-speaking  Albanian  citizen  in  Himara  that  is  under  investigation  by  the 
authorities.  

There  is  a  lack  of  accurate  data  on  minorities  in  Albania.  This  situation  is  expected  to  be 
addressed  by  the  conduct  of  a  population  census  in  2011,  respecting  international  standards 
including the principle of free self-identification. This census will include optional questions 
on  the  ethnic  origin,  religious  affiliation  and  mother  tongue  of  respondents.  Establishing 
updated  statistical  data  is  important  for  the  development  of  appropriate  minority  policies. 
Albania  has  ratified  the  Council  of  Europe’s  Framework  Convention  for  the  Protection  of 
National  Minorities  but  has  not  adopted  the  European  Charter  for  regional  or  minority 
languages. Albanian legislation provides for the rights of national minorities to be respected 
throughout  the  entire  territory.  Agreements  have  been  signed  at  local  level  in  some 
municipalities to display local names in minority languages; however, the implementation of 
these  agreements  is  not  always  consistent.  The  availability  of  minority  language  education 
needs to be enhanced and rigid regulatory provisions for access to it removed. Albania needs 
to ensure members of all minorities enjoy full access to their rights, taking into account the 
recommendations  of  the  Advisory  Committee  of  the  Framework  Convention  for  the 
Protection of National Minorities. 

The State Committee for Minorities, under the authority of the Prime Minister, is tasked with 
making  recommendations  to  the  government  on  measures  related  to  minority  groups.  The 
Committee is composed of representatives of the five recognised minorities. Its chairperson is 
selected by the Prime Minister. The institutional capacity of the Committee remains weak and 
its  performance  as  an  effective  advisory  body  can  be  questioned.  The  Albanian  authorities 
need  to  ensure  that  the  Committee  has  the  necessary  financial  and  human  resources  to 
effectively perform its tasks. The level of representation of persons belonging to minorities in 
public administration and politics needs to be enhanced.  

As regards the Roma, a national strategy to improve Roma living conditions was adopted in 
2003  and  is  being  implemented  by  the  Ministry  of  Labour,  Social  Affairs  and  Equal 
Opportunities. In 2008 Albania joined the Decade of Roma Inclusion 2005-2015 and adopted 
a national action plan focusing on education, employment and social protection, housing and 
infrastructure,  health,  social  inclusion  and  equal  opportunities,  and  cultural  heritage. 
Nevertheless,  the  Roma  community  constitutes  the  most  vulnerable  minority  group  in 
frequent 
facing  widespread  poverty,  socioeconomic  marginalisation  and 
Albania, 
discrimination,  particularly  regarding  access 
to  education,  social  protection,  health, 
employment  and  adequate  housing.  Implementation  of  the  national  strategy  has  been  slow, 
due to insufficient human and financial resources, inadequate coordination of all institutions 
involved  at  local  and  central  level,  and  deficiencies  in  the  monitoring  and  evaluation 
mechanisms.  

EN 

32 

  EN 

A registration campaign took place in 2009 to provide ID cards to citizens, including Roma. 
However,  many  Roma  still  lack  civil  registration,  thus  impeding  the  exercise  of  their 
fundamental rights. Access to health for this minority group is particularly problematic, and a 
number  of  Roma  suffer  from  diseases  associated  with  poverty.  Many  Roma  live  in  poor 
conditions in settlements lacking basic sanitary infrastructure. Although steps have been taken 
to  favour  inclusion  of  Roma  in  the  school  system, in particular through the creation of pre-
school  classes  to  enhance  their  knowledge  of  the  Albanian  language,  school  enrolment  of 
Roma remains insufficient and the drop-out rate high. Participation of the Roma minority in 
political and public life remains marginal, even at local level.  

Overall,  a  legal  framework  on  human  rights  and  respect  for  and  protection  of  minorities  is 
largely in place and broadly corresponds to European standards. However, its implementation 
remains  insufficient  in  a  number  of  areas.  The  institutional  framework  is  adequate  but  its 
appropriate functioning needs to be ensured. As regards civil and political rights in particular, 
access to justice for vulnerable groups needs to be ensured, ill-treatment in police custody and 
the  situation  of  mentally  ill  prisoners  need  to  be  addressed,  and  independence  and 
transparency  in  the  media  sector  increased.  In  the  field  of  economic  and  social  rights, 
appropriate  resources  need  to  be  allocated  for  implementing  the  Law  on  protection  against 
discrimination, a framework law on children’s rights needs to be adopted, the legal framework 
for  persons  with  disabilities  enhanced,  and  the  existing  strategies  for  gender  equality  and 
fighting  domestic  violence  need  to  be  effectively  implemented.  Overlapping  legislation  and 
the resulting lack of legal certainty, unenforced court decisions and risks of corruption in the 
area  of  property  rights  need  to  be  urgently  addressed.  Respect  for,  and  protection  of, 
minorities  needs  to  be  enhanced  through  improved  visibility  of  the  State  Committee  for 
Minorities  and  increased  access  to  minority  language  education.  Proper  implementation  of 
strategies  and  action  plans  pertaining  to  the  Roma  minority  is  necessary  to  improve  their 
living conditions and facilitate their integration into society.  

1.3. 

Regional issues and international obligations 

The Parliamentary Assembly of the Council of Europe has monitored Albania’s fulfilment of 
its  membership  obligations  since  1995  and  has  recently  closely  followed  developments 
relating to the political situation in the country. 

Regional cooperation and good neighbourly relations form an essential part of Albania’s 
process  of  moving  towards  the  European  Union.  Albania  actively  takes  part  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  (ECT)  and  the  European  Common  Aviation  Area  Agreement. 
Albania is currently chairing the Migration, Asylum, Refugees Regional Initiative (MARRI).  

Concerning international judicial cooperation in civil and criminal matters, Albania concluded 
bilateral  agreements  with  several  neighbouring  countries  and  other  countries  in  the  region. 
Albania concluded bilateral agreements on legal assistance in civil and criminal matters with 
Greece,  the  former  Yugoslav  Republic  of  Macedonia  and  Italy.  Albania  is  a  party  to  the 
European  Convention  on  mutual  legal  assistance  in  criminal  matters  and  cooperates 
satisfactorily  at  regional  and  international  level.  Albania  concluded  agreements  on  mutual 
enforcement  of  court  decisions  in  criminal  matters  with  Greece  and  the  former  Yugoslav 
Republic  of  Macedonia.  A  Law  on  jurisdictional  cooperation  with  foreign  authorities  in 
criminal matters was adopted in December 2009. Albania is actively participating in regional 
police cooperation, either bilaterally or through Europol and Interpol. Cooperation agreements 

EN 

33 

  EN 

in the fight against organized crime, trafficking of human beings, trafficking of narcotics and 
terrorism were signed with Bosnia and Herzegovina, Croatia, the former Yugoslav Republic 
of Macedonia,  Montenegro and Serbia. Joint international counter-narcotics operations have 
been successfully conducted, notably with Italy. 

As  regards  extradition,  according  to  the  Constitution,  no  Albanian  citizen  may  be  expelled 
from  the  territory  of  the  State.  Extradition  may  be  permitted  only  when  it  is  expressly 
provided  for  in  international  agreements,  to  which  Albania  is  a  party  and  only  by  judicial 
decision. The extradition procedures followed are pursuant to the 1957 European Convention 
on Extradition, as ratified, as well as bilateral agreements with effect on the field, with Greece 
and with the former Yugoslav Republic of Macedonia. The bilateral agreements with Croatia 
and Bosnia and Herzegovina  are de facto not implemented because both these countries are 
parties to the Convention on extradition procedures.  

Albania  has  very  good  bilateral  relations  with  other  enlargement  countries  and 
neighbouring EU Member States.  

Relations with Serbia are constructive. Regardless of the serious disagreement over the status 
of  Kosovo,  bilateral  relations  have  normalised.  In  March  2010,  the  Albanian  Minister  of 
Foreign  Affairs  visited  Belgrade  for  the  very  first  time  since  Kosovo’s  declaration  of 
independence  and  signed  several  important  bilateral  agreements,  including  on  police 
cooperation. In April 2010 Albania unilaterally lifted visa requirements for Serbian citizens.  

Albania  has  good  relations  with  the  former  Yugoslav  Republic  of  Macedonia.  Albania 
supports that country’s accession to NATO and has been supportive towards its integrity and 
ethnic  stability.  Albania  has  encouraged  dialogue  between  different  ethnic  communities 
during meetings with Albanian political leaders from Skopje. 

Albania  has  traditionally  very  good  relations  with  Kosovo  and  was  among  the  first  to 
recognise  its  independence.  Albania  has  actively  backed  Kosovo’s  recognition  within  the 
Organisation  of  the  Islamic  Conference  (OIC)  and  recently  sponsored  the  adoption  of  a 
resolution  in  support  of  the  efforts  undertaken  by  Kosovo  for  the  establishment  of  peaceful 
and  democratic  institutions.  Several  agreements  are  in  place  for  bilateral  cooperation, 
including on border and police cooperation and the most recent ones regarding cooperation in 
the fields of education and science.  

Albania has established very close relations with Montenegro. A joint border crossing point, 
the first in the region, was recently opened in Muriqan and a number of agreements on border 
and police cooperation were signed.  

Relations  with  Bosnia  and  Herzegovina  have  developed  positively.  In  November  2009,  the 
visa-free  regime  with  Bosnia  and  Herzegovina  entered  into  force  and  in  February  2010 
parliament ratified the agreement between the two countries on the  readmission of irregular 
migrants.  

Albania has good relations with Croatia. Political dialogue has strongly developed over recent 
years  and  has  witnessed  a  particularly  qualitative  increase  as  a  result  of  both  countries' 
accession  to  NATO  in  April  2009.  Cooperation  is  marked  by  a  high  number  of  bilateral 
agreements in fields such as economic and investment development and security. 

Relations with Italy are very good. A large part of the Albanian diaspora lives in Italy. The 
two governments have established very close relations and Italy strongly supports Albania’s 

EN 

34 

  EN 

EU  integration  efforts.  Italy  is  the  main  trade  partner  and  one  of  the  main  investors  in 
Albania.  On  12  February  2010,  Italy  and  Albania  signed  a  strategic  partnership  agreement 
which  provides  that  both  countries  will  cooperate  on  the  implementation  of  joint  projects 
including nuclear energy projects.  

Relations  with  Greece  are  very  good.  Greece  is  a  strong  supporter  of  Albania’s  efforts  for 
European  integration.  The  two  countries  cooperate  closely  in  many  sectors.  The  main 
institutional basis for this cooperation is the 1996 Agreement on friendship, cooperation, good 
neighbourliness and security. The Albanian Constitutional Court judgment in January 2010 to 
annul the maritime border pact between the two countries has not affected bilateral relations. 
Greece is the main investor in Albania and the second largest trade partner. A large part of the 
Albanian diaspora lives in Greece. 

Albania  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  Position  on  the  integrity  of  the  Rome  Statute  or  with  the  related  EU 
guiding  principles  on  bilateral  immunity  agreements.  Albania  needs  to  align  with  the  EU 
position. 

Overall, Albania generally satisfies the Stabilisation and Association Process conditions for 
regional  cooperation.  The  country  is  strongly  committed  to  regional  cooperation;  it  plays  a 
constructive regional role and participates actively in regional initiatives. 

1.4. 

General Evaluation 

The present assessment is made on the basis of the Copenhagen criteria related to the stability 
of  institutions  guaranteeing  democracy,  the  rule  of  law,  human  rights  and  respect  for  and 
protection of minorities and the conditionality of the Stabilisation and Association Process. 

Albania  is  a  parliamentary  democracy  based  on  a  constitutional  and  legislative  framework, 
which is largely in line with European principles and standards. There is a general consensus 
on the goal of EU membership. Yet, the effectiveness and stability of democratic institutions 
is  not  sufficiently  achieved.  Parliamentary  institutions  and  procedures  do  not  function 
properly.  As  a  result,  parliament  does  not  exercise  effective  oversight  and  control  over  the 
government  and  its  scrutiny  of  legislative  development  is  weak.  Political  dialogue  is 
confrontational and unconstructive, not least because of the political stalemate since the June 
2009  elections.  This  obstructs  parliamentary  work  and  prevents  necessary  policy  reforms 
based on consensus. The government together with the opposition share the responsibility for 
reaching, in a transparent way and in full respect of the constitution, solutions needed for the 
country to move forward on its EU integration path. In addition, there are shortcomings in the 
implementation  of  legislation.  The  public  administration's  legal  framework  and  the  civil 
service  system  are  mostly  in  line  with  European  standards  and  practices.  However,  proper 
implementation of the legal framework is a concern, and the public service is very politicised, 
lacks transparency in appointments and is marked by high turn-over of staff.  

The  June  2009  legislative  elections  were  assessed  by  the  OSCE-ODIHR  as  meeting  most 
international  standards  and  as  being  an  improvement  over  past  practices.  However, 
shortcomings  were  identified  and  a  number  of  recommendations  were  made  for  future 
elections  including  addressing  the  politicisation  of  processes  such  as  the  vote  count. 
Recommendations have not yet been translated into a satisfactory electoral reform, which is 
needed for upcoming elections. 

EN 

35 

  EN 

Albania has in recent years strengthened rule of law, in particular by conducting legislative 
and institutional reforms of the judiciary and in the areas of the fight against corruption and 
organised  crime.  Administrative  capacity  notably  of  law  enforcement  bodies  has  been 
strengthened.  However,  reforms  remain  incomplete,  there  are  substantial  shortcomings 
regarding the independence, transparency and accountability of the judicial system and a solid 
track record of effective fight against corruption and organised crime is missing. 

The reform process of the judiciary is on-going. However, a comprehensive and coordinated 
judiciary  reform  strategy  is  pending  as  is  the  adoption  of  key  laws  including  on  the 
administrative  courts  and  the  organisation  of  the  High  Council  of  Justice.  Serious  concerns 
remain on the overall functioning, the efficiency and independence of the judiciary. There is a 
lack  of  transparency  in  the  appointment,  promotion,  transfer  and  evaluation  of  judges  and 
there are considerable weaknesses in the inspection system of the judiciary. The cases of non-
respect of Constitutional Court decisions by government in recent years and the politicisation 
of the vote on the President's Constitutional and High Court appointments are of concern as 
they  challenge  fundamental  principles  such  as  the  independence  of  the  judiciary  and  the 
respect  for  the  rule  of  law.  Human  and  financial  resources,  as  well  as  infrastructure 
conditions,  are  not  adequate  and  need  to  be  improved  to  ensure  the  efficient  functioning  of 
courts. 

Albania has made efforts over recent years to establish a legal and institutional framework to 
fight corruption, which is now broadly in place. Despite these efforts, corruption is prevalent 
in many areas and constitutes a particularly serious problem. Areas of particular concern are 
corruption  in  the  judiciary  and  in  relation  to  the  system  of  restitution  and  compensation  of 
property  rights,  and  widespread  bribery  in  the  health  sector.  Absence  of  transparency  in 
political  party  funding,  allowing  inappropriate  influence  on  politics,  is  a  considerable 
problem.  Albania  needs  to  complete  the  legal  framework  in  the  field  of  fight  against 
corruption and to address obstacles to effective investigations notably of judges, ministers and 
MPs related to the unlimited immunity of these public officials. Thorough implementation of 
the  anti-corruption  strategy  and  action  plan  needs  to  be  ensured  and  a  solid  track  record  of 
pro-active  investigations  and  prosecutions  as  well  as  of  conclusive  indictments  and 
convictions in corruption cases at all levels established. 

In  the  area  of  the  fight  against  organised  crime,  Albania  has  established  a  legislative  and 
institutional framework which is largely adequate. Reform of law enforcements authorities, as 
well  as  their  adequate  resources  and  equipment  contributed  to  counter  this  phenomenon. 
However,  effective  implementation  of  new  legislation  and  the  professionalism  of  new 
structures and systems need to further be proven in practice. Proactive investigation needs to 
be  ensured  and  cases  that  have  been  successfully  investigated  need  to  be  followed  by 
convictions.  Activities  of  organised  crime  groups  in  Albania,  having  impact  outside  of  the 
country  remain  an  issue  of  serious  concern.  Further  strengthening  of  cooperation  at  the 
international level is necessary, including in particular with neighbouring countries. 

The Albanian legal and policy framework regulating human rights and the respect for and 
protection  of  minorities  is  largely  in  place  and  broadly  corresponds  to  European  and 
international  standards.  The  institutional  framework  is  adequate.  However,  there  are  some 
gaps in the legislation and implementation of existing strategies and action plans. Awareness 
and sensitivity to human rights' standards on the part of the administration, the judiciary and 
law enforcement authorities need to be reinforced.  

EN 

36 

  EN 

Human rights are broadly respected in Albania. However, some concerns remain. Restitution, 
legalisation  and  compensation  of  property  is  governed  by  piecemeal  legislation  and  many 
agencies with overlapping competencies, reaching a level of complexity that puts at risk the 
effective  enjoyment  of  human  rights  in  this  area.  There  are  several  judgements  against 
Albania in the European Court of Human Rights for breach of the principle of due process in 
this  field.  Another  serious  concern  relates  to  detention  conditions  and  the  treatment  of 
detained persons in police stations, pre-trial detention and prisons. Media independence is put 
at risk by the prevalence of political influences and business interests. Domestic violence is a 
persistent phenomenon which affects numerous families and is not systematically addressed. 
The  anti-discrimination  legal  and  institutional  framework  has  been  substantially  improved, 
notably  with  the  creation  of  the  Office  of  the  Commissioner  for  Protection  from 
Discrimination.  However,  Roma,  persons  with  disabilities  and  lesbian,  gay,  bisexual  and 
transgendered  persons  are  still  subject  to  discrimination.  Gender  equality  is  not  fully 
guaranteed in practice, in particular in the field of employment and access to economic aid. 
There are some gaps in the legislation governing human rights, notably since an integral law 
on children's rights is yet to be adopted. Additionally, the operation of national human rights 
institutions is hampered by the delays in appointment of a new Ombudsman, which is pending 
since early 2010.  

Although  Albania  has  no  framework  law  on  minorities,  respect  for  and  protection  of 
minorities  are  broadly  guaranteed.  In  practice,  specific  rights  of  three  "national"  and  two 
"ethno-linguistic"  minorities,  as  defined  by  the  country,  are  recognised.  However,  there  are 
inconsistencies  in  the  application  of  these  rights.  The  lack  of  accurate  data  on  minorities 
impedes  the  development  of  appropriate  policies.  This  is  expected  to  be  addressed  by  the 
conduct of the next population census in 2011 in line with international standards. The level 
of  representation  of  persons  belonging  to  minorities  in  public  administration  and  politics 
needs to be enhanced. The existing policy framework for improving the lives of the Roma is 
insufficiently  implemented.  The  Roma  minority  faces  very  difficult  living  conditions  and 
limited access to employment, education and social services.  

Albania broadly satisfies the Stabilisation and Association Process conditions. The country 
is  strongly  committed  to  regional  cooperation;  it  plays  a  constructive  regional  role  and 
participates  actively  in  regional  initiatives.  Bilateral  relations  with  neighbours  are  overall 
good.  Albania  is  a  party  to  the  Rome  Statute.  However  the  country  ratified  a  bilateral 
immunity agreement with the United States regarding the International Criminal Court which 
does not comply with the relevant EU Common Positions and guiding principles. The country 
needs to align with the EU position. 

2. 

ECONOMIC CRITERIA 

In  1993,  the  European  Council  in  Copenhagen  set  the  following  economic  criteria  for 
accession to the EU: 

- the existence of a functioning market economy; 

- the capacity to cope with competitive pressure and market forces within the Union. 

These  criteria  are  linked.  A  functioning  market  economy  will  cope  better  with  competitive 
pressure and, in the context of membership of the Union, the reference market is the internal 
market.  

EN 

37 

  EN 

Following a brief overview of economic developments and policies in a historical perspective, 
the  report  goes  on  to  consider the  extent  to  which  Albania  fulfils  the  two  economic  criteria 
established by the Copenhagen European Council. 

2.1. 

Economic developments 

Albania  is  a  small  and  mountainous  country,  with  a  population  of  just  over  3  million 
distributed  on  a  territory  of  28,750  square  kilometres.  The  country  is  well  endowed  with 
natural resources, mainly chrome, nickel, copper, and small quantities of oil and coal. Albania 
enjoys a favourable climate for agriculture and tourism and almost all of its electricity needs 
can  be  generated  from  hydropower  sources.  Albania  has  undergone  a  profound  structural 
transformation  over  the  past  two  decades,  from  a  highly  centrally  planned  to  a  free-market 
economy, which has resulted in high growth rates. Average annual GDP growth was slightly 
more  than  6%  from  2000  to  2008,  before  slowing  down  to  just  over  3%  in  2009.  Gross 
domestic  product  reached  almost  €9  billion  (2009),  or  0.07%  of  EU-27  GDP.  Expressed  in 
purchasing  power  standards,  GDP  per  capita  in  2009  amounted  to  €6,400,  or  27.1%  of  the 
EU-27  average.  Income  disparities  between  Tirana,  the  capital,  and  the  less  developed 
mountain areas are significant, but declining, 

Macroeconomic background 

The  first  years  of  the  transition  that  started  in  1991  saw  a  drastic  contraction  in  output,  a 
ballooning  budget  deficit  and  inflation  rising  to  triple  digits.  With  the  support  of  the 
international  community,  in  1993  the  country  embarked  on  a  programme  to  stabilise  the 
economy  that  included  fiscal  consolidation,  tight  monetary  targets  and  structural  reforms. 
Progress towards macroeconomic stability was interrupted in 1997 by the collapse of the so-
called pyramid schemes6 which had a significant adverse effect on the economy and gave rise 
to  civil  disorder.  The  opening  of  the  country  and  the  collapse  of  the  pyramid  schemes  also 
resulted in mass emigration and workers remittances have become an important feature of the 
Albanian economy.  

In the aftermath of the pyramid schemes crisis, a new stabilisation programme was launched. 
This  programme  led  to  a  notable  improvement  in  economic  performance  in  1998  and  in 
subsequent years, underpinned by gradual fiscal consolidation and a tight monetary policy. By 
2000,  inflation  had  been  brought  down  to  single-digit  levels.  Macroeconomic  stability  has 
been broadly maintained since 2000 and steps have been taken to integrate Albania with the 
international economic system.  

Albania has undergone significant reforms aimed to enhance the quality of public spending. 
Fiscal  discipline  improved  during  most  of  the  1990s  in  line  with  the  various  adjustment 
programmes.  Since  2000,  a  medium-term  budget  programme,  which  consists  of  a  rolling 
three-year expenditure plan, has been in place.  

In the first years of transition unemployment soared, reaching its peak at 23% in 1993. It was 
then slowly reduced mainly due to migration. In the aftermath of the pyramid scheme crisis 
unemployment  increased  again.  Since  1999  it  has  been  progressively  reduced,  however,  it 
remains high standing at 13.8% in 2009. 

6 

Investment arrangements whereby the money paid by the latest investors is used to pay artificially high 
interest to earlier investors 

EN 

38 

  EN 

                                                 
The  moderate  openness  of  the  economy  and  the  low  level  of  integration  of  the  financial 
system  with  the  global  market,  together  with  the  substantial,  albeit  declining,  share  of 
agriculture have limited the impact of the global crisis on Albania. Macroeconomic policy has 
been instrumental in cushioning the effects of the turmoil. 

Structural change 

Since 1991, the economy has undergone a structural transformation which has seen a decline 
in the dominance of industry and agriculture in favour of services and construction. Services 
are  now  the  main  driver  of  growth,  accounting  for  around  54%  of  GDP.  Manufacturing  is 
characterised  by  a  lack  of  diversification,  both  in  terms  of  products  exported  and  export 
markets. 

Privatisation featured high on the reform agenda from the early stages of transition. In the first 
stage,  which  started  in  1991,  small  retail  shops  and  other  commercial  services,  agricultural 
land  and  housing  were  sold,  mostly  to  their  current  employees.  A  mass  privatisation 
programme  to  sell  off  large  state-owned  enterprises  began  in  1995  and  proceeded  with 
relative speed. Since 1999, around 340 public enterprises have been partly or fully privatised 
through international tendering in strategic sectors. The share of the private sector is now 82% 
of GDP.  

Until  1991,  prices  at  all  levels  of  production  were  established  by  central  planners. 
Comprehensive  price  liberalisation  covering  practically  all  consumer  goods  took  place  in 
1992 as part of the macroeconomic stabilisation and reform programmes. The authorities also 
adopted  a  policy  of  gradually  freeing  or  raising  some  of  the  controlled  and  administered 
prices to cost-recovery levels.  

In  1992,  the  authorities  embarked  on  a  programme  to  establish  a  modern  banking  system. 
This was given a further impetus as a response to the pyramid scheme crisis. A new banking 
law  was  passed  further  strengthening  the  independence  of  the  Bank  of  Albania.  Steps  were 
also taken to improve banking supervision and introduce prudential regulations. In addition, a 
privatisation  strategy  was  launched  and  the  entry  of  new  private  banks  encouraged.  The 
reforms proved effective and led to an increase in formal private sector credit and a rise in the 
number of private banks. With full privatisation and the entry of international private banks, 
the banking sector has continued to develop in recent years.  

Significant  progress,  mainly  in  facilitating  market  entry,  has  led  to  an  increase  in  foreign 
investment  in  recent  years.  However,  it  remains  low  by  regional  standards.  This  reflects  a 
weak  business  climate  which,  among  other  things,  suffers  from  incomplete  recognition  of 
property rights, shortcomings in the public administration, weak enforcement of the law and 
bottlenecks in basic infrastructure, including as regards the reliability of power supply. 

2.2. 

Assessment in terms of the Copenhagen Criteria 

2.2.1.  The existence of a functioning market economy 

The  existence  of  a  functioning  market  economy  requires  that  prices,  as  well  as  trade,  are 
liberalised  and  that  an  enforceable  legal  system,  including  property  rights,  is  in  place. 
Macroeconomic stability and consensus about economic policy enhance the performance of a 
market economy. A well-developed financial sector and the absence of significant barriers to 
market entry and exit improve the efficiency of the economy. 

EN 

39 

  EN 

Economic policy essentials 

Albania  has  implemented  far-reaching  market-oriented  changes,  including  price  and  trade 
liberalisation,  privatisation  and  fiscal  and  monetary  reforms.  These  reforms  have  been 
supported,  inter  alia,  by  several  financial  and  technical  arrangements  with  the  EU,  the  IMF 
and the World Bank. There has been over the years a consensus between the political parties 
about Albania’s integration with the EU. Overall, there is a broad domestic consensus on the 
fundamentals of economic policy. 

Macroeconomic stability 

Real GDP growth has been very strong since 1998, reflecting the continuation of resource re-
allocation from low  to higher  productivity  sectors. Consequently,  Albania’s per capita GDP 
increased  but  remains  very  low.  Private  consumption  remains  the  main  component, 
representing some 80% of GDP, reflecting the significant boost given to household income by 
migrants'  remittances.  The  role  of  remittances  in  the  development  of  the  economy  has  been 
significant throughout the transition. Unlike most other countries, economic growth remained 
positive although decelerating to slightly above 3% in 2009, owing to the impact of the global 
crisis.  Overall,  Albania  has  witnessed  very  strong  economic  growth,  exceeding  5%  since 
1998,  while  economic  activity  slowed  down  but  remained  positive  in  2009  in  spite  of  the 
global crisis. 

Since 2000, the current account deficit has been progressively rising, mainly due to a growing 
merchandise trade gap. It reached 15% of GDP in 2009. After posting a deficit between 2002 
and 2006, the services account turned into a surplus as exports — supported by a burgeoning 
tourism  sector  —  increased  rapidly.  Around  half  of  the  trade  deficit  has  traditionally  been 
financed through current transfers from abroad, amounting to approximately 13% of GDP in 
2009. A significant share of these transfers is accounted for by workers’ remittances which, 
after following an upward trend in the first half of the 2000s, have declined in the past few 
years. In the last decade, net capital inflows have broadly covered the current account deficit, 
contributing to higher foreign reserves. FDI, driven by privatisation proceeds and representing 
around half of external financing, rose from around 4% of GDP in 2000 to 7.6% in 2009. The 
high  current  account  deficit  represents  a  risk.  Insufficient  capital  inflows,  specifically  FDI, 
could lead to an abrupt adjustment with a negative feedback loop on the real economy and an 
adverse  impact  on  public  finances.  Overall,  the  trade  balance  and  the  current  account  show 
significant and persistent deficits. 

The contribution of employment to GDP growth has been limited, partly due to unfavourable 
demographic  shifts,  a  loss  of  skills  spurred  by  mass  emigration  as  well  as  a  significant 
informal  sector.  Job  growth  was  positive  in  the  period  2002-08  but  contracted  in  2009  as  a 
result of the crisis. Unemployment has been declining gradually along the years and stood at 
13.8% in 2009. The labour market is characterised by a high inactivity rate, which in recent 
years stood at just below 40%. Informal work arrangements remain widespread across most 
economic activities notwithstanding several initiatives to tackle them, including a reduction in 
social contributions. High long-term unemployment, which accounts for around 65% of total 
jobseekers, is another characteristic of the Albanian labour market. Female participation and 
employment  rates  are  significantly  lower  than  for  males,  while  unemployment  is  higher. 
Although  official  labour  market  data  comprise  a  high  degree  of  uncertainty,  unemployment 
has  remained  persistently  high  reflecting  the  low  education  level,  the  outdated  skills  of  the 
jobless  and  undeclared  work,  which  help  in  alleviating  poverty  but  reduce  job-search 
incentives.  Overall,  the  existence  of  widespread  informal  work  arrangements  continues  to 

EN 

40 

  EN 

severely  distort  the  labour  market  whilst  the  absence  of  reliable  statistics  hampers  the 
analysis. Although declining, unemployment has remained stubbornly high. 

The Bank of Albania, a largely independent institution, was mandated in 1997 to achieve and 
maintain  price  stability  as  a  primary  objective.  Direct  credit  and  administered  interest  rates 
were replaced in 2000 by repurchase agreements, which became the key policy instrument for 
controlling bank liquidity. In 2004, the Bank moved closer to an inflation targeting framework 
to achieve the price stability goal by keeping an inflation rate of 3%, within a band of +/- 1 
percentage point. This publicly announced target has been instrumental in anchoring inflation 
expectations.  

During the last decade, inflation was brought progressively down and, except for 2002, was 
below 3%. Inflation started to pick up in October 2009, reflecting mostly the depreciation of 
the lek which raised import prices. It accelerated in January and February 2010, primarily due 
to increases in administrative prices (water and electricity tariffs) but decelerated thereafter, 
reaching  3.4%  in  September.  Overall,  since  2003  annual  inflation  has  remained  below  3%, 
reflecting a monetary policy conducive to a high level of price stability. 

The degree of euroisation in the economy is high. The high interest rate on lek-denominated 
loans, while essential for the stability of the currency, has resulted in more lending in foreign 
currencies.  In  July  2010,  the  share  of  foreign-currency  loans  amounted  to  70%  of  the  total 
stock  of  loans,  while  their  share  of  deposits  was  48%.  Such  currency  substitution  places  a 
constraint  on  the  effectiveness  of  monetary  policy.  Furthermore,  the  high  euroisation  is  a 
potential source of financial system instability since it may expose banks to currency risk. The 
BoA has taken prudential measures that have the effect of encouraging borrowing in the local 
currency  by,  among  other  things,  requesting  banks  to  weight  foreign  currency-denominated 
loans with an additional 50% when calculating capital adequacy ratios.  

The  weighted  average  interest  rate  spreads  between  loans  and  deposits  are  relatively  wide, 
standing  at  about  8.4  percentage  points  for  those  denominated  in  lek,  but  have  declined 
significantly during the past years (from 16.5 percentage points in the last quarter of 2000).  

Albania has established a loosely managed float as its exchange rate regime with the value of 
the currency determined in the foreign exchange market and interventions limited to softening 
sharp currency movements, while maintaining adequate reserve cover. With the unfolding of 
the global crisis, the lek started to weaken and on average lost 7.5% of its value against the 
euro  in  2009.  At  the  end  of  2009,  the  BoA  reserves  amounted  to  4.3  months  of  imports  of 
goods  and  services.  Overall,  monetary  policy  has  been  conducive  to  anchor  inflationary 
expectations notwithstanding the important constraint placed on its effectiveness by the high 
euroisation. 

The government deficit which had followed a downward path until 2006, reached 7% of GDP 
in  2009.  Until  2006,  the  overall  improvement  in  the  fiscal  imbalance  has  been  mainly 
expenditure-led,  first  relying  on  restraint  of  non-wage  current  spending  and  capital  outlays 
while during the period 2000-05 the budgetary consolidation reflected primarily lower interest 
payments. Total revenue only rose marginally in the period 2000-06, as the notable gains in 
direct and indirect taxes were partially offset by lower foreign project-related aid and customs 
duties, due to the alignment of tariffs with international obligations. Thereafter, following an 
increase in 2006-08, revenue declined in 2009 and stood at 26.2% of GDP as the government 
allowed the full play of automatic stabilisers, mostly through lower receipts from direct and 
indirect taxes, in the face of weakening economic performance. Total expenditure started to 

EN 

41 

  EN 

rise in 2006,  reaching 33.2% of GDP in 2009,  driven  mainly  by  higher  capital  spending  — 
related  to  major  road  infrastructure  projects  —  as  well  as  an  increase  in  the  public  service 
wage bill and pensions. This suggests that a pro-cyclical stance, masked by tax-rich revenue 
in  the  boom  period,  started  already  in  2006  and  contributed  to  aggravating  the  budgetary 
deficit  and  external  imbalance,  leading  to  reduced  fiscal  space  in  the  post-crisis  period. 
Overall, the public deficit has been brought down from high levels but the trend was reversed 
in 2007-09, fed by pro-cyclical expenditure policies already as of 2006. 

The  composition  of  government  revenue  remained  practically  unchanged  during  the  period 
2000-09, with indirect tax revenue (VAT) representing the largest share (36.8% in 2009). As a 
result of the broadening of the tax base, the share of direct taxes (15.5% in 2009), particularly 
personal income tax, increased significantly over this period, partly owing to the lowering of 
statutory  tax  rates  to  10%  and  the  establishment  of  reference  salaries  and  reference 
employment  in  2008.  While  these  measures  help  to  reduce  tax  evasion,  a  fully-fledged  tax 
compliance system is still lacking. Reforms over the years have led to improvements in the 
tax  administration.  However,  gaps  in  terms  of  both  revenue  collection  and  continued 
administrative changes remain. In addition, corruption in tax and custom collection, as well as 
weak  law  enforcement,  allow  businesses  to  operate  in  the  informal  sector,  which  in  turn 
results  in  a  narrow  tax  base.  The  management  of  local  government  finances  remains  poor, 
resulting  in  low  revenue  collection  (small  business,  property  and  local  taxes  for  which  they 
are responsible account for some 4% of total government revenue), and limited spending. The 
structure  of  total  expenditure  is  dominated  by  current  transfers  (30%)  and  capital  outlays 
(29%).  Compensation  of  employees  followed  a  rising  trend  over  the  period  2000-09,  now 
representing roughly a fifth of total spending. Interest payments declined progressively, due to 
both  lower  interest  rates  and  public  sector  borrowing  requirements,  but  still  represent  some 
9.5%  of  total  expenditure  and  therefore  continue  to  crowd  out  primary  spending.  Overall, 
weak  institutions  and  a  large  informal  sector  have  resulted  in  a  narrow  tax  base  which 
constrains fiscal receipts, despite various measures in the past years. 

The fiscal consolidation brought about a decline in public debt, from 61% of GDP in 2000 to 
54.3% in 2007. This downtrend was reversed in 2008-09, when the debt stood at almost 60% 
of GDP. While this is a relatively high public debt ratio, a risk-mitigating factor is the fact that 
some  three-fifths  of  total  public  debt  is  domestic,  almost  entirely  denominated  in  lek.  The 
public debt consists of central government debt and while local governments can borrow, the 
use of this possibility has been limited so far. However, around 60% of domestic debt is short-
term, i.e. with a maturity of 1 year and less, giving rise to refinancing risk. Commercial banks 
remain  the  main  holders  of  domestic  public  debt.  External  debt  is  composed  of  long-term 
loans  of  which  slightly  more  than  half  is  denominated  in  euro,  while  another  30%  is 
denominated in Special Drawing Rights. Multilateral creditors represent approximately 53% 
of the external debt. Overall, the recently increasing and high level of public debt remains a 
source of macro-financial vulnerability.  

Appropriate fiscal and monetary policies have been the main anchors of the policy mix and 
have underpinned the relative macroeconomic stability in Albania. However, the pro-cyclical 
budget stance since 2006 has reduced the fiscal room for manoeuvre and reversed the decline 
in  public  debt.  The  monetary  policy  framework  has anchored inflation expectations, despite 
the limitations arising from significant euroisation. The flexible exchange rate has supported 
adjustment to external shocks. Overall, rebuilding fiscal space so as to ensure medium-term 
budgetary sustainability and vigorously accelerating reforms to continue structural adjustment 
remain key macroeconomic policy challenges. 

EN 

42 

  EN 

Interplay of market forces  

Price  liberalisation  has  been  largely  completed  but  price  regulation  protects  a  number  of 
sectors.  Around  4.3%  of  the  items  that  compose  the  consumer  price  index  remain 
administered  or  regulated.  Administered  prices  are  set  by  sectoral  regulators  (electricity, 
telephony, water supply) or government bodies.  

State participation in the economy has been progressively reduced and as a consequence the 
private  sector  today  accounts  for  around  four-fifths  of  GDP  and  82%  of  total  employment. 
This  has  been  achieved  largely  through  a  widespread  privatisation  process.  The  sectors  that 
are  still  owned  or  controlled  by  the  state  include  electricity  generation,  railways,  ports  and 
water  supply  utilities.  The  government  is  planning  to  continue  with  the  privatisation 
programme  by  proceeding  with  the  delayed  selling  of  shares  and  assets  in  strategic  sectors 
such as hydrocarbons, insurance, certain port services, certain operations in rail transport and 
telecommunications. Overall, the privatisation process is advanced, while the contribution of 
the private sector in the economy has reached a high level. 

Market entry and exit 

Significant  progress  in  facilitating  business  start-ups  has  been  achieved  in  recent  years.  In 
2007,  a  new  law  was  approved  on  the  National  Business  Registration  Centre  (NRC)  which 
provides  for  simultaneous  registration  in  ‘one-stop-shops’  for  the  purposes  of  tax 
administration,  social  and  health  insurance,  and  labour  inspections.  The  streamlined 
procedures have made business start-up faster and cheaper. Despite an increasing number of 
electronic services and registration centres across the country, further efforts are required to 
strengthen  the  NRC’s  capacity  in  municipalities.  In  addition,  with  the  establishment  of  a 
National  Licensing  Centre  (NLC)  in  2009,  many  licences  were  abolished,  while  procedures 
for  many  sectors  have  been  simplified  and  streamlined,  thereby  reducing  administrative 
barriers  for  businesses.  Overall,  notable  progress  has  been  achieved  in  facilitating  market 
entry at national level but more effort is needed at local level. 

The  new  law  on  bankruptcy  procedures  approved  in  May  2009  provides  a  more  efficient 
framework  for  market  exit.  Moreover,  courts  will  consider  a  case  within  30  days,  thereby 
speeding up bankruptcy procedures. However, implementation has been poor, the agency to 
deal with bankruptcy cases provided for in the amended law has not been established yet, and 
the number of companies declared bankrupt by the courts has been minimal, despite several 
ongoing  judicial  proceedings.  Overall,  despite  recent  legislative  changes,  implementation  of 
bankruptcy procedures remains largely ineffective. 

Legal system 

A  legal  system  which  supports  the  market  economy  has  been  evolving  since  the  1990s. 
However,  the  legislative  process  is  not  fully  transparent  as  proposed  laws  are  not  always 
subject  to  public  consultation.  Laws  and  regulations  are  sometimes  inconsistent,  incomplete 
or lack implementing regulations, leading to unreliability in their interpretation.  

The  functioning  of  Albania’s  property  market  remains  inefficient,  which  adds  to  business 
uncertainty. One of the main issues relates to the restitution of property and the regularisation 
of  informal  construction.  About  80%  of  all  property  has  been  registered,  but  registration  is 
less  advanced  in  urban  and  coastal  areas,  the  latter  having  a  high  potential  for  tourism 
development. The land registration process is tainted by lack of legal documents, delays and 
poor enforcement of court decisions, competing land ownership claims, corruption and weak 

EN 

43 

  EN 

coordination  among  government  agencies.  This  leads  to  an  informal  exchange  of  property 
giving rise to disputes which further burdens the courts and causes an additional loss of tax 
revenue.  Overall,  although  progress  has  been  achieved  in  the  past  two  decades,  ownership 
transfer and recognition of property rights remain incomplete and hamper the functioning of 
the land market. 

The judicial system suffers from undue political interference, corruption, lack of capacity and 
non-transparent and inefficient court proceedings. Informal methods of contract enforcement, 
by-passing the legal system, continue to be widespread. The government took several steps to 
strengthen the judicial system and step up the fight against corruption. A number of electronic 
public services (including the electronic public procurement system) were introduced in order 
to increase transparency. Inspections of courts and public agencies have been stepped up and 
legal  proceedings  initiated  against  officials  responsible  for  violations.  However,  the  law 
establishing  the  administrative  courts,  that  will  deal  with  commercial  cases  and  disputes 
between  companies  and  public  institutions,  has  not  been  adopted.  The  role  of  courts  in  the 
enforcement of contracts remains limited due to weak administrative capacity and prevalent 
corruption.  Overall,  while  some  progress  has  been  recorded,  the  business  climate  remains 
hampered by the weak rule of law.  

Financial sector development  

Although  still  low,  banking  intermediation  has  increased  rapidly  during  the  past  years.  In 
2009,  the  loan-to-GDP  ratio  rose  to  slightly  above  41%  from  7.3%  in  2003.  All  16 
commercial  banks  are  fully  privately-owned  with  an  asset-to-GDP  ratio  of  approximately 
82%.  The  banking  sector  is  characterised  by  a  high  degree  of  concentration,  with  the  six 
largest banks having a share of 72% for loans and 81% for deposits. 

Ownership  of  the  banking  sector  is  foreign-dominated.  The  capitalisation  of  the  banking 
system has increased gradually, standing at around 9.4% of banks’ balance sheets. The capital 
adequacy ratio stood at 16.2% in 2009 — well above the legal minimum of 12% imposed by 
the BoA and the 8% required under the Basel framework agreement. 

The  structure  of  the  banks’  assets  has  undergone  significant  changes  in  recent  years.  The 
banking sector’s investment in government securities has declined from almost half the total 
assets in 2003 to 12% in 2009, giving way to an increase in the share of the credit portfolio. 
The corporate sector share in total loans amounts to roughly 62%, households 33%, the public 
sector  2.7%,  and  financial  institutions  accounted  for  the  rest.  In  the  past  seven  years,  the 
maturity structure of loans has become increasingly skewed toward long-term loans, i.e. loans 
with maturity of one year and above, which represent around 72% of the total.  

Banks’ profitability followed a general upward trend on the back of increasing net operating 
income  between  2004  and  2007,  but  declined  in  the  subsequent  two  years  owing  mainly  to 
rising  operational  costs  and  the  rapid  growth  of  expenses  for  provisioning  due  to  the 
economic  crisis.  While  non-performing  loans  (NPLs)  increased  at  a  moderate  pace  in  the 
period  2005-07,  this  pace  has  accelerated  since  the  last  quarter  of  2008.  In  the  first  half  of 
2010, NPLs continued to increase — reaching 12% in the second quarter of 2010 — although 
at a decelerating pace. Return on assets dropped from 1.3% in 2004 to around 0.3% in 2009. 
However, the banking system remains well capitalised.  

Starting from a low base, credit expanded rapidly in the first half of the 2000s, driven mainly 
by heightened competition in the sector following the privatisation of the Savings Bank. Most 

EN 

44 

  EN 

of this expansion in lending was financed through domestic resources, in the form of domestic 
deposits  and  recapitalisation.  During  the  past  two  decades,  the  Bank’s  supervisory  capacity 
has been significantly bolstered through the implementation of a more risk-based supervision 
process. Substantial progress has been made in improving the legal framework for insolvency 
and bankruptcy procedures have been strengthened. Overall, the banking system has recorded 
rapid expansion in recent years as a result of privatisation and the entry of foreign players.  

The insurance market has registered gradual expansion, albeit from a low base. In 2008, total 
assets  amounted  to  approximately  1.4%  of  GDP.  All  10  licensed  companies  active  in  the 
sector are domestic, but since 2007 Albania has attracted increased foreign (EU) participation. 
In the voluntary insurance sector, non-life insurance represents around 83% of turnover. The 
private pensions market is still underdeveloped. Three companies are licensed to offer private 
pensions. At the end of 2009, the legal framework for private pensions was amended by a new 
law  on  voluntary  pension  plans.  The  law  opens  up  the  possibility  for  the  establishment  of 
defined contributions third pillar pension funds, but does not reflect all the provisions of the 
acquis. Overall, the non-banking  financial sector is  still  undeveloped and  plays a negligible 
role as a source of private sector financing. 

The  Tirana  Stock  Exchange  was  formally  established  in  1996,  but  there  are  no  companies 
listed on the stock exchange. 

2.2.2.  Capacity to cope with competitive pressure and market forces within the Union 

The ability to fulfil this criterion depends on the existence of a market economy and a stable 
macroeconomic  framework,  allowing  economic  agents  to  take  decisions  in  a  climate  of 
predictability. It also requires a sufficient amount of human and physical assets. Enterprises 
need  to  invest  to  improve  their  efficiency  and  innovate  to  adjust  to  a  globalised  and  highly 
competitive external environment. Overall, the more an economy is integrated with the Union 
before accession, the better will it be able to take on the obligations of membership. 

Existence of a functioning market economy 

Albania is a small and increasingly open economy with a large private sector that accounts for 
some 80% of GDP. Prices and trade have been mostly liberalised. Throughout the transition, 
Albania  has  broadly  followed  a  policy  mix  pursuing  macroeconomic  stability.  Economic 
growth has been strong while inflation has declined and remained low. However, the current 
account deficit has worsened throughout the years, while unemployment, although declining, 
remains high. The pro-cyclical expenditure stance, which started already in 2006, led to a rise 
in  the  budgetary  deficit  as  of  2007  and  was  further  aggravated  by  deteriorating  revenue  in 
2009.  As  a  consequence,  the  decline  in  public  debt  was  reversed,  which,  together  with  the 
build-up  of  external  imbalances,  poses  a  risk  to  macroeconomic  stability.  Resuming  fiscal 
consolidation,  bolstering  the  stability  of  the  banking  sector,  eliminating  obstacles  to  market 
entry  and  exit  and  stepping  up  the  enforcement  of  the  legal  system  would  improve  the 
economy’s  growth  potential.  Overall,  Albania  has  achieved  a  degree  of  macroeconomic 
stability  which  broadly  allows  economic  operators  to  make  decisions  in  a  climate  of 
predictability. However, to become a functioning market economy, Albania needs to further 
strengthen  governance,  improve  the  performance  of  the  labour  market,  complete  the 
recognition of property rights and step up law enforcement. 

Human and physical capital  

EN 

45 

  EN 

Although  public  resources  devoted  to  education  are  significant  (3.8%  of  GDP  in  2009), 
Albania faces a number of challenges. Demographic shifts brought about by the brain drain in 
the  past  years,  a  high  incidence  of  informality  as  well  as  weaknesses  in  the  education  and 
skills system hinder the full realisation of human capital. The result is that firms face a dearth 
of  skills  that  limits  their  growth.  Educational  attainment  is  weak  notwithstanding 
improvements in the past years. On average, Albanian pupils complete 8.6 years of schooling, 
which is significantly low by international standards. However, drop-out rates have fallen in 
recent  years,  especially  in  primary  education,  and  participation  in  secondary  and  higher 
education  have  increased.  Reforms  to  make  the  vocational  education  system  (VET)  more 
responsive to changes in the labour market are relatively recent. University curricula, which 
were  insufficiently  linked  to  labour  market  demand,  are  undergoing  a  thorough  re-
organisation in terms of content and structure in accordance with the Bologna standards. On 
an  institutional  level,  reforms  are  also  increasing  the  autonomy  and  self-governance  of 
universities. The level of expenditure on research and development in Albania remains low. 
Spending on scientific research was estimated at 0.2% of GDP in 2009. Overall, while there 
are  serious  gaps  in  the  knowledge,  skills  and  orientation  of  the  labour  force  needed  by  a 
changing job market, recent reforms are a step in the right direction.  

In 2007, a strategy on employment and vocational training covering the period 2007–13 was 
adopted.  The  National  Employment  Service  runs  active  labour  market  programmes  by 
providing vocational counselling and training and job mediation and employment promotion 
programmes mostly targeting students, females and vulnerable groups. The coverage of these 
programmes  remains  inadequate.  A  comprehensive  strategy  on  workforce  skills  is  lacking, 
while on-the-job training is weak. Overall, active labour market programmes are insufficient 
compared with the level of unemployment, while work-related training remains a challenge. 

Burdened by a largely obsolete physical capital stock, Albania faced considerable investment 
needs after 1992 in view of its very poor endowment with basic infrastructure and productive 
capital.  Expressed  as  a  percentage  of  GDP,  average  annual  total  investment  amounted  to 
around  37%  during  the  period  2000-08.  However,  residential  property,  which  saw  rapid 
expansion  during  the  past  years  sustained  by  strong  inflows  from  migrants’  remittances, 
accounted  for  most  of  this  high  level  of  investment.  Such  investment,  together  with  rather 
modest  green-field  inward  investment  which  has  been  concentrated  in  capital-poor 
manufacturing  activities  in  the  past  years,  is  unlikely  to  increase  the  economy’s  productive 
capacity.  Green-field  investment  is  hampered  by  the  state  of  infrastructure  which,  although 
improving  in  the  last two decades, still faces weaknesses in terms of quality, reliability and 
affordability.  Overall,  investment  has  been  high  but  impediments  to  productive  capital 
remain. 

The  unreliability  of  electricity  supply  is  one  such  constraint.  Lack  of  investment  in  the 
transmission  and  interconnection  grids  as  well  as  over-reliance  on  hydropower  has  led  to 
periodic  load-shedding.  This,  together  with  deficiencies  in  distribution,  translated  into 
financial losses for KESh, the power supplier, triggering the need for subsidies. However, the 
situation has improved since 2008 mainly because of favourable hydrological conditions. In 
2003, a national energy strategy was launched with the objective of transforming  the sector 
along  market-oriented  principles.  The  government  is  seeking  to  diversify  energy  sources  by 
offering  concessions  to  private  investors  for  the  construction  and  operation  of  hydroelectric 
plants and other alternative sources of power. Interconnection with neighbouring countries is 
limited,  although  investment  in  this  area  is  ongoing.  Overall,  recent  reforms  have  begun  to 
address the bottlenecks in electricity infrastructure but further investment is needed to ensure 
a reliable supply. 

EN 

46 

  EN 

Telecommunications  infrastructure  is  also  inadequate  and  hampers  businesses.  Fixed-line 
telephone penetration stands at a low 11.3 per 100 inhabitants. Broadband penetration remains 
significantly low at 2.5% of population as tariffs remain high. Internet take-up by business has 
increased in recent years but remains particularly low among micro-enterprises that comprise 
the largest proportion of firms. On the other hand, heightened competition has led to a rapid 
rise  in  mobile  telephony  density,  which  is  comparable  with  EU  levels.  Notwithstanding  the 
competition  and  reductions  in  tariffs  in  2008,  mobile  telephony  charges  remain  at  the  high-
end by regional standards. Overall, the performance of telecommunications is weak. 

Significant  investment  in  recent  years  has  resulted  in  an  enlarged  road  network  but  the 
incidence of poor quality roads is high since spending allocated for road maintenance is low. 
Albania’s primary deep-sea ports in Durres and Vlora are undergoing upgrading works. The 
priority given by the government to road infrastructure has resulted in a lack of investment in 
the  rail  network.  Overall,  attention  devoted  to  building  transport  infrastructure  in  the  past 
years has not been matched with maintenance, while rail transport remains inadequate. 

Sector and enterprise structure 

Most of manufacturing is classified as light industry and is almost entirely privately owned. 
Despite  a  notable  expansion  in  recent  years,  Albania's  manufacturing  base  remains  narrow 
and  capital-poor.  The  textiles  and  footwear  sub-sectors  is  a  major  sub-sector,  representing 
some 15% of industry value added. A large part of output is destined to foreign markets and 
constitutes around 43% of total export of goods. The extracting sector, composed of energy 
and non-energy production, represents around 14% of merchandise exports. The non-energy 
sector  is  composed  of  mining  of  metal  ores  and  other  mining.  Given  Albania's  significant 
deposits, the non-energy subsector remains largely below potential mainly as a result of poor 
institutions,  a  lack  of  regulatory  effectiveness  and  weak  technical  capacities.  Services 
represent  some  54%  of  GDP  with  trade,  hotels  and  restaurants  accounting  for  the  largest 
share. Tourism has been one of the most dynamic sub-sectors in the past decade.  

The  significantly  higher  share  of  services  in  output  is  not  mirrored  in  employment  figures. 
The Albanian private sector  economy  is characterised by a dichotomy; a high  proportion of 
employment (around 44%) is engaged in declining sectors, primarily agriculture, with a low 
share  of  output,  while  growth  sectors  i.e.  services,  industry  and  construction  with  a  high 
proportion  of  GDP  account  for  a  lower  weight  of  employment  (38%).  The  public  sector 
absorbed  roughly  18%  of  total  employment  in  2008.  The  informal  sector,  fuelled  by 
weaknesses in tax and expenditure policies, as well as in law enforcement, including the fight 
against corruption and organised crime, is large. It reduces the tax base and the efficiency of 
economic policies. Overall, despite sizeable structural shifts over the years, there is still ample 
scope  for  more  labour  inputs  to  move  from  low  to  the  higher  productivity  activities.  The 
informal sector is an important challenge. 

In recent years, regulatory reforms provided for the restructuring and the gradual liberalisation 
of  the  electricity  market  as  well  as  promoting  regional  trade  in  electricity.  The  government 
also  decided  to  unbundle,  commercialise  the  electric  power  provider  and  in  2009  privatised 
the  electricity  distribution  arm.  The  sector’s  regulator  was  strengthened  and  given  more 
powers  including  issuing  licences  to  the  different  market  operators.  Tariffs  have  been 
gradually  increased  but  are  not  yet  at  a  cost-recovery  level.  Strengthening  the  technical, 
financial and management situation of the provider and making the privatisation effective by, 
amongst  others,  taking  steps  to  reduce  energy  losses  and  enforce  bill  collection  remain  a 
challenge.  The  essential  elements  of  the  telecommunications  regulatory  framework  are  in 

EN 

47 

  EN 

place, i.e. a telecoms regulator and a privatised fixed-line operator, while legislation is partly 
in line with EU practise. Overall, recent steps in the electricity sector are in the right direction 
but need further re-enforcement to ensure that the re-organisation of the sector is effective.  

Albania’s transition process has resulted in a business sector dominated by SMEs which have 
a  share  of  more  than  three-fifths  of  GDP  and  employ  around  four-fifths  of  total  workers. 
Micro  and  small  enterprises  dominate  the  services  and  trade  sectors,  while  medium-sized 
firms are concentrated in construction and industry. SMEs concentrate on the domestic market 
and  lack  export  competitiveness.  Support  to  export-oriented  and  innovative  companies  is 
weak.  In  2007,  the  government  established  a  €1.6  million  export  guarantee  fund  to  export-
oriented  firms  as  well  as  a  grant  scheme  as  part  of  a  competitiveness  fund.  A  strategic 
framework  for  SME  development  was  launched  in  2007  with  the  Business  and  Investment 
Development  Strategy  which  is  a  long-term  strategy  complemented  by  a  medium-term 
programme.  Overall,  SMEs  are  mostly  domestically-oriented  as  export  promotion  remains 
inadequate.  

Although  access  to  finance  has  improved  over  the  years,  own  resources  remain  the  main 
source  of  financing  for  most  firms.  This  is particularly  the  case  for  micro,  small  businesses 
and  start-ups,  which  face  tough  borrowing  conditions,  especially  in  rural  areas.  Since  2009, 
credit  conditions  for  SMEs  have  become  more  restrictive,  with  lending  rates  charged  by 
commercial banks on new lek-denominated loans standing at around 15%. While companies 
continue to suffer from delays in the reimbursement of overpaid VAT or export refunds, the 
situation  has  improved  somewhat  since  the  beginning  of  2010.  A  public  credit  registry, 
established  by  the  BoA  in  2008,  collects  data  from  banks  and  makes  them  available  to 
lenders.  However,  the  exclusion  of  micro-credit  institutions  from  the  credit  registry  is 
considered  to  be  a  bottleneck  for  the  access  to  bank  lending  for  SME.  Overall,  despite 
significant progress, access to finance remains a challenge to micro and small enterprises. 

State influence on competitiveness 

State aid (including for agriculture and fisheries) has declined from 0.6% of GDP in 2006 to 
0.4% in 2008. Three-fifths of state aid is granted to support special sectors mostly providing 
public services including water supply and railways. The electricity sector has been a major 
recipient of state support in 2007 partly as a result of adverse weather conditions which led to 
a crisis in the sector. The level of subsidies granted to this sector has declined thereafter. No 
additional  specific  financial  assistance  was  awarded  to  companies  to  counter  the  economic 
crisis in 2009 and 2010. Overall, the amounts of state aid are limited..  

Economic integration and convergence with the EU  

During  the  past  two  decades,  Albania  has  become  more  integrated  into  the  global  economy 
and increasingly more open as trade in goods and services reached more than 80% of GDP in 
2009 — almost double the corresponding figure in 1996. The EU is the major trading partner, 
representing  roughly 70% of goods, followed by the CEFTA countries (9.4%). In 2008, the 
largest  share  of  merchandise  trade  with  the  EU  was  directed  to  Italy  (62%  exports;  27% 
imports) and Greece (9% exports; 15% imports). However, the share of trade with both Italy 
and  Greece  has  shown  a  generally  declining  trend.  The  increased  integration  and  trade 
openness was achieved against a background of FDI inflows averaging 4.7% of GDP during 
the period 2003-08. During this period, more than three quarters of FDI originated from EU 
countries,  with  Greece  being  the  main  source,  accounting  for  more  than  half  of  the  total, 
followed  by  Italy  (11%)  and  Austria  (8%).  Although  the  real  effective  exchange  rate  has 

EN 

48 

  EN 

depreciated since mid-2008, contributing to an improvement in price competitiveness, limited 
quality  upgrading  of  exports  points  to  weak  non-price  competitiveness.  Overall,  trade  and 
investment integration with the EU is high. The recent depreciation of the real exchange rate 
has 
factors  constrain  non-price 
competitiveness.  

supported  price  competitiveness,  but 

structural 

2.3. 

General evaluation 

The  present  assessment  is  made  on  the  basis  of  the  Copenhagen  criteria  related  to  the 
existence  of  a  functioning  market  economy,  as  well  as  the  capacity  to  cope  with 
competitive pressure and market forces within the Union. 

There is a broad consensus in Albania on the fundamentals of economic policy as well as a 
track  record  in  the  implementation  of  economic  reforms.  Albania  achieved  a  degree  of 
macroeconomic stability sufficient enough to allow economic operators to make decisions in 
a  climate  of  predictability.  The  macro  policy  mix  in  the  past  years  has  been  appropriate, 
generating  growth  rates  exceeding  5%  and  activity,  although  slower,  remained  positive  in 
2009  despite  the  crisis.  Inflation  has  remained  low.  The  free  interplay  of  market  forces  has 
been developing through privatisation. Prices and trade have been mostly liberalised. Notable 
progress  has  been  achieved  in  facilitating  market  entry.  The  banking  system  has  rapidly 
expanded  as  a  result  of  privatisation  and  the  entry  of  foreign  players.  State  aid  has  been 
reduced. The share of trade and investment integration with the EU remained high. 

However,  fiscal  consolidation  has  been  reversed  recently  and  the  high  level  of  public  debt 
remains  a  source  of  macro-financial  vulnerability.  A  narrow  export  base  and  public 
investment have led to a significant and persistent current account imbalance. The existence 
of widespread informal work arrangements continues to severely distort the labour market and 
unemployment  remains  high  and  stood  at  13.8%  in  2009.  Access  to  finance  remains  a 
challenge  to  small  enterprises.  Weaknesses  in  the  rule  of  law  hamper  the  business 
environment  and  ownership  transfer  and  recognition  of  property  rights  remain  a  serious 
problem.  The  education  system  remains  unable  to  equip  the  labour  force  with  the  skills 
needed by the changing job market. Infrastructure requires further investment and institutional 
and  regulatory  steps  are  needed  to  ensure  a  reliable  energy  supply.  The  informal  economy 
remains an important challenge.  

3. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

The European Council in Copenhagen in June 1993 included among the criteria for accession 
“the  ability  to  take  on  the  obligations  of  membership,  including  adherence  to  the  aims  of 
political, economic and monetary union”.  

In applying for membership on the basis of the Treaty, Albania has accepted without reserve 
the basic aims of the Union, including its policies and instruments.  

This part of the analytical report analyses Albania's ability to assume the detailed obligations 
of membership — that is, the acquis, as expressed in the Treaties, the secondary legislation 
and the policies of the Union. This section follows the structure of the 33 negotiating chapters 
into which the acquis has been divided for the purpose of conducting accession negotiations. 
Each chapter examines the current situation and prospects in Albania.  

EN 

49 

  EN 

As the Union has developed, the acquis has become progressively more onerous and presents 
a greater challenge for future accessions than was the case in the past. The ability of Albania 
to  implement  the  acquis  will  be  central  to  its  capacity  to  function  successfully  within  the 
Union. 

In this respect, alignment with the acquis is a necessary but not sufficient condition to meet 
the  obligations  of  EU  membership.  Albania  must  also  take  all  necessary  measures  to  create 
the  necessary  implementing  structures,  to  bring  its  administrative  capacities  to  the  required 
level  and  to  ensure  effective  enforcement.  An  analysis  and  assessment  of  the  country’s 
administrative capacities is therefore included in each of the chapters below.  

For the purpose of this analytical report, and without prejudging any future date of accession, 
the medium-term perspective in the assessments has been defined as a period of five years.  

3.1. 

Chapter 1: Free movement of goods 

The principle of free movement of goods means that products must be traded freely from one 
part of the Union to another. In a number of sectors this general principle is supplemented by 
a  harmonised  regulatory  framework,  following  either  the  ‘Old  Approach’  (laying  down 
precise product specifications) or the ‘New Approach’ (setting general product requirements). 
Transposition  of  harmonised  European  product  legislation  accounts  for  the  bulk  of  the 
obligations  under  this  chapter.  Smooth  implementation  and  proper  implementation  of  the 
acquis requires sufficient administrative capacity to notify restrictions on trade and to apply 
horizontal and procedural measures in areas such as standardisation, conformity assessment, 
accreditation, metrology and market surveillance.  

The Stabilisation and Association Agreement creates a number of obligations in the field of 
free  movement  of  goods,  such  as  establishment  of  a  free  trade  area.  It  also  provides  for 
gradual  alignment  to  EU  technical  regulations  and  standards  as  well  as  metrology, 
accreditation and conformity assessment procedures. 

Regarding  the  general  principles,  Albania  needs  to  ensure  that  its  legislation,  including 
distinctly as well as indistinctly applicable measures, is compatible with Articles 34 to 36 of 
the  Treaty  on  the  Functioning  of  the  European  Union  and  related  case  law  of  the  European 
Court of Justice (with special emphasis on the principle of mutual recognition). 

In  the  area  of  horizontal  measures,  Albania  adopted  new  legislation  on  accreditation, 
standardisation  and  metrology  during  2007  and  2008.  The  Law  on  general  product  safety, 
essential  requirements  and  conformity  assessment  of  non-food  products  aims  at  gradual 
harmonisation  with  the  principles  of  the  New  and  Global  Approach.  It  will  need  further 
revision  to  comply  fully  with  the  general  principles  of  the  New  Approach  and  with  the 
horizontal acquis adopted in 2008.  

The framework Law on standardisation was adopted in March 2008. However, Albania has 
not yet established the legal basis and administrative structure for adoption of ETSI (European 
Telecommunications Standards Institute) standards as Albanian standards. 

The General Directorate of Standardisation (GDS), a government department reporting to the 
Minister of Economy, Trade and Energy, is responsible for standardisation in all fields except 
telecommunications.  The  GDS  is  a  correspondent member  of  the  International  Organisation 
for  Standardization  (ISO),  an  associate  member  of  the  International  Electrotechnical 
Commission  (IEC)  and  an  affiliate  member  of  both  the  European  Committee  for 

EN 

50 

  EN 

Standardization  (CEN)  and  the  European  Committee  for  Electrotechnical  Standardisation 
(CENELEC). It plans to apply for full membership of CEN and CENELEC in 2012. So far it 
has adopted around 92% of the European standards (ENs) prepared by CEN and CENELEC 
as Albanian standards, thus meeting the standard-related membership criterion. The GDS has 
a  staff  of  18.  There  are  60  technical  committees,  all  but  one  mirroring  CEN/CENELEC 
committees. Sufficient translation and information technology capacity, backed up by funding 
for promoting use of standards, will need to be ensured. The supervisory board provided for in 
the 2008 law on standardisation to monitor the work of the GDS has not yet been established. 

As  regards  conformity  assessment,  the  Albanian  framework  Law  on  general  product  safety, 
essential requirements and conformity assessment of non-food products needs to be revised to 
align it with the 2008 horizontal acquis. Current practices on use of the CE marking are not in 
line with the acquis. So far 17 conformity assessment bodies have been accredited. By law, 
accreditation is a pre-condition for being designated as a conformity assessment body.  

Albania’s accreditation policy is broadly in line with the EU principles, notably as regards the 
public,  not-for-profit  basis  of  the  General  Directorate  for  Accreditation  (GDA)  and  its 
professional  and  financial  independence  from  possible  clients.  The  GDA  is  in  charge  of 
accreditation of conformity assessment bodies. It has a staff of 15 and its rules of procedure 
are regulated by a government decision of October 2008 which aims at further alignment with 
the  acquis.  The  GDA  signed  a  contract  of  co-operation  with  the  European  co-operation  for 
Accreditation  (EA)  in  2006  and  in  2008  it  applied  to  be  a  signatory  of  the  EA  Multilateral 
Agreement (MLA) in the field of testing laboratories.  

The  appeal  procedures  introduced  by  the  2008  law  on  metrology  were  improved  in  2010, 
granting economic operators recourse to court. The General Directorate for Metrology (GDM) 
in the Ministry of Economy, Trade and Energy is in charge of legal, scientific and industrial 
metrology  and  acts  as  the  National  Metrology  Institute.  The  law  on  metrology  allows 
outsourcing  of  some  verification  activities  to  private  bodies.  The  GDM  is  an  institution 
funded from the State budget with 110 employees. The continuity of its staff will be essential 
to create an institutional memory and transfer knowledge. The GDM is a full member of the 
European  Association  of  National  Metrology  Institutes  (EURAMET)  and  an  observer 
member  of  WELMEC,  the  organisation  for  European  cooperation  in  legal  metrology.  Two 
calibration laboratories are accredited in accordance with EN ISO/IEC 17025 by the Albanian 
accreditation  body.  The  GDM  is  working  on  implementation  of  the  investment  plan  for  the 
new areas of measurements, premises and equipment, as part of the National Strategy on the 
Metrology  System  in  Albania  for  2008–2012.  A  new  National  Metrology  Centre  is  under 
construction.  

The  Albanian  market  surveillance  system  is  based  on  many  different  pieces  of  legislation 
depending on the product in question. A pre-marketing authorisation system based on permits 
or licences also exists for some products. The 2007 Law on general product safety, essential 
requirements  and  conformity  assessment  of  non-food  products,  one  of  the  main  pieces  of 
legislation regulating market surveillance of industrial products, does not fully incorporate the 
requirements of the acquis.  

The Ministry of Economy, Trade and Energy plays a coordinating role in the area of market 
surveillance.  Its  Market  Surveillance  Directorate  took  on  a  wider  remit  by  becoming  the 
Directorate  for  Trade  Mechanisms  and  State  Aid  in  June  2010.  Its  institutional  and 
administrative  capacity  and  resources  need  to  be  increased  in  order  to  ensure  efficient, 
coordinated  market  surveillance.  Different  inspectorates  or  agencies  carry  out  market 

EN 

51 

  EN 

surveillance activities, but they have had problems with the transition from State pre-market 
the  acquis.  The 
to  market  surveillance  authorities  required  by 
inspection  bodies 
comprehensive market surveillance structure required under the acquis is not yet in place and 
existing  inconsistencies  will  need  to  be  repealed.  Inter-institutional  coordination  and 
cooperation, including with customs authorities, needs to be enhanced.  

Albania  has  not  yet  transposed  the  vast  majority  of  the  sector-specific  legislation.  Major 
discrepancies  with  the  acquis  persist  in  sectors  covered  by  the  Old  Approach  product 
legislation. Albania has already partly aligned its legislation on detergents, pre-packaging and 
legal units of measurement with the acquis. However, legislation applicable to motor vehicles, 
emissions  of  pollutants  from  non-road  mobile  engines,  chemicals,  medicinal  products  for 
human  use,  medicinal  products  for  veterinary  use,  cosmetics,  aerosol  dispensers,  textiles, 
footwear and crystal glass is not yet aligned with the acquis. 

Albania  has  already  transposed  many  of  the  directives  in  areas  covered  by  the  New  and 
Global  Approach  product  legislation.  It  has  adopted  legislation  aiming  at  alignment  on 
toys,  simple  pressure  vessels,  pressure  equipment,  gas  appliances,  low-voltage  equipment, 
electromagnetic compatibility, machinery, equipment and protective systems intended for use 
in  potentially  explosive  atmospheres,  lifts  and  personal  protective  equipment.  However,  its 
alignment  with  the  acquis  needs  to  be  verified.  The  acquis  has  not  yet  been  transposed  as 
regards  medical  devices,  recreational  craft,  cableway  installations,  construction  products, 
explosives  for  civil  uses,  pyrotechnical  articles,  radio  and  telecommunications  terminal 
equipment, eco-design requirements for energy-related products, noise emissions by outdoor 
equipment, non-automatic weighing instruments and measuring instruments. 

Regarding procedural measures, Albania has not yet transposed the acquis on provision of 
information on technical standards and regulations. The 1992 Law on weapons and the related 
implementing legislation are being amended with the aim of full compliance with the acquis 
on civil firearms. The Law on cultural heritage is not yet in line with the acquis on the return 
of cultural objects unlawfully removed from the territory of EU Member States. As regards 
external  border  checks,  the  Albanian  legislation  is  not  in  line  with  the acquis  on  control  of 
products coming from third countries. 

Conclusion 

Albania has started to harmonise its national legislation with the principles of free movement 
of  goods.  However,  most  provisions  of  the  acquis  are  not  yet  in  place.  Horizontal  and 
procedural  measures,  including  the  framework  legislation  on  technical  regulations  for 
products  and  conformity  assessment  procedures,  and  Old  and  New  Approach  product 
legislation  need  to  be  harmonised  with  the  acquis.  The  basic  separation  of  standardisation, 
accreditation  and  metrology  functions  has  been  established,  but  further  implementing 
measures are necessary. An adequate market surveillance structure needs to be established in 
accordance with the acquis. Overall administrative capacity needs to be reinforced and proper 
coordination  of  measures  on  free  movement  of  goods  is  needed at government  level. Major 
efforts to transpose directives will be necessary. 

Overall, in the field of free movement of goods, Albania will have to make considerable and 
sustained efforts to align with the acquis and to implement it effectively in the medium term.  

EN 

52 

  EN 

3.2. 

Chapter 2: Freedom of movement for workers 

The acquis under this chapter provides that EU citizens of one Member State have the right to 
work in another EU Member State, to reside there for that purpose with their family and to be 
treated in the same way as national workers in terms of working conditions and social and tax 
advantages. Furthermore, the acquis includes the EU instruments on coordination of different 
national social security systems. 

The  Stabilisation  and  Association  Agreement  provides  that,  subject  to  conditions  and 
modalities  applicable,  Albania  and  EU  Member  States  ensure  that  nationals  of  the  partner 
country  who  are  legally  employed  on  their  territory  are  not  subjected  to  any  discrimination 
based on nationality as regards working conditions, remuneration or dismissal. 

Concerning access to the labour market, the current Albanian legislation is not in line with 
EU law on free movement of EU citizens. It requires EU citizens to apply for a work permit 
(pursuant to the Law on foreigners) which may be issued following a labour market test. No 
distinction is drawn between EU nationals and other foreign nationals in this respect. Families 
of  EU  migrant  workers  have  the  right  to  reside  in  Albania  for  the  same  duration  as  the 
workers.  EU  nationals  legally  residing  and  employed  in  Albania  enjoy  equal  treatment  as 
regards  employment,  pay  and  working  conditions,  but  employment  in  the  public  sector  is 
restricted to Albanian nationals.  

By  the  time  of  its  accession  to  the  EU,  Albania  would  have  to  implement  the  acquis  on 
freedom of movement for workers. Its national law will have to ensure that no work permit 
scheme applies to EU nationals and that EU workers have the right to reside in the country 
and enjoy the same social advantages as Albanian nationals. Furthermore, Albania’s national 
law  will  have  to  grant  family  members  of  EU  migrant  workers  the  right  to  be  employed 
without  needing  a  work  permit  and  their  children  the  right  to  be  admitted  to  educational 
institutions on the same conditions as nationals of Albania.  

As  regards  employment  in  the  public  sector,  The  Albanian  legislation  on  the  status  of  civil 
servants  stipulates  that  a  general  requirement  for  hiring  in  the  civil  service  is  to  be  an 
Albanian  citizen..  Albania  will  have  to  take  into  account  the  acquis  (in  particular,  the  case 
law) in this field, which allows EU Member States to restrict public service posts to their own 
nationals  only  if  they  are  directly  related  to  the  specific  activities  of  the  public  service,  i.e. 
involve exercising public authority and responsibility for safeguarding the general interest of 
the State (including of local authorities).  

Preparation  for  future  participation  by  Albania  in  the  European  Employment  Services 
(EURES) network will need to be verified. Besides making sure that the vacancy database is 
available in English and checking the language skills of potential EURES advisors, attention 
needs  to  be  paid  to  ensuring  that  local  and  regional  offices  have  the  possibility  to  share 
vacancies data not only with the central employment agency but also with each other. 

As  regards  supplementary  pensions,  Albania’s  pension  scheme  has  two  components:  a 
compulsory public pension and recently adopted voluntary pension insurance (first and third 
pillars).  Upon  accession  Albania  will  need  to  implement  measures  in  line  with  Directive 
98/49/EC  to  guarantee  equal  treatment  between  EU  migrants  and  nationals  regarding 
preservation  of  vested  second-pillar  supplementary  pension  rights  and  payment  thereof  in 
another  Member  State.  Moreover,  posted  workers  must  have  the  possibility  to  continue  to 
make  contributions  to  a  supplementary  pension  scheme  in  their  country  of  origin  for  the 

EN 

53 

  EN 

duration of their posting, in which case they are exempt from contributing to such a scheme in 
the host Member State.  

As  regards  coordination  of  social  security  systems,  the  social  security  system  in  Albania 
includes all traditional branches of social security which come within the scope of the rules on 
EU  coordination  and  includes  benefits  and  characteristics  similar  to  those  in  many  EU 
Member  States’  systems.  The  Albanian  social  security  system  is  based  on  the  principle  of 
compulsory  insurance  in  the  country  of  work  (lex  loci  labori).  Albanian  social  security 
legislation  provides  for  no  discriminatory  treatment  with  regard  to  nationals  from  other 
countries.  Albania  has  concluded  bilateral  social  security  agreements  with  three  other 
countries, including two EU Member States, and negotiations are continuing with three more. 
In  Albania,  the  Social  Security  Institute  and  Health  Care  Institute  will  be  responsible  for 
applying  the  European  Union  provisions  on  coordination  of  social  security  schemes. 
Regulations  883/2004  and  987/2009  are  directly  applicable  upon  accession.  Consequently, 
only  technical  adjustments  to  Albania’s  social  security  legislation  will  be  necessary. 
Application  of  these  regulations  could  have  some  financial  implications  for  Albania, 
including export of pensions and reimbursement of medical expenses for Albanian nationals 
treated  in  another  Member  State.  In  addition,  preparations  will  have  to  be  made  for 
participation  in  the  EESSI  system  (on  electronic  exchange  of  social  security  information), 
implying  additional  costs  for  the  necessary  IT  infrastructure.  Albania  will  have  to  develop 
sufficient  administrative  capacity  to  apply  the  acquis  fully  as  from  accession.  Additionally, 
Albania will also have to introduce the European Health Insurance Card upon accession. 

Impact 

The  estimated  impact  of  Albania's  possible  accession  upon  the  EU  labour  market  has  to  be 
related to a number of factors, such as the size of Albania's working population, age structure 
and migration movements.  

Albania's  population  is  estimated  to  be  around  3.2  million  persons.  The  annual  population 
growth  until  2020  is  estimated  at  0.5%7.  As  regards  the  age  structure,  the  share  of  the 
youngest age groups (15 and less), around 23%, is higher than in the EU (15.4%).  

Albania's working age population (15-64) in 2009 was estimated at around 2.1 million, which 
represents 0.6% of the EU working age population. The economically active population was 
estimated to be around 1.3 million individuals. In 2009, the employment rate was estimated to 
be  around  53.4%  (compared  to  65.9%  in  the  EU).  Unemployment  has  been  declining 
gradually,  except  in  2009,  when  it  rose  slightly  from  13%  to  13.8%.  Furthermore,  an 
important number of persons work in the informal economy.  

Despite a strong annual growth of the GDP in the last decade (always higher than 5% since 
1998,  apart  from  2002),  there  remain  very  large  differences  in  the  level  of  GDP  per  capita 
between Albania and the EU. Albanian GDP per capita in purchasing power parity represents 
27.1% of the EU 27 average.  

Since  the  early  1990s  there  have  been  migration  movements  from  Albania  towards  third 
countries including EU member states. It is estimated that around 1 million Albanian citizens 
currently  live  in  the  EU  (mostly  in  Italy  and  Greece)  representing  3.2%  of  the  foreign 
population  living  in  the  EU  (and  0.2%  of  the  EU  total  population).  There  is  a  trend  of 
reduction of the net migration rate from Albania in recent years.  

7 

United Nations Population projections. See: http://esa.un.org/unpp/index.asp?panel=2 

EN 

54 

  EN 

                                                 
Notwithstanding  limits  due  to  the  lack  of  reliability  and  comparability  of  Albania's  labour 
market  statistics  with  that  of  the  EU,  overall,  the  above  preliminary  assessment  tends  to 
indicate that Albania's membership in the EU would have a relatively minor impact on the EU 
labour market. However, this situation will have to be closely monitored taking into account 
developments in Albania and the EU. 

Conclusion 

Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
implement it effectively in the medium term in the field of freedom of movement for workers. 
With regard to coordination of social security, taking into account that Albania has only three 
social  security  agreements,  development  of  adequate  administrative  capacity  to  apply  the 
provisions on coordination with all EU Member States will be a major challenge.  

3.3. 

Chapter 3: Right of establishment and freedom to provide services 

Member States must ensure that the right of establishment of EU nationals and legal persons 
in  any  Member  State  and  the  freedom  to  provide  cross-border  services,  as  laid  down  in 
Articles 49 and 56 of the Treaty on the Functioning of the European Union (TFEU), are not 
hampered  by  national  legislation,  subject  to  the  exceptions  set  out  in  the  Treaty.  The  core 
piece  of  acquis  in  this  area  is  the  Services  Directive.  The  acquis  also  harmonises  the  rules 
concerning regulated professions to ensure mutual recognition of qualifications and diplomas 
between  Member  States.  For  certain  regulated  professions  a  common  minimum  training 
curriculum must be followed in order to have the qualification automatically recognised in an 
EU  Member  State.  The  EU  postal  reform  aims  to  ensure  provision  of  a  universal  postal 
service,  the  establishment  of  an  internal  market  for  postal  services  and  a  high-quality  postal 
service for end users. 

The Stabilisation and Association Agreement provides for gradual liberalisation of the right of 
establishment and the freedom to provide services between the EU and Albania. It includes a 
standstill  clause  as  regards  restrictions  to  supply  of  services  by  providers  established  in  a 
country other than that of the person for whom the services are intended.  

As regards the right of establishment, the Albanian legislation does not discriminate against 
foreign  operators  or  their  subsidiaries  or  branches.  The  procedures  for  registration  in  the 
commercial registry are non-discriminatory. 

Albania’s legislation on the freedom to provide cross-border services is not in line with the 
acquis,  particularly  the  Services  Directive.  Its  current  legislation  regulates  provision  of 
services  with  an  establishment  in  Albania,  but  not  provision  of  cross-border  services.  Full 
implementation  of  the  Services  Directive  will  require  significant  strengthening  of  the 
administrative  capacity.  Furthermore,  effective  compliance  with  the  acquis  will  entail 
adequate coordination at national level between all relevant administrative bodies and, upon 
accession, with EU Member States.  

Albania’s  primary  legislation  on  postal  services  follows  the  principles  and  objectives  laid 
down  in  the  acquis.  A  number  of  specific  issues  regarding  the  universal  service  obligation 
will  require  particular  attention,  such  as  product  range  and  minimum  requirements,  VAT 
exemption, exceptions to the obligation, and the period for designation and supervision of the 
service provider. Further efforts have to be made regarding provisions on the reserved areas, 
licence  requirements  for  the  authorisation  procedure,  tariff  regulation  and  accounting 
separation  for  the  universal  service  along  with  complaints  procedures.  A  new  postal  sector 

EN 

55 

  EN 

development  strategy,  taking  into  account  changes  introduced  by  the  Third  Postal  Services 
Directive, is at an early stage of preparation. The Ministry for Innovation and Information and 
Communication Technology is responsible for policymaking, including rules and procedures 
for  setting  tariffs  and  conditions  for  universal  postal  services.  The  Electronic  and  Postal 
Communications  Agency,  an  independent  body  not  funded  from  the  State  budget,  is  the 
national regulatory authority (NRA). The current administrative capacity of the NRA is weak 
and  its  regulatory  department  for  postal  services  has  not  been  established.  This  hampers 
effective separation of regulatory functions from policymaking.  

In  the  field  of  mutual  recognition  of  professional  qualifications,  the  scope  and  minimum 
training  requirements  for  the  regulated  professions  are  broadly  in  line  with  the  acquis. 
Minimum  training  requirements  will  need  to  be  adjusted  to  ensure  full  alignment.  Some 
requirements  for  EU  professionals  to  practise  in  the  health  sector  are  not  in  line  with  the 
acquis. Albanian legislation provides for the mutual recognition of foreign higher education 
and professional qualifications. However, there is no clear differentiation between recognition 
of  professional  qualifications  and  recognition  of  academic  qualifications  and  some 
implementing legislation for the recognition of professional qualifications is still outstanding. 
The Commission on Recognition in the Ministry of Education and Science is responsible for 
both academic and professional qualifications. It processes all applications for recognition of 
certificates  of  first-level  higher  education,  secondary-level  higher  education,  second-level 
Master’s diplomas and specialist certificates obtained abroad. Line ministries are responsible 
for  regulated  professions  in  their  fields.  Administrative  capacity  appears  insufficient  for  the 
scope  of  the  tasks.  The  Commission  has  five  members  and  is  assisted  by  a  technical 
secretariat  which  has  a  staff  of  two.  Further  efforts  will  be  required  to  achieve  full 
transposition of the acquis and establish an adequate institutional framework 

Conclusion 

There  are  no  discriminatory  legal  barriers  to  the  right  of  establishment  for  EU  operators  in 
Albania. However, significant efforts need to be made regarding the alignment of legislation 
on the freedom to provide services with the acquis, as well as on administrative capacity and 
interinstitutional  cooperation.  Albania  should  have  no  major  difficulties  to  align  its  national 
postal  legislation  with  the  acquis  in  the  medium  term,  but  adequate  capacity  and  full 
independence of the NRA will need to be ensured. Legislation on recognition of professional 
qualifications  needs  to  be  further  aligned  with  the  acquis.  The  relevant  structures  and 
procedures for implementation need to be established.  

Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
implement it effectively in the medium term. Early preparations and particular attention will 
be needed in the area of freedom to provide services. 

3.4. 

Chapter 4: Free movement of capital 

Member  States  are  expected  to  remove  all  restrictions  on  capital  movements  and  payments 
both within the EU and between Member States and third countries. The acquis also includes 
rules  on  cross-border  payments  and  execution  of  transfer  orders  concerning  securities.  The 
Directive  on  the  fight  against  money  laundering  and  terrorist  financing  requires  banks  and 
other  economic  operators  to  identify  customers  and  report  certain  transactions,  particularly 
when dealing with high-value items and large cash transactions. A key requirement in order to 
combat  financial  crime  is  creation  of  effective  administrative  and  enforcement  capacity, 
including cooperation between supervisory, law enforcement and prosecution authorities.  

EN 

56 

  EN 

The  Stabilisation  and  Association  Agreement  (SAA)  sets  out  a  timetable  for  capital 
liberalisation. It also provides for freedom and convertibility of current account payments and 
transfers. 

In  the  area  of  capital  movements,  the  Regulation  on  foreign  exchange  activity  adopted  in 
September 2009 liberalised current account transactions between residents and non-residents. 
It  provides  for  unrestricted  capital  inflows  and  outflows.  It  also  abolished  previous 
prerogatives of the Bank of Albania on control of capital outflows. 

Acquisition of real estate by foreigners is subject to certain restrictions: foreigners are not yet 
allowed  to  acquire  agricultural  land,  forests,  meadows  and  pastures.  The  SAA  provides  for 
progressive  adjustment  of  the  legislation  in  this  area  to  ensure,  by  1  April  2016,  no  less 
favourable treatment for EU nationals than accorded to Albanian nationals. This will require 
enhancing  current  administrative  capacity.  Moreover,  Albania  will  need  to  solve  existing 
uncertainties on real estate ownership rights. 

The  1993  Law  on  foreign  investments  provides  for  a  free  investment  arrangement  for  both 
non-residents investing in Albania and residents investing abroad. Foreign direct investment 
(FDI)  has  been  one  of  the  main  factors  in  the  recent  economic  development  of  Albania.  In 
2009,  304  foreign  companies,  74  branches  and  21  offices  representing  foreign  companies 
were established in the country. The estimated value of FDI for 2009 totalled €695 million. 
Privatisation  in  key  sectors  (banking,  telecommunications  and  energy)  has  been  the  main 
source of FDI. So far the government has retained no special rights or ‘golden shares’ when 
privatising  strategic  companies,  but  the  existing  legislation  allows  it  to.  The  legislation 
governing investment in the non-banking financial market includes provisions which are not 
compatible with the acquis and can only be justified on the grounds of imperative reasons in 
the public interest. 

The Albanian legislative framework on payment systems is different and far less developed 
than the current EU framework. Substantial amendments and adoption of new legal acts will 
be needed to bring it into line with the acquis. Cross-border payments are not regulated and 
rights  and  obligations  related  to  provision  and  use  of  payment  services  apply  to  national 
transactions only and do not cover many aspects addressed by the EU directive. For example, 
provisions  on  electronic  payment  instruments  are  limited  in  scope  and  do  not  provide  for 
consumer  protection  (settlement  of  disputes).  The  administrative  structure  necessary  for 
transposition of the acquis is in place. However, it will need to be reinforced to cope with the 
increase in supervisory and enforcement duties during transposition and after adoption of the 
EU payment legislation. 

The main legislative acts regulating the fight against money laundering are the 2008 Law on 
the  prevention  of  money  laundering  and  financing  of  terrorism  (the  AML  law)  and  its 
implementing  regulations.  They  already  cover  a  number  of  requirements  of  the  acquis. 
However,  there  are  shortcomings  concerning  definitions,  particularly  of  beneficial  owners, 
shell  banks  and  politically  exposed  persons.  Certain  measures  required  from  financial 
institutions  to  deal  with  consumer  due  diligence  (CDD)  remain  vague  and  provisions  on 
politically exposed persons will have to be amended.  

Implementation  of  the  anti-money-laundering  legislation  is  steadily  progressing,  with  the 
latest initiatives focusing mainly on definition of suspicious transactions, CDD requirements, 
record-keeping obligations and supervisory issues. The October 2009 national strategy paper 

EN 

57 

  EN 

on  investigation  of  financial  crime  lays  the  foundations  for  progress  in  the  fight  against 
money laundering and financing of terrorism. 

The  number  of  cases  referred  by  the  Financial  Intelligence  Unit  (FIU)  to  the  Prosecutor’s 
Office  and  the  Albanian  State  Police  has  increased,  as  have  the  number  and  quality  of 
inspections. However, effective implementation and enforcement of the legislation is a cause 
for concern. So far there has been only one conviction for money laundering. Despite a slight 
upward  trend,  the  overall  number  of  suspicious  transaction  reports  (STR)  sent  to  the  FIU 
remains low and unsatisfactory. Electronic reporting remains very limited. Reporting is also 
uneven  as,  with  the  exception  of  commercial  banks,  most  financial  or  non-financial 
institutions do not send STRs to the FIU. More outreach to the private sector will be necessary 
to  increase  awareness  of  reporting  obligations.  Moreover,  the  extensive  use  of  cash  in  the 
economy  and  the  high  levels  of  organised  crime  and  corruption  are  hampering  the 
implementation of the framework to fight money laundering and financing of terrorism.  

The  General-Directorate  for  the  Prevention  of  Money  Laundering  (GDPML)  serves  as  the 
FIU. Its organisation and functions are regulated by the AML law. It operates as the national 
centre for collecting and analysing information on potential money laundering and terrorism 
financing  activities  and  disseminating  it  to  law  enforcement  agencies.  The  capacity  of  the 
GDPML has been improved with additional staff, training and IT equipment, but its overall 
capacity  remains  limited,  in  particular  on  the  analysis  side.  Cooperation  between  law 
enforcement  bodies  has  improved  and  specialised  training  for  all  institutions  has  continued, 
but further efforts are still needed.  

Conclusion 

Capital  movements  in  Albania  are  essentially  liberalised  and  so  far  the  country  has  met  the 
deadlines  for  implementing  its  SAA  commitments  in  this  area.  However,  further  efforts  are 
still  needed  and  the  acquis  on  payments  will  need  to  be  transposed.  Adequate  human 
resources  need  to  be  made  available.  A  sound  legal  framework  is  in  place  to  fight  money 
laundering and financing of terrorism. Legislation needs to be further aligned with the acquis, 
but  it  should  be  possible  to  solve  the  existing  shortcomings  in  the  medium  term.  Effective 
enforcement  of  legislation  will  require  further  efforts  and  political  determination  to  address 
systemic  issues  such  as  the  large  cash  economy  and  the  high  levels  of  organised  crime  and 
corruption.  An  additional  challenge  will  be  to  provide  adequate  training,  guidance  and 
supervision to the private sector.  

Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
implement it effectively in the medium term in the field of free movement of capital. 

3.5. 

Chapter 5: Public procurement 

The  acquis  on  public  procurement  includes  the  general  principles  of  transparency,  equal 
treatment, and non-discrimination. In addition, specific EU rules apply to coordination of the 
award  of  public  contracts  for  works,  services  and  supplies,  for  the  classical  sectors,  for 
utilities  and  for  the  fields  of  defence  and  security.  The  scope  of  application  is  defined 
according  to  contracting  entities,  contracts  covered,  application  thresholds  and  specific 
exclusions.  The  acquis  also  lays  down  rules  on  review  procedures  and  the  availability  of 
remedies.  

EN 

58 

  EN 

The  Stabilisation  and  Association  Agreement  (SAA)  stipulates  that  EU  companies,  whether 
established in Albania or not, must have access to contract award procedures in Albania based 
on treatment no less favourable than that accorded to Albanian companies.  

The  Albanian  legislation  is  broadly  aligned  with  the  general  principles  applying  to  public 
procurement on the internal market. However, not all the provisions of the public procurement 
directives have yet been transposed.  

Award of public contracts is regulated by the 2006 Public Procurement Law (PPL), which 
was last amended in 2009. Detailed rules for implementing the law are in place. The PPL is 
aligned with the basic principles of the acquis. However, further alignment will be required in 
areas such as certain award procedures, remedies and defence-related procurement. The 2006 
Concessions Law (CL) provides the legislative framework for concessions. Detailed rules on 
the award procedures are in place. The CL is not aligned with the acquis and does not include 
provisions  relating  to  works  and  service  concessions.  Albania  has  no  specific  legislation  on 
public-private partnerships.  

As regards administrative capacity, the Public Procurement Agency (PPA) is the government 
authority responsible for policymaking and implementation in the field of public contracts and 
concessions. It also gives procuring entities advice and support to ensure proper application of 
the legislation. The PPA is no longer responsible for review procedures, as a new body, the 
Public  Procurement  Commission  (PPC),  was  established  for  this  purpose  by  the  latest 
amendments to the Public Procurement Law. As a consequence, the staff of the PPA has been 
reduced from 36 to 18 and attention will be required to ensure that the PPA retains adequate 
capacity.  The  establishment  of  the  PPC  will  ensure  separation  of  policymaking  and 
implementation  from  remedies  functions,  bringing  the  system  more  into  line  with  the  EU 
rules. The PPC is responsible for remedies, both for public contracts and for concessions. Its 
members are elected by the Council of Ministers. At present the PPC has a staff of 18. There 
is  a  need  to  ensure  that  it  has  adequate  resources  to  carry  out  its  functions  effectively. 
Safeguarding  the  independence  of  the  PPC  will  be  essential.  Particular  attention  should  be 
paid  to  avoiding  conflicts  of  interest  and  preventing  corruption.  The  responsibilities  of  the 
PPC  and  the  PPA  and  the  arrangements  for  interaction  between  them  need  to  be  clearly 
defined. 

The Public Procurement Advocate came into operation in 2008 to perform functions similar to 
an ombudsman, safeguarding the rights and interests of suppliers against acts or omissions by 
contracting authorities. The PP Advocate is appointed by parliament for a five-year term, on a 
proposal  by  the  Council  of  Ministers.  In  the  area  of  concessions,  the  Concession  Treatment 
Unit in the Ministry of Economy has certain functions for promoting and assisting contracting 
authorities in evaluating and negotiating concessions. 

Conclusion 

So far Albania has fulfilled its SAA commitments in this area. The legislative and institutional 
framework provides a good basis for development of an effective public procurement system 
in line with EU rules. Adequate capacity needs to be ensured in all public procurement bodies 
and clear definitions of responsibilities and cooperation mechanisms need to be established. 
Safeguarding the independence and effectiveness of the review procedures will be essential. 
Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
effectively  implement  it  in  the  medium  term,  particularly  in  the  areas  of  concessions  and 
remedies. 

EN 

59 

  EN 

3.6. 

Chapter 6: Company law 

The company  law  acquis includes rules on disclosure requirements,  formation,  maintenance 
and alteration of capital, mergers and divisions, takeover bids and shareholders' rights, as well 
as  corporate  governance  principles.  In  the  area  of  financial  reporting,  the  acquis  lays  down 
rules on presentation of annual and consolidated accounts, including simplified rules for small 
and medium-sized enterprises. Particular accounting rules apply to the banking and insurance 
sectors.  Application  of  International  Accounting  Standards  is  mandatory  for  some  public-
interest entities. In addition, the acquis specifies rules on the approval, professional integrity 
and independence of statutory auditors. 

The Albanian legislation on company law is, overall, consistent with the acquis on disclosure 
requirements, takeover bids, formation of public limited liability companies and alteration of 
their capital and rights of shareholders in listed companies. However, further alignment will 
be required on disclosure of information, minimum subscribed capital requirements for public 
limited  companies,  cross-border  mergers  and  on  reporting  and  documentation  requirements 
for mergers and divisions. Albania has not yet adopted a corporate governance code.  

The  establishment  of  the  National  Registration  Centre  (NRC)  in  2007  marked  a  significant 
step  towards  simplification  of  the  regulatory  framework  for  registration  of  companies.  The 
NRC  functions  as  a  one-stop  shop  and  has  32  service  desks  in  operation  throughout  the 
country.  The  average  time  for  effective  registration  is  one  day  and  a  single  registration 
number is valid for every step of the procedure. At present, shortcomings in implementation 
of  the  legislation  on  electronic  signatures  are  hampering  electronic  applications  for 
registration.  

The  NRC  maintains  the  commercial  register,  which  is  kept  in  electronic  form.  There  is  no 
legal  condition  that  members  of  the  public  must  have  a  legitimate  interest  before  they  can 
request information regarding files stored in the register. Electronic access to the data in the 
company information register is possible. The law provides for compulsory annual disclosure 
of  accounting  documents.  However,  the  low  level  of  compliance  points  to  inappropriate 
penalties  for  the  purposes  of  the  EU  directive.  There  is  still  no  mechanism  in  place  for 
coordination and cooperation with registers from EU Member States. 

Corporate accounting is regulated by the Law on accounting and financial statements. The 
law entered into force in 2006 and is largely aligned with the acquis. All companies listed on 
the  stock  exchange  and  their  affiliates,  together  with  banks,  financial  institutions,  insurance 
and  reinsurance  funds  and  securities  and  all  companies  licensed  to  conduct  investment 
activities  are  required  to  apply  international  financial  reporting  standards  (IFRS).  This  also 
applies to large economic entities meeting set criteria on their number of employees and bi-
annual revenue. Other entities are required to apply the 2008 national accounting standards. 

The  National  Accounting  Council  is  responsible  for  reviewing  and  advising  on  laws  and 
regulations  and  for  improving  accounting  methods  and  qualifications.  It  also  drafts  national 
accounting standards and translates IFRS into Albanian.  

The  Albanian  legislation  on  statutory  audits,  organisation  of  statutory  audits  and  certified 
accountant  professions  is  broadly  aligned  with  the  acquis  as  regards  public  oversight, 
registration  of  auditors,  approval  and  withdrawal  of  approval,  education  and  training.  The 
Public  Oversight  Board  (POB)  for  the  audit  profession  was  established  in  2009.  It  will  be 
necessary to guarantee its independence. The salaries of its members are paid by the Ministry 

EN 

60 

  EN 

of Finance and at present it depends on the Institute of Registered Chartered Accountants for 
administrative  support.  A  system  for  investigations  and  disciplinary  action  in  line  with  the 
acquis is not yet in place. Further measures will be required to ensure independent supervision 
by the POB of the quality assurance work undertaken by the Institute of Registered Chartered 
Accountants. The current legislation and practices do not ensure sufficient independence.  

Conclusion 

The Albanian legislation on corporate accounting and statutory audits is broadly aligned with 
the acquis. The national accounting standards are developed in accordance with the law and 
international  accounting  standards.  However,  further  alignment  is  required  in  the  area  of 
company law, including adopting the corporate governance code and operating the business 
register. Further efforts will be needed to ensure adequate capacity and independence on the 
part  of  the  POB  and  guarantee  its  investigative  and  disciplinary  powers  and  independent 
supervision of quality assurance.  

Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
implement it effectively in the medium term. 

3.7. 

Chapter 7: Intellectual property law 

The primary objective of the EU acquis in the area of intellectual property rights is to ensure 
the  proper  functioning  of  the  internal  market  while  striking  the  right  balance  between  the 
rights  of  right-holders  and  the  interests  of  users  and  adapting  the  legal  framework  to  the 
changing  technological  environment.  The  copyright  acquis  harmonises  rules  on  legal 
protection  of  copyright  and  related  rights.  Specific  provisions  apply  to  protect  databases, 
computer  programs,  semiconductor 
topographies,  satellite  broadcasting  and  cable 
transmission.  The  acquis  on  industrial  property  rights  sets  out  harmonised  rules  for  legal 
protection  of  trademarks  and  designs.  Specific  provisions  apply  to  biotechnological 
inventions, pharmaceuticals and plant protection products. The acquis also establishes an EU 
trademark  and  EU  design.  Finally,  the  acquis  contains  harmonised  rules  for  enforcement  of 
copyright and related rights and industrial property rights. It requires Member States to set up 
adequate implementing mechanisms, in particular effective enforcement capacity.  

The  Stabilisation  and  Association  Agreement  states  that  Albania  must  take  the  measures 
necessary to guarantee, by 1 December 2010, a level of protection of intellectual, industrial 
and commercial property rights similar to that existing in the EU, including effective means of 
enforcing such rights.  

Albania acceded to the World Trade Organisation (WTO) in September 2000 and is therefore 
party to the TRIPS Agreement. It is also party to a number of international agreements, such 
as the Berne Convention on the protection of literary and artistic works, the WIPO Copyright 
Treaty  and  the  WIPO  Performances  and  Phonograms  Treaty,  the  Universal  Copyright 
Convention  and  its  two  Additional  Protocols,  the  Rome  International  Convention  for  the 
protection  of  performers,  phonogram  producers  and  broadcasting  organisations,  the 
Convention  for  the  protection  of  phonogram  producers  against  unauthorised  duplications  of 
their  phonograms  and  the  International  Convention  for  the  protection  of  new  varieties  of 
plants. Therefore, the country has fulfilled its SAA commitments in this respect.  

Albania  has  adopted  a  national  strategy  for  the  enforcement  of  intellectual  and  industrial 
property rights (IPR) with the objective of achieving a level of IPR protection similar to that 
in  the  European  Union  countries.  The  strategy  sets  out  the  obligations  and  roles  of  all  the 

EN 

61 

  EN 

institutions  involved.  Its  aims  include  building  adequate  administrative  capacity,  improving 
inter-institutional  cooperation  and  coordination,  and  informing  and  raising  the  awareness  of 
the public on the benefits of IPR.  

The current Law on copyright and neighbouring rights entered into force in 2005 and is not 
compliant  with  a  number  of  EU  Directives.  The  new  law  on  copyright,  drafted  with  the 
assistance of the World Intellectual Property Organisation (WIPO), has not yet been adopted. 
A Law on administrative contraventions was adopted in 2010 to improve collection of fines 
for  infringements  of  copyright.  The  Albanian  Copyright  Office  (ACO)  established  in  April 
2007  is  the  main  institution  responsible  for  monitoring  and  implementing  the  law  on 
copyright. There are two Regional Copyright Offices, with ten more planned according to the 
IPR strategy. Information technology capacity of the copyright offices and on-line copyright 
services need strengthening.  

As  regards  industrial  property  rights,  the  2008  Industrial  Property  Law  complies  largely 
with  the  acquis.  A  number  of  implementing  regulations  are  also  in  place.  In  2010  Albania 
became  a  contracting  party  to  the  WIPO  Patent  Law  Treaty  and  a  full  member  of  the 
European  Patent  Organisation  (EPO).  The  General  Directorate  for  Patents  and  Trademarks 
(GDPT)  is  responsible  for  granting  and  administering  patents,  commercial  trademarks  and 
service  marks,  industrial  designs  and  geographical  indications.  The  IPR  strategy  foresees 
establishing  a  network  of  centres  for  technical  and  scientific  information  under  the 
responsibility of the GDPT. The administrative capacity of the GDPT needs reinforcing and 
the security of its IT systems needs to be upgraded.  

Regarding  enforcement,  the  legal  framework  will  have  to  be  thoroughly  revised  and  its 
alignment  with  the  acquis  will  need  to  be  established.  The  main  institutions  active  in  IPR 
enforcement  are  the  ACO,  the  GDPT,  the  General  Directorate  for  Customs,  the  Tax 
Inspectorate,  the  Prosecutor’s  Office,  the  police  and  the  courts.  The  General  Directorate  for 
Customs includes a directorate for the protection of intellectual property and has powers to act 
ex  officio,  but  not  the  ACO  or  the  GDPT.  The  IPR  strategy  foresees  establishing  a  Market 
Inspectorate for Industrial Property to identify and monitor infringements of IPR legislation. 
However, the necessary legislation is still outstanding. 

The current legal and institutional set-up is weak and implementation of IPR is hampered by 
many  shortcomings.  Both  the  ACO  and  the  GDPT  lack  capacity,  particularly  for  copyright 
inspection.  Cooperation  between  enforcement  institutions  needs  to  be  improved  to  ensure 
enforcement  of  IPR  in  practice.  There  are  no  specialised  courts  for  IPR  matters  and  the 
judiciary lacks appropriate experience and qualifications. The number of infringement cases 
brought  to  court  and  the  number  of  convictions  are  low.  Sanctions  are  not  effective,  as  the 
level of fines and collection rates remain low. Public awareness of IPR is poor. The collective 
management societies are not working appropriately. Their income is very low, as most users 
do not pay royalties.  

Conclusion 

Albania has drafted a new law to bring its legislation on copyright and related rights into line 
with the acquis. This law is expected to be adopted before the end of 2010. Alignment with 
the acquis on industrial property rights needs to continue. Albania adopted a national strategy 
for the enforcement of IPR aiming at further approximating its practices to those of the EU. 

EN 

62 

  EN 

Shortcomings in human, technical and financial resources, particularly at the level of the law 
enforcement bodies and the judiciary, are hampering effective enforcement of intellectual and 
industrial  property  rights.  Overall,  Albania  will  have  to  show  determination  and  make 
considerable and sustained efforts to align with the acquis and to implement it effectively in 
the  medium  term.  At  present  it  is  doubtful  that  the  country  will  be  able  to  meet  the  1 
December 2010 deadline to comply with its SAA obligations.  

3.8. 

Chapter 8: Competition 

The competition acquis covers anti-trust, merger and State aid control policies. It includes 
rules and procedures to fight anti-competitive behaviour by companies (restrictive agreements 
between undertakings and abuse of dominant positions), to scrutinise mergers and to prevent 
governments  from  granting  State  aid  that  distorts  competition  on  the  internal  market. 
Competition  rules  are  directly  applicable  throughout  the  Union  and  Member  States  must 
cooperate fully with the Commission on enforcing them. 

The Stabilisation and Association Agreement (SAA) includes provisions closely aligned with 
a  large  part  of  the  competition  acquis.  These  cover  anti-competitive  agreements  between 
undertakings,  abuse  of  dominant  positions  and  State  aid  distorting  competition.  The  SAA 
includes rules applying to public undertakings and to undertakings which have been granted 
special and exclusive rights and prohibits quantitative restrictions on imports from the EU into 
Albania.  The  SAA  provides  for  operationally  independent  public  authorities  to  supervise 
application of the competition rules. It also includes a protocol laying down rules on State aid 
in the iron and steel sectors. 

As regards anti-trust and mergers, the current Competition Law applies to all sectors of the 
economy and is modelled on the EU rules. The law was amended in September 2010 and is 
now in line with the essential elements of the acquis. The amended law significantly lowers 
threshold  values  for  prior  notification  of  mergers  to  the  Albanian  Competition  Authority 
(ACA). This could lead to an increase in notifications making it important to ensure that the 
ACA has adequate administrative capacity to deal with the increased caseload.  

As  regards  administrative  capacity,  the  ACA  is  a  public  body  and  a  separate  legal  entity 
which  performs  its  tasks  independently  and  reports  to  parliament.  The  chairman  and  four 
members  of  the  authority’s  decision-making  body  -  the  Competition  Commission  -  are 
appointed  by  parliament  for  a  five-year  term.  The  ACA  has  adequate  investigative  powers 
including requesting information and searching companies’ premises. It may impose fines on 
undertakings  and  public  bodies.  The  thresholds  for  fines  are  being  revised  to  bring  them 
closer into line with EU policy. The ACA’s decisions are subject to judicial review. The ACA 
may also intervene in regulated sectors by issuing policy recommendations. The ACA staff of 
35  appears  insufficient,  considering  the  numerous  tasks  given  to  the  authority  and  the 
lowering of the merger notification thresholds.  

The 2005 State Aid Law was amended in 2009 to align it further with EU rules. The amended 
law  includes  rules  on  State  aid  for  risk  capital  and  for  environmental  protection.  It  allows 
State aid, including risk capital, to be granted to SMEs under certain conditions. A State aid 
inventory was compiled in January 2008. In 2007 Albania confirmed that it had no intentions 
to grant state aid to its iron and steel industry. 

As  regards  administrative  capacity,  the  State  Aid  Sector  (SAS)  under  the  Department  for 
Market Mechanisms and State Aid in the Ministry for Economy, Trade and Energy (METE) is 

EN 

63 

  EN 

the administrative body in Albania’s two-tier system. The SAS carries out investigations and 
prepares  proposals  for  State  aid  decisions.  Until  early  2010,  investigative  and  operational 
tasks were performed by a separate State Aid Department. The SAS has the same number of 
staff  (four)  as  the  former  State  Aid  Department  and  has  reportedly  retained  the  same 
responsibilities and tasks. However, it needs to be established that this apparent downgrading 
does  not  impinge  on  its  operational  capacity.  The  State  Aid  Commission  (SAC)  is  the 
decision-making  body  for  State  aid  control.  It  is  chaired  by  the  Minister  of  Economy.  The 
SAC's four members are appointed by the Council of Ministers and may include nominees put 
forward  by  the  METE,  which  is  likely  to  be  one  of  the  main  granters  of  aid.  The  SAC 
authorises  State  aid  schemes  and  individual  aid  and  may  recover  unlawful  aid.  It  also 
monitors the use made of State aid. The SAC may initiate ex officio investigations and third 
parties have the right to submit complaints to it. To date, no ex officio cases have been opened 
and no complaints have been received. 

Concerning  liberalisation,  the  Competition  Law  incorporates  the  principles  of  the  acquis 
regarding  services  of  general  economic  interest.  A  number  of  undertakings  in  the  transport, 
public  utilities,  postal  services  and  energy  sectors  enjoy  special  or  exclusive  rights.  Certain 
reserved  sectors  are  supervised  by  sectoral  regulatory  authorities.  Further  analysis  of  the 
compatibility of these practices with the acquis will be needed.  

Conclusion 

Albania’s legal framework for competition is largely based on EU rules and the necessary legal 
and  administrative  structures  are  in  place.  However,  sufficient  safeguards  need  to  be  put  in 
place  to  guarantee  the  operational  independence  and  administrative  capacity  of  the 
Competition and State aid authorities so that they can enforce the legislation efficiently. The 
actual independence of sectoral regulators needs to be demonstrated. Further monitoring and 
analysis of Albania’s progress towards market liberalisation in reserved sectors in line with the 
acquis will be required. 

Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and 
implement it effectively in the medium term.  

3.9. 

Chapter 9: Financial Services 

The  main  objectives  of  the  acquis  as  regards  financial  services  are  to  ensure  financial 
stability,  the  financial  soundness  of  companies  operating  in  the  financial  sector  and 
appropriate  protection  of  consumers,  investors  and  policy-holders.  The  aim  is  to  build  up 
confidence  in  the  financial  markets  and  to  provide  a  level  playing  field.  The  acquis  on 
financial  services  includes  rules  on  authorisation,  operation  and  supervision  of  financial 
institutions  in  the  areas  of  banking,  insurance,  supplementary  pensions,  investment  services 
and securities markets as well as on financial market infrastructure. Financial institutions can 
operate across the EU in accordance with the ‘single passport’ and the ‘home country control’ 
principle, either by establishing branches or by providing cross-border services. 

As regards banks and financial conglomerates, the current Albanian legislation constitutes a 
solid  ground  for  further  alignment  with  the  EU  banking  acquis,  such  as  on  calculation  and 
adequacy  of  own  funds,  concentration  of  exposures,  capital  requirements,  deposit  guarantee 
and supervision of financial conglomerates. The Bank of Albania is responsible for licensing 
and supervising banks and branches of foreign banks in Albania and the branches of licensed 
banks  operating  abroad.  The  Bank  of  Albania  has  increased  its  regulatory  activity  and 

EN 

64 

  EN 

reinforced  and  restructured  its  Supervision  Department  with  special  emphasis  on  risk-based 
supervision. It has signed memoranda of understanding with other institutions on the domestic 
financial  market  and  with  foreign  supervisory  authorities  of  banking  entities  operating  in 
Albania. There are 16 banks operating in Albania, all of which are totally or partially foreign-
owned.  The  Bank  of  Albania’s  strategy  of  gradual  implementation  of  the  Basel  II  Accord 
reflects the development of the domestic banking system.  

The  capacity  of  the  BoA  is  adequate  to  address  the  challenges  posed  by  approximation  of 
Albania’s  legislative  and  regulatory  framework  to  the  EU  rules.  The  responsibilities  of  the 
Bank’s  Regulation  Office  and  of  the  Methodology  and  Analysis  Office  include  adoption  of 
best practices and approximation of the legislative framework to the EU. 

In the field of insurance and occupational pensions, the 2004 Albanian Insurance and Re-
insurance Act is not aligned with the EU directives on life and non-life insurance. Albania’s 
legislation on voluntary pension plans does not reflect all provisions of the acquis as regards 
the activities and supervision of institutions for occupational retirement provision. As regards 
motor  insurance,  tariffs  for  compulsory  insurance  and  third  party  liability  will  need  to  be 
liberalised in line with EU rules.  

As  regards  securities  markets  and  investment  services,  the  Albanian  regulated  securities 
market  consists  of  the  Tirana  stock  exchange  and  the  government  securities  retail  market. 
There  are  no  multilateral  trading  facilities  in  Albania  and  no  specific  rules  are  yet  in  place, 
neither  on  MTFs  nor  on  trading  on  MTFs.  The  government  securities  retail  market  in  2008 
was dominated by short-term instruments. The Law on securities and the Law on collective 
investment are partly aligned with the acquis and provide a good basis for further alignment. 
The  Law  on  corporate  bonds  and  local  government  bonds  of  October  2009  regulates  the 
issuance  of  bonds  by  joint  stock  companies  residing  in  Albania  and  by  local  governments. 
Nevertheless  there  are  discrepancies  from  the  definitions  and  exemptions  provided  for  in  a 
number of EU directives (e.g. the Prospectus Directive, MiFID, the Market Abuse Directive 
and the UCITS Directive), and no system for judicial appeal is in place in the authorisation 
procedure.  There  is  no  legislation  on  investor  compensation  schemes.  Due  attention  will  be 
required to take into account impending amendments to the acquis on investment services.  

The  Albanian  Financial  Supervisory  Authority  (AFSA)  is  the  regulatory  and  supervisory 
authority  in  the  fields  of  insurance,  occupational  pensions  and  securities.  AFSA  is  an 
independent  body  funded  essentially  by  its  own  resources.  It  has  adequate  oversight  and 
investigative  powers,  but  lack  of  adequate  administrative  sanctions  for  market  abuse,  inter 
alia, is limiting its capacity to ensure market surveillance. AFSA became a full member of the 
International Organisation of Securities Commissions (IOSCO) in 2009, thus paving the way 
for  cooperation  and  exchanges  of  information  with  counterpart  institutions  worldwide. 
AFSA’s  administrative  capacity  will  need  to  be  strengthened  to  cope  with  the  challenge  of 
alignment with the Solvency II framework.  

Conclusion 

Albania’s legislation in the field of financial services is partly in line with the acquis and lays 
a solid foundation for further alignment. There is adequate capacity in the banking sector, but 
further  efforts  will  be  needed  in  the  non-banking  financial  sector  to  enforce  market 
surveillance and ensure adequate capacity to face future challenges.  

EN 

65 

  EN 

Overall,  Albania  will  have  to  undertake  additional  efforts  to  align  with  the  acquis  and  to 
implement it effectively in the medium term, particularly in the non-banking sector.  

3.10.  Chapter 10: Information society and media 

The  acquis  on  information  society  and  media  aims  to  eliminate  obstacles  to  the  effective 
operation of the internal market in electronic communication services and networks, promote 
competition  and  safeguard  consumer  interests  in  the  sector,  including  the  universal 
availability  of  basic  modern  services.  It  also  includes  rules  on  information  society  services 
and  a  transparent,  predictable  and  effective  regulatory  framework  for  audiovisual  media 
services in line with European standards. 

The Stabilisation and Association Agreement (SAA) calls for Albania to adopt the acquis on 
electronic communications networks and services by April 2010.  

In the field of electronic communications and information technologies, the 2008 Law on 
electronic  communications,  which  provides  for  broad  approximation  to  the  2002  EU 
regulatory framework, will need to be amended to take into account recent developments in 
the acquis (in 2009). In addition, a number of related implementing regulations were adopted 
late and this has resulted in Albania not fulfilling its SAA  commitments on time. The  1998 
Law  on  public  and  private  radio  and  television  regulates  radio  and  television  activities, 
including satellite and cable services. Cable TV operators still require individual licences for 
provision  of  telephony  and  internet  services,  even  though  a  general  authorisation  system 
applies to all other telephony providers under the Law on electronic communications.  

legislation 

lays  down 

liberalisation  of 

Existing 
the  electronic 
the  conditions  for 
communications  and  services  market.  Tariff  re-balancing  is  being  applied,  but  key 
competitive  safeguards,  including  local  loop  unbundling,  carrier  selection,  carrier  pre-
selection and cost orientation  of  wholesale charges by the incumbent operator, have not yet 
been implemented. Number portability has not been applied within the timeframe set by the 
law. An updated regulation on access and interconnection was adopted in June 2010. From 1 
November 2010 onwards the mobile operators with significant market power (SMP) will no 
longer have obligations on termination of international calls. Competition is very limited on 
the fixed telephony market, with only one operator licensed to provide services throughout the 
country.  There  is  some  competition  on  the  provision  of  broadband  internet  market.  Mobile 
telephony penetration is high, due in part to the practice of having more than one SIM card. 
Overall,  insufficient  regulation  and  non-implementation  of  competitive  safeguards  are 
hindering effective competition.  

The Ministry for Innovation and Information and Communication Technology is in charge of 
policymaking and legislation. The Agency for Electronic and Postal Communications (AKEP) 
is the regulatory authority and is also responsible for market surveillance and implementation 
of legislation. The administrative capacity and technical expertise of the ministry and AKEP 
need to be strengthened to address the responsibilities introduced by the 2002 EU regulatory 
framework  and  its  subsequent  revision.  The  Albanian  legislation  provides  for  the 
independence  of  the  national  regulator,  a  key  component  of  the  EU  regulatory  framework. 
However,  the  circumstances  surrounding  the  dismissal  of  the  steering  committee  of  AKEP 
and  the  appointment  of  new  members  in  2008  and  2009  cast  doubts  over  its  effective 
independence.  

EN 

66 

  EN 

Legislation  on  information  society  services  is  progressively  being  approximated  to  the 
acquis.  In  particular,  legislation  concerning  eSignature  is  a  good  approximation  of  the 
directive.  Nevertheless,  there  are  shortcomings,  for  example  regarding  data  retention, 
unsolicited  communications,  itemised  billing  and  conditional  access.  The  2009  Law  on 
electronic commerce will need to be amended to address restrictions to the freedom to provide 
information  society  services.  Overall,  additional  efforts  are  needed  to  ensure  effective 
implementation  of  legislation  and  policies.  The  main  priorities  of  the  2009  strategy  on  the 
information  society  cover  infrastructure,  e-governance  and  public  services,  education  and 
knowledge, e-business and development of the legislative framework. However, a broadband 
policy  has  not  yet  been  developed  and  investment  in  communication  infrastructure  is  still 
poor.  

The  National  Agency  for  the  Information  Society  (NAIS)  has  been  integrated  into  the 
Ministry  for  Innovation  and  Information  and  Communication  Technology  which  is 
responsible  for  reforms  relating  to  the  information  society  and  for  implementing  the 
information  society  strategy.  Other  institutions  relevant  in  this  field  are  the  Agency  for 
Electronic  and  Postal  Communications,  the  Commissioner  for  Personal  Data  Protection  and 
the National Authority for Electronic Certification. The government has shown commitment 
to developments in this field by allocating budgetary and human resources, but administrative 
capacity to implement policies and legislation remains weak overall. A national contact point 
will also need to be established, as required by the Directive on e-commerce.  

The  main  legislative  acts  in  the  field  of  audiovisual  policies  are  the  Law  on  public  and 
private radio and television in the Republic of Albania, the Law on digital broadcasting, the 
Law  on  the  press  and  the  Law  on  the  right  to  information  on  official  documents.  Albania’s 
legislative framework is only partly aligned with European standards on media regulation. In 
particular,  it  is  not  aligned  with  the  Audiovisual  Media  Services  Directive  and  it  fails  to 
ensure some of the main standards, such as guaranteeing the independence of the broadcasting 
regulatory  authority  and  of  the  public  service  broadcaster.  The  legislation  also  lacks 
provisions for regulating on-demand and online audiovisual services. Adoption of the strategy 
for switching from analogue to digital broadcasting is still pending. Other issues also require 
attention.  In  particular,  there  is  a  need  to  ensure  freedom  of  expression  and  a  better  media 
climate by decriminalising defamation and libel. (See Chapter 1.2 - Civil and political rights) 

Albania is party to the Council of Europe Convention on trans-frontier television and to the 
UNESCO Convention on the promotion of diversity of cultural expressions. 

Parliament is in charge of policymaking and the National Council for Radio and Television 
(NCRT) is the regulatory authority monitoring enforcement. The NCRT’s administrative and 
technical capacity is currently insufficient to meet the obligations imposed by the Audiovisual 
Media  Services  Directive.  The  NCRT  is  an  independent  authority.  However,  measures  are 
required  to  guarantee  its  effective  independence,  including  amendments  to  the  existing 
legislation.  

Conclusion 

Albania’s legislation is partly aligned with the acquis. However, effective implementation of 
legislation  is  lagging  behind  and  will  require  building  adequate  capacity  in  the  national 
regulatory  authorities  and  guaranteeing  their  independence.  The  country  failed  to  meet  its 
SAA obligations on electronic communications networks and services on time. The existing 
legislation  on  audiovisual  media  services  fails to  ensure  some  of  the  main  EU  standards  on 

EN 

67 

  EN 

media  regulation.  The  overall  climate  for  the  media  needs  to  be  improved  by  adopting  the 
draft  law  on  audiovisual  media  services,  decriminalising  libel  and  defamation,  adopting  the 
digitalisation strategy and increasing transparency of media ownership. 

Overall, Albania will have to make considerable and sustained efforts to align with the acquis 
and  to  implement  it  effectively  in  the  medium  term  in  the  field  of  information  society  and 
media. The country needs to ensure implementation of its SAA commitments in the field of 
electronic communications networks and services.  

3.11.  Chapter 11: Agriculture and rural development 

The  acquis  on  agriculture  and  rural  development  covers  a  large  number  of  binding  rules, 
many  of  which  are  directly  applicable.  The  proper  application  of  these  rules  and  their 
effective  enforcement  and  control  by  an  efficient  public  administration  are  essential  for  the 
functioning of the common agricultural policy (CAP). Running the CAP requires the setting 
up  of  a  paying  agency  and  management  and  control  systems,  such  as  an  integrated 
administration and control system (IACS), and the capacity to implement rural development 
measures. Member States must be able to apply the EU legislation on direct support schemes 
and to implement the common market organisation for various agricultural products.  

Gradual liberalisation of agricultural trade between the EU and Albania has been provided for 
by an Interim Agreement on trade and trade-related matters since December 2006 and, since 
April  2009,  by  the  Stabilisation  and  Association  Agreement.  Albania  is  a  member  of  the 
World  Trade  Organisation  and  Central  European  Free  Trade  Agreement  and  implements 
liberal  arrangements  for  trade  in  agricultural  and  food  products.  Their  main  features  are  a 
simple tariff system with a maximum duty of 15% ad valorem and the absence of incentives 
or support schemes for imports and exports of agricultural products. Albania has a free trade 
agreement with Turkey.  

Agriculture continues to be one of the main sectors of the economy, generating about 18.5% 
of Gross domestic product (in 2008) and 48.3% of total employment. Around 500,000 people 
work  in  agriculture,  of  whom  55%  full  time  and  45%  part  time.  Labour  productivity  in 
agriculture is only 30% of labour productivity in the rest of the Albanian economy and 20% 
of the EU labour productivity in agriculture. More than 50% of the total population live in the 
rural areas where agriculture is the main economic activity.  

The annual growth rate of agricultural production during the last five years was around 3 to 
3.5%. Factors hindering the growth of this sector include the small size of farms (1.2 ha on 
average),  land  fragmentation  (3.8  parcels  per  farm),  underdeveloped  irrigation  and  drainage 
systems, deficient infrastructure, lack of access to markets, the low level of development of 
the  agri-food  industry,  the  low  technological  level,  weak  farmers  organisations  and  lack  of 
access to financing. The land market lacks dynamism and functions below its potential due to 
problems with registration and unsettled land ownership.  

The  utilised  agricultural  area  (UAA)  totals  approximately  1.15  million  ha,  of  which 
697,000 ha  are  arable  land.  About  43%  of  the  arable  land  is  in  lowland  areas  with  high 
productivity,  34%  is  in  hilly  areas  and  23%  is  in  mountainous  areas.  Livestock  production 
accounts for 46% of the total production of the sector, followed by crops with 42% and fruit 
with  12%.  Albania  is  a  net  importer  of  food  products  with  a  considerable  negative  trade 
balance.  Around  80%  of  agricultural  exports  go  to  the  EU.  As  for  imports,  the  EU  share  is 
60%.  

EN 

68 

  EN 

The  Ministry  of  Agriculture,  Food  and  Consumer  Protection  (MAFCP),  responsible  for 
agricultural  policymaking,  has  a  staff  of  2,200.  The  Agency  for  Agricultural  and  Rural 
Development  (AARD,  the paying  agency)  was  established  at  the  end  of  2008  to  implement 
the  support  measures  in  the  agricultural,  food  and  rural  development  sector.  It  has  been 
designated  as  the  future  IPARD  agency  in  charge  of  implementation  of  pre-accession 
measures. 

The general land register information exists only in manual form and is not complete or up to 
date. The vineyard register was completed recently. An agricultural census is foreseen to take 
place in 2012. The results should provide a strong basis for designing agricultural and rural 
development policy. (See Chapter 18 – Statistics). 

Albania’s agricultural policy is based on the Agriculture and Food Sector Strategy for 2007-
2013. The strategic sectors are (i) fruit, olive and grape production; (ii) vegetable production; 
(iii) livestock products; (iv) processing of fruit and vegetables; (v) processing of grapes; and 
(vi) processing of meat and milk.  

Support for production is provided by a series of measures covering, in particular, subsidies 
for  new  plantations,  drip  irrigation,  greenhouse  equipment,  headage  payments  for  sheep, 
production  aid  for  milk  and  olive  oil,  subsidies  for  organic  production  and  interest-rate 
subsidies for agriculture and the agro-industry. The list of measures (some of which fall under 
the broad heading of rural development) and the level of support can change from one year to 
the next. The budgetary expenditure on such support totalled €10 million in 2009. 

Direct  payments  in  Albania  are  not  compatible  with  the  EU  rules.  There  are  substantial 
differences in the way direct support to farmers is delivered. Contrary to the approach taken in 
the reformed CAP, direct aid payments are coupled and will therefore need to be brought into 
line with the EU acquis. Direct aid is currently granted to Albania’s key production sectors: 
production  aid  for  milk  and  olive  oil  and  headage  payments  for  sheep  and  goat  production. 
The aid rates are set annually. No obligations to comply with environmental standards or any 
other  type  of  ‘cross-compliance’  standards  have  been  introduced  so  far.  Albania  will  also 
have to put in place an information system for beneficiaries of CAP payments under shared 
management and ensure yearly publication of names of beneficiaries. 

There  is  no  established  structure  equivalent  to  the  integrated  administration  and  control 
system  (IACS).  Introduction  of  a  functioning  IACS,  including  a  farm  register,  an  IT  system 
and  a  land  parcel  identification  system,  is  a  difficult  and  lengthy  task  that  will  require 
extensive investment and institution-building well in advance of accession. Albania will also 
need a farm accountancy data network (FADN) in line with the acquis.  

With regard to State aid, apart from market-related subsidies and rural development measures, 
Albania applies a number of additional measures. Albania will need to bring all its State aid 
measures into line with the EU rules and guidelines. 

Agricultural  markets  are  vulnerable  and  still  under  construction.  The  accent  is  being  put  on 
developing  regional  markets,  predominantly  served  by  small  farmers.  There  is  nothing 
comparable to the common market organisation under the EU acquis.  

Regarding arable crops, cereals are grown on 628,000 ha, wheat and maize being the main 
crops.  Potatoes  are  grown  on  200,000  ha,  showing  an  upward  trend  in  recent  years. 
Production  of  other  arable  products  is  of  little  significance  in  Albania.  Albania’s  self-
sufficiency rates are 56% for wheat, 81% for maize and 91% for potatoes.  

EN 

69 

  EN 

Cattle  breeding  is  the  largest  sub-sector  in  animal  production.  Beef  production  is 
66,000 tonnes, sheep and goat meat production 44,000 tonnes, poultry 17,000 tonnes and pig 
meat 16,000 tonnes. Albania’s self-sufficiency rates are 95% for beef, 99% for sheep and goat 
meat, 48% for poultry and 58% for pig meat. Total milk production was 1,045,000 tonnes in 
2009, of which 87% was cow milk. About 10% of milk and milk products consumed in the 
country are imported.  

As  regards  specialised  crops,  in  Albania  about  30,000  ha  are  planted  with  vegetables  and 
watermelons, cultivated in open fields, plus about 750 ha in greenhouses. Fruit trees occupy 
an area of 20,000 ha, olive trees 42,000 ha and vineyards 10,000 ha. Estimates for 2009 put 
production of vegetables at 730,000 tonnes, of fruit at 47,202 tonnes and of olive oil at 5,060 
tonnes. About 70% of farms produce vegetables, 80% cultivate fruit trees, 33% olive trees and 
19% vineyards.  

Production and yield of fruit and vegetables have been increasing year by year, but the sector 
is  affected  by  the  low  collection  and  storage  capacity  and  by  the  low  level  of  producers' 
organisations.  Despite  the  efforts  made  to  promote  and  disseminate  new  production 
technologies and improve standards and market conditions, the fruit and vegetables sector still 
does not meet the need to supply the local market all year long. 

Arboriculture and viticulture have been the fastest developing sectors over the last few years. 
Albania  grants  a  per-hectare  subsidy  for  planting  new  olive  trees,  fruit  trees  and  vineyards. 
This measure is not in line with the acquis.  

Farmers  organisations  are  very  weak  and  no  support  is  granted  from  the  national  budget  to 
promote establishment of groups of producers, as is the case under the EU common market 
organisation for fruit and vegetables. Albania needs to set up the administrative structure and 
legal  provisions  which  would  allow  it  to  operate  a  system  of  producers'  organisations, 
producer  groups,  associations  of  producers'  organisations  and  inter-branch  organisations  in 
line  with  the  EU  acquis  (rules  on  recognition,  operational  programmes,  operational  funds, 
eligibility criteria, etc.).  

Particular attention needs to be paid to aligning existing marketing standards to EU standards 
and  to  performing  conformity  checks  in  line  with  the  acquis  (trader  database,  risk  analysis, 
etc.). Development of the market information system will be necessary in order to meet the 
obligation to notify the Commission of producer prices for fruit and vegetable products, based 
on type, variety, size and/or presentation at representative markets.  

Rural development in Albania is based on the rural development cross-cutting strategy for 
2007-2013.  A  range  of  foreign-financed  stand-alone  programmes,  coupled  with  national 
support  measures,  have  been  completed  or  are  in  implementation  or  preparation  stage.  The 
primary  focus  within  the  rural  development  policy  remains,  however,  on  agriculture.  In 
addition, the measures currently applied have limited scope and there is a need for additional 
alignment with the EU acquis. 

The strategic approach applied to rural development does not take sufficient account of agri-
environmental aspects, of the transition from agricultural to non-agricultural employment and 
of  training  and  education  for  people  in  rural  areas.  Participation  by  sectoral  stakeholders  in 
strategic planning exercises needs to be secured. 

Responsibility  for  implementation  of  the  rural  development  policy  lies  with  the  Ministry  of 
Agriculture,  Food  and  Consumer  Protection.  The  capacity  for  both  programming  (for 

EN 

70 

  EN 

example,  preparation  and  adaptation  of  the  programme,  monitoring  and  evaluation)  and 
implementation  (for  example,  selection  of  projects,  authorisation  and  control  of  payments) 
needs to be enhanced. Extension services would have to be strengthened in order to facilitate 
participation by farmers in implementation of rural development measures.  

As  regards  quality  policy,  Albania  protects  geographical  indications  and  traditional 
specialities by means of trademarks and, in particular, certified trademarks, which is different 
from the EU system of geographical indications and traditional specialities. This would have 
to be brought into line with the EU acquis. 

Organic farming is a relatively small sector, but can be expected to grow in the future as a 
result  of  domestic  support  and  ongoing  international  projects  and  trends.  The  total  surface 
area  of  certified  organic  farms  in  Albania  is  89,000  ha,  but  more  than  99%  of  this  area  is 
occupied  by  uncultivated  products  (such  as  medicinal  and  aromatic  plants).  Over  99%  of 
these  products  are  exported.  The  number  of  operators  registered  in  2009  was  61,  seven  of 
which  are  groups  of  farmers.  Albania’s  legislation  on  organic  farming  needs  to  be  further 
aligned with the acquis. 

Impact 

The  estimated  impact  of  accession  by  Albania  on  the  EU  common  agricultural  policy  is 
commensurate  to  the  structure  and  size  of  Albania’s  agricultural  sector.  Albania  would  add 
1.15 million ha of UAA to the EU agricultural sector (equal to 0.6% of the EU UAA). Crop 
production, like production of milk, beef and sheep, would equal a very small percentage of 
current  total  EU-27  production.  Overall,  a  preliminary  assessment  suggests  that  Albania’s 
membership of the EU would have a very limited impact on the CAP. 

Conclusion 

Overall,  in  the  field  of  agriculture  and  rural  development,  Albania  will  have  to  make 
considerable and sustained efforts to align with the acquis and to implement it effectively in 
the medium term. Its agricultural policy will require adjustments, moving towards decoupled 
support.  Albania  will  have  to  strengthen  its  administrative  capacity  and  focus  on  setting  up 
basic instruments and institutions for management and control of the funds available under the 
common agricultural policy. One important measure is timely preparation for implementation 
of  the  assistance  for  rural  development  available  from  the  Instrument  for  Pre-accession 
Assistance  (IPA).  Albania  needs  to  establish  a  solid  basis  of  precise  agricultural  statistics. 
Particular attention must be paid to strengthening administrative capacity to manage common 
market organisation and rural development activities.  

3.12.  Chapter 12: Food safety, veterinary and phytosanitary policy 

The  EU  has  an  integrated  approach  aimed  at  ensuring  a  high  level  of  public  health,  animal 
health,  animal  welfare  and  plant  health  by  means  of  coherent  farm-to-table  measures  and 
adequate monitoring, while ensuring effective functioning of the internal market. The acquis 
lays  down  hygiene  rules  for  food  production  and  veterinary  rules,  which  are  essential  for 
safeguarding  animal  health,  animal  welfare  and  the  safety  of  food  of  animal  origin  in  the 
internal  market.  EU  phytosanitary  rules  cover  issues  such  as  seed  quality,  plant  protection 
products,  harmful  organisms  and  animal  nutrition.  Member  States  must  have  appropriate 
administrative  structures  for  inspection  and  control  of  food  products,  including  appropriate 
laboratory capacity. 

EN 

71 

  EN 

Albania has started  to comply with the Stabilisation  and Association  Agreement obligations 
regarding food safety and veterinary and phytosanitary policy, which aim at modernising and 
restructuring  agriculture  and  the  agro-industry  in  Albania  and  at  supporting  gradual 
approximation of the Albanian legislation with the acquis.  

In the area of general food safety, overall responsibility for policymaking and coordination 
of  the  different  institutions  and  regional  authorities  involved  lies  with  the  Ministry  of 
Agriculture,  Food  and  Consumer  Protection.  The  administrative  structure  in  place  until  the 
end of 2009 was complicated, with an unclear chain of command, overlapping responsibilities 
and a lack of efficient controls, enforcement and registration of food establishments.  

In  2010  a  National  Food  Authority  was  created  with  EU  assistance,  which,  when  fully 
risk  assessment  and 
operational,  will  assume  all 
communication.  As  these  are  currently  spread  among  four  different  ministries  and  regional 
offices, this will improve the overall administrative set-up for the sector. However, it will not 
be fully functional until 2011 and its functioning will have to be monitored. Human resources 
at central level are extremely limited, with no indication of any plan to increase administrative 
capacity and budgetary resources.  

responsibilities 

inspection, 

for 

Responsibility  for  drafting  implementing  legislation  in  this  sector  is  shared  between  the 
Ministry of Agriculture and the Ministry of Health. Limited progress has been made towards 
alignment  with  EU  legislation.  Legislation  introducing  the  EU  ‘hygiene  package’,  setting 
general and specific hygiene conditions for food establishments and food business operators, 
is  still  pending.  Very  substantial  efforts  will  be  necessary  for  progressive  efficient 
implementation of hygiene rules and official controls on products of animal origin.  

A system of veterinary laboratories is supervised by the Food Safety and Veterinary Institute. 
More  efforts  will  be  necessary  on  laboratory  analysis  for  pesticide  residues  and  on 
accreditation  of  laboratories.  There  is  currently  no  rapid  alert  system  for  food  and  feed  in 
place in Albania. Crisis management capacity will need to be developed and adapted to the 
new  administrative  structures.  Steps  will  also  have  to  be  taken  to  ensure  that  all  Albania’s 
bilateral international food agreements comply with EU requirements.  

The  main  legislative  provisions  on  veterinary  policy  are  the  Law  on  the  veterinary  service 
and inspectorate and the Law on the identification and registration of animals and livestock 
farms.  Legislation  establishing  the  control  system  for  the  internal  market  and  for  imports 
transposes  part  of  the  acquis.  However,  implementing  capacity  needs  to  be  reinforced. 
Regarding  animal  registration,  efforts  are  being  made  on  compliance  with  EU  standards: 
identification and registration of bovines is almost complete, but its operational character will 
have to be assessed, while registration of small ruminants has started in parts of the country.  

Albania  has  adopted  legislation  on  measures  to  control  animal  diseases  (e.g.  anthrax, 
tuberculosis, brucellosis, rabies and Newcastle disease), but efforts need to continue to ensure 
alignment with the acquis and proper implementation, including sampling and reporting. It is 
necessary to put in place a compliant and effective system for trade in live animals, semen, 
ova  and  embryos.  There  is  no  Albanian  legislation  specifically  on  non-commercial 
movements of pet animals transposing the relevant EU legislation. Basic principles of animal 
welfare have been introduced in the national legislation, but will need to be further developed.  

As regards legislation on placing on the market food and feed, hygiene rules and specific 
rules for animal products have been partly aligned. However, introduction of legal provisions 

EN 

72 

  EN 

on  hazard  analysis  and  critical  control  points  has  not  started  yet  and  implementation  of 
legislative measures is still incomplete. The microbiological quality of raw milk is below EU 
standards.  There  is  no  specific  legislation  on  animal  feed.  Albania  has  no  incineration 
capacity for high-risk material.  

Alignment with the acquis on food safety is very limited and partial. In a number of areas, for 
example  genetically  modified  organisms  (GMOs),  it  has  not  started  yet.  Significant  efforts 
will be needed to implement legislation in the sector, along with heavy investment to upgrade 
agro-food establishments.  

As regards specific rules for feed, relevant provisions are included in the amended Law on 
livestock breeding, the Law on animal feed and the Law on nutrition. A considerable distance 
will need to be covered to achieve alignment with the EU legislation. Careful monitoring of 
implementation of laws and regulations in this sector will be necessary.  

The main legislative provisions governing phytosanitary policy are set out in the Law on the 
Plant Protection Service. The Directorate for Food and Consumer Protection in the Ministry 
of  Agriculture,  Food  and  Consumer  Protection  is  the  competent  authority  for  harmful 
organisms  and  seeds.  It  collaborates  with  the  Ministry  for  the  Environment,  Forestry  and 
Water Administration and with the Ministry of Health on plant protection products.  

Alignment  with  the  relevant  EU  acquis  is  very  limited.  Although  regulated  by  national 
legislation, control of pesticide residues has not been applied for lack of laboratory facilities. 
Regarding the quality of seeds and plant propagating material, no distinction, uniformity and 
stability tests are performed for registration of plant varieties, except for wheat. The country 
follows OECD, and not EU certification schemes.  

Conclusion 

Although Albania has made a start on alignment with and implementation of EU legislation, 
there  are  major  concerns  about  food  safety  and  veterinary  and  phytosanitary  policy.  Big 
efforts  will  need  to  be  made  to  ensure  gradual  introduction  of  the  acquis.  Administrative 
capacity will need to be built up in view of the heavy workload linked to preparation for the 
obligations which come with membership. Overall, implementation of the existing legislation 
is weak. Areas such as the hygiene package, animal registration, food safety controls, GMOs, 
capacity  for  inspections  and  laboratory  analysis  and  incineration  of  animal  by-products  will 
require  particular  attention  from  the  national  authorities,  with  technical  assistance  from  the 
EU. Albania will have to make considerable and sustained efforts to align with the acquis and 
to implement it effectively in the medium term.  

3.13.  Chapter 13: Fisheries 

The  acquis  on  fisheries  consists  of  directly  applicable  Regulations,  which  do  not  require 
transposition into national legislation. However, it does require the introduction of measures 
to  prepare  the  administration  and  operators  for  participation  in  the  common  fisheries  policy 
(CFP),  which  covers  resource  and  fleet  management,  inspection  and  control,  structural 
actions, market policy and state aid control. In some cases, existing fisheries agreements and 
conventions with third countries or international organisations will need to be adapted.  

The  Stabilisation  and  Association  Agreement  regulates  preferential  trade  in  fish  and  fishery 
products and encourages cooperation on fisheries.  

EN 

73 

  EN 

Economic  activity  in  this  sector  includes  marine  fisheries,  inland  fisheries  and  aquaculture. 
Catches totalled 7,132 metric tonnes in 2008. Albania has taken the first steps to improve its 
administrative  capacity  by  setting  up  a  Fisheries  Inspectorate  Sector  in  the  Ministry  of  the 
Environment,  Forests  and  Water  Administration  (MEFWA).  To  increase  monitoring  and 
control of the fisheries sector, the Interinstitutional Maritime Operations Centre was brought 
into  operation  in  January  2010.  It  currently  has  six  staff.  The  Fisheries  Inspectorate  has  23 
local  fisheries  inspectors,  with  relevant  qualifications  and  experience,  who  monitor 
application  of  fisheries  legislation,  but  are  also  assigned  tasks  relating  to  aquaculture, 
veterinary and zoo-technical issues.  

There  is  a  need  to  make  the  vessel  monitoring  system  (VMS)  compliant  with  the  common 
fisheries  policy  by  equipping  the  fishing  fleet  with  blue  boxes  and  by  upgrading  the 
infrastructure  of  the  coastguard  and  of  the  MEFWA.  Substantial  strengthening  of 
administrative  capacity  is  required,  as  the  staff  at  central  and  local  levels  with  their 
rudimentary  inspection  equipment  are  insufficient  to  take  on  the  tasks  imposed  by  the  CFP 
acquis.  

Regarding resource and fleet management, the sector is not subject to any catch limitations, 
except for a quota on bluefin tuna. Albania has started implementing the CFP acquis, notably 
Regulation  1967/2006  on  fisheries  management  measures  (minimum  size,  technical 
characteristics and maximum dimensions of fishing gear, etc.) and Regulation 2371/2002 on 
fleet  management.  However,  there  is  a  need  to  ensure  reliable,  systematic  and  improved 
collection  of  data  on  the  fishing  fleet,  catches,  landings  and  the  biological  state  of  the  fish 
stocks in Albanian waters and beyond.  

The fishing fleet consists of 280 vessels based in four fishing ports (Saranda, Vlora, Durres 
and Shengjin). The large majority of the  vessels are ageing, obsolete  and in need of repairs 
and spare parts. In addition, there are 289 small fishing vessels (less than 8 metres long, using 
fixed gear or gill nets and fishing not more than 2 to 3 miles from the coast). Albania needs to 
complete the vessel register in accordance with CFP rules (Commission Regulation 26/2004) 
and  to  make  it  compatible  with  the  EU  vessel register.  There  is  no  statistical  monitoring  or 
recording  of  catches  and  landings  and  only  limited  collection  of  catch  data  from  logbooks. 
Compliance with these basic requirements clearly needs to be addressed.  

Concerning  inspection  and  control,  Albania  introduced  logbooks  for  vessels  longer  than 
10 metres  in  2009  (a  simplified  reporting  system  is  planned  for  vessels  less  than  10  metres 
long),  but  more  efforts  will  be  necessary  to  streamline  logbook  requirements  (format  of 
logbooks,  collection  and  processing  of  data,  introduction  of  electronic  logbooks  for  larger 
vessels, etc.) and to put in place a fisheries information system for cross-checking catch and 
landing data. Albania needs to establish a fisheries monitoring centre or to share facilities with 
neighbouring countries.  

In order to reach an appropriate level of inspections, systematic training needs to be given to 
fisheries inspectors, particularly on pre-inspection preparation, vessel selection (risk analysis), 
maintaining control during an inspection, physical inspection of fish, fishing gear, fish holds, 
documents, VMS, completion of inspection reports and post-inspection cross-checks.  

An  electronic  fisheries  information  system  performing  cross-checks  between  quantities 
recorded  in  the  logbook  and  the  quantities  recorded  in  the  landing  declaration  and/or  sales 
notes  is  still  lacking.  The  system  must  be  able  to  detect  discrepancies  and  missing 
documentation.  It  is  very  important  to  conduct  systematic  physical  inspections  of  catch 

EN 

74 

  EN 

composition and logbook records during the landing procedure and to draw up an inspection 
report containing full details each time.  

In  preparation  for  management  of  structural  action,  reinforcement  and  training  of  staff, 
backed up by EU expertise, will be required. Measures on market policy are at an embryonic 
stage, in particular concerning producers' organisations and collection of market data. There 
are no wholesale fish markets, although investments are planned.  

In order to comply with the acquis on combating illegal, unreported and unregulated fishing, 
Albania has prepared catch certificates for fisheries products to be exported to EU countries 
and has notified the relevant EU authorities about the vessel register, licensing procedures and 
checks on the veracity of catch certificates.  

Albania  provides  State  aid  to  support  development  of  fisheries  infrastructure  in  the  four 
fishing  ports  and  excise-free  fuel  for  fishing  vessels.  Albania  will  have  to  comply  with  EU 
State aid rules for the fisheries sector upon accession.  

Regarding  international  agreements,  Albania  has  been  a  party  to  the  International 
Commission for the Conservation of Atlantic Tunas since 2008. It is a member of the General 
Fisheries  Commission  for  the  Mediterranean  and  is  participating  in  the  FAO  AdriaMed 
project (co-funded by the EU).  

The  overall  impact  of  Albania’s  accession  to  the  EU  will  be  negligible  in  terms  of  trade 
balance, fleet, production and functioning of the CFP.  

Conclusion 

The  Albanian  fisheries  sector  is  gradually  developing,  with  catches  increasing  and  some 
investment in infrastructure. Progress has been made on streamlining administrative structures 
and on resource management, fleet inspection and control. However, approximation to the EU 
acquis is still at an early stage and policymaking and administrative capacity at central level, 
including for managing structural actions, are inadequate. Further investment and training will 
be  necessary  for  local  inspectors,  as  will  improvements  in  data  collection  and  fleet 
monitoring,  including  satellite  monitoring.  Overall,  Albania  will  have  to  make  considerable 
and sustained efforts to align with the acquis and to implement it effectively in the medium 
term.  

3.14.  Chapter 14: Transport policy 

EU  transport  legislation  aims  at  improving  the  functioning  of  the  internal  market  by 
promoting  efficient,  environment-  and  user-friendly  transport  services.  The  transport  acquis 
covers road transport, railways, aviation, maritime transport and inland waterways. It governs 
technical and safety standards, social standards and market liberalisation in the context of the 
single European transport market. 

The Stabilisation and Association Agreement (SAA) places an obligation on Albania to grant 
unrestricted  access  to  EU  transit  traffic  to  cross  its  territory  and  provides  for  applying  non 
discriminatory  road  charges  as  well  as  for  a  timetable  for  harmonisation  of  the  road  safety 
legislation with the EU.  

In the case of road transport, legislative alignment with the EU acquis is fairly advanced and 
implementation  has  started  in  all  areas,  including  on  the  implementation  of  the  digital 

EN 

75 

  EN 

tachograph. Adequate administrative capacity is in place to deal with the social acquis. Access 
to the market for goods and passenger transport for both national and international services is 
regulated,  however  one  of  the  four  criteria  for  access  to  the  occupation  of  road  transport 
operator,  namely  the  financial  standing  criteria  is  lagging  far  behind  EU  requirements. 
Although  some  actions  have  been  taken  to  harmonise  the  national  legislation  with  EU 
requirements for vehicles' inspections, road safety remains a concern. 

In  the  rail  transport  sector,  Albania  needs  to  step  up  its  efforts,  both  on  aligning  and  on 
implementing  the  EU  acquis.  The  state  owned  Albanian  railway  company  has  separated  its 
accounts  for  passenger  and  freight  services  to  prepare  for  compensation  for  passenger 
transport  and  calculation  of  the  costs  involved  in  its  passenger  operations.  However, 
independent  railway  institutions,  which  are  the  precondition  for  the  open  access  to  the 
Albanian  rail  network,  are  not  established.  The  infrastructure  manager  and  the  state-run 
railway  undertaking  (HSE)  do  not  enjoy  the  independence  required  under  the  EU  railway 
legislation  and  their  unbundling  remains  a  concern.  The  agreement  on  Albania’s  sole 
international  rail  border  crossing  with  Montenegro  is  under  revision  to  align  it  with  EU 
legislation.  

There is no inland waterways transport in Albania. 

As regards combined transport, Albania is in the initial phases of its development.  

As regards air transport, Albania is continuing the implementation of the first phase of the 
European Common Aviation Area (ECAA) Agreement. In this context, air safety remains a 
continuing concern. Albania has transposed the EU acquis in this field but has not yet ensured 
effective implementation of the legislation. The safety oversight by Civil Aviation Authority 
(CAA)  over  the  country's  carriers  needs  to  be  improved.  In  spring  2010  Albania  adopted  a 
new air code and passed legislation aiming at increasing the human resources and improving 
the  expertise  in  the  field  of  air  safety  in  the  CAA  as  well  as  establishing  an  independent 
National  Body  for  investigation  of  accidents  and  incidents  in  civil  aviation.  As  regards 
aviation security, Albania needs to ensure compliance with the latest version of the security 
requirements of the European Civil Aviation Conference (ECAC). In relation to the air traffic 
management acquis, the single European sky, the four main regulations have been adopted, as 
well the common requirements regulation and the flexible use of airspace regulation. Further 
efforts are needed to complete regulatory alignment with the single European sky within the 
ISIS Programme, in particular as regards the implementation of a solid national supervisory 
authority. 

In  the  case  of  maritime  transport,  Albania  is  a  member  of  the  International  Maritime 
Organisation (IMO) and of the International Labour Organisation (ILO). Albania's legislation 
is fairly in line with EU market rules, although some adjustments are necessary. References to 
authorisations  and  licensing  schemes  need  to  be  removed  from  the  legislation  on  market 
access to international transport. Cabotage is reserved to national flag-carriers, which conflicts 
with  European  rules.  Finally,  there  is  a  requirement  that  ship's  captains  must  be  Albanian 
nationals,  whereas  alignment  with  the  EU  acquis  would  require  extension  to  all  EU 
nationalities. The rules on vessel registration and establishment of ship-owners are consistent 
with EU law.  

Substantial  efforts  will  be  needed  to  improve  both  flag  State  control  and  port  State  control. 
The  rates  of  detention  of  the  Albanian  vessels  pursuant  to  the  Paris  Memorandum  of 
Understanding on Port State Control was 21% in 2009 compared with an EU average of 2.2% 

EN 

76 

  EN 

and  the  Albanian  flag  is  listed  as  very  high  risk,  being  in  the  Black  List  of  the  Paris 
Memorandum. Concerning maritime security, Albania has already taken a number of steps to 
align with international and EU requirements. However, there is no indication as regards the 
alignment  of  domestic  shipping  with  the  EU  acquis.  A  maritime  administration  was  put  in 
place in April 2009, with Port State and Flag State departments recently created, but adequate 
capacity to fulfil the required tasks has not been developed yet.  

As regards satellite navigation, Albania does not currently plan to participate in the Galileo 
satellite navigation programme, once it is operational.. 

Conclusion 

Overall, Albania will have to make considerable sustained efforts to align its legislation with 
the acquis and to implement and enforce it effectively in the medium-term. While it is well 
advanced in the case of road transport, serious efforts need to be made to step up its action in 
the  rail,  maritime  and  aviation  sectors.  In  order  to  ensure  effective  implementation  of  the 
acquis, Albania’s administrative structures in the different transport sectors would need to be 
considerably strengthened.  

3.15.  Chapter 15: Energy 

The EU’s energy policy objectives are to improve competitiveness, ensure security of supply 
and  protect  the  environment.  The  energy  acquis  consists  of  rules  and  policies  covering 
competition and State aid, the internal energy market (opening up electricity and gas markets 
in particular), promoting renewable energy sources, energy efficiency, crisis management and 
oil stock security obligations, nuclear energy and nuclear safety and radiation protection. 

Albania is a member of the Energy Community and, as such, is legally bound to implement 
substantial  parts  of  the  energy  acquis.  The  country  has  no  integrated  energy  law.  Different 
energy  sectors  are  regulated  by  specific  laws.  The  current  national  energy  strategy  is  not 
compliant with the acquis. A new national energy strategy is being prepared. 

In 2008, Albania’s overall  energy  balance comprised firstly oil products  (64%) followed  by 
electricity (23%), firewood (12%) and coal (1%). The transport sector accounted for 42.3% of 
consumption,  the  residential  sector  23.6%,  industry  13%,  services  10.8%  and  other  sectors 
10.3%.Total energy consumption in 2008 was 10% higher than in 2007, mainly because of the 
increase  in  road  transport.  Domestic  production  of  primary  energy  covered  62%  of  total 
primary  energy  consumption  in  2008.  Oil  and  gas  made  up  49.8%  of  domestic  production, 
electricity 28% and firewood 18.5%. Imports largely consist of oil products. 

As  regards  security  of  supply,  the  law  places  an  obligation  on  Albanian  oil  refineries  and 
wholesale companies to hold 60 days reserves of oil products, which will increase to 90 days 
by 2011, in line with the EU Oil Stocks Directive. Albania will need to demonstrate effective 
compliance  with  current  and  future  oil  stocks  requirements.  With  respect  to  security  of 
electricity  supply,  Albania’s  2009  security  of  supply  statement  takes  into  consideration  the 
existing generation capacity and the current limitations in interconnection and lack of energy 
diversification.  The  Power  Sector  Law,  the  new  market  model  and  the  National  Energy 
Strategy cover basic provisions on the security of electricity supply. However, Albania needs 
to make further efforts to implement the acquis on security of electricity supply as required 
under the Energy Community Treaty. The 2008 Law on natural gas defines security of natural 
gas supplies.  

EN 

77 

  EN 

Albania  depends  almost  exclusively  on  hydropower  for  its  electricity  generation,  making  it 
vulnerable  to  unfavourable  hydrological  conditions.  The  transmission  network  needs 
substantial investments. Its interconnections with neighbouring countries are limited although 
developments  are  underway  in  priority  infrastructure  projects  of  the  Energy  Community. 
Albania  has  some  indigenous  gas  production,  which  is  used  only  domestically  for 
technological  purposes.  The  country  is  not  linked  to  any  international  gas  pipelines.  Coal 
(lignite and brown coal) production is not significant and is of poor quality. The government 
plans to discontinue coal production in the near future. Current coal imports are very limited. 
No notifications of State aid for this sector have been given. Local production of crude oil is 
significant and increasing. Exploration and production are carried out with the involvement of 
foreign  investors.  The  refining  sector  is  85%  privatised.  Albania’s  legislation  on  oil 
exploration is harmonised with the EU Hydrocarbons Directive. 

On the internal energy market, the electricity sector is regulated by the Power Sector Law, 
which is largely in line with the Energy Community Treaty. However, a number of obstacles 
still  hinder  full  market  opening.  A  substantial  percentage  of  transmission  and  distribution 
capacity  is  reserved  for  the  wholesale  supplier.  The  transmission  system  operator  is 
unbundled and 76% of the shares of the distribution operator have been privatised. Electricity 
tariffs  are  not  yet  at  cost-recovery  level.  Illegal  connections  and  high  technical  and  non-
technical  losses  are  undermining  the  viability  of  the  electricity  market.  Bill  collection  rates 
remain below the EU average. The 2008 Gas Law, based on the Energy Community Treaty, 
transposes a considerable part of the relevant acquis but fails to provide for market opening. 
Albania has not yet started to implement the 2009 internal energy market acquis for gas and 
electricity  ("the  third  package  of  legislative  measures").  A  joint  independent  regulatory 
authority  (ERE)  for  electricity  and  gas  was  established  in  2008.  Its  monitoring  and 
enforcement powers need to be strengthened. 

Albania’s  renewable  energy  law  has  not  yet  been  adopted,  but  the  country  has  transposed 
some  provisions  of  the  acquis  in  its  legislation  on  promoting  use  of  biofuels  and  other 
renewable  fuels  in  transport.  Albania  has  also  taken  measures  to  support  development  of 
electricity  from  renewable  sources,  particularly  in  the  hydropower  sector.  Albania’s 
regulatory framework needs further development to meet the requirements of the Renewable 
Energy Directive in all sectors. Implementation of the legal framework will require particular 
attention.  All  contracting  parties  in  the  Energy  Community  will  have  to  set  a  target  for  the 
minimum national share of renewable energy for 2020 based on the method applicable to EU 
Member States. One of the main challenges facing Albania is to establish a reliable value for 
the share of renewable energy in 2005, which is the base year for the calculation. 

The  legal  framework  on  energy  efficiency  is  partly  aligned  with  the  acquis  on  the  energy 
performance  of  buildings,  energy  labelling  of  household  appliances  and  energy  services. 
However,  overall  implementation  of  legislation  is  poor,  including  on  energy  labelling  of 
products.  Alignment  with  the  recast  Eco-design  Directive  is  being  prepared  and  a  new  law 
which  will  cover  the  acquis  on  cogeneration  is  being  drafted.  The  draft  national  energy 
efficiency action plan sets an indicative target for energy savings by 2016.  

As regards nuclear energy, nuclear safety and radiation protection, Albania has no nuclear 
power  or  research  installations  or  other  nuclear  fuel  cycle  facilities.  The  government  is 
considering  the  possibility  of  using  nuclear  technology  for  energy  production.  The  National 
Agency  on  Nuclear  Energy  (AKOB)  established  in  January  2010  is  responsible  for 
developing  the  nuclear  programme,  which  is  at  a  very  early  stage,  including  its  financial 
aspects. The country has made progress on the nuclear regulatory framework, although its full 

EN 

78 

  EN 

compliance  with  the  EU  acquis  still  needs  to  be  verified  and  a  significant  number  of 
regulations  and  working  procedures  need  to  be  developed.  Albania  is  a  party  to  the 
Convention on physical protection of nuclear material. It has adopted a law to ratify the 2004 
Protocol Additional to its Comprehensive Safeguards Agreement with the IAEA, although the 
law has not yet entered into force. However, Albania has not yet ratified the Joint Convention 
on the safety of spent fuel management and the safety of radioactive waste management and 
the  Convention  on  nuclear  safety  .  The  regulatory  authority  is  weak  and  will  require 
substantial financial and human resources to build up its capacity to establish, implement and 
effectively  enforce  legislation  in  line  with  international  standards  and  the  Euratom  acquis, 
including the 2009 Nuclear Safety Directive. The arrangements for informing the public are 
incomplete. The environmental radiation monitoring programme needs to be put into action. 
Finally, measures will be required to guarantee the financial independence of the regulatory 
authority from the Ministry of Health. 

The country has a centralised radioactive waste management facility with capacity of 300 m³ 
to store conditioned waste produced in various applications of radiation sources. This facility 
needs  to  be  properly  licensed  as  it  is  currently  licensed  as  a  source.  Furthermore,  its  safety 
analysis report needs to be (re)written. 

Conclusion 

Albania has aligned its legislation with a number of aspects of the acquis and amendments to 
the  legislative  framework  are  being  prepared.  However,  the  fields  of  energy  efficiency, 
renewable energy and oil stocks as well as ensuring the viability of the electricity market and 
the development of the gas market require further attention. The role of the electricity and gas 
regulatory authority needs to be strengthened. Energy diversification is poor and the country 
is  still  vulnerable  as  regards  security  of  electricity  supply.  The  capacity  of  the  regulatory 
authority on nuclear safety and radiation protection needs substantial strengthening. Overall, 
the country will have to undertake additional efforts to align with the acquis and to implement 
it effectively in the medium term.  

3.16.  Chapter 16: Taxation 

The acquis on taxation covers the area of indirect taxation as regards value added tax (VAT) 
and excise duties and lays down definitions and principles of VAT. Excise duties on energy, 
tobacco products and alcoholic beverages are subject to EU Directives covering the structures 
of the duties, the levels of minimum rates and the holding and movement of excisable goods. 
Regarding direct taxation, the acquis covers some aspects of corporate taxes and aims mainly 
at removing obstacles to cross-border activities between enterprises. EU legislation in the area 
of  administrative  cooperation  and  mutual  assistance  provides  tools  to  prevent  intra-EU  tax 
evasion and tax avoidance.  

In  the  area  of  indirect taxation,  Albania’s  legislative  framework  is  in  line  with  the  Capital 
Duty Directive. 

Albania’s VAT framework is fairly in line with the EU rules, but some amendments will be 
required to bring the current legislation into line with the VAT Directive, including as regards 
exemptions and special schemes.  

The excise system covers most products subject to excise in the EU. Excise duties are applied 
to tobacco products, alcoholic beverages and oil products. However,  there are discrepancies 
with the EU system, including on scope, structures and rates.  

EN 

79 

  EN 

On  alcoholic  beverages  taxation,  the  duty  categories  and  some  provisions  on  preferential 
treatment  of  raki  are  not  harmonised  with  the  acquis.  Albania’s  tax  structure  and  rates  on 
tobacco  differ  from  those  in  the  EU.  Furthermore,  the  tax  on  cigarettes  is  based  on  the 
nicotine  content.  This  is  not  in  line  with  the  acquis.  Energy  products  do  not  include 
electricity, coal, natural gas and LPG. The system for travellers’ allowances is different from 
the EU system as regards the amounts that can be imported, allowances, value thresholds and 
minimum age of beneficiaries.  

Concerning direct taxation, Albania’s legislative framework is not in line with the the main 
EU  legislative  acts  in  this  area.  Albania  broadly  complies  with  the  code  of  conduct  on 
business taxation, although existing restrictions on shareholdings in resident entities will need 
to  be  assessed.  As  regards  good  governance  on  tax  matters,  there  are  some  concerns  about 
transparent identification of the final owner or beneficiary of assets, liabilities or transactions, 
as  required  under  international  and  EU  standards.  Future  double  taxation  agreements  being 
negotiated will be based on the OECD model which ensures full exchanges of information in 
all tax matters. 

On administrative cooperation and mutual assistance, Albania will need to implement the 
acquis  on  mutual  assistance  in  direct  tax  matters,  including  the  Savings  Directive,  upon 
accession. Central liaison offices for exchanges of information on VAT and excise will have 
to be set up and equipped with adequate personnel and procedures to meet the deadlines set in 
the  acquis  for  providing  information.  Interconnectivity  and  interoperability  with  the  EU 
excise  movement  and  control  systems  and  with  the  computerised  systems  for  exchanges  of 
information on VAT and excise will have to be put in place.  

As  regards  operational  capacity  and  computerisation,  the  legislative  and  administrative 
framework to implement and enforce the tax legislation is in place. The General Directorate 
for  Taxation  (GDT)  in  the  Ministry  of  Finance  is  in  charge  of  implementation  of  national 
taxes,  public  charges  and  collection  of  contributions.  Its  administrative  capacity  and 
procedures  are  adequate  for  its  current  tasks,  although  further  efforts  will  be  needed  on 
training and working methods. The VAT system will need to be improved, mainly with regard 
to  identification  of  traders.  An  effective  excise  control  system,  including  electronic 
administration procedures, needs to be put in place. Additional capacity will also be needed to 
comply, upon accession, with the requirements on administrative cooperation with other EU 
Member  States  on  VAT,  excises,  direct  taxes  and  taxation  of  savings.  The  perception  of 
corruption in the Tax Administration is high and Albania will need to make particular efforts 
to address this issue.  

The  Tax  Administration  has  made  significant  efforts  to  enhance  voluntary  compliance  by 
taxpayers and manages to collect the bulk of tax debts effectively. Current legislation requires 
payment of the full amount of tax due before an appeal can be lodged against a decision of the 
Tax  Administration  and  does  not  allow  a  bank  guarantee  to  be  used  for  this  purpose.  Risk 
analysis,  inspection  and  interinstitutional  cooperation  will  require  further  strengthening  to 
enhance enforcement and reduce the large informal economy.  

A Taxation Council has been established as an advisory body to the Ministry of Finance and 
to enhance technical cooperation between the ministry, the GDT and taxpayers. However, it is 
not yet operational and its role needs to be further defined. The Taxpayers’ Advocate became 
operational in June 2010 to provide information and assistance to taxpayers and to assist the 
authorities in the fight against corruption and unethical behaviour among tax officials.  

EN 

80 

  EN 

Computerisation is fairly advanced in the Tax Administration and the integrated tax system is 
operational  throughout  the  country.  Electronic  tax  procedures  are  in  place  for  business 
taxpayers  and  implementation  is  being  extended.  A  cash  register  system  has  already  been 
implemented  for  large  and  other  VAT  taxpayers,  with  18,000  daily  balances  being  filed 
electronically. However, the computer centre needs to be upgraded and human resources and 
systems development in the IT area need to be reinforced, including with the aid of training. 
Upon accession, the country will be required to develop and operate all the national parts of 
trans-European taxation and excise IT systems. 

Conclusion 

Albania’s  tax  legislation  is  partly  aligned  with  the  EU  acquis.  Further  approximation  is 
needed on indirect taxation, particularly on excise, and Albania will need to implement most 
of  the  acquis  on  direct  taxation.  There  are  no  potentially  harmful  tax  measures,  but  the 
transparency of the tax system needs to be further examined. The administrative capacity of 
the  Tax  Administration  will  need  to  be  strengthened,  particularly  as  regards  risk  analysis, 
inspection,  internal  communication  and  communication  with  other  agencies  or  public 
authorities. Particular efforts will be needed to establish the administrative structures required 
by the acquis upon accession and to achieve full connectivity with the EU’s computerised tax 
and excise systems. 

Overall, Albania still faces challenges with legislative alignment and administrative capacity, 
but  should,  in  the  medium  term,  have  the  capacity  to  comply  with  the  requirements  of  the 
acquis, provided it keeps up its efforts.  

3.17.  Chapter 17: Economic and Monetary Policy 

The  acquis  in  the  area  of  economic  and  monetary  policy  contains  rules  requiring  the 
independence of central banks in Member States and prohibiting both direct financing of the 
public  sector  by  the  central  banks  and  privileged  access  for  the  public  sector  to  financial 
institutions. Member States are expected to coordinate their economic policies and are subject 
to the rules of the excessive deficit procedure as well as of the Stability and Growth Pact. The 
national central banks will be subject to the Statute of the European System of Central Banks 
(ESCB). New Member States are also committed to complying with the criteria for adopting 
the  euro.  Until  they  join  the  euro  area,  they  will  participate  in  the  Economic  and  Monetary 
Union  as  Member  States  with  a  derogation  and  must  treat  their  exchange  rate  policy  as  a 
matter of common concern. 

In  the  area  of  monetary  policy,  the  Law  on  the  National  Bank  is  broadly  in  line  with  the 
acquis. It provides a large degree of independence for the Central Bank and sets it the primary 
objective of maintaining price stability. The law stipulates that the Bank must neither seek nor 
take  instructions  from  other  authorities  and  that  it  is  the  sole  institution  responsible  for 
monetary  and  foreign  exchange  policies  in  the  country.  However,  the  law  will  need  to  be 
further aligned with the acquis, including on the personal independence of Council members 
and the Central Bank’s accountability. In particular, provisions on dismissal of the Governor 
will need to be brought more closely into line with the ESCB Statute. 

The  Central  Bank  is  financially  independent  and,  overall,  has  sufficient  administrative 
capacity to function effectively.  

Concerning  economic  policy,  the  Law  on  the  National  Bank  explicitly  prohibits  extending 
credit directly to the State, although not to other public institutions. Regarding the prohibition 

EN 

81 

  EN 

of privileged access by the public sector, existing legislation will need to be aligned with the 
acquis, as there are acts that provide specific rules or incentives for the financial sector to lend 
to the public sector or to purchase public securities. In particular, the Law on insurance and 
the  Law  on  pension  funds  contain  provisions  which  effectively  give  the  public  sector 
privileged access to financial institutions. 

Since 2006, Albania has been participating in the pre-accession economic policy surveillance 
which  aims  at  strengthening  economic  planning  capacity  in  the  country  to  prepare  it  for 
eventual  participation  in  the  economic  policy  coordination  and  budgetary  surveillance 
mechanisms  of  the  European  Monetary  Union  (EMU).  In  this  context,  Albania  submits 
regular economic and fiscal programmes (EFP). The 2010 EFP covers the period 2010-2012 
and  is  based  on  several  medium-term  government  strategies.  It  broadly  complies  with  the 
requirements on format and content, although the public finance data are not compliant with 
the ESA95 European system of accounts. There are some significant gaps in the data, which 
point  to  the  need  for  further  strengthening  of  the  statistical  system,  including  statistical 
governance. All in all, the programme presents a very extensive but mainly descriptive outline 
of the structural reform agenda. It remains vague on the overall strategy and on the link between 
the reforms and the fiscal objectives and provides no clear timetable for implementation of the 
reforms.  

Conclusion 

Albania’s  legislation  is  not  in  line  with  the  acquis  on  central  bank  independence,  monetary 
financing and privileged access for the public sector to financial institutions. 

Overall, Albania will have to undertake additional efforts to align with the acquis in the field 
of  economic  and  monetary  policy  and  to  implement  it  effectively  in  the  medium  term. 
Preparation for participation in the third stage of EMU as a Member State with a derogation 
should pose no major problems prior to accession. 

3.18.  Chapter 18: Statistics 

The acquis on statistics consists almost exclusively of legislation which is directly applicable 
in the Member States, such as European Parliament and Council regulations and Commission 
decisions or regulations. It also includes a range of methodological handbooks and manuals. 
International agreements provide a further basis for production of statistics. 

In  the  area  of  statistical  infrastructure,  the  statistical  system  in  Albania  is  rather 
decentralised  with  many  government  agencies  producing  official  statistics.  The  Law  on 
official statistics was adopted in 2004. The national statistical institute INSTAT has the co-
ordinating  role.  INSTAT  is  subordinate  to  the  Prime  Minister’s  Office  and  the  appointment 
and  dismissal  of  the  General  Director  are  subject  to  the  approval  of  the  Prime  Minister.  In 
order to strengthen the professional independence of INSTAT, the Law on statistics needs to 
be revised to set a fixed term for the General Director and to define more precisely the role of 
INSTAT  as  coordinator  of  the  national  statistical  system.  The  composition  of  the  statistical 
council should be changed to better represent all stakeholders of official statistics. The current 
level  of  human  and  financial  resources  available  for  statistics  is  not  sufficient  for  full 
compliance with the acquis. 

The area of statistical classifications needs to be substantially improved. The translation and 
introduction  of  the  new  classification  of  economic  activities  (NACE  Rev.  2)  is  particularly 
important and will require coordination with all producers of official statistics. The quality of 

EN 

82 

  EN 

the  business  register  is  inadequate  and  requires  regular  updating.  A  regional  statistical 
classification compatible with the NUTS classification is still not available. 

In  the  area  of  sector  statistics,  weaknesses  persist,  in  particular  in  agricultural,  social, 
business  and  macroeconomic  statistics.  Agricultural  statistics  needs  to  be  upgraded  and 
agromonetary statistics as well as a farm structure survey need to be introduced. Population 
statistics are based on the civil register, but that needs further improvements. The population 
and housing census in 2011 will allow an update of demographic statistics and more accurate 
population projections. Migration statistics are not in line with EU requirements. The Labour 
Force  Survey  needs  to  be  implemented  on  a  quarterly  basis.  The  Survey  on  Income  and 
Living Conditions does not comply with the acquis. Other social statistics, e.g. on education 
and health, are likewise not well developed. Further improvements are necessary concerning 
the  methodology  and  the  data  sources  of  national  accounts.  Statistics  on  government  deficit 
and debt, foreign direct investments as well as monetary and financial statistics need further 
improvement  as  well.  This  is  especially  valid  for  the  measurement  of  the  remittances.  The 
consumer price index in Albania does not comply with the EU harmonised index of consumer 
prices. External trade statistics partly comply with EU requirements, but closer collaboration 
between  INSTAT,  the  Bank  of  Albania  and  the  customs  authorities  is  necessary.  Business 
statistics need further improvement. Limited statistics are available on transport and energy. 
Fishery, environment and tourism statistics are not in accordance with EU standards. 

Conclusion 

Overall,  the  statistics  produced  by  Albania  are  not  yet  satisfactorily  aligned  with  the  EU 
standards, particularly as regards classifications and registers and on agricultural, business and 
macroeconomic  statistics.  The  professional  independence  of  INSTAT  is  not  sufficiently 
anchored  in  the  legislation.  Albania  will  have  to  ensure  that  sufficient  human  and  financial 
resources  are  made  available  and  will  have  to  undertake  additional  efforts  to  align  with  the 
acquis and to implement it effectively in the medium term.  

3.19.  Chapter 19: Social Policy and employment 

The acquis on social policy and employment includes minimum standards in areas of labour 
law,  equal  opportunities,  health  and  safety  at  work  and  anti-discrimination.  Member  States 
participate  in  EU  policy  processes  in  the  areas  of  employment  policy,  social  inclusion  and 
social  protection.  The  social  partners  of  Member  States  participate  in  social  dialogue  at 
European level. The European Social Fund (ESF) is the main financial tool through which the 
EU  supports  the  implementation  of  its  employment  strategy  and  contributes  to  social 
inclusion efforts.  

Albania’s labour market is marked by low activity (at 61.9% in 2009) and a low employment 
rate  (at  53.4%)  compared  with  the  EU  average  and  targets,  reflecting  the  very  low 
the  official 
employment  of  women.  Unemployment  stands  at  around  13.8%,  but 
unemployment  rate  does  not  correctly  reflect  the  actual  unemployment  in  the  country.  The 
rate of long-term unemployed and discouraged jobseekers is high, whilst at the same time the 
Albanian  labour  market  experiences  substantial  skills  mismatch  problems.  Informal 
employment is widespread.  

As  regards  labour  law,  Albania’s  legislative  framework  partly  covers  a  number  of  basic 
principles laid down by the acquis. However, several adjustments to the national legislation 
will  still  be  necessary  in  order  to  fully  transpose  and  implement  the  acquis  in  the  field  of 

EN 

83 

  EN 

labour  law.  Legislation  similar  to  the  EU  directives  on  information  and  consultation  at 
national or transnational level is lacking (i.e. European Work Councils, European Company, 
European  Cooperative  Society).  There  is  no  legislation  corresponding  to  the  Insolvency 
Directive, nor to the directive on posting of workers. The general District Courts have specific 
sections  to  adjudicate  industrial  disputes.  A  specific  law  regulates  the  State  Labour 
Inspectorate.  

The recently adopted Law on Health and Safety at Work aims to transpose the Framework 
Directive 89/391/EEC. It introduces new concepts, such as employers’ obligations regarding 
risk assessment, along with prevention and protection measures, services provided by external 
bodies with a view to protection  from and prevention of health  and safety  risks and worker 
participation.  It  also  introduces  a  classification  of  accidents  at  work,  depending  on  their 
consequences and the number of persons involved. Its effective implementation remains to be 
seen.  Considerable  efforts  will  be  needed  to  ensure  proper  transposition  and  effective 
implementation  of  the  EU  Directives  in  particular  sectors  and  on  specific  subjects,  such  as 
carcinogenic  substances,  explosive  atmospheres,  health  and  safety  signs,  artificial  optical 
radiation,  display  screen  equipment,  vibration,  chemical,  physical  and  biological  agents  at 
work and others.  

The State Labour Inspectorate (SLI) is responsible for monitoring and enforcing legislation on 
health and safety at work. It has 12 regional directorates, but its capacity to enforce legislation 
throughout the country is hampered by lack of equipment and by the fact that only one out of 
the 24 local offices planned has been established. Certain sectors are excluded from the scope 
of  authority  of  the  SLI  (such  as  agriculture  and  matters  related  to  exposure  of  biological 
agents at work), which substantially affects the uniform implementation of health and safety 
at work acquis.  

Social  dialogue  in  Albania  is  still  developing.  It  takes  place  almost  exclusively  in  the 
framework of the National Labour Council (NLC), the main tripartite consultation body. The 
NLC  is  chaired  by  the  Minister  of  Labour,  Social  Affairs  and  Equal  Opportunities  and 
includes representatives from workers’ and employers’ organisations. Both cross-industry and 
sectoral  organisations  are  represented.  Its  aim  is  basically  to  examine  draft  proposals 
submitted by the government. A working group has been set up within the NLC to amend the 
current regulation of its functioning, but for the time being the NLC has no explicit roles and 
responsibilities and lacks policymaking powers. In practice, social partners have very limited 
influence  over  policy-  and  decision-making.  Improving  social  dialogue  in  the  country  will 
require raising the profile of the NLC, determining the representativeness criteria to be met by 
social partners and improving the scheduling and regularity of its meetings.  

Bipartite social dialogue is not very developed. Collective bargaining at sectoral level is still 
almost  non-existent,  with  the  exception  of  some  sections  of  the  public  sector.  There  is  no 
national collective agreement in Albania.  

Albania  has a Sector  Strategy for Employment for 2007-2013 and is currently developing a 
national action plan for employment. Setting and monitoring feasible objectives and ensuring 
the  necessary  commitment  on  the  part  of  the  entire  government  and  social  partners  are  key 
challenges.  Employment  policy  essentially  consists  of  a  number  of  active  labour  market 
measures. Four active labour market policies (ALMPs) are in place: subsidised employment 
for women in need; work placements for university graduates; subsidised on-the-job training; 
and training for people in need. Both the budget and the number of participants involved in 
such  measures  are  small  in  relation  to  the  needs  for  active  support.  Overall,  the  financial 

EN 

84 

  EN 

resources put into active measures are very low (0.016% of GDP in 2009) compared with the 
EU  average  of  0.46%  of  GDP  in  2008.  No  in-depth  evaluation  of  ALMPs  has  been 
undertaken  to  date.  The  effectiveness  of  training  programmes  in  terms  of  integrating 
participants  into  the  labour  market  is  perceived  to  be  low,  as  training  is  often  short  and  its 
quality remains an issue. Strengthening cooperation between employment offices and training 
institutions and continuing to survey skills needs on the labour market are important issues.  

The  labour  market  measures  are  implemented  by  the  National  Employment  Service  (NES). 
Throughout  2009  and  2010  NES  staff  were  trained  and  guidelines  were  issued  for  modern 
counselling  services.  However,  regional  and  local  labour  offices  are  still  poorly  staffed  and 
equipped and can rarely offer effective counselling services. Capacity-building is necessary in 
the employment service, especially at local level.  

In  terms  of  preparations  for  the  European  Social  Fund  (ESF),  currently  there  is  neither  a 
social nor an employment fund in Albania which would be similar to the ESF. Measures will 
be  needed  to  set  up  these  structures  and  ensure  the  required  consistency  between  Albania’s 
national  legislation  and  the  cohesion  policy  framework.  The  Ministry  of  Labour,  Social 
Affairs  and  Equal  Opportunities  is  responsible  for  developing  social  policy  in  Albania,  but 
other  ministries  and  services  also  have  specific  sectoral  powers.  Sector  strategies  exist,  and 
inter-ministerial working groups ensure coordination. However, an integrated strategy for the 
medium 
institutional  set-up  for 
management and implementation of funds, needs to be put into place, involving all relevant 
stakeholders  in  the  planning  and  programming  process.  Preparations  for  programming  and 
implementation  of  IPA  Component  IV  on  human  resources  development,  in  view  of  future 
implementation  of  the  ESF  are  still  at  a  very  early  stage.  In  this  context,  the  quality  and 
consistency with national priorities of employment and social policies requires attention. (See 
also Chapter 22 - Regional policy and coordination of structural instruments) 

term,  with  effective  coordination  mechanisms  and 

The National Strategy on Social Inclusion for 2007-2013 will need improving, especially in 
the  form  of  clearer  targets,  budgets  and  responsibilities.  Coordination  of  social  inclusion 
initiatives by the government remains weak, both across sectors and between central and local 
government. Further efforts are needed to assess the level of poverty better and to align with 
the new concepts and approaches developed at EU level.  

The  2009  Action  Plan  for  the  Decade  of  Roma  Inclusion  is  structured  around  six  priority 
fields (education, employment and social protection, housing and infrastructure, health, social 
inclusion and equal opportunities, and cultural heritage).  

Implementation of the National Strategy for People with Disabilities suffers from insufficient 
budget  allocations  at  central  and  local  government  levels.  There  is  a  lack  of  appropriate 
health, education, social and employment services for people with disabilities. Their level of 
inclusion  in  the  labour  market  is  very  low.  Quotas  set  by  law  to  promote  their  access  to 
employment are generally not met (not even in public institutions). The disability legislation 
is  fragmented,  with  different  categories  benefiting  from  special  status.  The  government  is 
working on a draft law which will cover all people with disabilities.  

In the area of social protection, despite a favourable population structure (relatively low old-
age  dependency  ratio),  the  Albanian  pension  system  has  recorded  deficits  in  recent  years. 
Weak  links  between  contributions  paid  and  benefits  received  create  incentives  for 
contribution evasion, especially for those with higher earnings. The coverage of the pension 
system is relatively low by EU standards. Albania has implemented a number of reforms with 

EN 

85 

  EN 

the  aim  of  improving  its  adequacy  and  sustainability.  Avoiding  further  deterioration  of  the 
replacement rate in the long term will need attention. Health expenditure is low compared to 
the needs.  

Regarding  anti-discrimination  legislation,  the  Constitution  prohibits  discrimination  on 
several  grounds.  The  2010  Anti-discrimination  Act  significantly  improved  alignment  of  the 
legislation  with  the  acquis.  Several  issues  remain  to  be  correctly  addressed,  including  the 
scope  of  the  prohibition  of  discrimination  and  the  exceptions  to  the  principle  of  equal 
treatment.  Relations  between  the  Anti-discrimination  Act  and  other  legislation  need  to  be 
further  clarified.  The  Commissioner  for  Protection  from  Discrimination,  a  national  equality 
body,  has  been  established,  but  lacks  adequate  premises  and  budget.  Establishing  adequate 
administrative capacity for both anti-discrimination and gender equality measures is a major 
challenge.  

In the area of equal opportunities, the Labour Code and the Law on gender equality prohibit 
discrimination on grounds of gender in connection with employment. The Anti-discrimination 
Act  also  covers  gender  discrimination.  Albania  is  a  party  to  a  number  of  international 
conventions, including the UN Convention on the elimination of all forms of discrimination 
against women.  

Basic  legislation  is  in  place,  including  on  equal  pay,  access  to  employment,  maternity 
protection  and  maternity  leave.  Further  legal  adjustments  are  necessary,  e.g.  introducing 
parental  leave,  removing  the  over-protection  of  women  and  improving  the  equal  pay 
legislation.  The  different  pension  ages  for  men  and  women  will  need  to  be  adapted  and  the 
pension system will have to be further examined.  

The Law on measures against violence in family relations is intended to prevent and reduce 
all  forms  of  domestic  violence  and  to  protect  family  members  who  are  victims  of  violence, 
paying special attention to women and children. A National Strategy for Gender Equality and 
Domestic Violence for 2007-2010 and an action plan to implement it were adopted in 2007. 
The  action  plan  has  eight  strategic  priorities  and  is  implemented  by  central  and  local 
government  institutions  in  partnership  with  academic  institutions,  media,  civil  society  and 
international organisations.  

The Ministry of Labour, Social Affairs and Equal Opportunities is the authority responsible 
for gender equality. The National Council for Gender Equality is an advisory body on gender 
policies  and  programmes.  There  is  a  network  of  gender  officers  in  ministries  and  local 
government  authorities  and  a  national  referral  mechanism  is  being  established  to  provide  a 
coordinated  response  to  domestic  violence.  Public  awareness  campaigns  on  gender  equality 
and  domestic  violence  have  been  organised.  Representation  of  women  in  political  decision-
making is low, but the introduction of a quota in the Law on gender equality and the Electoral 
Code marked a step forward on promoting female participation in policy-making bodies.  

Conclusion 

Albania has started alignment with the acquis in the areas of labour law, equal treatment for 
women and men and anti-discrimination, but further efforts are necessary, in particular in the 
area  of  health  and  safety  at  work.  Effective  implementation  of  the  legal  framework  and 
building adequate enforcement capacity remain major challenges, particularly in the areas of 
anti-discrimination  and  health  and  safety  at  work.  Social  dialogue  is  still  at  an  embryonic 
stage. A strategy is needed to improve the institutional framework and mechanisms for social 

EN 

86 

  EN 

dialogue,  alongside  measures  to  build  up  social  partners’  capacity  and  establish  clear 
representativeness  criteria.  In  the  areas  of  labour  market,  employment,  social  inclusion  and 
social protection, capacity for policy development, implementation and monitoring remains a 
major challenge, not least with a view to Albania’s participation in the European Social Fund. 
Developing  reliable  data  and  statistics  remains  an  outstanding  issue  in  several  areas,  in 
particular  labour  market  analyses.  Overall,  Albania  will  have  to  make  considerable  and 
sustained efforts to align with the acquis and to implement it effectively in the medium term.  

3.20.  Chapter 20: Enterprise and industrial policy 

recommendations,  which  are 

The  acquis  under  the  enterprise  and  industrial  policy  chapter  consists  largely  of  policy 
principles  and  policy 
in  communications, 
recommendations  and  Council  conclusions.  The  EU’s  enterprise  and  industrial  policy, 
including  its  small  and  medium-sized  enterprises  (SME)  policy,  seeks  to  promote  the 
competitiveness  of  the  economy.  It  is  strongly  driven  by  the  Europe  2020  strategy,  the 
successor of the Lisbon strategy for growth and jobs, and by the 2008 Small Business Act for 
Europe.  Enterprise  and  industrial  policy  comprises  policy  instruments,  including  financial 
support and regulatory measures. It also includes sectoral policies, such as recommendations 
for more targeted policy analysis and for new initiatives and consultations at sectoral level.  

reflected 

Albania has a relatively small and not very advanced industrial base consisting mainly of low-
tech sectors (e.g. mining, textiles and clothing, footwear, food and beverages and furniture). 
In 2009 industry contributed 7.2% to GDP (out of which 6.5% from the processing industry). 
Textiles  and  footwear  account  for  1.6%  of  GDP  and  30%  of  industrial  employment.  Other 
major  manufacturing  sectors  are  food  products,  beverages  and  tobacco  (1.3%  of  GDP  and 
12% of industrial employment) and basic metals and metal items (1.3% of GDP and 8.4% of 
industrial  employment).  The  chemicals,  rubber  and  plastics  industry  makes  a  modest 
contribution to the economy. Agriculture generates 16.2% of GDP and services 54.3%.  

The Business and Investment Development Strategy (BIDS) provides the strategic framework 
for  Albania’s  enterprise  and  industrial  policy.  It  aims  at  promoting  steady  growth  and 
dynamic development of entrepreneurship, productivity and competitiveness, investment and 
better use of human, financial and natural resources. The industrial policy is built on analysis 
of competitiveness and includes broad consultations with stakeholders. During preparation of 
the policy, Albania followed the EU principles. In general, the measures taken are appropriate 
to  the  needs  of  industry,  but  attention  needs  to  be  paid  to  effective  implementation.  The 
Ministry  of  Economy,  Trade  and  Energy  (METE)  is  the  main  institution  responsible  for 
enterprise  and  industrial  policy.  The  Albanian  Business  and  Investment  Agency  (Albinvest) 
has been replaced by the Albanian Investment Development Agency. Like Albinvest, the new 
agency  depends  of  METE  and  is  responsible  for  promoting  investment,  improving 
competitiveness and providing professional support services to SMEs. 

Albania’s SME policy is based on the European Charter for Small Enterprises and the country 
is  committed  to  implementing  the  Small  Business  Act  for  Europe.  Albania’s  definition  of 
‘SME’ is in line with the EU’s as regards the number of employees and autonomous partners 
and linked enterprise concepts. The share of SMEs in the economy is similar to that in the EU. 
In 2008 their value added to GDP stood at 63%, their contribution to exports at 69%, while 
their contribution to employment was 82.7%. The overall climate for business has improved 
as  a  result  of  developments  in  the  regulatory  framework.  In  particular,  business  registration 
and  licensing  procedures  were  improved  and  one-stop  shops  are  in  operation  for  these 
formalities.  Positive  measures  were  also  taken  in  the  form  of  tax  reforms,  entrepreneurship 

EN 

87 

  EN 

education and programmes to support SMEs and promote their competitiveness. Albania will 
need  to  step  up  its  efforts  to  remove  remaining  obstacles  to  investment.  In  this  context, 
fighting  corruption  and  the  informal  economy,  ensuring  the  rule  of  law,  in  particular 
enforcement  of  contracts,  raising  the  quality  of  exported  products  and  improving  human 
capital and infrastructure will require attention.  

Albania  currently  has  no  cluster  policy,  but  clusters  are  being  developed  in  several  sectors 
with external assistance. Incubation and start-up support face challenges, mainly related to the 
lack of infrastructure and poor availability of bank loans for start-up activities, particularly in 
rural areas.  

Only a few components of an innovation policy and effective innovation support mechanisms 
are  in  place.  Current  initiatives  related  to  strategies,  governance  and  support,  such  as 
establishment  of  the  Agency  for  Research,  Technology  and  Innovation  (ARTI)  and  the 
planned business relay innovation centre (BRIC), are encouraging signs of development of the 
institutional framework for Albania’s innovation policy. 

As  regards  enterprise  and  industrial  policy  instruments,  Albania  is  participating  in  the 
Entrepreneurship  and  Innovation  Programme  (EIP)  under  the  EU  Competitiveness  and 
Innovation  Framework  Programme,  but  not  yet  in  the  Enterprise  Europe  Network  or  EIP's 
financial  instruments.  In  general,  access  to  finance  remains  limited.  The  banking  system 
finances  mainly  large  companies  and  tends  to  be  conservative  towards  SMEs.  Credit  to  the 
private sector increased in 2009, but loans are still provided mainly for purchase of plants and 
equipment. Start-up businesses have almost no access to financing from banks and rely on the 
non-banking sector and microcredit providers. Bank requirements on loan collateral vary from 
120% to 150% of the loan and credit interest rates are high. Albania has not yet transposed the 
Directive on combating late payment in commercial transactions.  

On sectoral policies, Albania has launched initiatives on mining, tourism and the clothing and 
footwear sectors. Mining generated 0.8% of GDP in 2008 and 9% of employment in industry. 
However,  it  should  be  taken  into  account  that  revenue  from  mining  is  very  cyclically 
dependent.  Textiles  and  footwear  account  for  about  43%  of  total  exports.  However,  the 
clothing  and  footwear  sectors  rely  heavily  on  outward  processing  traffic  based  on  assembly 
operations with low labour costs and exporting mainly low value-added products. 

Tourism  contributed  approximately  4.1%  to  GDP  and  3.3%  to  employment  in  2008.  This 
sector  is  expanding  rapidly.  Albania  has  adopted  sustainability  as  the  general  overarching 
principle in this sector, which is in line with EU policy.  

Conclusion 

Albania’s  SME  and  industrial  policies  are  broadly  in  line  with  EU  principles.  However, 
remaining challenges to improve the business environment and remove remaining obstacles to 
investment  will  require  particular  attention  and  the  Directive  on  combating  late  payment  in 
commercial  transactions  will  need  to  be  transposed.  Overall,  the  country  should,  in  the 
medium  term,  have  the  capacity  to  comply  with  the  requirements  of  the  acquis  provided  it 
continues its efforts.  

3.21.  Chapter 21: Trans European Networks 

This  chapter  covers 
transport, 
telecommunications and energy infrastructure, including the EU guidelines on development of 

trans-European  networks  policy 

the  areas  of 

in 

EN 

88 

  EN 

trans-European  networks  and  the  support  measures  for  developing  projects  of  common 
interest.  The  aim  of  establishing  and  developing  trans-European  networks  and  promoting 
proper  interconnection  and  interoperability  of  national  networks  is  to  take  full  advantage  of 
the internal market and contribute to economic growth and the creation of employment in the 
European Union. 

As regards trans-European transport networks (TEN-T), Albania faces a huge challenge due 
to  limited  financial  resources,  its  mountainous  landscape  and  the  concentration  of  the 
population and the main economic activities in the western part of the country. As the country 
is experiencing rapid economic growth, parallel development of a sufficient transport network 
is very important. This needs to be done in the framework of the South-East European Core 
Network and the future TEN-T network. In the case of the road core network, huge progress 
has been made on its quality and density. The rail core network has been disregarded so far 
and  needs  quick  targeted  improvements  in  order  to  ensure  sustainability  in  the  medium  and 
long run. Regarding sea port connections, rehabilitation of Durres port, the main commercial 
port  in  Albania,  must  continue.  Sufficient  financial  resources  need  to  be  allocated  to 
maintenance  of  transport  infrastructure.  Finally,  access  from  the  remote  rural  areas  to  the 
core network has to be ensured by continuing to improve the secondary network.  

In connection with trans-European energy networks (TEN-E) in Albania, only the electricity 
transmission has been developed to date, whereas there is no gas market. The Albanian gas 
pipeline  network  consists  of  some  400  km  linking  producing  sites  in  the  south  with  major 
domestic  consumers,  most  of  the  infrastructure  is  no  longer  in  use.  Numerous  possible  gas 
interconnectors  have  already  been  studied,  also  in  the  context  of  the  Energy  Community 
process and infrastructure priorities have been identified. Despite a gas act passed in 2008 for 
the development of a fully-fledged natural gas sector in the country, Albania needs to further 
develop the legislative framework for gas, as a precondition for further extension of the gas 
market and for participation in the regional gas network. Albania has expressed interest in two 
projects: the Ionian Adriatic gas pipeline (along the Adriatic coast to Croatia, constituting an 
element of the Energy Community Gas Ring) and the Trans-Adriatic pipeline (which aims at 
linking  Greece  to  the  south  of  Italy).  With  regards  to  the  electricity  transmission  system  in 
Albania,  voltage  profile  in  the  main  network  of  400kV  and  220kV  is  almost  in  compliance 
with the criteria of UCTE. Nevertheless, the system needs overall network reinforcement and 
improvement  of  operational  measures.  The  current  decrease  in  voltage  in  the  transmission 
network limits the general net consumption and certain transmission lines are overloaded. The 
Albanian  system  is  connected  with  Greece  (400kV)  and  Montenegro  (220kV),  and  under 
construction with Kosovo (220 kV) and Montenegro (400kV), yet some interconnectors need 
to be upgraded and finalised. Access to imported electricity is limited by the interconnection 
capacities and, to some extent, by the existing procedures of capacity allocation, which need 
to  be  addressed.  Two  projects  of  common  interest  are  identified  in  the  TEN-E  guidelines: 
"Electricity connection between Elbasan/Albania and Podgorica/Montenegro" and "Electricity 
connection between Kardia/Greece) and Elbasan/ Albania". The former is nearing completion. 
It  is  essential  to  improve  the  coordination  of  transmission  system  investments  with  the 
neighbouring countries, notably with Greece, the formerYugoslav Republic of Macedonia and 
Kosovo, bilaterally and in the framework of the Energy Community. 

Albania  is  not  participating  in  the  trans-European  telecommunication  network.  The 
government  expresses  interest  in  joining  the  Information  and  Communication  Technologies 
Policy Support Programme under the Competitiveness and Innovation Programme (CIP). 

Conclusion 

EN 

89 

  EN 

Overall,  Albania  will  have  to  undertake  additional  efforts  in  the  field  of  trans-European 
transport and to make considerable and sustained efforts in the field of trans-European energy 
networks to align with the acquis and to implement and enforce it effectively in the medium 
term. Albania needs to develop its transport infrastructure in line with the expected volume of 
traffic. Rail needs specific attention, as it could play an essential role in the medium-term and 
needs  to  be  well  connected  with  the  existing  link  with  Montenegro.  A  balance  needs  to  be 
struck  between  the  necessary  improvement  of  the  core  network  and  its  connections  on  one 
hand and, on the other, the profitability of some projects, which must be taken into account 
better.  Albania  has  been  actively  participating  in  the  South-East  Europe  Transport 
Observatory  (SEETO)  and  must  continue  to  cooperate  with  its  neighbours  with  a  view  to 
jointly  defining  projects  of  regional  interest.  Albania  needs  to  increase  the  security  of 
electricity supply and to make the natural gas available to the Albanian economy in order to 
allow for efficient and stable infrastructure. 

3.22.  Chapter 22: Regional policy and coordination of structural instruments 

The  acquis  on  regional  policy  and  coordination  of  structural  instruments  consists  mostly  of 
framework  and  implementing  regulations,  which  do  not  require  transposition  into  national 
legislation.  They  lay  down  the  rules  for  drawing  up,  approving  and  implementing 
programmes financed by the Structural Funds (the European Regional Development Fund and 
the European Social Fund) and — for some Member States — Cohesion  Fund  programmes 
reflecting each country’s territorial organisation. These programmes are negotiated and agreed 
with the Commission. Implementation is a shared responsibility of the Member States and the 
Commission. Member States must comply with the provisions of the acquis, for example in 
the areas of public procurement, competition and the environment, equality between men and 
women  and  non-discrimination,  as  well  as  sustainable  development,  when  selecting  and 
implementing projects. 

As regards the legislative framework, the issue of regional development is not regulated in 
any  uniform  manner.  There  is  no  specific  law  on  regional  development,  though  it  is  not  a 
requirement  to  have  such  a  law  to  implement  regional  policy  programmes.  However,  the 
Albanian  authorities  are  currently  preparing  a  law,  which  would  lay  the  foundation  for 
regional  development  policy  in  Albania.  Currently,  fragmented  regional  development 
operations are planned in a coordinated way via a newly established Regional Development 
Fund. 

Albania  has  three  levels  of  governance:  national/central,  county  and  local  (municipalities). 
Directly  elected  self-government  bodies  exist  at  central  and  local  levels  only.  County-level 
bodies  consist  of  delegated  representatives  from  local  units.  Albania’s  territory  is  organised 
into 12 counties and 373 local government units. The State administration is divided into 36 
districts  for  the  purpose  of  carrying  out  public  tasks  under  State  supervision  or  State 
responsibility.  There  are  neither  administrative  nor  self-governing  regions  in  Albania  that 
would  correspond  to  level  2  in  the  NUTS  classification,  counties  being  the  equivalent  of 
NUTS level 3. 

The  Law  on  the  organisation  and  functioning  of  local  government  stipulates  that 
municipalities  are  responsible  for  drawing  up  development  strategies  and  selecting  and 
implementing  projects  related  to  them.  Funds  for  financing  municipalities  are  raised  from 
local taxes and transfers from the central budget. Albania is in the process of decentralisation.  

EN 

90 

  EN 

The  Budget  Law  does  not  explicitly  provide  for  multi-annual  budget  programming,  but 
allocations for multi-annual policies and projects are coordinated in the three-year Medium-
Term Budget Programme and transposed in the annual Budget Acts, thus securing financing 
for multi-annual investments. 

Albania  is  currently  preparing  for  components  III  (regional  development)  and  IV  (human 
resources  development)  of  the  Instrument  for  Pre-Accession  (IPA),  which  will  become 
available once Albania is granted candidate country status. The main aim of IPA components 
III and IV is to prepare candidate countries for management of financial instruments under the 
Structural  and  Cohesion  Funds  following  EU  accession.  During  the  first  half  of  2010,  the 
Albanian  authorities  adopted  a  number  of  decisions  to  put  in  place  an  institutional 
framework to plan, manage and monitor future assistance under IPA components III and IV. 
The  strategic  coordinator  is  the  Deputy  Minister  in  the  Ministry  of  European  Integration, 
while  the  operating  structures  have  been  designated  in  the  Ministry  of  Public  Works, 
Transport and Telecommunications (for component III) and in the Ministry of Labour, Social 
Affairs and Equal Opportunities (for component IV). The heads of these structures have been 
appointed.  Other  structures  established  for  previous  EU  assistance  under  IPA  component  I 
will remain in place, namely the national IPA coordinator, the national authorising officer and 
the  National  Fund.  Capacity  developed  in  the  Central  Finance  and  Contracts  Unit  (CFCU) 
will serve as a basis for implementing future programmes on IPA components III and IV. The 
Audit  Authority  is  a  newly  established  body.  Its  functional  independence  still  needs  to  be 
verified and its capacity developed in order to fulfil its audit duties. 

Administrative capacity to deal with the requirements of the EU’s structural policy need to 
be developed. Competent staff needs to be recruited and solid managerial capacity needs to be 
developed at all levels of the administration dealing with the Structural Funds. To manage this 
process, training and organisational development strategies  remain to be formulated and the 
necessary  financial  resources  to  be  allocated.  Sound  financial  management,  control  and 
monitoring  mechanisms  will  need  to  be  given  adequate  human  resources  to  deliver  the 
expected results. 

Experience with pre-accession funding under component I is limited and further efforts will 
be  necessary  to  increase  administrative  capacity  to  allow  smooth  management  and 
implementation  of  projects  under  IPA  III  and  IV.  Attention  must  be  paid  in  this  context  to 
build up a pipeline of eligible projects. The same applies to the capacity at local and county 
levels and in municipalities, which must be significantly strengthened. 

A number of programming documents have been adopted by the government to implement 
and  promote  sectoral  policies  for  regional  development  purposes.  The  National  Programme 
for  Development  and  Integration  for  2007-2013  is  the  main  national  planning  strategy  for 
Albania.  It  synthesises  the  strategic  priorities  defined  in  various  sectoral  strategies.  These 
documents  could  provide  a  good  basis  for  drafting  a  strategic  coherence  framework  for  the 
IPA.  Drafting  of  the  strategic  coherence  framework  is  ongoing  and  preparation  of  the 
operational programmes has recently commenced. 

Strategy-making,  including  for  regional  development,  is  coordinated  via  the  Integrated 
Planning  System,  which  involves  line  ministries  and  other  stakeholders  in  setting  policies. 
Financing  is  budgeted  under  the  Medium-term  Budget  Programme  and  implementation  is 
coordinated and monitored by the Department for Strategy and Donor Coordination. 

EN 

91 

  EN 

Partnership needs to be ensured, as the planning and programming process should involve full 
participation  by  economic  and  social  partners.  Future  policy  instruments  remain  to  be 
designed  to  ensure  consistent  consultation  of  social  and  economic  partners  and  broad 
participation by citizens and interest groups via open consultations and public meetings. 

Action  under  IPA  components  I  and  II  has  allowed  the  Albanian  authorities  to  familiarise 
themselves with the monitoring and evaluation requirements for EU co-funded programmes 
and  projects.  Evaluation  capacity  is  very  weak  in  Albania.  Proper  national  systems  and 
mechanisms  need  to  be  put  in  place  to  evaluate  and  monitor  the  quality  and  impact  of 
development  programmes.  For  decision-making  and  reporting  purposes,  a  management 
information  system  (MIS)  is  being  currently  introduced  by  the  Albanian  administration  for 
IPA components I and II, which could be a good basis also for components III and IV. 

A  law  governing  rules,  methodology,  procedures  and  administrative  structures  for  financial 
management and control activities in the public sector is planned. In the context of the IPA, 
the  national  authorising  officer  (NAO),  as  the  head  of  the  National  Fund  (NF),  will  be 
responsible  for  sound  financial  management  of  EU  funds  once  the  country  has  been 
accredited to manage IPA funds in a decentralised manner. This responsibility is assumed by 
the  Deputy  Minister  of  Financial  Affairs.  The  NAO  assumes  overall  responsibility  for 
financial  management  of  EU  funds  and  is  responsible  for  the  legality  and  regularity  of 
financial transactions. The NAO is also responsible for effective functioning of management 
and control systems under the IPA. 

An Audit Authority has just been set up as an independent agency reporting to the Minister of 
Finance.  The  High  State  Control  Office  plays  no  role  in  auditing  of  EU  funds  in  Albania. 
Internal audit units and irregularity officers in IPA bodies need to be strengthened. (See also 
Chapter 32 Financial Control) 

Impact 

Albania had a nominal GDP of €7.8 billion in 2007. This equa ls about 0.06% of EU-27 GDP 
for about 0.6% of the EU-27 population. Considering the size of its economy and population, 
Albania’s accession would marginally reduce the EU’s average per capita GDP (PPS) figures 
and, hence, slightly influence the eligibility of regions. 

Given  that  its  per  capita  GDP  is  considerably  below  the  EU  average,  Albania  would  be 
entitled to receive EU contributions from the Cohesion Fund under the convergence objective. 
Following  a  preliminary  assessment  of  Albania's  economic  situation  and  considering  the 
current  capping  rules  of  the  structural  funds,  the  estimated  impact  of  Albania’s  possible 
accession on EU cohesion policy is considered manageable. 

Conclusion 

Overall,  cohesion  policy  instruments  and  structures  are  at  a  very  early  stage  in  Albania. 
Institutional structures need to be established and their administrative capacity will have to be 
considerably strengthened to allow successful participation in the IPA regional development 
component and EU cohesion policy. A positive start has been made with preparations for IPA 
components  III  and  IV,  however,  considerable  and  sustained  efforts  to  set  up  sound 
procedures and competent administrative structures will be necessary to allow Albania, in the 
medium term, to apply EU rules and channel the funds from the EU structural instruments.  

EN 

92 

  EN 

3.23.  Chapter 23: Judiciary and fundamental rights 

EU  policies  in  the  area  of  the  judiciary  and  fundamental  rights  aim  to  maintain  and  further 
develop  the  Union  as  an  area  of  freedom,  security  and  justice.  The  establishment  of  an 
independent  and  efficient  judiciary  is  of  paramount  importance.  Impartiality,  integrity  and 
high  standards  of  adjudication  by  the  courts  are  essential  for  safeguarding  the  rule  of  law. 
This requires a firm commitment to eliminating external influences over the judiciary and to 
devoting adequate financial resources and training. Legal guarantees for fair trial procedures 
must be in place. Likewise, Member States must fight corruption effectively as it represents a 
threat to the stability of democratic institutions and the rule of law. A solid legal framework 
and  reliable  institutions  are  required  to  underpin  a  coherent  policy  of  prevention  and 
deterrence of corruption. Member States must ensure respect for fundamental rights and EU 
citizens’ rights as guaranteed by the acquis and by the Charter of Fundamental Rights.  

The  principle  of  independence  of  the  judiciary  is  enshrined  in  the  Constitution  and 
implemented in relevant legislation. However, there are obstacles to the full independence of 
judges. 

Judges of the High Court and the Constitutional Court are appointed by the President of the 
Republic with the consent of the Assembly. The need for simple majority instead of qualified 
majority consent by parliament has led to the politicisation of the appointment process of the 
two courts, which undermines the neutrality and independence of these institutions.  

The High Council of Justice (HCJ), as the body administering the judiciary, is responsible for 
the protection, appointment, transfer, dismissal and professional evaluation of judges of first 
instance  and  appeal.  The  HCJ  does  not  have  competences  over  the  High  Court,  which  is 
politically  appointed  and  has  an  extra-ordinary  position  within  the  judicial  system.  Such  a 
disconnection  of  the  highest  instance  court  from  the  other  instance  courts  weakens  the 
independence of the whole system.  

The first appointment as  well  as  the  reassignment  of judges of the district courts  and of the 
appeal  courts  is  made  by  the  President  upon  the  proposal  of  the  HCJ  based  on  criteria 
established  by  law  and  competitive  procedures  for  selection.  However,  the  HCJ  does  not 
provide reasoned decisions, apart from in disciplinary matters. There are also no procedures 
or  provisions  for  candidates  to  appeal  these  decisions.  The  lack  of  transparent  decisions  as 
well as the lack of appeal provisions or other judicial review mechanisms entails the risk of 
political interference and possible susceptibility to corruption, thus limiting the independence 
of judges. With a view to strengthening their independence, judges benefit from full immunity 
by  law.  However,  immunity  can  only  be  lifted  upon  decision  of  the  HCJ,  rendering 
investigations more difficult. In addition, it is one of the main risk factors for corruption in the 
judiciary. 

The judiciary system in the Republic of Albania enjoys financial independence. Courts have a 
separate  budget  which  they  propose  pursuant  to  the  law  and  which  they  administer 
themselves. However, budgetary appropriations for the judiciary overall remain insufficient. 

Inspections of the judiciary are undertaken by two institutions, the inspectorates of the High 
Council of Justice and of the Ministry of Justice. There is a certain degree of overlap and lack 
of  coordination  between  the  two  inspectorates.  The  evaluation  of  judges  by  the  HCJ  lacks 
transparency. Disciplinary procedures are launched solely by the Minister of Justice without 
control mechanisms or balances; this bears the risk of political interference. 

EN 

93 

  EN 

The  General  Prosecutor  is  appointed  by  the  President  of  the  Republic  by  simple  majority 
consent  of  the  Assembly,  making  this  appointment  open  to  political  influence.  The  other 
prosecutors are appointed by the President upon the proposal of the General Prosecutor. The 
prosecutorial system is highly centralized and pyramidal. It is considered to belong neither to 
the judicial nor to the executive power. The autonomy of prosecutors is guaranteed in the trial 
phase, but is limited in the investigative phase, thus reducing its efficiency.  

The  School  of  Magistrates  is  in  charge  of  initial  and  continuous  training  of  judges  and 
prosecutors. 

The  principle  of  equality  before  the  law  and  the  right  to  process  by  impartial  courts  is 
established by the Constitution. The Code of Judicial Ethics was introduced by the National 
Judicial  conference  in  2000  and  overseen  by  this  body  since  then.  A  computerised  case 
management  system  and  random  allocation  of  cases  in  criminal  and  civil  procedures  are  in 
place  in  most  judicial  offices.  Further  efforts  are  needed  to  have  a  fully  uniform  and 
harmonised integrated case management system functioning in all courts.  

The  judiciary  suffers  from  problems  of  transparency  and  efficiency.  Court  management  is 
poor  due  to  a  lack  of  human  and  financial  resources,  in  particular  in  first  instance  district 
courts. There is no sound and adequate organisation and training of court administrators. The 
backlog of cases is problematic, court proceedings are slow and the number of trial sessions 
for cases is high. Working conditions in courts generally remain poor and hearings often take 
place in judges' offices, hampering transparency and efficiency. Working conditions also raise 
concern  over  the  security  of  judges.  Currently,  the  Ministry  of  Justice  is  preparing 
amendments  to  the  Civil  Procedure  Code  and  the  Civil  Code  aiming  at  tackling  these 
problems. 

Albania  lacks  a  comprehensive  long-term  strategy  for  the  judiciary  sector  to  continue  and 
complete reform efforts in this area. 

Enforcement  of  decisions  is  weak,  in  particular  in  cases  where  state  institutions  are  the 
defendants. The new private bailiff system has not yet started to function and no sound case 
management for bailiffs is in place. 

Access to justice has been improved by the Law on legal aid of 2008, which provides for free 
legal  assistance  in  civil,  criminal  and  administrative  proceedings  to  different  categories  of 
persons.  However,  the  law  is  not  implemented  effectively  yet.  Furthermore,  generally 
applicable  judicial  administration  fees  were  increased  substantially  in  March  2010,  limiting 
access to justice for the least economically advantaged. 

(See also Political criteria — Democracy and the rule of law) 

Concerning,  anti-corruption  policy  and  measures,  Albania  is  undertaking  coordinated 
efforts. 

Albania  has  acceded  to  the  Council  of  Europe  Criminal  and  Civil  Law  Conventions  on 
Corruption and the Convention on Laundering, Search, Seizure and Confiscation of Proceeds 
from Crime. Albania ratified the UN Convention against Corruption and has been a member 
of  the  Group  of  States  against  Corruption  (GRECO)  since  April  2001.  Out  of  the  thirteen 
recommendations of GRECO's report on Albania, two recommendations regarding the rule on 
political party financing remain to be addressed. 

EN 

94 

  EN 

Albania  has  adopted  several  anti-corruption  measures  and  laws.  The  Criminal  Code 
criminalises the main forms of corruption and the Criminal Procedure Code includes key tools 
for  fighting  corruption,  including  special  investigative  measures.  A  cross-cutting  Anti-
corruption Strategy was prepared in 2008 as well as two action plans since then to implement 
the strategy. Albania has a law on declaration and audit of assets for civil servants and a law 
for  the  prevention  of  conflict  of  interest  while  exercising  public  office.  Albania  needs  to 
vigorously  implement  the  anti-corruption  strategy  and  action  plans  as  well  as  relevant 
legislation. 

A  number  of  key  institutions  and  agencies  have  been  established  for  the  fight  against 
corruption.  The  Department  for  Internal  Administrative  Control  and  Anti-Corruption 
performs  internal  controls  on  administration  and  is  the  administrative  body  in  charge  of 
coordinating the anti-corruption strategy. The High Inspectorate for Declaration and Audit of 
Assets is in charge of receiving and verifying the declaration of assets of public officials and 
the  compliance  of  their  positions  with  the  law  on  conflict  of  interest.  In  the  Ministry  of 
Interior,  an  Internal  Control  Service  was  established  to  investigate  corruption  cases  in  the 
police. Joint Investigative Units for economic and corruption crimes were established, which 
aim  at  improving  the  coordination  efforts  of  law  enforcement  agencies.  These  units  are 
increasingly effective in investigating and prosecuting corruption cases. 

Additional measures include the establishment of E-procurement systems to reduce personal 
contacts between contracting authorities and bidders, and reforms in the education sector (e.g. 
electronic database for registrations and anonymous entry exams) and health sector (e.g. new 
regulation on the referral system). The effectiveness of these measures still has to be proven 
in practice. 

Despite  an  improved  legal  and  institutional  framework,  corruption  remains  widespread  in 
Albania.  Areas  of  particular  concern  are  bribery  and  corruption  in  the  judiciary,  the  health 
sector  and  in  relation  to  the  system  of  restitution  and  compensation  of  property  rights.  The 
absence  of  transparency  in  political  party  funding,  allowing  inappropriate  influence  on 
politics,  is  a  considerable  problem.  The  main  deficiencies  include  weaknesses  in  the  legal 
framework for the fight against corruption, full immunity granted to a large group of public 
officials (including judges, ministers and MPs) posing a serious obstacle to the investigation 
of  corruption  and  gaps  in  the  institutional  set-up  and  administrative  capacity.  Resources  to 
fight corruption remain limited. 

There  are  an  increasing  number  of  corruption  cases  been  investigated  and  prosecuted,  but 
conviction rates in such cases are low. There is no evidence that high level corruption cases 
are investigated, prosecuted and adjudicated. There is a lack of a track record of convictions 
in corruption cases established at all levels. 

(See also Political criteria — Democracy and the rule of law) 

Albania is well advanced in setting up the legal and institutional framework necessary for the 
protection of fundamental rights and continues improving it. The Office of the Ombudsman 
(People's  Advocate)  functions  well  and  is  supplemented  by  the  recently  appointed 
Commissioner for the protection from discrimination. However, operation of these institutions 
is hampered by delays in the staffing of the Office of the Commissioner for protection from 
Discrimination  and  the  appointment  of  a  new  Ombudsman,  both  pending  since  early  2010. 
Attention needs to focus on implementation of legislation and on genuine independence of the 
Human Rights bodies, including through appropriate allocation of resources.  

EN 

95 

  EN 

Albania ensures the right to life and has abolished the death penalty under all circumstances. 
However,  despite  a  decrease  in  number,  the  incidence  of  blood  feud  killings  continues  to 
affect some sections of the population.  

As regards the prison system, there is a need to continue upgrading facilities to bring them in 
line  with  European  standards  and  to  urgently  ensure  adequate  treatment  and  appropriate 
placement of mentally ill detainees. Albania has an appropriate mechanism in place to prevent 
torture and ill-treatment, through the National Prevention Mechanism and partnerships with 
NGOs.  However,  cases  of  ill-treatment  remain  an  issue  of  concern,  in  particular  in  police 
custody.  Implementation  of  recommendations  by  the  Ombudsman  and  prosecution  of 
perpetrators needs to be enhanced.  

Despite  constitutional  guarantees  covering  freedom  of  expression  (including  the  media)  and 
the existence of a pluralistic media, political and business pressures continue to impede media 
independence.  The  overall  media  climate  needs  to  be  improved,  in  particular  by  addressing 
the  issue  of  informality  of  contracts  and  the  lack  of  transparency  in  media  ownership. 
Criminal Code provisions on defamation need to be repealed. 

Freedom  of  assembly  and  association  is  guaranteed  and  civil  society  operates  in  a  non-
restrictive environment. However, the NGO sector remains weak.  

Freedom  of  religion  is  ensured  by  the  Constitution  and  broadly  respected,  ensuring  good 
inter-faith  relations.  Restitution  of  property  belonging  to  religious  communities  needs  to  be 
ensured. 

As  regards  anti-discrimination  policies,  the  adoption  of  the  Law  on  protection  against 
discrimination  is  a  significant  step  in  ensuring  equal  treatment  for  all.  Its  implementation 
needs to be ensured, in particular through allocation of appropriate funds to the Commissioner 
for  protection  from  discrimination.  The  rights  of  lesbian,  gay,  bisexual  and  transgendered 
persons (LGBT) persons are protected through this Law. However, this community continues 
to face widespread discrimination and some cases of violence have been reported. This issue 
needs to be addressed.  

As regards women's rights, the legal framework is in place and the introduction of a gender 
quota  to  enhance  their  participation  in  politics  is  a  positive  step.  However,  their  effective 
participation  remains  limited.  Many  women  are  discriminated  against  in  the  field  of 
employment  and  their  equal  access  to  economic  aid  is  not  fully  guaranteed.  Gender 
mainstreaming  needs  to  be  enhanced.  Despite  an  increase  in  reported  cases  of  domestic 
violence  following  to  the  introduction  of  the  Law  against  violence  in  the  family  and  the 
national  strategy  on  gender  equality  and  the  eradication  of  domestic  violence,  this 
phenomenon  continues  to  affect  many  families  and  cases  are  being  under-reported,  in 
particular in rural areas. Emphasis needs to be put on increased prosecutions, access to justice, 
victim protection and programmes for their social reintegration. 

As  regards  children's  rights,  Albania  is  progressively  setting  up  children's  right  units  in  all 
Regional Councils and has established Child protection units in 15 municipalities. However, 
Albania still lacks a national child protection system and the integral law on childen's rights 
has yet to be adopted. The juvenile justice system has been reformed but it still lacks adequate 
measures for children under the age of 14. Street children and child labour remain issues of 
concern. 

EN 

96 

  EN 

The  implementation  of  the  national  strategy  on  persons  with  disabilities  remains  slow  and 
these persons continue to suffer from discrimination and social exclusion. A framework law 
covering  all  persons  with  disabilities  needs  to  be  introduced  and  legal  quotas  for  access  to 
employment enforced. As regards mental health, the process of deinstitutionalisation needs to 
continue and conditions in institutional healthcare facilities improved.  

As regards property rights, Albanian legislation is overlapping and leads to low levels of legal 
certainty.  The  process  of  restitution  or  compensation  for  property  nationalised  under  the 
previous  regime  is  ongoing  and  progressing  slowly.  The  incidence  of  corrupt  practices 
impedes this process. The high number of pending court cases and non-enforcement of court 
judgments puts into question the functioning of the judicial system in this area.  

The constitution provides the protection of the rights of minorities. The current lack of data on 
minorities  will  be  addressed  by  the  2011  census.  The  availability  of  minority  language 
education  needs  to  be  enhanced  and  made  accessible  to  all  persons  belonging  to  minorities 
(national  and  ethno-linguistic).  Restitution  of  property  belonging  to  minorities  remains  an 
issue.  The  State  Committee  for  Minorities  needs  to  be  substantially  reinforced  in  order  to 
ensure  its  representative  and  consultative  role.  The  implementation  of  the  Strategy  on  the 
Roma minority and the Roma decade action plan need to be accelerated. Focus needs to be put 
on  improving  the  living  conditions  of  the  Roma  minority  and  decreasing  discriminatory 
attitudes. Civil registration of Roma needs to be enhanced.  

(see also Political criteria - Human Rights and the protection of minorities) 

To  ensure  EU  citizens'  rights  to  vote  and  stand  as  a  candidate  in  municipal  and  European 
Parliament  elections,  Albania  will  need  to  amend  its  legal  and  constitutional  framework. 
There are administrative structures in place to deal with electoral matters. There should not be 
any difficulties for Albania to transpose and implement EU law in this field.  

Regarding residence rights, the current Albanian legal framework is not in line with EU law 
on  free  movement  of  EU  citizens  and  major  amendments  are  necessary.  However,  this  will 
only be a requirement in the later stages of the EU accession process. There are administrative 
structures  in  place  to  deal  with  immigration  matters  and  these  structures  are  likely  to  be 
involved in implementation of EU law.  

Regarding diplomatic and consular protection, the current Albanian legal framework is not in 
line with EU law. Amendments will be necessary at a later stage. However, transposition and 
implementation of EU law should not be problematic.  

For access to justice, protection of personal data and the right to vote see Political criteria, 
for  trafficking  in  human  beings  see  Political  criteria  and  Chapter  24,  for  labour  rights  and 
trade unions see Political criteria and Chapter 19.  

Conclusion 

Overall, Albania will have to make considerable and sustained efforts to align with the acquis 
in this chapter and to effectively implement and enforce it in the medium term. Considerable 
strengthening of administrative and implementation capacities will also be needed. 

(see the conclusion of Part 1 – Political criteria) 

EN 

97 

  EN 

3.24.  Chapter 24: Justice, freedom and security 

EU policies aim to maintain and further develop the Union as an area of freedom, security and 
justice.  On  issues  such  as  external  migration,  asylum,  border  control,  visas,  judicial 
cooperation in criminal and civil matters, police cooperation, the fight against organised crime 
and terrorism, cooperation in the field of drugs and customs cooperation, Member States need 
to be properly equipped  to  adequately implement the  growing  framework of  common  rules. 
Above  all,  this  requires  strong  and  well-integrated  capacity  within  the  law  enforcement 
agencies and other relevant bodies to attain the necessary standards. A professional, reliable 
and efficient police organisation is of paramount importance.  

The most detailed part of the EU’s policies on justice, freedom and security is the Schengen 
acquis,  which  entails  lifting  internal  border  controls  in  the  EU.  For  new  Member  States 
substantial  parts  of  the  Schengen  acquis  are  implemented  following  a  separate  Council 
decision taken after accession. 

Albania has made progress in a number of key areas of this chapter in the framework of the 
visa  liberalisation  dialogue  with  the  EU,  which  set  out  benchmarks  to  be  achieved  in  fields 
such as border security, migration, asylum and the fight against organised crime. The progress 
attained  in  these  areas  is  a  good  basis  on  which  Albania  can  build  further  to  meet  the 
challenges of the enlargement process. 

As  regards  migration,  legislation  on  residence  permits,  family  reunification,  students  and 
long-term  residents  is  largely  in  place,  although  it  is  not  fully  in  line  with  the  EU  acquis. 
Some  divergences  remain  in  the  scope  of  the  right  to  family  reunification  and  the  rules  on 
long-term resident status. Albania has no special arrangements for highly-qualified workers. It 
has a sufficiently developed residence permits database, but further alignment of penalties for 
smuggling people, employment of illegally resident foreign nationals or the residence permits 
scheme for victims of trafficking will be necessary. Albania’s return policy is regulated by the 
Law  on  foreigners  adopted  in  2008,  which  addresses  the  key  issues  of  the  EU  Return 
Directive and is generally in line with the acquis. However, the detention process for persons 
subject to return decisions needs to be built around a more individual case-by-case assessment 
and less coercive, alternative measures to detention need to be considered. 

The  readmission  agreement  between  the  European  Community  and  Albania  has  been 
implemented  smoothly  since  2005.  Irregular  migration  from  Albania  remains  a  significant 
challenge,  particularly  across  the  land  border  with  Greece.  Cooperation  between  the  Greek 
and  Albanian  police  on  this  issue  is  good.  In  2009,  64,625  return  cases  were  recorded  and 
47,239 Albanian citizens were returned. Albania has developed a strategy and action plan for 
the period 2010-2015 to reintegrate returned citizens and needs to pursue its implementation. 
Local  employment  bodies  and  migration  counters  providing  information  about  special 
services for returnees play an important role. Close cooperation with the border and migration 
police  is  to  be  pursued  in  this  area.  The  Total  Information  Management  System  (TIMS)  at 
border crossing points provides data on visas, residence permits and work permits issued and 
on the migration statistics available. Risk analysis and monitoring of migration flows need to 
be further improved. 

In the area of asylum, the institutional and legal framework has been put in place. The Law 
on asylum was adopted in 2009 and is generally in line with EU standards. Consistency needs 
to be ensured between the Law on asylum, the Law on integration and the Law on foreigners. 
Basic procedural guarantees in the appeal process need to be regulated in the Law on asylum. 

EN 

98 

  EN 

Albania needs to continue efforts leading to shorter appeal procedures against decisions of the 
Department  for  Citizenship  and  Refugees.  Training  of  the  Department's  staff,  as  well  as  of 
judges hearing asylum appeals, needs to continue. 

A reception centre for asylum seekers has been fully operational since May 2010. The asylum 
system has sufficient human resources and capacity to deal with its current low caseload. In 
February  2010,  there  were  69  recognised  refugees  and  29  asylum  applicants.  However,  in 
case of a higher influx of asylum seekers, the Department for Citizenship and Refugees would 
need additional and more specialised staff. Albania is more of a transit country for potential 
refugees  on  their  way  to  the  EU.  The  asylum  seekers  are  mostly  ethnic  Albanians  from 
Kosovo.  Provision  of  identity  documents  for  refugees  needs  to  be  ensured  in  order  to 
guarantee  them  effective  access  to  the  rights  conferred  by  Albanian  legislation,  and  their 
integration  needs  to  be  further  improved.  Legislation  should  exempt  asylum  seekers  and 
refugees  from  obligations  to  provide  official  documents  issued  in  their  country  of  origin. 
Legislation should specify an age limit for fingerprinting asylum seekers and migrants. More 
comprehensive statistical data needs to be compiled in the field of asylum. 

As  regards  visa  policy,  Albania  has  created  a  legal  framework,  which  needs  to  be  brought 
fully  in  line  with  the  acquis.  The  Law  on  foreigners  was  adopted  in  2008,  but  further 
harmonisation with the EU Visa Code is needed. The Albanian visa lists are not harmonised 
with the EU lists. The legislation allowing Albania unilaterally to apply a seasonal visa-free 
arrangement to citizens of certain non-EU countries is not in line with the EU acquis. Issuing 
visas at the border needs to remain an exception. Albania operates a visa-free regime for all 
EU  Member  States  and  unilaterally  recognises  Schengen  visas  and  residence  permits  as 
equivalent to short-stay visas issued by Albania. The visa facilitation agreement between the 
EU  and  Albania  is  being  implemented.  An  e-visa  information  system  is  being  set  up 
Important elements to ensure in this context will include ownership, good managerial use and 
maintenance, security features and personal data protection. The system will need to be in line 
with visa information system (VIS) requirements. 

In the area of external borders and Schengen, the border management system is generally in 
line with EU standards. The Law on state border control and surveillance was adopted in 2008 
and  followed  by  several  legal  acts  regarding  the  border  and  migration  police  (BMP).  A 
national  integrated  border  management  strategy  was  adopted  in  2007  and  the  associated 
action plan has been was updated in 2009. The BMP is a clearly structured department within 
the  State  Police  with  sufficient  human  resources  (1,539  staff),  IT  resources  and  technical 
equipment  to  perform  border  checks.  The  training  curricula  of  the  BMP  were  designed  in 
cooperation  with  the  Police  Assistance  Mission  of  the  European  Community  to  Albania 
(PAMECA)  and  Frontex.  Risk  analysis  capacity  has  been  strengthened  and  is  operational. 
Further upgrading of the infrastructure at border crossing points is continuing. All 24 border 
crossing  points  are  connected  to  TIMS,  providing  access  to  the  national  database  on  travel 
documents and wanted persons and to the Interpol database. The BMP has limited access to 
the MEMEX criminal intelligence information system. Further roll-out is needed, especially 
to border crossing points.  

The development of a fully civilian surveillance of the blue borders is continuing. An inter-
institutional maritime operations centre started work in January 2010 under the administration 
of  the  Ministry  of  Defence,  ensuring  close  cooperation  between  the  BMP,  coastguard, 
customs  authorities  and  Fisheries  Inspectorate.  The  training  system  is  being  set  up  and  the 
standard  operating  procedures  are  being  finalised.  Albania  should  be  able  to  patrol  its 

EN 

99 

  EN 

coastline effectively in the medium term. At the moment, a three-year ban on speed boats is in 
force in order to facilitate the fight against trafficking. 

Cross-border cooperation is generally functioning well in the form of joint patrols, as well as 
one joint border crossing point (with Montenegro). A working arrangement with Frontex has 
been in place  since February 2009  and cooperation is good. Albania actively  participates in 
the Western Balkans risk analysis network and draws on expertise and advice from Frontex 
for  training.  Inter-agency  cooperation  with  the  customs  authorities  has  been  strengthened. 
However,  further  joint  efforts  are  needed  to  fight  against  all  types  of  cross  border  crime 
including trafficking of stolen vehicles. It is necessary that the customs authorities carry out 
systematic controls and make effective use of equipment.  

Regarding  judicial  cooperation  in  civil  matters,  recognition  and  enforcement  of  foreign 
judgments  is  incorporated  in  the  Civil  Procedure  Code.  The  general  system  for  civil  and 
commercial matters is similar to that laid down in EU legislation. Efforts are needed to ensure 
its efficient enforcement. No simplified debt recovery procedures are envisaged in Albanian 
legislation.  Albania  has  acceded  to  a  number  of  relevant  international  instruments,  for 
example  the  1970  Hague  Convention  on  the  taking  of  evidence  abroad.  Accession  to  other 
conventions,  such  as  the  2007  Convention  on  the  international  recovery  of  child  support,  is 
still outstanding. 

In  the  field  of  judicial  cooperation  in  criminal  matters,  Albania  has  ratified  the  most 
important Council of Europe conventions and UN instruments. It needs to take steps towards 
acceding to the Additional Protocol to the Convention on the transfer of sentenced persons. A 
new  law  on  mutual  legal  assistance  entered  into  force  in  February  2010.  The  provisions 
generally comply with EU standards, but effective implementation of the law by sufficiently 
trained personnel is needed. Judges and prosecutors also need to receive training in this field. 
In  2009,  the  number  of  transfers  of  convicts  to and from other  countries increased. Albania 
needs to take steps, particularly in the area of data protection, in order to be able to conclude a 
cooperation  agreement  with  Eurojust.  In  order  to  be  able  to  assume  full  membership  of 
Eurojust  in  the  future,  further  capacity  building efforts  are  necessary  in  the  field  of  judicial 
cooperation  in  criminal  matters.  Bilateral  agreements  are  in  place  with  a  number  of 
neighbouring countries on judicial cooperation in criminal and civil matters. 

In  the  field  of  police  cooperation  and  the  fight  against  organised  crime,  important 
measures  have  been  taken  in  recent  years.  The  legal  framework  has  been  enhanced,  with  a 
new law enabling effective seizure and confiscation of the illegal proceeds of crime. The so-
called  "Anti-Mafia"  Law  entered  into  force  in  January  2010  together  with  the  Law  on 
protection  of  witnesses  and  informants.  Their  effective  implementation,  in  particular  the 
effective management of seized and confiscated assets, needs to be ensured and demonstrated 
through a track record of final confiscations.  

A  new  police  structure  reflecting  the  priority  given  to  organised  crime  investigations  is  in 
place since July 2010. Human resources have been relocated in order to increase the number 
of staff dealing with organised crime investigations and budgetary provision has been made 
for further investments. The introduction of joint investigative units to fight economic crime 
and corruption has proved effective. Efforts have been made to increase investigative capacity 
and  a  more  pro-active  and  intelligence-led  approach  is  promoted.  Common  training  with 
prosecution  and  other  law  enforcement  agencies  needs  to  continue  in  order  to  further 
strengthen  operational  cooperation  between  the  police  and  prosecution.  Specialised  training 
needs to be further developed, in particular on the international aspects of organised crime. 

EN 

100 

  EN 

The use of the MEMEX criminal intelligence system has improved data exchange within the 
Albanian  State  Police.  An  upgrade  and  the  purchase  of  more  licences  are  planned.  For  the 
moment, the system is not shared with other law enforcement agencies. The transfer of data 
from archives has not been completed. The system contains police data but not information on 
investigations  led  by  the  prosecution  service.  With  the  increased  use  of  new  databases, 
personal  data  protection  within  the  police  needs  to  be  enhanced.  Special  investigative 
measures are increasingly used, although line intercepts and the use of undercover agents are 
limited to central level. The division of tasks between the Albanian State Police and the SIS 
(Security Service), particularly tasks such as the interception of telecommunications, needs to 
be  clarified  and  streamlined  in  accordance  with  European  best  practices  and  the  relevant 
Council of Europe instruments. Forensic capacities, including management of forensic DNA, 
need to be improved. A reliable system for reporting statistics is necessary. 

Overall  sustained  and  effective  joint  action  by  all  stakeholders  is  necessary  to  dispel  the 
general association of Albania with trafficking of human beings, drugs, weapons, stolen cars 
and  money  laundering.  Successful  law  enforcement  operations  need  to  be  underpinned  by 
convictions.  In  October  2010,  an  agreement establishing  a  regional  office  in  Belgrade  for 
improving cooperation in the fight against organised crime was signed with Albania, Bosnia 
and  Herzegovina,  Croatia,  Montenegro  and 
former  Yugoslav  Republic  of 
Macedonia. Further strengthening of cooperation at international level is necessary, including 
with  Interpol.  Albania  needs  to  meet  the  requirements  for  the  conclusion  of  an  operational 
agreement with Europol.  

the 

In the fight against terrorism, Albania has revised and adapted its national legal framework 
with the international regulatory framework, but still needs to fully comply with the acquis. A 
counter-terrorism  strategy  has  not  been  adopted  yet.  Information  systems  and  databases, 
which  would  facilitate  the  cooperation  and  coordination  of  competent  authorities,  remain  to 
be developed. 

The  fight  against  drugs  remains  an  area  of  concern,  although  recently  a  more  active 
approach has been adopted by law enforcement agencies, resulting in drug seizures. Albania 
continues  to  be  on  one  of  the  main  Balkan  drug  trafficking  routes.  Cannabis  is  still  being 
produced in Albania, but cultivation has largely moved to more remote mountain regions. An 
action plan to fight cultivation of narcotics is being implemented. Programmes for cultivation 
of alternative crops need to be put in place. The National Strategy against Drugs will expire at 
the  end  of  2010.  A  new  strategy  needs  to  be  drafted  based  on  lessons  learnt.  Some  efforts 
have  been  made  towards  more  efficient  investigation  and  prosecution  of  drug  trafficking 
cases.  Cooperation  with  foreign  law  enforcement  agencies  is  good,  but  needs  to  continue. 
Further  development  of  investigative  methods  is  required  in  order  to  conduct  complex 
investigations. 

Albania’s capacity to deal with the demand for treatment and rehabilitation of drug addicts is 
still  insufficient.  Cooperation  with  the  European  Monitoring  Centre  for  Drugs  and  Drug 
Addiction  (EMCDDA)  produced  some  substantial  results  in  2009;  a  first  country  overview 
and  an  Information  Map  were  published  and  scientific  activities  organised.  Overall,  the 
institutional framework for cooperation with EMCDDA is still at a preliminary stage. 

Despite the good progress, trafficking in human beings continues to be an area of concern. 
Albania remains a source country for trafficking for the purposes of sexual exploitation and 
forced labour. The implementation of the outgoing strategies needs to be evaluated and new 
strategies drafted. Albania is improving its capacity to detect, protect and reintegrate victims. 

EN 

101 

  EN 

However, there has been a drop in detection of cases, in line with the regional trend. In 2009, 
very  few  trafficking  cases  were  prosecuted  in  court.  Training  on  identification  and 
interviewing victims, as well as special investigative techniques, need to be further provided 
to  law  enforcement  officers.  Recruitment  of  specially  trained  female  police  officers  at  the 
most sensitive crossing points needs to continue. International police cooperation needs to be 
stepped up.  

A  new  Law  on  social  services  was  approved  in  March  2010,  providing  financial  support  to 
victims. Financial and human resources need to be further improved and cooperation between 
the local authorities involved (schools, social services, municipalities) needs to be enhanced 
to better prevent trafficking and to reintegrate victims, especially children. In 2009, day care 
centres  and  child  protection  units  were  established.  Effective  protection  of  victims  who 
collaborate with the law enforcement authorities is needed.  

In  the  area  of  money  laundering,  Albania  has  put  in  place  a  legislative  framework  which 
however still needs to be fully aligned with international norms, FATF recommendations and 
the provisions of the acquis (see also Chapter 4 — Free movement of capital). The minimum 
criminal  penalties  for  money  laundering  need  to  be  raised  in  line  with  the  acquis.  Practical 
improvements have been made in recent years by decreasing reporting thresholds, introducing 
preventive measures and reducing cash transactions. Client identification is still inconsistent 
and  needs  to  go  hand  in  hand  with  the  consolidation  of  the  Address  and  Civil  Registry 
systems. The financial intelligence unit (FIU) is in place and has improved its operational and 
analytical  capacity  through  increased  training.  The  number  of  cases  referred  to  the 
prosecution  services  is  increasing.  Cooperation  with  other  national  and  international 
institutions is satisfactory. The National Strategy and Action plan are being implemented, but 
additional  efforts  are needed to tackle the phenomenon effectively.  The  quality  and the low 
number  of  suspicious  transaction  reports  sent  to  FIU  remains  a  challenge.  Electronic 
reporting, especially from the non-banking sector, needs to be promoted. A national register 
of  bank  accounts  is  not  in  place.  More  cross-checks  with  other  institutions  need  to  be 
performed by the FIU. The analytical staff and IT tools of the FIU need to be reinforced. The 
Bank of Albania needs to play a more active role in this field, as a principal supervisor of the 
banking system. Albania needs to use powers to confiscate criminal assets more effectively. 
The  central  asset  recovery  office  required  by  the  EU  acquis  has  not  yet  been  set  up  in 
Albania.  The  low  number  of  prosecutions  and  final  convictions  in  money  laundering  cases 
remains a concern. 

Albania has put in place a range of bilateral agreements on customs cooperation and needs to 
implement these effectively. It needs to start preparing for ratification and implementation of 
the Convention on mutual assistance and cooperation between the Member States (Naples II) 
and  the  Convention  on  the  use  of  information  technology  for  customs  purposes  (CIS).  The 
technical and administrative capacity  of  customs  services needs to be further enhanced,  and 
their  investigative  powers  used  more  proactively,  in  order  that  they  can  carry  out  effective 
operations to counter organised crime. 

For protection of the euro against counterfeiting, see chapter 32 Financial control. 

Conclusion  

Albania  has  made  considerable  efforts  to  align  its  legislation  with  the  acquis  in  the  field  of 
justice,  freedom  and  security.  Positive  results  have  been  achieved  in  reform  of  the  law 
enforcement authorities and in providing them with adequate resources and tools to face the 

EN 

102 

  EN 

challenges of organised crime. However, further steps are necessary to fully align legislation 
with the acquis and international norms. A proactive approach by law enforcement authorities 
is key to tackling organised crime, which remains a matter of concern. A solid track record of 
convictions  needs  to  be  built  up.  Overall,  Albania  will  have  to  make  considerable  and 
sustained efforts to align with the acquis and to implement it effectively in the medium term.  

3.25.  Chapter 25: Science and research 

The acquis in the field of science and research does not in principle require transposition of 
EU rules into the national legal order. Successful implementation of the acquis in this domain 
therefore  involves  mainly  fulfilling  the  necessary  conditions  for  participating  effectively  in 
the EU's Research Framework Programmes and contributing to the creation of the European 
Research Area. This requires good administrative capacity (adequate staffing and knowledge 
of  research  cooperation)  and  scientific  excellence  in  order  to  be  successful  in  carrying  out 
research and innovation projects together with scientific partners from EU Member States and 
in creating growth and jobs in an economically sustainable way. 

Albania, as a potential candidate country, has been associated with the Seventh EU Research 
Framework Programme (FP7) since January 2008. 

National  research  policy  is  under  the  authority  of  the  Ministry  of  Education  and  Science, 
which  oversees  the  strategic  planning  and  legislative  sides  and  national  and  international 
cooperation. Basic research priorities are set by the government and approved in parliament, 
following  consultation  of  the  Academy  of  Sciences,  the  Council  of  Higher  Education  and 
Science and the Conference of University Rectors. In 2010 Albania established an Agency for 
Research, Technology and Innovation, which is responsible for evaluation of research funding 
at  both  national  and  international  levels.  Albania  has  identified  seven  priority  fields  for 
research  which  should  contribute  to  the  economic  development  and  competitiveness  of  the 
country.  

Albania  started  reforming  its  scientific  research  system  in  2006,  with  the  integration  of  the 
former institutes of the Academy of Sciences into the major public universities. The role of 
the Academy now consists, as in most European countries, of representation and advice. The 
research institutes under the line ministries were also restructured and merged into 12 newly 
created technology transfer centres and agencies.  

The  current  level  of  investment  is  very  low  (about  0.2%  of  GDP  in  2009).  Due  to  lack  of 
statistics and systems to collect data from the private sector, there are no means to monitor the 
targets  set.  Albania  is  actively  working  on  a  reform  of  science  and  research  statistics  to 
comply with EU criteria.  

In 2009, a Strategy on Science, Technology and Innovation (STI) was adopted for the period 
2009 to 2015, which maps out the reforms needed to create a knowledge-based economy. The 
STI aims, among other things, to increase public expenditure on research to 0.6% of GDP by 
2015,  create  centres  of  excellence,  increase  the  number  of  researchers  and  boost  the 
innovation  capacity  of  businesses  with  the  aid  of  partnerships  between  academics  and 
industry.  

Effective  participation  in  the  EU  research  framework  programmes  requires  good 
administrative  capacity  (sufficient  staffing  and  expertise  on  research  cooperation  under  the 
EU framework programmes) and scientific excellence in order to be able to submit successful 
proposals  for  projects  jointly  with  EU  and  non-EU  research  institutes.  Since  Albania  first 

EN 

103 

  EN 

became  associated  with  FP7,  it  has  become  more  familiar  with  cooperation  under  the  EU 
research  framework  programme,  but  its  rate  of  successful  participation  is  still  very  low. 
Albania has started to take the necessary capacity-building measures by nominating observer 
delegates to the FP7 management committees and restructuring its network of national contact 
points.  The  country  is  not  engaged  in  nuclear  research  and  has  not  requested  to  become 
associated with the Euratom framework programme.  

Regarding policy initiatives to help create the European Research Area, the STI strategy for 
2010-2015  is  fully  in  line  with  the  ERA  objectives,  but  serious  efforts  will  be  necessary  to 
achieve  the  targets  set.  In  addition,  exact  data on  investment  in  research  and  the  number  of 
researchers  in  the  country  or  the  diaspora  are  lacking.  Albania  has  started  to  take  action  to 
reverse the brain drain by attracting scientists back to the country. It has announced an action 
plan  on  mobility  of  researchers,  including  measures  to  attract  young  people  to  sciences  and 
strengthen  human  capital-building.  Albania  is  suffering  from  a  lack  of  modern  research 
infrastructure  and  state-of-the-art  equipment,  but  efforts  are  underway 
improve 
infrastructure,  starting  with  support  for  development  of  communication  networks  and  IT 
systems.  

to 

Albania  is  participating  in  the  work  of  the  European  Research  Area  Committee  (ERAC, 
former  CREST)  and  has  nominated  a  delegate  observer  to  the  Standing  Committee  for 
Agricultural Research (SCAR). It has also been invited to nominate delegate observers to the 
different ERA governance bodies.  

International  cooperation,  particularly  with  EU  partners,  is  high  on  the  national  agenda. 
Albania is actively participating in several regional projects with the other Balkan countries 
and  has  recently  concluded  science  and  technology  agreements  with  several  neighbouring 
countries and other international partners.  

Conclusion 

Overall, if it continues its efforts, Albania should, in the medium term, have the capacity to 
comply  with  the  requirements  of  the  acquis.  The  National  Science,  Technology  and 
Innovation Plan is fully in line with the targets set at EU level in the context of the European 
Research Area. Consistent implementation and close monitoring of targets adopted at national 
level are, however, of key importance. Albania will have to undertake additional efforts for its 
effective  participation  in  the  research  framework  programmes  and  further  integration  in  the 
European  research  area.  This  also  requires  strengthening  the  administrative  capacity  and 
increasing the currently very low level of investment.  

3.26.  Chapter 26: Education and Culture 

The acquis on education and culture consists mainly of a cooperation framework made up of 
programmes  and  the  open  method  of  coordination  (OMC),  which  aims  at  convergence  of 
national  policies  and  attainment  of  shared  objectives.  In  the  field  of  education  and  youth, 
Member  States  need  to  ensure  sound  management  of  decentralised  EU  programmes.  The 
acquis  also  requires  Member  States  to  facilitate  the  education  of  children  of  EU  migrant 
workers and to prevent discrimination against EU nationals. In the field of culture, the 2005 
UNESCO  Convention  on  the  protection  and  promotion  of  the  diversity  of  cultural 
expressions, ratified by the EU, is a major component of the acquis. The EU also contributes 
to promoting European sporting issues.  

EN 

104 

  EN 

In the field of education and training, Albania is in the process of reforming its education 
system  in  line  with  the  developments  in  the  EU.  Efforts  are  being  made  to  improve  the 
education  and  training  system  and  very  ambitious  targets  have  been  set  at  national  and 
regional levels. School curricula have been revised and provide some flexibility to meet the 
needs  of  minority  and  vulnerable  groups.  Legislation  on  ensuring  inclusive  education  of 
vulnerable groups and children with special needs has to be enforced. Some quality assurance 
measures  have  been  introduced  or  strengthened,  such  as  new  textbooks  and  school 
inspections. However, the quality of education is affected by the need for continuous school 
rehabilitation, equipment upgrading and teacher training. Albania does not yet participate in 
international  testing  (OECD  PISA  test)  or  in  data  sources,  such  as  the  UNESCO  database. 
The  recently  revised  legislation  and  the  new  school  curriculum  implemented  in  2009-2010 
aim  at  improving  the  level  of  education.  The  implementation  of  the  reforms  needs  to  be 
followed  very  closely  and  progress  monitored.  Providing  adequate  human  resources  and 
material  capacity  and  reforming  the  school  governance  are  major  challenges.  In  terms  of 
public spending on education, funding in 2009 was at 3.8% of GDP.  

The  vocational  education  and  training  (VET)  system  is  under  review.  In  order  to  take  into 
account labour market needs and social demands, the VET studies structure is in line with the 
European  Qualifications  Framework  (EQF).  The  recently  established  National  Agency  for 
Vocational Education and Training has been given a mandate to monitor quality assurance in 
VET.  

As  a  party  to  the  Bologna  process,  Albania  is  continuing  its  efforts  in  higher  education 
reform.  However,  there  is  a  need  for  assessment  of  recent  reforms.  Both  third-level  (PhD) 
degrees and a National Qualifications Framework (NQF) have been introduced, but need to be 
further  developed.  Internal  quality  assurance  systems  are  in  place,  but  external  quality 
assurance has still to be completed. Institutional autonomy and good governance will require 
particular  attention.  Further  efforts  are  required  on  integration  of  teaching  and  research, 
continued curricular reform, recognition of prior learning, and increasing mobility.  

In  Albania,  responsibility  for  formulating  and  implementing  youth  policy  lies  with  the 
Ministry of Tourism, Culture, Youth and Sports. A National Youth Strategy was adopted in 
2006,  followed  by  a  National  Youth  Action  Plan  for  2007-2013.  A  national  youth  centre  is 
currently being  established as the main government body responsible for implementation of 
policies  related  to  youth.  However,  much  depends  on  the  vision  and  commitment  of  non-
governmental youth organisations which, themselves, are struggling to establish a sustainable 
position in society. Albania will have to review its strategy in line with the EU Youth Strategy 
(2010-2018).  

As  regards  the  Directive  on  education  of  children  of  EU  migrant  workers,  Albanian 
legislation already covers most of its requirements.  

In order to fulfil the preconditions for participation in the decentralised EU programmes in the 
fields  of  education  and  training  and  youth,  the  relevant  authorities  will  need  to  develop 
capacities for sound financial management and financial control.  

In  the  area  of  culture,  drawing  on  national  and  local  public  funds,  Albania  is  supporting 
cultural institutions and artistic and creative work and promoting capacity-building, including 
international training. Albania ratified the 2005 UNESCO Convention on the protection and 
promotion of the diversity of cultural expressions in 2006 and subscribes to the objectives of 
the  European  Agenda  for  Culture.  A  new  national  strategy  on  culture  is  expected  to  be 

EN 

105 

  EN 

adopted in 2010. Negotiations are under way for full participation of Albania in the Culture 
Programme.  

Conclusion 

Reforms in this sector need to be pursued and implementation monitored. Convergence with 
EU policies and promoting quality and good governance in education and training are major 
national  priorities.  Non-discrimination  against  EU  nationals  within  the  Albanian  education 
system will need to be ensured. Albania will need to significantly strengthen its administrative 
capacity  in  order  to  ensure  sound  financial  management  of  the  decentralised  education 
programmes. Overall, if it continues its efforts, Albania should, in the medium term, have the 
capacity to comply with the requirements of the acquis. 

3.27.  Chapter 27: Environment 

EU environment policy aims to promote sustainable development and protect the environment 
for present and future generations. It is based on integration of environmental protection into 
other  EU  policies,  preventive  action,  the  polluter  pays  principle,  fighting  environmental 
damage at source and shared responsibility. The acquis comprises over 200 major legal acts 
covering  horizontal  legislation,  water  and  air  quality,  waste  management,  nature  protection, 
industrial pollution and risk management, chemicals and noise. Ensuring compliance with the 
acquis requires significant investment, but also brings significant benefits. A strong and well-
equipped  administration  at  national  and  local  levels  is  imperative  for  application  and 
enforcement of the acquis. 

The Constitution of Albania considers sustainable development and environmental protection 
one  of  the  fundamental  goals  of  the  State.  The  2002  Framework  Law  on  environmental 
protection  provides  a  basis  for  specific  legal  acts  regulating  different  components  of 
environmental protection. Specific laws are in place to regulate air and water quality, waste 
management, chemicals, biodiversity, etc. However, considerable efforts are needed to revise 
the existing national legislative framework to align it fully with the EU environmental acquis.  

Regarding  the  institutional  and  administrative  framework,  the  Ministry  of  the  Environment, 
Forests  and  Water  Administration  along  with  12  regional  environment  agencies  and  the 
Environment  Inspectorate  cover  a  considerable  part  of  environment  policy.  However,  the 
existing  institutions  are  not  fully  operational  and  there  are  gaps  and  fragmentation  of 
responsibilities,  particularly  in  the  waste  and  water  sectors.  Further  streamlining  and 
consolidation  of  the  existing  institutional  arrangements  is  required  plus  setting  up  new 
institutions,  such  as  an  environment  and  forests  agency  and  inspection  units.  It  is  also 
essential  to  establish  a  clear  division  of  responsibilities  between  different  administrative 
bodies. Inter-institutional coordination remains poor.  

The environmental inspection system is only partly aligned with the acquis. There is a lack of 
administrative capacity, in particular enough well trained staff and appropriate equipment for 
proper  implementation  of  the  whole  environmental  inspection  cycle.  Particular  efforts  are 
needed  on  inspection  planning,  on  effective  cooperation  between  environmental  inspectors 
and  other  supervisory  authorities  and  on  improving  the  system  for  reporting  and  evaluating 
the inspectorate’s work. A more effective system for prosecuting breaches of environmental 
law  is  required,  including  new  legislation  targeting  specific  offences,  proportionate  and 
dissuasive  sanctions,  an  effective  enforcement  system  and  proper  prosecution.  Overall, 
implementation  and  enforcement  levels  are  low  due  to  weak  legislation,  lack  of  human  and 

EN 

106 

  EN 

financial  resources,  lack  of  awareness  in  government,  business  and  society  in  general, 
fragmented responsibilities and a weak judicial system. 

Environmental  monitoring  across  all  sectors  is  weak  and  inconsistent  and  does  not  provide 
reliable  data.  Urgent  efforts  are  needed  to  develop  a  consolidated,  properly  equipped 
monitoring and information system.  

There  is  no  overall  environmental  investment  strategy.  Priority  needs  to  be  given  to 
environmental spending from national resources, to complement international funding. In this 
context, the commitment to set up an environmental fund is very welcome and should be met. 
A national environmental investment strategy needs to be prepared as soon as possible.  

Public  awareness  and  participation  in  environmental  decision-making  and  public  access  to 
environmental  information  remain  weak.  Further  efforts  are  needed  to  build  a  solid 
partnership between government and civil society.  

Horizontal  legislation  is  weakly  aligned  with  the  acquis.  Further  efforts  are  needed  to 
finalise alignment in the area of environmental impact assessment, including to remedy flaws 
in  transposition.  Transposition  of  the  legislation  on  strategic  environmental  assessment  and 
environmental  liability  is  at  an  early  stage  and  needs  to  be  speeded  up.  Further  efforts  are 
needed  to  improve  access  to  justice  and  facilitate  public  participation,  including  better 
information,  financial  assistance,  legal  aid  and  making  sure  that  procedures  are  not 
unreasonably long and expensive. Implementation and enforcement of legislation in this field 
impact  assessments, 
require  considerable  strengthening.  In  particular,  environmental 
including  due  consideration  of  viable  alternatives,  need  to  be  carried  out  properly  and 
coordination between authorities and with all stakeholders needs to be ensured.  

Air  pollution  is  one  of  the  main  environmental  concerns  for  Albania.  However,  there  are 
neither  a  specific  national  strategy  nor  regional  plans  (except  for  Tirana)  to  address  air 
quality.  A  2008  cross-cutting  strategy  for  the  environment  sets  a  number  of  objectives  for 
alignment with EU and WHO standards, but these are not yet operational. Air quality is now 
monitored in all the main cities, but monitoring is hindered by poor equipment and methods 
and no consistent data are available. Transposition and implementation of the acquis in this 
sector  remain  at  an  early  stage.  The  main  gaps  to  be  filled  include  designating  competent 
authorities, adopting a number of laws, including the new Law on air protection, establishing 
a  comprehensive  monitoring  programme  and  database  and  making  data  available  to  the 
public.  

Alignment  in  the  area  of  waste  management  is  moderate  and  needs  to  be  considerably 
speeded up. In particular, a comprehensive waste management strategy and national as well as 
municipal  waste  management  plans  need  to  be  rapidly  developed.  The  waste  management 
hierarchy needs to be brought into line with the EU Waste Framework Directive. A number of 
legislative  acts  transposing  a  large  part  of  the  EU  waste  legislation  need  to  be  adopted. 
Implementation  and  enforcement  remain  at  a  very  early  stage  and  investment  needs  to 
increase considerably. No permanent monitoring takes place and no official database exists. 
Currently a solid waste collection system exists only in the main cities and towns. There is no 
safe landfill complying with EU standards. Most waste, particularly in rural areas, is disposed 
of in uncontrolled dumps or burnt. Substantial efforts are required to reduce waste generation 
and promote recycling. Rehabilitation of toxic hotspots is progressing, but new ones are being 
identified.  

EN 

107 

  EN 

As  regards  water  quality,  alignment  with  EU  standards  is  at  an  early  stage.  The  national 
strategy  for  water  supply  and  sewage,  the  new  water  law  and  most  of  the  legislation  for 
approximation  with  the  Water  Framework  Directive  and  other  directives  in  this  sector  have 
yet to be adopted. Albania is making steady progress on improving waste water collection and 
treatment and its drinking water supply infrastructure, but very significant investment is still 
required.  As  regards  the  marine  environment,  Albania  is  involved  in  the  work  under  the 
Barcelona  Convention  on  protection  against  pollution  in  the  Mediterranean  Sea.  Further 
efforts  are  needed,  however,  on  aligning  with  the  Marine  Strategy  Framework  Directive. 
Implementation  and  enforcement  of  the  water  legislation  also  need  to  be  considerably 
strengthened.  Particular  attention  needs  to  be  paid  to  clearly  defining  currently  fragmented 
responsibilities and ensuring sound coordination between competent authorities.  

Albania  is  advancing  on  transposition  of  the  nature  protection  legislation.  Initial 
preparations are being made for establishment of the Natura 2000 network and accession to 
the  key  multilateral  agreements  in  the  area  of  nature  protection.  A  National  Biodiversity 
Strategy  and  Action  Plan  are  being  implemented.  However,  further  monitoring  is  needed, 
targeted  on  adjustments  to  strategy  related  to  the  new  EU  biodiversity  target.  Albania  is 
progressing  well  on  establishment  of  the  Emerald  network.  However,  implementation, 
enforcement  and,  in  particular,  management  of  the  protected  areas  need  considerable 
improvement.  Illegal  logging  and  hunting  and  unauthorised  construction  in  nature  reserves 
remain significant concerns. Inspections and sanctions have to be implemented. An effective 
monitoring and information system has yet to be developed.  

As  regards  industrial  pollution  and  risk  management,  the  level  of  alignment  is  very  low 
and needs to be speeded up. In particular, transposition of the Integrated Pollution Prevention 
and Control Directive and development of a permit system based on best available techniques, 
including  equipping  environmental  inspectorates  with  proper  capacity  to  conduct  control, 
verification and assistance functions, need to be addressed as early as possible. Transposition 
of the Large Combustion Plants, Seveso II, Waste Incineration and Solvents Directives is also 
at a very early stage. Serious efforts are needed on institutional capacity-building.  

Albania  has  national  legislation  regulating  management  of  chemicals  and  dangerous 
substances.  However,  it  is  only  partly  in  line  with  the  main  EU  legislation  in  the  field  of 
chemicals  (REACH  and  the  regulations  on  classification,  labelling  and  packaging  of 
substances and mixtures). In particular, there is no single competent authority. Responsibility 
in the field of chemicals is spread across a number of ministries, with unclear and overlapping 
responsibilities  and  weak  administrative  capacity.  The  register  of  chemical  substances  and 
mixtures and the classification and labelling system need to be adjusted to EU requirements. 
The  mechanism  for  evaluation  of  chemicals  needs  to  be  developed.  As  regards  control  of 
hazardous  materials,  Albania  applies  the  relevant  international  conventions,  but  alignment 
with the EU legislation is still necessary. Directives on biocides and laboratory animal welfare 
have still to be adopted.  

As regards environmental audits and eco-labelling, no specific system exists in Albania and 
substantial  efforts  are  needed  to  create  the  conditions  for  proper  implementation  of  such 
schemes. 

Albania  has  been  a  ‘non-Annex  I’  party  to  the  United  Nations  Framework  Convention  on 
climate change since 1994 and also ratified the Kyoto Protocol in 2004. However, as a non-
Annex I party, Albania has no greenhouse gas (GHG) emission limit/reduction target. Albania 
has  submitted  two  National  Communications.  The  second,  submitted  in  November  2009, 

EN 

108 

  EN 

includes estimates for emissions of HFCs, PFCs and SF6. At the moment, Albania is not ready 
to take on a legally binding greenhouse gas emission limit or reduction commitment under the 
post-2012  climate  regulations.  Albania  is  striving  to  improve  its  GHG  monitoring  and 
reporting,  on  which  much  remains  to  be  done.  A  GHG  inventory  for  the  period  1990-2000 
exists, but no more recent data are available. Albania plans to include a GHG inventory for 
2001-2010  in  its  third  National  Communication.  It  has  taken  no  measures  to  transpose  and 
implement  the  EU  emission  trading  system  (EU  ETS).  Albania  has  made  some  efforts  to 
address key sectors outside the EU ETS (e.g. transport and waste), but further measures need 
to be envisaged to align with the acquis. 

Albania is party to the Montreal Protocol on substances that deplete the ozone layer and has 
ratified  all  the  amendments  to  it.  Albania  has  to  comply  with  less  demanding  phase-out 
schedules for the different groups of substances than the EU and its Member States and has a 
satisfactory  level  of  compliance  with  the  Protocol.  Albania  recently  sent  notification  of  a 
revision of its ozone legislation, which seems to go further than required under the Protocol 
and further aligns this legislation with the EU acquis.  

Administrative  capacity  and  technical  and  financial  resources  need  to  be  strengthened 
considerably for Albania to be able to align with and implement all the requirements of the 
EU acquis on climate change. 

As regards noise, transposition of parts of the acquis is underway, but implementation is at an 
early stage. 

The  Council  of  Ministers  is  responsible  for  planning  and  response  measures  regarding  civil 
protection.  To  deal  with  any  civil  emergency,  an  Inter-ministerial  Committee  for  Civil 
Emergencies  has  been  established.  The  Ministry  of  the  Interior  is  responsible  for  preparing 
and implementing the National Civil Emergency Plan. Albania also has several related laws in 
place. International cooperation has been established. At the beginning of 2010 Albania used 
the  Monitoring  and  Information  Centre  (MIC)  operated  by  the  European  Commission  to 
respond to the  severe  flooding. Furthermore,  Albania is supporting the  regional  cooperation 
on response to forest fires and has enhanced its national capacity for fire-fighting.  

Conclusion 

Considerable efforts are needed to revise the existing national legislative framework to align it 
fully with the EU environmental acquis. The process of strategic planning in all sectors needs 
to be accelerated and sustainable funding for implementation needs to be secured, including 
by establishing a dedicated environment fund. Particular attention must be given to the quality 
of transposition of the EU legislation and to ensuring proper implementation and enforcement. 
The  environment  has  to  be  integrated  into  other  sectors,  at  both  the  strategic  and  policy 
implementation  levels.  Development  of  a  comprehensive  environmental  monitoring  and 
information system across all sectors needs to be addressed urgently.  

Administrative  capacity  needs  to  be  significantly  reinforced,  including  filling  the  existing 
gaps, streamlining management of currently fragmented responsibilities and ensuring proper 
horizontal  and  vertical  coordination.  At  local  level  particularly,  care  needs  to  be  taken  to 
ensure  that  local  authorities  have  the  resources  necessary  to  discharge  their  responsibilities 
effectively.  The  implementation  and  enforcement  capacity  of  the  inspectorates  needs  to  be 
considerably  strengthened,  by  making  the  necessary  legislative  adjustments,  carrying  out 
general capacity-building and ensuring effective cooperation with the judicial system. 

EN 

109 

  EN 

Overall, Albania will have to make considerable and sustained efforts to align its legislation 
with  the  environmental  acquis  and  to  implement  and  enforce  it  effectively  in  the  medium 
term.  It  will  be  particularly  important  to  create  the  conditions  for  building  the  necessary 
technical and human capacity and resources in this area within the next few years. Effective 
compliance  with  EU  legislation  requiring  a  sustained  high  level  of  investment  and 
considerable administrative efforts can only be achieved in the long term. 

3.28.  Chapter 28: Consumer and health protection 

The  acquis  on  consumer  protection  covers  the  safety  of  consumer  goods,  as  well  as  the 
protection  of  the  economic  interests  of  consumers  in  a  number  of  specific  sectors.  Member 
States  need  to  transpose  the  acquis  into  national  law  and  to  put  in  place  independent 
administrative structures and enforcement powers which allow effective market surveillance 
and  enforcement.  Appropriate  judicial  and  out-of-court  dispute  resolution  mechanisms, 
consumer information and education and a role for consumer organisations should be ensured 
as well. This chapter also covers rules in the area of public health.  

The Stabilisation and Association Agreement provides for enhanced cooperation in the area of 
consumer  protection  aiming  at  aligning  the  consumer  protection  standards  in  Albania  with 
those  of  the  European  Union,  including  active  consumer  protection  and  efficient  law 
enforcement.  

The general framework for consumer protection in Albania is enshrined in the national inter-
sectoral  strategy  on  consumer  protection  and  market  surveillance,  adopted  in  2007  and 
covering industrial, food and pharmaceutical products. Policies are developed by the Ministry 
of  Economic  Affairs,  Trade  and  Energy  (METE).  The  Trade  Mechanisms  and  State  Aid 
Department, operating under the Regulatory General Directorate in the METE, is responsible 
for  preparing  legislation  and  developing  policies  in  this  sector.  A  Central  Technical 
Inspectorate  (CTI)  under  the  METE,  with  67  inspectors  in  Tirana  and  the  regional  offices, 
carries out some market surveillance activities. However, application of a strategic plan and 
appropriate  methodology  is  still  pending.  The  government  has  not  yet  allocated  additional 
staff for enforcement of the General Product Safety Directive. Institutional and administrative 
capacity need to be increased in order to ensure efficient market surveillance.  

The Consumer Protection Commission is presently chaired by the METE and its members are 
appointed by the Prime Minister. Its independence and impartiality as a body responsible for 
protecting  the  economic  interests  of  consumers  will  have  to  be  reinforced.  The  Consumer 
Protection  Council,  established  by 
together 
representatives  of  the  government,  consumer  organisations  and  businesses,  has  not  yet  met. 
There are currently two consumer organisations operating in Albania.  

law  as  a  consultative  forum  bringing 

Regarding  product  safety  measures,  the  level  of  alignment  of  Albania’s  legislation  with  the 
General Product Safety Directive can be considered satisfactory at the moment. However, in 
order to achieve full alignment with the secondary EU legislation in this sector, Albania will 
have to make further efforts, in particular by amending its general product safety legislation.  

In the case of non-safety-related measures, Albania has already adopted legislation to ensure 
approximation with most of the consumer acquis, but the institutional framework necessary to 
enforce consumer rights has not yet been entirely established. In some areas the responsible 
authority has still to be set up (e.g. on package travel, package holidays and package tours), 
while in others the powers of some enforcement authorities need to be defined more clearly. 

EN 

110 

  EN 

In  addition,  enforcement  and  investigative  tools,  along  with  the  resources  of  certain 
authorities (e.g.  the  Consumer  Protection Commission), need to be further  enhanced so that 
they can address infringements of consumer laws efficiently.  

Concerning public health, the overall aim of the EU’s policy is to improve health and prevent 
human illness and diseases. The EU acquis in this area consists of a limited number of legally 
binding instruments and a larger body of non-binding measures and policy documents, as well 
as two international commitments on health.  

The Ministry of Health (MoH) is responsible for defining, coordinating and directing public 
health  policy.  The  Institute  of  Public  Health  assists  the  ministry  with  monitoring,  analysis, 
public information and awareness-raising. Current health policy priorities include upgrading 
emergency  services,  improving  accessibility  of  public  health  care  throughout  the  country, 
developing capacity to address epidemics and further computerisation of health services.  

Government  expenditure  on  health  is  low  (2.8%  of  GDP).  Disparities  in  coverage  by  basic 
health services exist due to the geographical distribution of service-providers, limited access 
in  remote  areas  and  requirements  limiting  enrolment  in  the  insurance  scheme.  There  is  a 
significant problem with patients having to make informal payments in order to receive health 
care.  

The Health Services Law was adopted in March 2009 as a framework law defining the basic 
principles and regulatory framework for organisation and operation of the health care system 
in Albania. In May 2009, the Public Health Care Law was adopted to define the activities and 
services of the public health system, the role of the State in securing funding for public health 
services  and  the  distribution  of  responsibilities  between  the  relevant  institutions.  The 
government is currently working on the specific by-laws to implement the Public Health Care 
Law, some of which are linked to communicable diseases.  

In  the  area  of  tobacco  control,  alignment  with  the  acquis  is  incomplete,  notably  as  regards 
oral  tobacco,  the  detailed  rules  for  health  warnings  and  sponsorship.  A  clear  timetable  for 
complete  alignment  and  implementation  of  tobacco  control  measures  is  missing.  A  clear 
commitment  on  restrictions  to  tobacco  advertising  and  tobacco  products  remains  necessary. 
As regards protection from environmental tobacco smoke, unclear arrangements are creating 
difficulties with enforcement of legal provisions.  

Regarding communicable diseases, the necessary legal basis is in place but needs to be further 
developed  to  comply  fully  with  the  EU  legislation.  Communicable  diseases  are  not  a  major 
cause  of  mortality,  but  remain  a  significant  morbidity  burden.  Vaccine-preventable  diseases 
appear largely under control and the immunisation rate is very high (over 95%). Albania was 
declared  polio-free  in  2002.  Although  decreasing,  waterborne  diseases  are  still  a  significant 
public health issue. There are emerging threats, such as HIV/AIDS and sexually transmitted 
infections,  although  the  HIV/AIDS  prevalence  is  low.  A  system  for  initial  notification  of 
communicable diseases is in place, but needs to be aligned with the acquis.  

In relation to the safety and quality rules on blood, human tissues and cells, approximation of 
the legislation on blood with the EU acquis is well advanced. The reorganisation of the blood 
transfusion  services  is  underway,  as  planned  in  the  national  strategy,  which  envisages  five 
regional  blood  banks  including  the  National  Blood  Transfusion  Centre,  15  district  blood 
banks  and  11  hospital  blood  banks.  To  date,  blood  testing  has  been  centralised  at  national 
level at the National Blood Transfusion Centre, while blood processing has been centralised 

EN 

111 

  EN 

in  two  regional  banks  (Tirana  and  Vlora)  out  of  the  five  covered  by  the  plan.  The  national 
strategy  aims  to  switch  from  the  existing  paid  and  replacement  donation  system  to  a  full 
voluntary  unpaid  donation  approach.  In  the  cases  of  tissues  and  cells,  alignment  with  the 
acquis is at a very early stage.  

Prevailing  conditions  in  the  area  of  mental  health  raise  concerns,  particularly  about  de-
institutionalisation  of  long-term  residents  of  psychiatric  hospitals.  Policy  commitments  will 
need  to  be  backed  up  by  adequate  provision  of  community-based  mental  health  care  across 
the country.  

Regarding prevention of alcohol and drug abuse, Albania has set up structures for developing 
public health policy, providing national leadership on health promotion and gathering public 
health  information.  First  steps  have  been  taken  to  develop  services  for  treatment  of  alcohol 
disorders.  A  national  drugs  strategy  has  been  in  place  since  2004,  but  a  national  alcohol 
strategy  is  still  at  the  planning  stage.  Given  that  alcohol  is  recognised  as  a  key  health 
determinant,  accountable  for  6%  of  the  disease  burden  in  Albania,  approval  and  careful 
implementation and monitoring of such a strategy are very important, not least with a view to 
regulation of sales of alcoholic beverages.  

There  is  currently  no  specific  national  e-health  policy  document,  although  the  plan  and 
objectives to promote use of ICT in the health sector are outlined in a separate chapter of the 
National Information and Communication Technologies Strategy.  

A  national  cancer  strategy  is  being  prepared.  However,  screening  programmes  for  breast, 
cervical and colorectal cancer have not yet been established. At present there is no legislative 
framework for protection against electromagnetic fields in Albania.  

Conclusion 

Consumer protection measures must be implemented against a background of efficient public 
authorities  and  with  the  active  involvement  of  non-governmental  consumer  organisations. 
Completion of an adequate and updated legislative framework needs to be combined with an 
effective system for enforcement and monitoring. Further measures will be needed to improve 
the efficiency of the health system for addressing public health issues and reducing social and 
regional  disparities  in  access  to  health  services.  Overall,  Albania  will  have  to  undertake 
additional efforts to align with the acquis and to implement it effectively in the medium term.  

3.29.  Chapter 29: Customs Union 

The acquis in this sector consists of the EU Customs Code and its implementing provisions, 
the Combined Nomenclature, the Common Customs Tariff, including trade preferences, tariff 
quotas  and  tariff  suspensions  and  other  customs-related  legislation  outside  the  scope  of  the 
Customs Code. Member States must ensure that the necessary implementing and enforcement 
capacities,  including  links  to  the  relevant  computerised  EU  customs  systems  (e.g.  tariff-
related  systems,  NCTS,  ECS,  ICS  and  EOS)  are  in  place.  The  customs  administration  must 
also  ensure  adequate  capacity  to  implement  and  enforce  special  rules  laid  down  in  related 
areas of the acquis such as the provisions on external trade, health and security.  

The Stabilisation and Association Agreement (SAA) provides for establishment of a free trade 
area with the EU and the immediate or progressive removal of customs duties on a wide range 
of products. It places an obligation on Albania to adopt the Combined Nomenclature. It also 

EN 

112 

  EN 

provides for administrative cooperation on customs matters, and rules of origin which have to 
be observed in order to benefit from the trade preferences. 

As regards customs legislation, Albania already applies the Combined Nomenclature and its 
classification  rules  are  largely  in  line  with  the  acquis,  although  practice  is  not  always 
consistent. Existing systems of binding tariff information, tariff suspensions, tariff quotas and 
duty relief are similar to those of the EU but are not yet fully aligned. Upon accession Albania 
will need to ensure implementation of all EU customs-related legislation. Albania’s customs 
legislation does not yet include security measures or the concept of the authorised economic 
operator (AEO). The system of administrative fees for customs supervision and control will 
need  to  be  analysed  in  depth,  as  some  of  the  charges  applied  may  not  be  in  line  with  the 
acquis.  Albania  will  need  to  align  its  transit  procedures  in  preparation  for  accession  to  the 
Common  Transit  Convention.  Temporary  admission  under  the  ATA  carnet  has  been 
introduced, but is not yet applied in practice as there is no national guarantor. 

Albania’s  system  of  preferential  rules  of  origin  and  methods  of  administrative  cooperation 
largely  reflect  those  used  by  the  EU  in  its  free  trade  agreements.  Albania  applies  diagonal 
cumulation with the EU and other countries participating in the Stabilisation and Association 
Process. Due to concerns about under-invoicing, reference prices are often used as alternative 
valuation  methods.  Currently  the  transaction  value  is  recognised  for  only  about  80%  of 
imports, which is lower than the EU standards.  

Customs  legislation  and  procedures  provide  a  level  of  protection  for  intellectual  property 
rights which is broadly similar to the level in the EU, although more efforts will be needed to 
ensure effective enforcement, including by improving interinstitutional cooperation.  

Concerning administrative and operational capacity, the legal and administrative structures 
to  apply  and  enforce  customs  rules  are  in  place.  An  Internal  Audit  Unit  plays  a  key  role  in 
homogeneous  application  of  the  rules  throughout  the  country.  Resources  are  generally 
adequate, but infrastructure and equipment will need upgrading to address future challenges 
and more capacity will be needed to implement and enforce the EU acquis, including in the IT 
area.  The  stability  and  independence  of  the  Customs  administration  needs  to  be  reinforced, 
especially  with  regard  to  the  status  of  its  employees.  The  perception  of  corruption  in  the 
customs  administration  is  high  and  Albania  will  need  to  continue,  with  determination,  its 
efforts  to  address  this  issue.  Enhanced  interinstitutional  cooperation  and  exchanges  of 
information  will  be  required,  both  internally  and  with  neighbouring  countries,  to  improve 
security at borders and the fight against illegal traffic.  

The  risk  management  system  is  adequate  in  terms  of  system  architecture,  functions  and 
governance  structure,  although  improvements  will  be  needed  in  detection  of  irregularities. 
Post-clearance controls will need to be systematically developed to compensate for the lower 
percentage  of  physical  and  documentary  checks  and  to  strike  a  balance  between  trade 
facilitation and efficient controls.  

The legal basis for trade facilitation needs to be established (simplified procedures and AEO) 
and more extensive use of simplified procedures will be necessary to enhance the practice of 
carrying out customs formalities on the premises of businesses. Overall, proper attention will 
need to be given to shifting the focus of the customs administration from collection of duties 
to trade facilitation and protecting the health and safety of citizens. 

EN 

113 

  EN 

The  current  computerised  declaration  and  processing  system  (ASYCUDA)  allows  risk 
analyses  of  all  documents  lodged  and  also  includes  some  basic  measures  to  introduce 
performance-based management. The system includes web-based declaration lodging and pre-
arrival  information.  However,  the  Albanian  IT  system  is  not  in  line  with  the  new 
computerised  transit  system  (NCTS),  the  integrated  transit  management  system  (ITMS)  and 
other  EU  e-customs  specifications.  Infrastructure  upgrades  will  be  needed  to  ensure 
continuous  operation  of  the  Customs  Computer  Centre,  including  establishing  a  disaster 
recovery centre.  Additional efforts on computerisation will be required to allow all customs 
formalities  and  exchanges  between  operators  and  customs  to  be  completed  electronically  in 
line  with  the  EU’s  modernised  Customs  Code.  Business  and  IT  strategies  still  need  to  be 
adopted and the systems development methods will need strengthening in the medium term.  

Conclusion 

Customs legislation in Albania is partly aligned with the acquis. Further efforts are needed in 
a  number  of  areas,  along  with  overall  alignment  with  the  EU’s  customs  legislation.  The 
administrative  and  operational  capacity  of  the  customs  administration  will  need  to  be 
reinforced  to  improve  implementation  of  the  existing  legislation  and  to  address  future 
challenges.  IT  capacity  will  need  to  be  strengthened,  with  particular  attention  to 
interconnectivity and interoperability with the computerised systems of the EU.  

Overall, Albania still faces challenges in the areas of legislative alignment and administrative 
capacity, but should, in the medium term, have the capacity to comply with the requirements 
of the acquis, provided it continues its efforts.  

3.30.  Chapter 30: External relations 

The acquis in the field of external relations consists mainly of directly binding EU legislation 
which  does  not  require  transposition  into  national  law.  In  the  area  of  humanitarian  aid  and 
development  policy,  applicant  countries  need  to  comply  with  the  EU  legislation  and  its 
international commitments and to ensure the capacity to participate in the EU’s policies. 

The Stabilisation and Association Agreement (SAA) includes a core trade part establishing a 
free trade area between Albania and the EU. It includes provisions in several areas requiring 
the  parties  to  act  in  accordance  with  the  rules  of  the  WTO  or  relevant  international 
obligations.  Albania  shall  enhance  cooperation,  including  trade  liberalisation,  within  the 
region and with other countries involved in the enlargement process. 

Upon accession, Albania will be bound by the common commercial policy. It will have to 
apply all the autonomous  (preferential and non-preferential) trade arrangements  that the EU 
grants to certain non-EU countries, including the Generalised System of Preferences (GSP). 
At present Albania does not apply any GSP scheme. Albania will also have to terminate all its 
current preferential trade agreements with non-EU countries and bring all other agreements, 
including non-preferential trade agreements, into line with the obligations of EU membership. 
Albania will also become party to the European Economic Area (EEA) and, upon accession, 
will have to apply all EU international trade agreements.  

Albania is a member of the Central European Free Trade Agreement (CEFTA). It has a free 
trade  agreement  with  Turkey.  The  free  trade  agreement  with  the  European  Free  Trade 
Association  (EFTA)  is  awaiting  ratification.  The  average  Albanian  most  favoured  nation 
(MFN)  ad  valorem  tariff  rates  are  7.6%  for  agricultural  products,  0.0%  for  fish  and  fishery 
products  and  4.44%  for  industrial  goods,  with  an  overall  average  of  5.2%.  The  EU  average 

EN 

114 

  EN 

MFN ad valorem tariff rates are 9.74% for agricultural products, 10.02% for fish and fishery 
products and 3.75% for industrial goods, with an overall average of 4.83%. Upon accession to 
the EU, Albania will have to apply the EU Common Customs Tariff. 

limitations  and  sector-specific  commitments,  generally  differ  from 

Albania has been a member of the WTO since 2000. As far as the plurilateral agreements are 
concerned, Albania is a party to the Agreement on trade in civil aircraft. Albania’s schedule of 
commitments  under  the  General  Agreement  on  Trade  in  Services  (GATS),  and  both 
horizontal 
those 
undertaken by the EU. In general, Albania has fewer horizontal commitments than the EU in 
terms  of  the  number  of  sectors  or  subsectors  covered.  The  sectoral  or  subsectoral 
commitments from Albania and the EU do not have the same level of limitations, either for 
market  access  or  national  treatment.  Albania  has  substantially  fewer  sector-specific 
commitments  than  the  EU  and  the  Albanian  system  is  more  liberalised.  Albania  also  has 
fewer  MFN  exemptions  than  the  EU.  In  order  to  avoid  compensation  under  Article  XXI  of 
GATS,  upon  accession  Albania  will  have  to  consider  amending  or  withdrawing  its 
commitments  in  some  sectors  sensitive  for  the  EU.  None  of  Albania’s  GATS  commitments 
hinder its ability to take on the obligations of EU membership. 

Albania  has  bilateral  investment  treaties  (BITs)  in  force  with  37  countries  and  a  further  8 
agreements have yet to be signed. Moreover, Albania is currently negotiating 13 more BITs. 
Some of the provisions in Albania’s BITs will need to be aligned with the acquis to meet the 
obligations  of  the  Treaty  on  the  Functioning  of  the  European  Union  and  relevant  case-law. 
Some  BITs  do  not  provide  for  exemptions  to  free  transfer  of  investment-related  funds 
between the signatories and provide for pre-establishment national treatment for third-country 
investors with respect to services.  

Albania has laws in place on anti-dumping and countervailing measures to offset the damage 
caused by subsidised imports. Upon accession Albania will have to repeal national legislation 
related to its trade defence instruments and measures based on this legislation. 

As regards administrative capacity, participation in the EU decision-making mechanisms on 
trade and implementation and enforcement of the acquis will require strengthening the Trade 
Policy Directorate in the Ministry of Economic Affairs, Trade and Energy. The mechanism in 
place for coordination between ministries needs to be further strengthened.  

Albania  has  no  export  credit  scheme.  The  acquis  on  export  credits  will  need  to  be  applied 
upon accession. 

Albania has legislation in place on dual-use export controls, but it is not yet fully in line with 
the acquis. Some parts of this legislation are different from current EU law, in particular from 
the  latest  EU  Regulation  (Regulation  428/2009),  and  the  list  of  items  controlled  prior  to 
export is not based on that regulation.  

In  relation  to  development  policy  and  humanitarian  aid,  Albania  is  a  signatory  of  the 
Millennium Declaration and supports the Monterrey Consensus on development financing. It 
is  a  recipient  of  aid  and  has  neither  a  policy  framework  nor  administrative  structures  for 
development  and  humanitarian  aid  policies.  It  has  provided  limited  ad  hoc  aid  to  non-EU 
countries  in  response  to  natural  disasters.  Albania  will  have  to  adopt  a  legal  and  material 
framework to cover humanitarian aid to non-EU countries and civil protection aid to Member 
States and non-EU countries in accordance with the principles already adopted by the Union, 
notably  Regulation  1257/96.  Albania  will  need  to  strengthen  the  administrative  structure 

EN 

115 

  EN 

inside  the  government  and  its  ability  to  participate  in  the  EU  decision-making  process  on 
development  and  humanitarian  aid  policies.  The  change  from  recipient  to  donor  of  external 
assistance will require the active support of informed civil society.  

Conclusion 

Overall, with regard to external relations, Albania should be able to meet EU requirements in 
the medium term, provided alignment with the acquis continues and the institutional capacity 
to implement and enforce it is strengthened. In preparing for membership, Albania will need 
to ensure that its action and commitments concerning international organisations are aligned 
and coordinated with those of the EU. 

3.31.  Chapter 31: Foreign, Security and Defence Policy 

The common foreign and security policy (CFSP) and the common security and defence policy 
(CSDP)  are  based  on  legal  acts,  including  legally  binding  international  agreements,  and  on 
policy  documents.  The  acquis  consists  of  political  declarations,  joint  actions,  common 
positions  and  agreements.  Member  States  must  be  able  to  conduct  political  dialogue  within 
the framework of the CFSP, to align with EU declarations, to take part in EU action and to 
apply the restrictive measures agreed. Applicant countries are required to progressively align 
with EU declarations and to apply restrictive measures as and when required. 

Albania fully supports the efforts of the European Union to strengthen its role as a cohesive 
force in international relations and its ability to promote European interests and values on the 
international scene. Albania is seriously committed to being ready and able to participate fully 
and actively in the EU’s CFSP and CSDP, as defined in the Treaty on European Union, by the 
date of accession. 

Albania’s  administrative  structures  are  generally  adequate,  although  parts  are  still  being 
developed  or  restructured.  Albania  has  40  embassies  (with  six  more  being  set  up),  six 
permanent representations and six consulates-general. The diplomatic service consists of 615 
employees, of whom 187 are in Tirana. In order to be able to participate fully in the CFSP and 
CSDP, development and restructuring of the administration need to be continued. 

As  regards  political  dialogue,  Albania  has  established  close  political  consultations  with 
Member States of the European Union. Following the entry into force of the Stabilisation and 
Association  Agreement,  this  takes  place  within  the  SAA  structures.  Since  January  2004, 
Albania  has  in  most  instances,  when  invited,  aligned  itself  with  Council  decisions,  EU 
demarches and declarations. However, it concluded the Agreement on Article 98 of the Rome 
Statute with  the  USA  in  June 2003,  which is not in line with the  EU position. Albania will 
have to change legislation in this field before its accession. 

Albania’s foreign  policy aims  at building constructive  bilateral and  multilateral relations. In 
this context, Albania intends to increase its role in promoting regional peace and stability. It is 
active in all multilateral organisations and initiatives with a focus on South-East Europe and 
plays a positive role. It holds the presidency of MARRI (the Migration, Asylum and Refugees 
Regional Initiative) in 2010/2011.  

Overall, Albania’s bilateral relations pose no significant problems.  

EN 

116 

  EN 

As  regards  restrictive  measures,  Albania  has  implemented  all  United  Nations  Security 
Council  restrictive  measures  and  EU  restrictive  measures  and  has  adopted  the  legal  acts 
necessary to this end.  

In relation to non-proliferation and the strategy on weapons of mass destruction/small arms 
and  light  weapons  (WMD/SALW),  Albania  is  participating  in  international  export  control 
arrangements  and  instruments  concerning  the  non-proliferation  of  weapons  of  mass 
destruction.  It  has  applied  to  become  a  party  to  the  Wassenaar  Arrangement  on  export 
controls for conventional arms and dual-use goods and technologies. Albania’s national laws 
and  control  system  comply  with  international  commitments  on  SALW,  including  the  EU 
strategy.  However,  for  the  time  being,  Albania  has  no  national  strategy  on  SALW.  Albania 
has  declared  its  intention  to  finalise  and  adopt  a  national  strategy  on  SALW  by  the  end  of 
2010.  Further  efforts  are  needed  to  develop  the  online  register  of  weapons  and  ammunition 
under the management of the State Police. Destruction of surplus weaponry and ammunition 
is following an action plan due to be completed by 2013, but requires substantial funding.  

With regard to cooperation with international organisations, Albania is a member of the UN, 
the  Council  of  Europe,  the  OSCE,  NATO  and  many  other  international  organisations  and 
agreements.  

Albania has introduced the legal basis and practical arrangements necessary to comply with 
the  Council  decisions  on  information  security,  including  on  handling  of  classified 
information.  However,  it  has  not  yet  concluded  a  security  agreement  with  the  EU  on 
exchanges and mutual protection of classified information. 

Albania  is  ready  to  participate  actively  in  different  civil  and  military  crisis  management 
missions.  The  country  already  has  a  team  of  12  taking  part  in  ALTHEA  ammunition  and 
explosives  disposal  operations  plus  one  officer  in  HQ.  In  Chad,  63  military  personnel  from 
Albania  took  part  in  EUFOR  Chad/RCA  (now  under  MINURCAT).  Albania  has  been 
participating  in  UN  peacekeeping  missions  in  Iraq  and  Afghanistan  and  contributing  to 
KFOR.  Cooperation  with  the  EU  rule  of  law  mission  (EULEX)  in  Kosovo  seems  to  have 
improved and raises no concerns at present. Several agreements in 2008 and 2009 laid a legal 
basis for this cooperation. 

Civil emergency services and disaster preparedness require further improvement. 

Conclusion 

Overall,  Albania  should  be  able  to  fulfil  its  obligations  under  the  CFSP  and  CSDP  in  the 
medium  term,  provided  it  takes  the  necessary  legal  and  administrative  measures  and  makes 
the necessary adjustments. 

3.32.  Chapter 32: Financial Control 

The acquis on financial control relates to the following policy areas: public internal financial 
control  (PIFC),  which  covers  internationally  agreed  standards  and  EU  best  practice  for 
implementation  across  the  entire  public  sector,  and  external  audit,  which  covers  the 
operational and financial independence of the external audit function (national audit office). 
Management  and  control  of  EU  funds  are  discussed  in  the  other  relevant  chapters  (e.g.  on 
agriculture  and  rural  development,  regional  policy,  coordination  of  structural  instruments  or 
fisheries). This chapter covers the more general aspects of internal control and external audit 
of  national  funds.  It  also  covers  protection  of  the  EU’s  financial  interests,  including 

EN 

117 

  EN 

administrative  cooperation  and  criminal  law  protection  (the  PIF  Convention  and  its 
protocols). Finally, the section on protection of the euro against counterfeiting deals with the 
first-pillar aspects of this issue.  

In Albania, the public internal financial control (PIFC) system is further developing. The 
first PIFC policy paper, adopted in June 2005, has been revised for the period 2009–2014 and 
highlights  the  importance  of  the  managerial  accountability  principle,  which  goes  beyond 
compliance  with  laws  and  regulations.  This  strategy  maps  out  the  future  development 
priorities  and  actions  necessary.  The  Budget  Law  (last  amended  in  2008),  the  Law  on 
Financial Management and Control from July 2010 and the Internal Audit Law of 2007 (last 
amended in September 2010) provide the legal basis for development of PIFC. The Law on 
Inspection  from  July  2010  provides  the  legal  basis  for  centralised  budget  inspection  in  line 
with  PIFC  requirements.  Updated  implementing  legislation  will  be  required  along  with 
considerable further efforts to implement the legal framework.  

Financial  management  and  control  (FMC)  in  Albania  is  currently  primarily  understood  in 
terms of controls, but there is a recognised need to strengthen managerial accountability. An 
FMC manual has been prepared and it has been approved by the Minister of Finance. There 
are  no  systematic  audit  trails.  Risk  management  is  not  yet  developed  on  a  systematic  basis. 
Considerable  training  and  awareness-raising  efforts  will  be  required  to  implement  the  legal 
provisions  on  managerial  accountability  and  FMC  principles.  As  regards  the  internal  audit 
function,  organisationally,  internal  audit  has  been  developed,  though  existing  internal  audit 
units perform primarily compliance audits. There have been only a few attempts at systems or 
performance  audits.  The  roles  of  internal  audit  and  inspection  have  been  legally  clearly 
separated but awareness needs to be raised and financial inspection function to be set up. Two 
central harmonisation units (one on FMC, the other on internal audit) have been established in 
the Ministry of Finance to develop and coordinate PIFC across the entire public sector.  

With  regard  to  protection  of  the  EU’s  financial  interests  (PFI),  the  country  is  also  at  an 
early stage of legislative and administrative preparations. Albania’s national penal legislation 
already contains many elements of the PFI legislation (the Convention on the protection of the 
EU’s financial interests and its protocols). In the medium term, Albania will need to ensure 
that  the  provisions  enshrined  in  the  Albanian  Criminal  Code  and  in  the  Albanian  Criminal 
Procedure Code comply with EU requirements for protection of the EU’s financial interests. 
Albania needs to set up an effective and efficient coordination service (AFCOS) to guarantee 
compliance  with  the  obligations  concerning  on-the-spot  checks  and  inspections  by  the 
European Commission, in particular the obligation to assist Commission inspectors from the 
day of accession at  the  latest. The  legal basis for that has been drafted and preparations for 
putting it into operation have already started. 

Concerning protection of the euro against counterfeiting, there is legislation covering various 
types  of  counterfeiting  (money,  credit  cards  and  securities).  Albania  is  working  on 
amendments  to  the  Criminal  Code  to  address  provisions  on  criminal  offences  of 
counterfeiting money, as well as on import, export and transport of counterfeited money. The 
existing  national  legislation  does  not  regulate  which  authorities  have  been  designated  for 
centralisation, technical analysis and processing of information on counterfeit bank notes and 
coins, both euro and other currencies. In the medium term, Albania will have to ensure that its 
Criminal Code and other laws and regulations on money counterfeiting comply with the EU 
requirements for protection of the euro against counterfeiting. 

Conclusion 

EN 

118 

  EN 

Overall, as regards financial control, Albania has started preparations, but it will have to make 
considerable and sustained efforts to align with the acquis especially in the areas of protection 
of  the  EU's  financial  interests  and  protection  of  the  Euro  against  counterfeiting  and  to 
implement  the  acquis  in  this  chapter  effectively  in  the  medium  term.  Whereas  the  legal 
framework and institutional arrangements for public internal financial control are largely in 
place,  actual  implementation  of  both  financial  management  and  control  and  internal  audit 
principles  still  needs  to  be  further  developed.  Considerable  further  training  and  awareness-
raising efforts are required in order to embed the new control environment and management 
culture. Regarding external audit, the independence of the SAI needs to be ensured and the 
SAI Law needs to be amended to bring it fully into line with INTOSAI standards. The SAI’s 
capacity needs further strengthening to ensure efficient external audits of government activity.  

3.33.  Chapter 33: Financial and budgetary provisions 

Chapter 33 covers the rules concerning the financial resources necessary for funding the EU 
budget  ('own  resources').  These  own  resources  are  made  up  mainly  of  contributions  from 
Member  States  based  on  (1)  traditional  own resources  deriving  mainly  from  customs  duties 
and  sugar  levies,  (2)  resources  based  on  VAT  and  (3)  resources  based  on  the  level  of  GNI 
(gross national income).  

The  acquis  under  this  chapter  consists  of  EU  legislation  that  is  directly  binding  on  the 
Member States  and  does not require  transposition into national law.  However,  all necessary 
steps  should  be  taken  to  ensure,  from  accession,  full  and  correct  application  of  the  rules  on 
own resources. 

The basic principles and institutions for the underlying policy areas shaping the own resources 
system  are  in  place  in  Albania.  A  national  VAT  system  is  in  operation,  customs  duties  are 
levied on imports and national  accounts  and GDP estimates are based on ESA95 standards. 
The Institute of Statistics has not yet developed an official version of GNI. Further efforts are 
needed to reach the full implementation of the ESA 95 standards to ensure that GNI resource 
is appropriately measured. 

As regards operational management of the own resources system, Albania will need to ensure, 
in  due  course,  the  human  and  administrative  resources  necessary  to  apply  the  EU  rules 
concerning payments to the EU budget. Albania needs to develop appropriate administrative 
capacity  to  coordinate  adequately  and  ensure  correct  forecasting,  calculation,  accounting, 
collection, payment and control of own resources. 

Impact 

Given  its  GDP  level,  Albania’s  accession  is  expected  to  have  a  limited  impact  on  the  EU 
budget. This applies both to its likely receipts under the various EU expenditure programmes 
and to its expected contribution to the EU budget, based on application of the rules on own 
resources. 

Conclusion 

There are no significant divergences between the systems in Albania and the EU in terms of 
the basic principles and institutions for the underlying policy areas shaping application of the 
rules  on  own  resources.  Overall,  if  it  continues  its  efforts,  Albania  should,  in  the  medium 
term, have the capacity to comply with the requirements of the acquis in the field of financial 
and budgetary provisions.  

EN 

119 

  EN 

3.34.  General Evaluation 

Albania's ability to assume the obligations of membership has been evaluated according to the 
following indicators: 

the obligations set out in the Stabilisation and Association Agreement; 
progress with adoption, implementation and enforcement of the EU acquis. 

Albania  has  overall  smoothly  implemented  the  obligations  under  the  Stabilisation  and 
Association  Agreement,  although  due  attention  needs  to  be  paid  to  respecting  the  deadlines 
for its commitments. Until recently there have also been some gaps in the implementation of 
certain trade provisions (notably the standstill clause related to taxation of imports). 

Albania adopted a National Strategy for Development and Integration (2007-2013) which is a 
comprehensive and ambitious plan providing for the approximation of national legislation to 
the EU acquis. It has in recent years made significant efforts in aligning its legislation with 
the  EU  acquis,  particularly  in  some  areas  of  the  internal  market,  trade-related  provisions, 
customs  and  taxation.  However  the  country  faces  major  challenges  in  implementing  and 
enforcing  legislation.  Administrative  and  judicial  capacities  remain  overall  limited  and  the 
country will need sustained efforts to strengthen them to be able to assume the obligations of 
membership in the medium-term. 

If it continues its  efforts,  Albania  should, in the medium term, have the capacity to comply 
with the requirements of the acquis in the following fields: 

- Taxation 

- Enterprise and industrial policy 

- Science and research 

- Education and culture 

- Customs union 

- External relations  

- Foreign, security and defence policy 

- Financial and budgetary provisions 

Albania will have to undertake additional efforts to align with the acquis and to implement it 
effectively in the medium term in the following fields: 

- Freedom of movement for workers  

- Right of establishment and freedom to provide services 

- Free movement of capital  

- Public procurement 

- Company law 

EN 

120 

  EN 

- Competition policy  

- Financial services  

- Energy  

- Economic and monetary policy 

- Statistics 

- Trans-European networks 

- Consumer and Health Protection  

Further adjustments of the legal and institutional framework and in particular strengthening of 
administrative and implementation capacities are needed in the above areas. 

Albania will have to make considerable and sustained efforts to align with the acquis and to 
implement it effectively in the medium term in the following fields: 

- Free movement of goods 

- Intellectual property law  

- Information society and media 

- Agriculture and rural development 

- Food safety, veterinary and phyto-sanitary policy  

- Fisheries 

- Transport policy 

- Social policy and employment 

- Regional policy and coordination of structural instruments 

- Judiciary and fundamental rights  

- Justice, freedom and security 

- Financial control  

legal  and 
Considerable  adjustments  of 
strengthening of administrative and implementation capacities are needed in these areas. 

institutional  framework  and  significant 

the 

Regarding  environment,  very  significant  efforts  will  be  needed  to  align  with  the  EU  acquis 
and  to  implement  it  effectively.  These  should  include  substantial  investments  and 
strengthening of administrative capacity for the enforcement of legislation in order to achieve 
effective compliance on the most important issues, including climate change, in the medium 
term.  Full  compliance  with  the  acquis  could  be  achieved  only  in  the  long  term  and  would 
necessitate increased levels of investment.  

EN 

121 

  EN 

Statistical Annex 

STATISTICAL DATA (as of 18 October 2010) 
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) 
GDP per capita in PPS (EU-27 = 100) 
Real GDP growth rate (growth rate of GDP volume, national currency, % change on 
previous year) 
Employment growth (national accounts, % change on previous year) 
Labour productivity growth: GDP growth per person employed (% change on previous year) 
Real unit labour cost growth (national accounts, % change on previous year) 
Labour productivity per person employed (GDP in PPS per person employed, EU-27 = 100) 
Gross value added by main sectors (%) 

Agriculture and fisheries 
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 
Annual average inflation rate (CPI, % change on previous year) 

Note

Note
1) 
1) 
1) 

Note

Note

2000 
3 058 
28 750 

2001 
3 063 
28 750 

2002 
3 084 
28 750 

2003 
3 103 
28 750 

2004 
3 120 
28 750 

2005 
3 135 
28 750 

2006 
3 149 
28 750 

2007 
3 153 
28 750 

2008 
3 170 
28 750 

2009 
3 185 
28 750 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

523 043 583 369  622 711 694 098 751 022 814 797 882 209 967 670 1 088 132e  1 122 566e 

3 945 
1 289 
: 
: 

4 541 
1 477 
: 
: 

4 705 
1 521 
: 
: 

5 048 
1 622 
: 
: 

5 883 
1 881 
: 
: 

7 828 
7 168 
6 561 
2 088 
2 476 
2 275 
5 000.0  5 500.0  5 800.0 
23.2 

22.2 

23.3 

8 861e 
2 785e 
6 500.0 
25.9 

8 500e 
2 661e 
6 400.0 
27.1 

6.7 
: 
: 
: 
: 

25.5 
7.8 
8.3 
58.5 
86.0 
31.7 
2.4 
17.9 
38.1 

2000 
: 

2000 
4.2 

7.9 
: 
: 
: 
: 

23.6 
7.3 
10.4 
58.6 
80.9 
38.4 
1.3 
18.4 
39.0 

2001 
: 

2001 
3.5 

4.2 
: 
: 
: 
: 

23.4 
6.9 
12.0 
57.6 
86.0 
37.9 
0.8 
19.6 
44.3 

2002 
: 

2002 
1.7 

5.8 
: 
: 
: 
: 

23.5 
8.7 
13.7 
54.0 
86.1 
40.5 
-1.8 
20.4 
45.1 

2003 
: 

2003 
3.3 

5.7 
: 
: 
: 
: 

22.3 
10.0 
13.9 
53.8 
89.0 
37.2 
-3.8 
22.0 
44.4 

2004 
: 

2004 
2.2 

5.7 
: 
: 
: 
: 

20.6 
10.6 
13.8 
55.0 
88.9 
37.0 
-1.2 
22.8 
47.5 

2005 
: 

2005 
2.0 

5.4 
: 
: 
: 
: 

19.4 
11.1 
14.3 
55.2 
87.4 
39.0 
-2.8 
24.9 
48.5 

2006 
: 

2006 
2.5 

5.9 
: 
: 
: 
: 

19.0 
9.4 
14.8 
56.8 
90.4 
38.7 
-2.4 
28.1 
54.8 

2007 
: 

2007 
3.1 

7.7e 
: 
: 
: 
: 

18.5e 
9.8e 
14.9e 
56.7e 
89.6 
38.1 
-1.1 
29.4 
56.1 

2008 
: 

2008 
2.2 

3.3 
: 
: 
: 
: 

: 
: 
: 
: 
: 
: 
: 
: 
: 

2009 
: 

2009 
3.5 

EN 

122 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 
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 (%) 
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) 
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) 

Note

2) 

2) 

Note

Note

3) 

4) 
5) 

Note

Note

EN 

2000 
-185 
-897 
12 
115 
586 
105 
157 
0 
: 
157 
: 

2000 
-7.6 
60.2 

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

2001 
-316 
-1 149 
100 
150 
583 
31 
231 
0 
: 
231 
: 

2001 
-6.9 
58.5 

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

2002 
-444 
-1 218 
-8 
116 
667 
41 
141 
0 
: 
141 
: 

2002 
-6.1 
63.9 

2002 
22.1 
112.5 
1 102 
2 430 
3 083 
302 
: 
15.0 
8.5 

2003 
-350 
-1 177 
-72 
132 
767 
53 
157 
0 
: 
157 
: 

2003 
-4.9 
61.5 

2003 
21.1 
103.5 
1 033 
2 555 
3 225 
381 
: 
12.2 
8.3 

2004 
-340 
-1 277 
-41 
138 
839 
61 
267 
0 
: 
267 
: 

2004 
-5.1 
58.3 

2004 
19.0 
86.5 
1 332 
3 080 
3 942 
566 
: 
15.5 
6.6 

2005 
-589 
-1 477 
-140 
131 
897 
61 
209 
0 
: 
209 
: 

2005 
-3.5 
56.8 

2005 
16.7 
73.0 
1 801 
3 434 
4 614 
1 007 
: 
12.4 
5.1 

2006 
-471 
-1 659 
-32 
209 
1 011 
43 
250 
0 
: 
250 
: 

2006 
-3.3 
56.8 

2006 
17.2 
69.0 
1 969 
3 879 
5 415 
1 590 
: 
12.9 
5.2 

2007 
-831 
-2 104 
13 
217 
1 043 
60 
470 
0 
: 
470 
: 

2007 
-3.5 
54.8 

2007 
16.6 
59.0 
1 963 
4 094 
6 129 
2 377 
: 
11.7 
5.7 

132.580 128.470  132.360 137.510 127.670 124.190 123.080 123.620

: 
853 

: 
1 704 

: 
1 486 

: 
1 650 

: 
1 885 

: 
2 145 

: 
2 203 

2001 
: 
: 
: 
101.5 
: 
: 

2001 
12.5 
10.8 
72.1 
77.5 

2002 

2003 

2004 

2005 

2006 

2007 

1 586.5  1 648.5  1 859.9  2 096.1  2 430.9  3 045.7 
786.1 
348.3 
-1 238.2 -1 252.3 -1 374.9 -1 566.0 -1 802.8 -2 259.6

485.0 

530.1 

628.1 

396.2 

99.9 
92.8 
77.0 

2002 
9.5 
10.2 
72.1 
77.9 

98.2 
93.8 
74.6 

2003 
9.3 
8.4 
72.1 
78.6 

99.0 
90.7 
70.4 

2004 
8.1 
7.8 
72.1 
78.6 

80.3 
92.0 
70.6 

2005 
7.2 
7.6 
72.1 
78.6 

100.6 
88.6 
65.5 

2006 
5.5 
7.4 
73.9 
78.0 

98.1 
83.1 
59.8 

2007 
5.9 
5.6 
72.9 
77.8 

: 
697 

2000 
: 
: 
: 
100.2 
: 
: 

2000 
11.4 
13.8 
72.1 
78.6 

123 

2008 
-1 370 
-2 431 
69 
55 
937 
31 
620 
0 
: 
620 
: 

2008 
-5.5 
53.9 

2008 
17.1 
: 
2 303 
4 520 
6 643 
3 227 
: 
11.8 
6.9 
122.800 
: 
2 658 

2008 
3 699.4 
784.3 
-2 915.1 
96.0 
76.6 
62.2 

2008 
6.3 
6.0 
72.9 
77.8 

2009 
-1 346 
-2 304 
121 
-101 
938 
27 
680 
0 
: 
680 
: 

2009 
: 
: 

2009 
: 
: 
2 154 
4 378 
6 599 
3 335 
: 
12.5 
6.8 
132.060 
: 
2 723 

2009 
: 
: 
: 
97.6 
: 
: 

2009 
: 
: 
72.9 
77.8 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Labour market 
Population (15-64): total of population aged 15-64 (thousand) 
Population in economic activity (15-64): total of population aged 15-64 that is economiclly 
active (thousand) 
Total employment (15-64): total of population aged 15-64 that is employed (thousand) 
Economic activity rate (15-64): share of population aged 15-64 that is economically active 
(%) 
Employment rate (15-64): share of population aged 15-64 in employment (%) 

Employment rate male (15-64) (%) 
Employment rate female (15-64) (%) 

Employment rate of older workers (55-64): share of population aged 55-64 in employment 
(%) 
Employment by main sectors (%) 

Agriculture 
Industry 
Construction 
Services 

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 (%) 
Long-term unemployment rate: share of labour force that is unemployed for 12 months and 
more (%) 

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) 
Early school leavers - Share of population aged 18-24 with at most lower secondary 
education and not in further 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 
Spending on human resources (public expenditure on education in % of GDP) 
Gross domestic expenditure on R&D in % of GDP 
Percentage of households who have Internet access at home (%) 

EN 

Note
6) 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

1 939.0  1 773.1  1 767.0  1 825.7  1 850.6  1 876.8  2 022.6  2 106.0b

1 283.3  1 101.1  1 092.5  1 089.3  1 088.2  1 085.4  1 084.5  1 373.1b
1 188.3b
1 068.2 

935.1 

931.2 

920.6 

920.1 

926.2 

932.1 

66.2 
55.1 
66.0 
44.1 

62.1 
51.9 
64.0 
39.6 

61.8 
52.1 
63.9 
39.7 

59.7 
50.7 
62.6 
39.1 

58.8 
50.3 
61.2 
38.9 

57.8 
49.7 
60.0 
38.8 

53.6 
46.2 
58.8 
38.1 

65.2b 
56.4b 
63.6b 
49.3b 

2008 
2 052.5 

1 271.4 
1 103.5 

61.9 
53.8 
63.0 
45.6 

: 

: 

: 

: 

: 

: 

: 

46.6 

44.0 

71.8 
5.4 
1.2 
21.5 
16.8 
14.9 
19.3 

: 

: 

57.7b 
7.7b 
6.1b 
28.5b 
16.4 
14.2 
19.9 

: 

: 

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 

: 

: 

47.9b 
10.4b 
8.2b 
33.5b 
13.5b 
14.4b 
12.2b 

44.6 
9.3 
8.5 
37.6 
13.0 
12.5 
13.5 

20.1b 

27.2 

9.3b 

8.5 

6) 
6) 

6) 
6) 
6) 
6) 

6) 
6) 
6) 
6) 
7) 
7) 
7) 

7) 

7) 

2009 
2150.6 

1331.9 
1147.8 

61.9 
53.4 
64.3 
43.6 

48.9 

44.1 
10.0 
9.9 
36.0 
13.8 
12.2 
15.9 

27.2 

9.1 

Note

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

14 963.0 17 218.0  19 659.0 21 325.0 24 393.0 26 808.0 28 822.0 33 750.0

2008 
36 537.0 

2009 
40 874.0 

Note

Note

Note

: 

: 

2000 
37.4 
: 

2000 
13.9 
: 

2000 
3.1 
: 
: 

124 

11.6 

21.1 

27.8 

42.8 

53.3 

60.9 

83.1 

91.7 

109.8 

: 

: 

: 

: 

: 

: 

42.0 

39.0 

: 

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 
: 
: 

2002 
15.0 
: 

2002 
3.0 
: 
: 

2003 
15.0 
0 

2003 
3.1 
: 
: 

2004 
15.1 
0 

2004 
3.2 
: 
: 

2005 
15.0 
0 

2005 
3.2 
: 
1.5 

2006 
13.9 
0 

2006 
3.1 
: 
: 

2007 
89.1 
: 

2007 
13.9 
0 

2007 
3.2 
: 
: 

2008 
91.4 
: 

2008 
13.9 
0 

2008 
3.5 
: 
3.4 

2009 
: 
: 

2009 
13.9 
: 

2009 
3.4 
: 
: 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Environment 
Greenhouse gas emissions, CO2 equivalent (tons, 1990=100) 
Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP) 
Electricity generated from renewable sources in % of gross electricity consumption 
Road share of inland freight transport (% of tonne-km)  

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) 

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

Note

2000 
: 
400.5 
: 
: 

2000 
987 
314 
20 
12 
858 
1 845 
4.7 

2001 
: 
386.5 
: 
: 

2001 
933 
335 
15 
8 
1 001 
1 934 
3.7 

2002 
: 
356.3 
: 
: 

2002 
896 
308 
5 
8 
965 
1 861 
3.2 

2003 
: 
370.6 
: 
: 

2003 
1 012 
359 
19 
12 
1 043 
2 055 
4.9 

2004 
: 
384.0 
: 
: 

2004 
1 178 
443 
19 
9 
1 080 
2 258 
5.5 

2005 
: 
366.5 
: 
: 

2005 
1 149 
418 
15 
10 
1 130 
2 279 
5.5 

2006 
: 
328.9 
: 
: 

2006 
1 237 
500 
15 
10 
826 
2 156 
5.6 

2007 
: 
306.6 
: 
: 

2007 
1 080 
564 
15 
16 
1 020 
2 130 
3.0 

2008 
: 
259.2e 
: 
: 

2008 
1 159 
578 
20 
8 
1 033 
2 119 
3.9 

2009 
: 
: 
: 
: 

2009 
: 
: 
: 
: 
: 
: 
5.2 

Note

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

: 
1 144 
728 
103 
3 045 
948 
566 
42 
620 

: 
1 139 
708 
106 
2 933 
984 
503 
39 
677 

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

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

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

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

102.5 
1 120 
634e 
152e 
2 770e 
1 102e 
508 
: 
688 

100.4 
1 121 
577 
147 
2 729 
1 016 
494 
: 
672 

107.4 
1 146 
541 
161 
2 620 
1 040 
609 
: 
715 

: 
1 164 
494 
160 
2 540 
1 045 
: 
: 
730 

: = not available 
e = estimated value 
b = break in series 
1) 2009 values are based on the sum of quarterly data, transformed to current prices for 2009. 
2) The balance of payments sign conventions are used. For FDI abroad a minus sign means investment abroad by the reporting economy exceeded its disinvestment in the period, while an entry without 
sign means disinvestment exceeded investment. For FDI in the reporting economy an entry without sign means that investment into the reporting economy exceeded disinvestment, while a minus sign 
indicates that disinvestment exceeded investment. 
3) Debt Outstanding Disbursed (DOD) cumulative stock covering external public debt and external publicly guaranteed debt, but excluding IMF credit. Total exports are calculated according national 
accounts concepts. 
4) Average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity. 
5) Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 12-month maturity. 
6) For 2001-2006 administrative data (information only for the male population aged 15-59 and for the female population aged 15-54); from 2007 onwards Labour Force Survey data. 
7) From 2000 to 2006 the unemployment indicators refer to administrative data; from 2007 on the unemployment indicators refer to LFS data. 

EN 

125 

EN