COMMISSION STAFF WORKING DOCUMENT Albania 2016 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2016 Communication on EU Enlargement Policy
Date: 2016-11-09
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Albania, accession criteria, accession negotiations, pre-accession strategy

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 9.11.2016  SWD(2016) 364 final   COMMISSION STAFF WORKING DOCUMENT Albania 2016 Report   Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2016 Communication on EU Enlargement Policy {COM(2016) 715 final}  
 
 
Table of Contents 

1.  

INTRODUCTION ....................................................................................................... 4 

1.1. Context .................................................................................................................. 4 
1.2. Summary of the report .......................................................................................... 4 

2.  

POLITICAL CRITERIA .............................................................................................. 6 

2.1. Democracy ............................................................................................................ 6 
2.2. Public administration reform............................................................................... 10 
2.3. Rule of law .......................................................................................................... 10 
2.4. Human rights and the protection of minorities ................................................... 10 
2.5. Regional issues and international obligations ..................................................... 10 

3.  

ECONOMIC CRITERIA ........................................................................................... 10 

3.1. The existence of a functioning market economy................................................. 10 
3.2. The capacity to cope with competitive pressure and market forces within the 
Union .......................................................................................................................... 10 

4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ...................... 10 

4.1. Chapter 1: Free movement of goods ................................................................... 10 
4.2. Chapter 2: Freedom of movement for workers ................................................... 10 
4.3. Chapter 3: Right of establishment and freedom to provide services .................. 10 
4.4. Chapter 4: Free movement of capital .................................................................. 10 
4.5. Chapter 5: Public procurement ............................................................................ 10 
4.6. Chapter 6: Company law ..................................................................................... 10 
4.7. Chapter 7: Intellectual property law .................................................................... 10 
4.8. Chapter 8: Competition policy ............................................................................ 10 
4.9. Chapter 9: Financial services .............................................................................. 10 
4.10. Chapter 10: Information society and media ...................................................... 10 
4.11. Chapter 11: Agriculture and rural development ................................................ 10 
4.12. Chapter 12: Food safety, veterinary and phytosanitary policy ......................... 10 
4.13. Chapter 13: Fisheries......................................................................................... 10 
4.14. Chapter 14: Transport policy ............................................................................. 10 
4.15. Chapter 15: Energy ............................................................................................ 10 
4.16. Chapter 16: Taxation ......................................................................................... 10 
4.17. Chapter 17: Economic and monetary policy ..................................................... 10 
4.18. Chapter 18: Statistics ......................................................................................... 10 
4.19. Chapter 19: Social policy and employment ...................................................... 10 
4.20. Chapter 20: Enterprise and industrial policy ..................................................... 10 
4.21. Chapter 21: Trans-European networks .............................................................. 10 
4.22. Chapter 22: Regional policy and coordination of structural instruments .......... 10 
4.23. Chapter 23: Judiciary and fundamental rights ................................................... 10 
4.24. Chapter 24: Justice, freedom and security ........................................................ 10 
4.25. Chapter 25: Science and research ...................................................................... 10 
4.26. Chapter 26: Education and culture .................................................................... 10 
4.27. Chapter 27: Environment and climate change .................................................. 10 
4.28. Chapter 28: Consumer and health protection .................................................... 10 
4.29. Chapter 29: Customs union ............................................................................... 10 
4.30. Chapter 30: External relations ........................................................................... 10 
4.31. Chapter 31: Foreign, security and defence policy ............................................. 10 

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4.32. Chapter 32: Financial control ............................................................................ 10 
4.33. Chapter 33: Financial and budgetary provisions ............................................... 10 

Annex I – Relations between the EU and Albania ................................................................... 10 
Annex II – Statistical Annex .................................................................................................... 10 

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1.  

INTRODUCTION1 

1.1.   Context 

In  June  2014,  the  European  Council  granted  Albania  candidate  status. The Stabilisation  and 
Association  Agreement  (SAA)  has  been  in  force  since  April  2009  and  Albania  has 
implemented smoothly its obligations. Regular political and economic dialogue between the 
EU  and  Albania  has continued  through  the  relevant  structures  under  the  SAA.  The 
government  engaged  in  EU-related reforms  and  continued  to  make  progress  in  meeting  the 
objectives set out in the five key priorities for the opening of accession negotiations. 

1.2.   Summary of the report 

As regards the political criteria, overcoming previous polarisation, the Parliament of Albania 
has  adopted  by  unanimity  constitutional  amendments  to  launch  a  deep  and  comprehensive 
justice system reform and the exclusion of criminal offenders from public offices. In view of 
the  next  general  elections  to  be  held  in  2017,  Albania  is  expected  to  adopt  in  due  time 
amendments to the electoral code and related reforms. These should address in particular the 
lack of impartiality and professionalism of the electoral administration. Adoption of the law 
establishing the national council for civil society provided the framework for more structured 
consultations with civil society organisations. 

Albania is moderately prepared in what concerns the reform of its public administration. The 
implementation  of  more  transparent  recruitment  procedures  of  civil  servants,  as  well  as  the 
implementation of the public administration reform and public financial management reform 
strategies have continued. Further progress is key to consolidate achievements towards a more 
efficient, depoliticised, and professional public administration. 

Albania's judicial system has some level of preparation. Constitutional amendments related to 
the organisation and functioning of the justice system were adopted. This paves the way for a 
comprehensive  and  thorough  justice  reform.  Work  on  related  implementing  legislation  also 
advanced:  a  law  on  the  re-evaluation  (vetting)  of  judges,  prosecutors  and  legal  advisors,  as 
well as a set of key laws providing for the institutional reorganisation of the judicial structures 
were  adopted.  In  addition,  around  40  other  legislative  texts  are  at  various  stages  of 
preparation.  Further  progress 
legislation. 
Administration of justice continued to be slow and inefficient; corruption remained prevalent 
across the sector.   

to  adopt  and 

is  needed 

implement 

this 

Albania has some level of preparation in the fight against corruption. A law on whistle-blower 
protection was adopted. Prosecutors and police gained increased access to national electronic 
public  registries,  with  a  view  to  exchanging  sensitive  information  and  increasing  the 
efficiency  of  investigations.  Further  progress  is  needed  to  establish  a  solid  track  record  of 
investigations, prosecutions and convictions. More efforts are needed to tackle corruption at 
high  level.  Proactive  investigations,  systematic  risk  assessments  and  inter-institutional 
cooperation need to be improved. Corruption remains prevalent in many areas and continues 
to be a serious problem. 

The country has reached some level of preparation in the fight against organised crime. Some 
progress  was  made,  in  particular  on  identifying  and  destroying  cannabis  plantations.  The 

1  This  report  covers  the  period  from  October  2015  to  September  2016.  It  is  based  on  input  from  a  variety  of 
sources, including contributions from the government of Albania, the EU Member States, European Parliament 
reports and information from various international and non-governmental organisations. As a rule, legislation or 
measures which are under preparation or awaiting parliamentary approval have not been taken into account. 

4 

 
 
 
 
                                                            
 
police  was  modernised  and  international  police  cooperation  intensified,  especially  with 
Europol.  However,  cooperation  between  police  and  prosecution  needs  to  be  further 
strengthened  to  dismantle  criminal  networks  more  effectively.  The  number  of  final 
convictions  in  organised  crimes  cases  is  still  low,  marking  only  a  slight  increase  in  recent 
to  organised  criminal  groups  are  not  used 
years.  Financial 
systematically and effectively. The track record of freezing and confiscating illegally acquired 
assets remains very low. 

investigations  related 

The  legal  framework  for  the  protection  of  human  rights  is  broadly  in  line  with  European 
standards.  Albania  has  ratified  most  international  human  rights  conventions.  However, 
enforcement of human rights protection mechanisms remains to be strengthened. As regards 
freedom of expression, Albania has some level of preparation / is moderately prepared. The 
overall environment is conducive to the freedom of expression, but better implementation of 
the legislation is needed. The independence of the regulatory authority and public broadcaster 
must be further strengthened, and transparency of state advertising in the media remains to be 
enhanced.  Albania  has  taken  measures  to  address  the  restitution  of  or  compensation  for 
property confiscated during the communist era. A new law providing for the setting up of a 
national  mechanism  for  compensation  is  now  in  place.  The  process  of  property  registration 
also  needs  to  advance.  Living  conditions  for  Roma  and  Egyptians2  need  to  be  improved. 
Additional  efforts  are  needed  to  develop  a  track  record  of  anti-discrimination  cases. 
Institutional mechanisms to protect the rights of the child and to tackle gender-based violence 
remain  poor.  The  legislation  on  juvenile  justice  remains  to  be  brought  in  line  with 
international standards. 

Albania has continued to have a constructive and proactive role in  regional cooperation and 
maintains good neighbourly relations in line with its commitments under the Stabilisation and 
Association Agreement.   

As regards the economic criteria, Albania is moderately prepared in developing a functioning 
market  economy.  Some  progress  was  made  in  improving  the  budget  balance,  fighting 
informality and reforming the electricity sector. Economic growth accelerated and the labour 
market situation improved, but unemployment is still high. Public debt is high and has not yet 
started  decreasing,  while  the  recurrent  underexecution  of  government  spending  on 
investments  persists.  The  financial  sector  is  stable.  However,  the  banking  sector  is  still 
burdened  with  non-performing  loans  and  credit  is  growing  slowly.  Business-relevant 
regulations  are  cumbersome  and  shortcomings  in  the  rule  of  law  continue  to  deter 
investments. The ongoing justice reform is expected to have a material impact on the business 
environment. 

Albania  has  some  level  of  preparation  concerning  its  capacity  to  cope  with  competitive 
pressure and market forces within the Union. Some progress was made particularly as regards 
improving  higher  and  vocational  education.  However,  the  quality  of  education  needs  to  be 
raised at all levels to better equip people with skills and knowledge in line with labour market 
needs.  Efforts  have  started  for  prioritising  infrastructure  investments,  but  gaps  in  transport, 
energy and digital infrastructure still hinder competitiveness and constrain trade. International 
trade  is  below  potential  and  it  is  sectorally  concentrated  making  the  economy  more 
vulnerable. Capacity for research, development and innovation remains low.    

Albania continued aligning its legislation to EU requirements in a number of areas, enhancing 
its  ability  to  take  on  the  obligations  of  membership.  In  many  areas,  the  country  is 

2 All these groups are considered under the wider "Roma" umbrella term under the EU Framework for National 
Roma Integration Strategies. 

5 

 
                                                            
moderately prepared, such as in financial control, or has some level of preparation, including 
in the areas of public procurement and statistics. Albania will need to continue its efforts as 
regards  the  overall  preparations  for  adopting  and  implementing  the  EU  acquis.  It  should 
continue work on the development of the transport and energy networks, also with a view to 
improving  connectivity  throughout  the  region.  The  administrative  capacity  and  professional 
standards  of  bodies  charged  with  the  implementation  of  the  acquis  need  to  be  strengthened 
and  the  independence  of  regulatory  bodies  safeguarded.  Enhancing  transparency  and 
accountability, in particular ensuring the effective, efficient and transparent functioning of the 
public  procurement  system  and  public  finance  management,  remains  essential.  Albania  has 
continued  to  fully  align  with  all EU  common  foreign  and  security  policy  positions  and 
declarations. 

The number of unfounded asylum applications lodged by Albanian nationals to EU Member 
States and Schengen associated countries has remained high. Albania should take immediate 
and determined action, including in the framework of the post-visa liberalisation monitoring 
mechanism, to effectively address this phenomenon. 

2.  

POLITICAL CRITERIA 

2.1.  Democracy 

Elections 

Some progress was made over the past year with the establishment of an ad hoc parliamentary 
committee  on  electoral  reform.  This  reform 
to  address  outstanding 
recommendations  of  the  OSCE's  Office  for  Democratic  Institutions  and  Human  Rights 
(OSCE/ODIHR).  It  is  important  that  the  reform  is  finalised  sufficiently  ahead  of  the  next 
round of general elections. 

is  expected 

An ad hoc parliamentary committee was established in December to address shortcomings in 
the electoral system and address outstanding OSCE/ODIHR recommendations from the 2013 
parliamentary  elections  and  2015  local  elections.  Shortcomings  include  lack  of  impartiality 
and  politicisation  of  the  electoral  administration,  transparency  of  campaign  finances  and 
electoral dispute resolution. The ad hoc committee is co-chaired by a representative from the 
ruling  majority  and  the  main  opposition  party  and  has  members  from  all  parliamentary 
groups.  Assisted  by  party-appointed  experts,  the  committee  was  tasked  with  drafting 
amendments  to  the  electoral  code  using  an  inclusive  approach.  Its  mandate  was  therefore 
extended  in  June.  The  committee  has  started  to  involve  other  relevant  institutions,  extra-
parliamentary  parties  and  civil  society.  It  is  important  that  the  electoral  reform  is  adopted 
sufficiently ahead of the next round of parliamentary elections to be held in 2017.  

Parliament 

Some progress in the functioning of parliament continued over the reporting period with the 
consensual adoption of constitutional amendments on justice reform and on the exclusion of 
criminal offenders from public office. Contacts with constituents were improved, as were the 
transparency  and  inclusivity  of  parliamentary  activities.  Cross-party  work  on  key  reforms 
continued, although on a number of occasions political dialogue was polarised. 

In  December,  cross-party  consensus  led  to  the  adoption  of  constitutional  amendments  and 
a law  on  the  integrity  of  elected  and  appointed  officials,  banning  criminal  offenders  from 
holding and running for public office. Amendments passed in February and by-laws in March 

6 

 
 
 
 
ensured that implementation could be launched within legal deadlines. Initial effects resulted 
in voluntary resignations and dismissals at local level. 

Both the majority and the opposition engaged in intense preparatory activities for justice and 
electoral  reforms.  The  ad  hoc  committee  for  justice  reform  carried  out  an  inclusive, 
transparent,  expert-driven  process,  producing  a  comprehensive  set  of  constitutional 
amendments  and  accompanying  laws.  Difficulties  in  achieving  cross-party  compromise 
caused  delays  in  finalising  the  reform  package.  The  amendments  to  the  constitution  were 
approved by a unanimous vote in July. Work continues for the adoption of a series of related 
legislative acts. The mandate of the ad hoc committee for justice reform was extended until 
the end of 2016. The ad hoc committee on electoral reform was established in December and 
its mandate has also been prolonged to the end of 2016. Parliament adopted 14 laws requiring 
a qualified majority, including amendments to the criminal code and the labour code. Of all 
laws  adopted  during  the  reporting  period,  around  one  third  received  the  support  of  the 
opposition (in the previous reporting period only 16 out of 173 received cross-party support). 

However, political polarisation remained high, hindering both political dialogue and technical 
processes.  Partial,  short-lived  opposition  boycotts  occurred  on  a  number  of  occasions. 
Parliamentary ethics do not meet regulatory provisions and public expectations. The code of 
ethics, which has been in parliamentary procedure since early 2016, is pending approval. 

In  March  and  April,  the  parliament  filed  requests  to  review  whether  three  members  of 
parliament  (MPs)  from  the  ruling  majority  had  complied  with  the  constitutional  rules 
governing  their  mandate.  The  mandate  of  one  MP  was  lifted  as  a  result  of  a  Constitutional 
Court ruling. The Constitutional Court has yet to issue decisions on the other two MPs. One 
MP from a smaller party lost his mandate after being imprisoned, while another MP from the 
majority  resigned  in  October  in  response  to  accusations  of  having  a  criminal  background. 
Two MPs await High Court rulings.   

Two  members  of  the  Central  Election  Commission  were  elected  in  December  and  one 
member  of  the  Financial  Supervisory  Authority  Board  was  appointed  in  January.  Four 
members of the Audiovisual Media Authority and one member of the Supervisory Council of 
the  Bank  of  Albania  were  elected  in  July.  The  parliament  rejected  five  presidential  decrees 
returning  laws  for  parliamentary  review  (law  on  international  agreements,  the  audio-visual 
media law, the law on property, the law on higher education and the law on tourism). 

Parliamentary rules of procedure are yet to reflect the law on the role of parliament in the EU 
integration  process,  adopted  in  March  2015.  The  capacity  of  the  National  Council  for 
European Integration was boosted with the addition of a dedicated support unit. The Council 
is  yet  to  fully  assume  its  role  as  a  forum  for  broad  involvement  and  consultation  on  EU 
integration  issues.  Parliament’s  overall  capacity  to  monitor  the  implementation  and 
compliance  of  new  legislation  with  the  acquis  remained  limited.  Despite  some  efforts, 
coordination with the executive branch needs to be further improved. 

The mandates of two parliamentary inquiry committees were extended in February, April and 
June,  and  two  new  ones  were  established  in  April.  Three  of  these  inquiry  committees  were 
initiated  and  are  led  by  the  opposition.  The  work  of  inquiry  committees  remained  highly 
conflictual  and  lacked  results.  Other  oversight  mechanisms  remained  underused.  Parliament 
conducted a  more structured process of review of annual reports of independent institutions 
and adopted 16 resolutions. However, a comprehensive follow-up and monitoring system of 
recommendations by parliament and independent institutions has yet to be developed. 

7 

 
Constituency offices were opened in five regions (Fier, Kukës, Shkodër, Gjirokastër, Korçë) 
and equipped with parliamentary staff. The office in Korçë functions on a cross-party basis. 
Coverage of all 12 regions has yet to be ensured. 

Transparency  and  inclusiveness  in  parliament's  work  continued  to  follow  an  upward  trend. 
A new  parliamentary  website 
to 
parliamentary  documents.  However,  more  transparency  is  needed  at  committee  level. 
Parliamentary  committees  continued  consultations  with 
relevant  stakeholders,  but 
improvements are required on early notification and follow-up. A law on the establishment of 
the National Council on Civil Society was adopted in November. 

in  March  significantly 

improved  access 

launched 

Expert capacity was strengthened in February and increased budgetary allocations for training 
were adopted, but research and analytical capacity remained limited. 

Governance 

The  government  continued  to  work  on  the  reform  agenda,  which  mainly  focused  on 
addressing the five key priorities for the opening of accession negotiations and stabilising the 
economy.  Some  progress  was  made  on  policy  coordination  and  at  local  government  level, 
with  the  adoption  of  the  new  law  on  the  organisation  and  functioning  of  local  governance. 
However,  substantial  efforts  are  needed  to  increase  the  administrative  capacity  of  local 
government  units  to  carry  out  their  expanded  competencies  and  provide  them  with  the 
necessary financial resources. 

The  government  remained  committed  to  EU  integration  and  pursued  the  reform  agenda, 
which  included  addressing  the  five  key  priorities  for  the  opening  of  accession  negotiations; 
strengthening the rule of law; and tackling the informal economy.  

In  May,  the  government  approved  the  2015-2020 national  strategy  for  development  and 
integration,  setting  the  strategic  milestones  for  the  five  years  ahead.  A  board  on  European 
Integration, composed of the Ministers in charge of the five key priorities, was established in 
November to upgrade coordination in view of future opening of accession negotiations.  

There is still a need for closer cooperation and coordination at all levels of government with 
parliamentary  and  civil  society  platforms  dealing  with  EU  integration  matters.  Policy 
coordination  improved  with  the  establishment  of  integrated  policy  management  groups  in 
pilot sectors. However, more efforts are needed to improve the capacity of the management 
groups,  their  technical  secretariats  and  the  Department  of  Development,  Financing  and 
Foreign Aid, which is the main coordinating body. 

There have been no Constitutional Court rulings since October 2015 on the functioning of 
state  institutions.  Several  ministries  are  implementing  transparency  programmes  and  the 
government  set  up  a  transparency  website.  However,  further  efforts  are  needed  to 
communicate  more  effectively  the  benefits  of  key  reforms,  in  particular  those  with  major 
social impact and those related to the EU integration process. The need for more transparency 
and accountability applies also to independent institutions. 

The ruling coalition remained stable. The government cabinet saw three changes of ministers, 
but there were no political reshuffles. 

On local government, implementation of the territorial reform continued, although financial 
and  administrative  consolidation  of  the  newly  created  municipalities  was  slow.  Full 
application of the law on civil servants at local government remains to be ensured. Adequate 
resources are needed to implement training plans for the staff in the new municipalities. 

8 

 
The  decentralisation  process  was  supported  by  the  establishment  of  an  inter-institutional 
coordination group under the integrated policy management group for good governance. The 
decentralisation strategy's medium-term financial sustainability has yet to be ensured. 

The  new  law  on  the  organisation  and  functioning  of  local  governance  entered  into  force  in 
January.  The  law  decentralises  a  high  number  of  new  competences  to  municipalities.  The 
establishment of a consultative council between the central and local governments is pending. 
One stop shops for public services were piloted in five municipalities. 

On  fiscal  decentralisation,  the  proportion  of  resources  allocated  to  local  government  units 
increased  from  2.2  %  of  GDP  in  2015  to  3.2  %  in  2016,  which  is  the  largest  budget  ever 
allocated  to  local  government  in  Albania.  However,  considering  the  powers  transferred  to 
local level, the 2016 budget does not represent a net increase in municipalities' resources.  

Adoption of a new law on local finances and local taxes is needed, based on the principles of 
predictability  and  transparency  of  funds  allocation,  providing  a  financial  equalisation 
mechanism  and  favouring  local  revenues,  tax  collection  and  access  to  loans  and  credits. 
Transparency in local government finances improved with the publishing of local government 
budgets online. A citizens' budget for the local government budget has yet to be produced. 

On territorial planning, an electronic one stop shop system for applying for building permits 
was  introduced  as  of  September  and  is  expected  to  increase  the  transparency  of  the 
decision-making process in the institutions involved. The capacity of local government units 
to prepare local development plans remained limited and their adoption was slow. The 2016 
state budget funds earmarked to support the drafting of local development plans are sufficient 
only for 26 out of the 61 municipalities. 

Since  his  appointment  in  2011,  the  Ombudsman  has  actively  promoted  the  rights  of 
vulnerable  groups,  including  by  submitting  special  reports  and  recommendations.  However, 
the  work  of  the  Ombudsman's  Office  continued  to  be  limited  by  a  lack  of  funding  and 
personnel and its central and local offices need to be upgraded so that staff can carry out their 
work  satisfactorily.  In  2016,  the  budget  allocation  of  the  Ombudsman's  Office  increased, 
allowing  for  the  recruitment  of  Commissioners  on  Children's  Rights  and  the  Prevention  of 
Torture,  but  the  actual  officials  are  yet  to  be  appointed.  Most  complaints  submitted  to  the 
Ombudsman's Office continued to relate to social rights and failure by the state administration 
to act within the legal deadlines. 

Civil society 

Some progress was made towards implementing the institutional framework for consultation 
with civil society following the approval of the law establishing the National Council for Civil 
Society.  The  fiscal  framework  regulating  the  activity  of  civil  society  organisations  (CSOs) 
was still not conducive to their development and needs to be revised. 

An empowered civil society is a crucial component of any democratic system and should be 
recognised  and  treated  as  such  by  the  state  institutions.  Albania's  legal  and  regulatory 
framework  on  the  right  of  freedom  of  association  is  generally  in  line  with  international 
standards.  However,  the  registration  process  at  the  First  Instance  Court  in  Tirana  remained 
cumbersome  due  to  the  high  financial  cost  of  registration,  lengthy  procedures  and  lack  of 
specialised  judges  dealing  with  CSOs'  legal  issues.  In  April,  the  law  on  volunteerism  was 
enacted by parliament, fulfilling one of the nine priorities identified in the government road 
map towards a more enabling environment for civil society development. 

In  November,  the  parliament  enacted  the  law  on  the  establishment  and  functioning  of  the 
National  Council  for  Civil  Society  (NCCS),  with  the  aim  of  institutionalising  cooperation 

9 

 
between  the  government  and  civil  society.  Chaired  by  the  Minister  of  Social  Welfare  and 
Youth, the Council is composed of 13 government and 13 civil society representatives, with 
the Agency for Support to Civil Society acting as a technical secretariat.  

The  selection  process  for  NCCS  civil  society  representatives  was  not  clearly  set  out  in  law 
and  was  concluded  only  in  June  with  international  assistance.  Information  sessions  were 
organised  across  the  country  to  present  the  NCCS  and  how  it  was  set  up.  Civil  society 
representatives participated in all meetings of the National Council of European Integration, 
but their role remained passive overall. Effective implementation of the laws on the right to 
information and public consultations remained a challenge, especially at local level. 

Following  the  entry  into  force  of  the  new  national  accounting  standards  for  non-profit 
organisations  in  January,  the  legal  and  regulatory  framework  on  the  tax  regime  for  CSOs 
needs to be further improved and tax inspectors' capacity strengthened. The current procedure 
for  VAT  reimbursement  of  expenses  under  Instrument  for  Pre-accession  Assistance  (IPA) 
funded  grants  is  not  functional  and  no  such  reimbursement  has  taken  place.  Public  funding 
remained limited and is not legally regulated at central and local level. The current legislation 
does not provide for any tax incentives for individual or corporate donations to CSOs. 

2.2.   Public administration reform 

Albania is moderately prepared with the reform of its public administration. Some progress 
was  made  on  public  administration  reform,  especially  with  more  transparent  recruitment 
procedures for civil servants. Steady implementation of the public administration reform and 
public financial management reform strategies continued. In the coming year, Albania should 
in particular: 

→ further align the annual budget and the medium-term budget programme with one another 
and with the ongoing reform strategies and the priorities of the government; 

→ strengthen the capacity of human resources managers and selection committee members to 
further  improve  the  recruitment  process;  and  enable  data  exchange  between  the  human 
resources management information system and the treasury;  

→  complete  alignment  of  relevant  sector  legislation  with  the  code  of  administrative 
procedures and adopt relevant by-laws to ensure its coherent implementation. 

Policy development and coordination 

is  still 

insufficient  and  cost-analysis  needs 

Albania  has  the  necessary  legal  and  institutional  set-up  for  a  good  policy-making  system. 
However,  alignment  between  the  strategic  documents  and  the  medium-term  budget 
to  be  further  developed. 
programme 
Implementation  of  all  strategies  requires  continuous  monitoring  and  reporting  focused  on 
results.  Despite  delays,  the  European  integration  coordination  system  was  strengthened  by 
increased number of staff in EU integration units of line ministries. Coordination in preparing 
the  National  Plan  for  European  Integration  has  further  improved,  but  needs  to  be  better 
integrated in the overall policy planning system. 

Policy  and  legislative  development  is  not  yet  sufficiently  inclusive  and  evidence-based. 
Impact assessment methodology needs to be adopted to ensure better quality of regulatory and 
fiscal  impact  assessments  and  their  systematic  implementation.  Horizontal  procedures  for 
acquis alignment are in place and the tables of concordance are compulsory, but the impact of 
alignment is not properly analysed and implementation costs are not always duly forecasted. 
Institutional  capacity  for  policy  coordination,  review  and  monitoring  needs  to  be  further 
strengthened.  

10 

 
 
Public consultation is regulated by law and a website for public consultation was launched in 
September.  The  quality  of  the  consultation  process  still  needs  to  be  improved.  Public 
scrutiny of government work is still limited. Government reports on strategic documents are 
submitted to parliament on an annual basis, but reporting often covers only implementation of 
activities.  

Public financial management 

The  government  published  the  first  monitoring  report  of  the  2014-2020  public  financial 
management  (PFM)  reform  strategy  in  May.  Despite  some  delays,  there  was  progress  in 
most areas, e.g. in arrears clearance; revision of the budget system law, internal control and 
financial  inspection;  online  access  to  the  treasury  system;  the  financial  management 
information system; the fight against informality campaign; and external audit manuals.  

A more robust result indicator matrix for the PFM strategy monitoring has been prepared and 
awaits adoption. Following a functional review, the structure of the Ministry of Finance was 
substantially  modified,  increasing  staff  from  250  to  293.  A  new  unit  was  set  up  in  the 
Ministry  of  Finance  to  monitor  PFM  strategy  implementation.  At  the  same  time,  in  August 
there were 80 open vacancies in the Ministry of Finance, having an impact on its capacity.  

The reforms in the next period should focus on implementing the revised organic budget law; 
improving  budget  planning  and  management,  prevention  of  reoccurrence  of  arrears; 
compliance with financial management and control standards in ministries; improving public 
procurement review function and compliance with procurement rules; giving online access to 
the  treasury  for  more  institutions;  ensuring  better  tax  collection  and  voluntary  compliance; 
improving  investment  planning  and  management;  and  filling  the  remaining  posts  at  the 
reorganised Ministry of Finance and the customs and tax administrations (see also chapters 5, 
16, 29 and 32). 

Steps were taken to improve budget transparency, but they need to be further intensified. A 
transparency roadmap has been implemented since 2015 and was updated for 2016 to address 
the findings of the transparency code assessment and the open budget index assessment.  

The  2016  budget,  the  citizens'  budget  for  the  2016  draft  budget,  and  the  list  of  public 
investments  under  the  medium-term  budget  programme  have  been  published.  The  annual 
government finance statistics for 2014 and 2015 were also published, while the 2015 budget 
implementation report was published with a delay. However, its structure does not allow for 
comparison  and  analysis  against  the  original  budget  and  reporting  on  state  assets  is  weak. 
In-year  reporting  is  available,  but  no  separate  mid-year  report  is  produced.  Citizens' 
participation in the budget process is still weak. 

Public service and human resources management 

The law on Civil Servants provides a clear scope for civil service, but institutions that deliver 
services  directly  to  citizens  are  excluded  from  its  scope.  This  needs  to  be  addressed  and 
common standards for a professional and merit-based administration need to be ensured.  

The law establishes procedures for merit-based recruitment and promotion. Despite a high 
number of applicants, approximately 40 % of announced vacancies remained unfilled in 2015. 
The practical organisation of recruitment procedures needs further improvement e.g. through 
better  planning  and  training  of  selection  committee  members.  Further  recruitment  of  senior 
civil  servants  through  the  in-depth  training  programme  at  the  Albanian  School  of  Public 
Administration should be put in place in accordance with the law. 

The 2014 amendments to the law broadened the grounds for dismissal of civil servants. The 
Department  of  Public  Administration  needs  to  closely  monitor  application  of  these 

11 

 
amendments  to  ensure  that  fair  and  transparent  dismissal  procedures  are  maintained.  High 
turnover of staff at local government level requires appropriate follow-up. In October 2015 an 
order was issued clarifying the procedure and responsibility for implementation of final court 
cases  related  to  appeals  by  civil  servants.  It  needs  to  be  applied  effectively  to  improve  the 
enforcement of final judgements.  

The capacity of the Department of Public Administration (DoPA) to lead the management of 
human  resources  was  improved  thanks  to  staff  increase  to  53  members.  However,  its 
coordination,  oversight  and  assistance  role  should  be  further  strengthened.  The  human 
resources  management  information  system  is  in  place,  but  technical  issues  are  preventing 
exchange of data with the treasury system. DoPA should ensure finalisation of data entry and 
develop procedures to ensure regular update and quality of data.  

Public  institutions  demonstrated  good  cooperation  with  the  Commissioner  for  Oversight  of 
the Civil Service. The annual report of the Commissioner was discussed in the parliament and 
was  published.  Adequate  resources  need  to  be  allocated  to  the  Commissioner  to  allow  full 
exercise of its mandate. 

The remuneration system of public servants is in principle transparent and is based on a job 
classification  system.  However,  the  implementation  of  the  new  system  based  on  job 
evaluation  is  pending.  Introduction  of  salary  bonuses  for  civil  servants  working  on  EU 
integration  shall  be  duly  assessed  as  it  risks  compromising  the  coherence  of  the  overall 
remuneration system.  

Professional development is recognised as a right of every civil servant. Training is provided 
by  the  Albanian  School  of  Public  Administration  and  the  quality  and  quantity  of  available 
courses  has  improved.  The  budget,  however,  is  not  sufficient  to  cover  the  high  number  of 
trainees, including at local level. A new performance appraisal system, with general appraisals 
taking  place  every  six  months,  has  been  developed.  DoPA  needs  to  monitor  its 
implementation and take the necessary corrective measures in case the new system creates an 
unnecessary  burden  on  the  administration  and  leads  to  discretionary  dismissal  decisions. 
Increased awareness raising and training of managers is required to ensure its application.  

A new law on the integrity of persons exercising public functions was adopted in December 
2015. In accordance with the law in April the Department of Public Administration collected 
24 000 self-declarations. Their verification led to the dismissal of 24 public employees. The 
perception of corruption remains high and more efforts are needed in this regard. 

Accountability of administration 

The  legal  framework  on  organisation  of  the  state  administration  requires  modernisation. 
Accountability  lines  and  reporting  between  institutions  are  regulated,  but  inconsistencies 
between different types of subordinated bodies persist. Also, the number of bodies that report 
directly to parliament is too high. Delegation of responsibility is provided for by the code of 
administrative  procedures.  The  state  administration  is  subject  to  oversight  by  independent 
institutions (see chapter 32). The number of unanswered Ombudsman's recommendations and 
requests  for  information  remained  significant,  compromising  citizens'  right  to  good 
administration.  

Although the right to access public information is regulated by law since 2015, the rate of 
response to citizens' requests remained low. Transparency programmes have been adopted in 
most  institutions,  but  their  quality  and  implementation  should  be  further  improved.  The 
capacity  of  the  Commissioner  for  the  Right  to  Information  and  Protection  of  Personal  Data 
needs to be increased so that the implementation of the law is properly monitored. 

12 

 
The right to administrative justice is governed by the law on administrative disputes and the 
law on administrative courts. The overall capacity of the administrative court system to deal 
with  the  backlog  of  cases  needs  to  be  significantly  improved.  The  legislation  for  protecting 
the right of citizens to seek compensation in cases of wrongdoing by public authorities is in 
place, but due to limited public awareness, court cases in this area are rare. 

Service delivery to citizens and businesses 

In May the government adopted a citizen-centred service delivery reform policy document 
to  improve  the  quality  of  public  services  and  enhance  citizen  feedback.  Inter-institutional 
coordination was improved thanks to the establishment of thematic groups on digitalisation,  
e-government  and  service  delivery  working  as  part  of  the  integrated  policy  management 
group on good governance. 

A new law on the Delivery of Front Office Services entered into force in March. The law sets 
out the standards for public services and is intended to simplify administrative procedures 
together  with  the  new  Code  of  Administrative  Procedures,  which  entered  in  force  in  May. 
However, due to the lack of a lead coordinating institution, work on adopting the necessary 
implementing  legislation,  reviewing  the  special  administrative  procedures  and  adjusting  the 
relevant sector legislation has been limited. 

Strategic framework for public administration reform 

The  first  annual  implementation  report  of  the  2015-2020  public  administration  reform 
strategy was published and provided baselines for the selected performance indicators. The 
integrated  policy  management  group  for  public  administration  reform  (PAR),  set  up  in 
September  2015,  still  needs  to  develop  into  a  policy  decision  forum.  Involvement  of  civil 
society and the business community in the monitoring process should be improved. 

Public administration reform is one of the priorities of the recently adopted National Strategy 
for  Development  and  Integration,  confirming  continued  political  support  to  this  area.  The 
Office  of  the  Minister  of  State  for  Innovation  and  Public  Administration  was  increased  by 
four additional staff members. Funding of the PAR strategy is reflected in the medium-term 
budget  programme.  However,  the  estimated  financial  gap  for  implementation  of  the  PAR 
strategy remained at 29 %, causing concern for the sustainability of its implementation. 

2.3.  Rule of law 

Functioning of the judiciary 

Albania's  judicial  system  has  some  level  of  preparation.  Good  progress  was  made  in  the 
past year, notably through the adoption of a set of constitutional amendments that paved the 
way for comprehensive and thorough justice reform. This work followed an intensive process 
of  public  consultation  and  close  cooperation  with the  European  Commission  for  democracy 
through law (Venice Commission) at the Council of Europe, which adopted an opinion on the 
constitutional changes. A law on the re-evaluation of judges, prosecutors and legal advisors 
was  adopted.  As  part  of  measures  to  fight  corruption  and  re-establish  public  trust  in  the 
judiciary, the law provides for the re-evaluation (vetting) based on 3 criteria: integrity through 
assets  assessment,  background  assessment  (inappropriate  links  with  organised  crime)  and 
professional  competence.  Its  application  has  been  suspended  by  the  Constitutional  Court, 
which  is  reviewing  its  constitutionality  and  has  requested  an  amicus  curiae  brief  from  the 
Venice Commission. 

Moreover,  a  set  of  organic  laws,  identified  by  the  Albanian  legislator  as  priority  for  the 
implementation  of  justice  reform,  were  adopted.  These  regulate  overall  organisation  of  the 
judiciary,  the  prosecution  office,  status  of  judges  and  prosecutors,  Constitutional  Court, 

13 

 
 
creation of specialised institutions for the fight against organized crime and anti-corruption. In 
addition  to  this  legislative  package,  preparations  for  other  40  laws  and  by-laws  relevant  for 
justice reform are ongoing.   

There  was  no  progress  on  meeting  other  recommendations  identified  last  year,  namely  the 
filling of vacancies at the High Court and the administrative courts; the effective use of the 
unified  case  management  system;  and  the  publication  in  due  time  of  all  court  decisions 
together  with  their  grounds.  In  order  to  fulfil  the  key  priority  on  the  reform  of  the  justice 
system, in the coming year, Albania should in particular: 

→  advance  implementation  of  the  new  constitutional  provisions,  also  through  the  adoption 
and implementation of related legislation; 

  pursue  sectoral  reform  in  the  framework  of  the  recently  adopted  cross-cutting  justice 
strategy  2017-2020  and  its  action  plan,  ensuring  that  adequate  financial  resources  are 
consistently available to achieve the reform objectives; 

→ establish working vetting bodies and have initial results in the process of re-evaluation of 
judges and prosecutors. 

Strategic documents 

The  previous  justice  system  reform  strategy  expired  in  2013.  A  new  strategy  providing  the 
framework to implement justice reform until 2020 has been adopted in November 2016. The 
2015-2017 medium-term strategy for the Prosecution Office is in place. 

Management bodies 

Under the constitutional reform, the current governing body of the judiciary, the High Council 
of Justice (HCJ), will be replaced by a High Judicial Council (HJC), which will have greater 
independence from political influence and be less prone to corporatism and corruption.  

Currently,  the  HCJ’s  role  is  limited  to  the  appeal  and  first  instance  courts,  while  the  HJC’s 
competence  will  extend  to  the  High  Court.  The  HJC  will  be  composed  of  11  full  time 
members,  namely  six  judges  appointed  by  their  peers  and  five  lay  members  elected  by 
parliament among highly-qualified jurists. Two lay members will be selected from the legal 
professions, two from among law professors and the School of Magistrates, and one member 
from  civil  society.  The  selection  of  lay  candidates  will  be  the  responsibility  of  a 
sub-committee  of  the  parliamentary  committee  for  legal  affairs,  subject  to  the  power  of  the 
parliament to approve the shortlisted candidates with 3/5 majority or reject such list with 2/3 
majority. The President of the Republic will no longer chair or sit in the Council. Instead the 
chair will be elected from among the HJC lay members. The Minister of Justice will only sit 
in the Council when strategic or budgetary matters are considered.  

As  with  the  HCJ,  the  HJC  will  be  in  charge  of  the  evaluation,  appointment,  promotion  and 
transfer of judges, as well as the imposition of disciplinary sanctions. However, disciplinary 
proceedings will no longer be initiated by the Minister of Justice but instead by a new High 
Justice Inspectorate. 

The  structure  of  the  current  Council  of  Prosecutors,  an  advisory  body  to  the  General 
Prosecutor  Office  (GPO),  will  also  change  under  the  reform  and  give  prosecutors  increased 
independence from the GPO. A High Prosecutorial Council (HPC) will be established and 
have  exclusive  responsibility  for  managing  the  career  of  prosecutors  and  for  disciplinary 
matters. The HPC will be composed of 11 members: six prosecutors appointed by their peers 
and five lay members, selected through the same procedure as HJC lay members. The HPC 
will propose to parliament the candidate for the position of General Prosecutor. 

14 

 
Independence and impartiality 

The  independence  of  the  judiciary  is  enshrined  in  the  constitution.  In  practice,  it  is 
undermined  by  the  high  politicisation  of  High  Court  and  Constitutional Court  appointments 
and  the  excessive  margin  of  discretion  enjoyed  by  the  HCJ  and  the  General  Prosecutor  in 
managing judges and prosecutors' careers. There are regular reports of political interference in 
investigations and court cases.  

The  unified  case  management  system  to  allocate  cases  to  judges  is  only  partly  functional. 
Non-transparent practices such as assigning cases by drawing lots - occasionally even in the 
office of the head of court - are still common in some courts. The prosecution service's case 
management  system  is  not  yet  fully  operational  throughout  the  country,  except  for  case 
registration  purposes.  The  civil,  criminal  and  administrative  procedure  codes  regulate  the 
exclusion of judges from cases, but there is no systematic registration of such cases.   

Accountability 

With a view to increasing the accountability of the judicial system, the constitutional reform 
grants exclusive inspection powers to the new High Justice Inspectorate, as well as exclusive 
powers  to  verify  and  investigate  complaints  against  judges  and  prosecutors.  Magistrates  are 
currently held accountable through inspections by both the Ministry of Justice and the HCJ. 
Despite the memorandum of understanding between these two bodies, the risk of overlapping 
inspections remained.  

The 2000 code of ethics for judges has no concrete impact on their accountability, although 
professional  ethics  is  one  of  the  subjects  covered  by  the  initial  training  programme  of  the 
School  of  Magistrates.  In-service  training  on  ethics  for  prosecutors  is  provided,  but 
compliance  with  the  2014  code  of  conduct  is  not  part  of  their  annual  evaluation.  There  is 
insufficient  monitoring  of  judges  and  prosecutors'  observance  of  ethical  standards  and 
integrity. Under the reform, it is foreseen that respect of ethics will be part of the evaluation of 
judges and prosecutors. A separate code of ethics for lawyers is in place. 

Judges  and  prosecutors  are  obliged  to  declare  their  assets  on  an  annual  basis.  Despite 
referrals  from  the  High  Inspectorate  for  Declaration  and  Audit  of  Assets  and  Prevention  of 
Conflict  of  Interest  (HIDAACI)  over  judges'  failure  to  properly  declare  their  assets,  no 
disciplinary  measures  have  been  taken  to  date.  The  judiciary  is  perceived  as  being  highly 
corrupt. 

Professionalism and competence 

The  careers  of  judges,  namely  their  recruitment,  appointment,  transfer,  promotion  and 
dismissal, are the responsibility of the HCJ. Professionalism and integrity are not sufficiently 
reflected  in  existing  criteria  for  judges'  appointments.  The  framework  for  evaluating  judges 
remained  weak  and  judges'  careers  are  not  fully  transparent  and  not  always  based  on  merit 
and other objective criteria.  

High Court and Constitutional Court members are appointed by the President of the Republic 
with  the  backing  of  a  simple  parliamentary  majority.  This  has  led  to  politicisation  and 
recurrent  standoffs  in  the  appointments  process,  with  frequent  rejection  by  parliament  of 
presidential nominees. Three High Court vacancies remained unfilled. Under the reform, the 
High Court will be transformed into a cassation court whose members will be appointed by 
the President upon proposal of the HJC. 

In  order  to  tackle  politicisation  of  appointments  to  the  Constitutional  Court,  the  reform 
provides for the establishment of a Justice Appointments Council, which will be responsible 
for  verifying  the  fulfilment  of  legal  requirements,  as  well  as  the  professional  and  moral 

15 

 
criteria applicable to the candidates for seats in the Constitutional Court and for the new post 
of High Justice Inspector.    

Under the reform, the appointment of the General Prosecutor will be made upon proposal of 
the  HPC  and  require  the  backing  of  a  3/5  majority  of  parliament;  further,  the  General 
Prosecutor's  mandate  will  be  reduced  from  9  to  7  years  without  the  right  of  reappointment. 
The General Prosecutor is currently appointed by the President with the consent of a simple 
majority  of  parliament,  which  undermined  the  independence  and  accountability  of  the 
prosecutorial system.  

As  part  of  measures  to  fight  corruption  and  re-establish  public  trust  in  the  judiciary,  the 
reform provides for the re-evaluation (vetting) of all currently serving judges, prosecutors and 
legal advisers. Implementation of the relevant law has been suspended by the Constitutional 
Court, which is reviewing its constitutionality.  

Quality of justice 

Initial  and  in-service  judicial  training  is  provided  by  the  School  of  Magistrates.  It  is  partly 
donor-supported,  despite  an  increase  in  the  School's  budget  in  2016.  Training  on  the  EU 
acquis  is  limited.  Since  June,  Albania  is  an  observer  in  the  European  Judicial  Training 
Network. The National School of Lawyers has been operational since 2013 and trained 660 
candidates in the 2015-16 academic year, but does not provide in-service training for lawyers. 

Annual  reports  of  courts'  activities  are  published  by  the  Ministry  of  Justice.  All  courts  are 
expected to produce one, but not all are available. Some courts do not have a website. 

The  budget  for  the  overall  justice  sector  in  2016  is  14 %  higher  than  in  2015  at 
EUR 91.7 million, which represents 0.85 % of GDP and 2.83 % of the state budget. It covers 
the Ministry of Justice, the prosecution, the courts, the School of Magistrates, the HCJ and the 
Constitutional Court. 

Albania has 408 professional judges (14 per 100 000 inhabitants), 336 prosecutors (11.6 per 
100 000 inhabitants) and 946 judicial administrative staff (2.31 employees per judge). There 
are also 1 880 practising lawyers (65 per 100 000 inhabitants). The planning and distribution 
of administrative and financial resources within the judiciary needs to be improved. 

The budgetary allocations for court infrastructure have increased but a number of premises are 
still  inadequate.  Additional  courtrooms  are  needed.  Hearings  continue  to  be  held  in  judges' 
offices, contributing to a lack of transparency and an increased risk of corrupt practices. 

A  State  Archive  of  the  justice  system  was  established  in  April  to  store  and  process 
information on court cases. The Archive is not yet operational. A case-law database exists, but 
publication of judicial decisions remains inconsistent and there are no effective research tools. 
The High Court handed down five rulings unifying case-law. The system for notifying parties 
and witnesses is inadequate. More frequent recourse has been made to an alternative dispute 
resolution mechanism under the law on mediation. 

Efficiency 

The  efficiency  of  the  court  system  remained  a  concern,  due  to  insufficient  financial  and 
human  resources,  inadequate  planning  and  a  lack  of  sound  legal  provisions  regulating  the 
internal  organisation  of  the  courts.  Backlogs  remained  high,  in  particular  in  administrative 
courts, appeal courts and at the High Court. The reform aims to diminish the workload of the 
High Court by narrowing the scope of its competences. The High Court will be transformed 
into a cassation court tasked with providing legal interpretation and unifying case-law rulings. 
Its  current  competence  to  handle  criminal  charges  against  the  highest  state  officials  will  be 

16 

 
transferred to a special first instance and appeal court also responsible for the adjudication of 
the criminal offences of corruption and organised crime. 

There  is  an  overall  lack  of  capacity  to  produce  reliable  statistical  data.  Only  a  few  first 
instance courts use the standards of Article 6 of the European Convention on Human Rights to 
measure  clearance  rates  and  length  of  proceedings  when  preparing  the  yearly  court 
performance  reports.  Although  clearance  rates  have  improved  in  some  first  instance  courts, 
they  remain  highly  problematic  in  administrative  courts,  appeal  courts  and  the  High  Court. 
The overall length of proceedings is a cause of concern and is primarily related to a lack of 
capacity and the inadequacy of the relevant provisions of the codes of procedure. There is no 
effective, unified internal monitoring mechanism applied in all courts. Enforcement of judicial 
decisions is a cause of concern, in particular on property-related cases. 

Fight against corruption 

Some level of preparation has been reached in the fight against corruption. Some progress 
was  made  in  the  past  year,  notably  through  the  adoption  of  the  law  on  whistle-blower 
protection, the law on the creation of a specialised and independent anti-corruption body, and 
increased access to national electronic public registries for prosecutors and police. However, 
corruption remains prevalent in many areas and continues to be a serious problem. There was 
some  progress  on  meeting  two  of  last  year's  recommendations,  namely  making  further 
progress  with  a  view  to  establishing  a  solid track  record  of investigations,  prosecutions  and 
convictions, and stepping up efforts to ensure direct access to databases for prosecutors and 
police. No progress was made in amending legislation on interceptions and surveillance, time 
limits  for  investigations  and  admissibility  of  evidence  before  court.  The  independence  and 
effectiveness of institutions in charge of the fight against corruption continued to be limited 
by political pressure and weak administrative capacity. In the coming year, Albania should in 
particular: 

→  demonstrate  further  progress  on  establishing  a  solid  track  record  of  investigations, 
prosecutions  and  convictions  in  the  fight  against  corruption  at  all  levels,  including  asset 
recovery; ensure sound investigation and prosecution of cases referred to prosecutors by the 
High  Inspectorate  for  the  Declaration  of  Audits  and  Assets  and  Conflict  of  Interest  and  the 
High State Audit (HIDAACI); 

→  amend  legislation  on  interceptions  and  surveillance,  time  limits  for  investigations  and 
admissibility  of  evidence  before  courts  to  make  investigations  in  corruption  cases  more 
efficient, in line with European standards and best practices; 

→  amend  the  legal  framework  on  political  party  finances  to  establish  an  effective  and 
accountable audit system; 

→ further enhance access  to  national electronic public registries for prosecutors and  police; 
expand the case management system in prosecution offices and ensure it is used efficiently. 

Track record 

Since 2010 there has been a positive trend in the number of investigations, prosecutions and 
convictions in the fight against corruption involving junior or middle-ranking officials, even 
though the track record remains low overall, especially regarding corruption cases involving 
high-level officials. 

Poor  inter-institutional  cooperation  and  exchange  of  information  continued  to  hamper 
proactive  investigation  and  effective  prosecution  of  corruption.  Financial  investigations 
resulting  in  the  confiscation  of  assets  were  very  low.  Penalties  imposed  in  corruption  cases 

17 

 
tend to be overly lenient. Political influence on the institutions of the criminal justice system 
and  corruption  in  the  judiciary  continued  to  be  major  causes  for  concern.  Corruption  and 
allegations of infiltration of the state by organised crime need to be further tackled. 

Asset  declarations  of  officials  are  published.  The  number  of  asset  declaration  checks  and 
indictments  for  falsification,  concealment  or  non-declaration  of  assets  has  increased 
substantially  since  2014.  There  are  very  few  cases  of  conflict  of  interest  violations,  due  to 
gaps  in  the  legislation  and  lack  of  capacity  to  carry  out  proactive  checks.  There  is  no 
independent  and  accountable  system  in  place  to  audit  party  financing  and  electoral 
campaign  financing.  In  the  public  administration,  control  and  inspection  mechanisms 
remained weak and mainly targeted low-ranking public servants. 

The  successful  implementation  of  the  law  on  access  to  information  is  hampered  by  the 
limited capacity of the Commissioner for Access to Information and Data Protection Office. 

Institutional framework 

The  National  Coordinator  against  Corruption  (who  is  also  the  Minister  of  State  for  Local 
Issues) is responsible for the design, coordination and monitoring of anti-corruption policies. 
The independence and accountability of HIDAACI need to be strengthened to reduce the still 
high risk of political influence. The internal controls framework has yet to be streamlined to 
achieve  better  inter-institutional  coordination  and  effectiveness.  The  scope  of  audits 
conducted by the High State Audit auditors and internal auditors overlap, while their findings 
often  differ  significantly.  The  role  of  the  Council  of  Ministers'  Unit  for  Internal 
Administrative  Control  and  Anti-corruption  has  yet  to  be  further  clarified.  Financial 
inspection needs to be stepped up to fight high-risk fraud, corruption and mismanagement of 
public  funds.  The  capacity  of  all  the  bodies  mentioned  above  needs  to  be  substantially 
strengthened. 

Further  efforts  are  needed  to  improve  transparency  of  public  administration;  step  up 
implementation  of  institutions'  transparency  programmes;  and  ensure  the  disclosure  of 
information of public interest in a timely and efficient manner. There is no code of ethics for 
MPs and MPs' asset declarations are not published automatically. Training for public officials 
on good governance and anti-corruption is provided by the School of Public Administration. 
Complaints of corruption can be filled in on the online portal launched by the government in 
2015. Corruption statistics are collected by an inter-institutional working group that includes 
the  Ministry  of  Justice,  the  State  police,  the  General  Prosecutor's  Office,  the  High  Court  of 
Justice,  and  the  High  Inspectorate  for  Declaration  and  Audit  of  Assets  and  Prevention  of 
Conflict  of  Interest.  There  is  no  system  of  sectoral  risk  assessments  implemented  either  at 
policy or law enforcement level. Corruption-proof methods in legislation drafting are not yet 
applied. 

The  foreseen  establishment  of  an  anti-corruption  body  should  streamline  powers  in  the 
criminal  justice  framework  and  ensure  specialisation  to  fight  corruption  across  the  law 
enforcement sector. HIDAACI, police and prosecutors still lack direct access to a number of 
registers and databases, hampering their capacity to build cases. Inter-institutional cooperation 
and  exchange  of  information  remained  insufficient,  as  did  human,  technical  and  financial 
resources in law enforcement bodies. Training of law enforcement authorities and magistrates 
to deal with complex corruption, financial and economic crime cases has yet to be increased. 

Since the adoption of the law on the right to information in September 2014, 198 coordinators 
on the right to information have been appointed and 108 public institutions have approved and 
published transparency programmes. 

18 

 
Legal framework 

Albania  has  ratified  all  relevant  international  conventions,  but  their  implementation  in 
practice remains uneven. Laws on the exclusion of criminal offenders from public posts and 
for  the  protection  of  whistle-blowers  were  adopted.  The  criminal  procedure  code  is  being 
revised  in  the  framework  of  the  justice  reform,  with  a  view  to  enhancing  the  efficiency  of 
investigations.  The  country  is  party  to  the  UN  Convention  against  Corruption  and  has 
criminalised the refusal and concealment of assets and the falsification and non-declaration of 
assets of public officials. 

Strategic framework 

The national anti-corruption strategy (2015-2020) and action plan (2015-2017) were adopted 
in  March  2015  after  consultations  with  a  wide  range  of  stakeholders.  A  monitoring  and 
reporting framework is in place and was implemented in 2015. The performance assessment 
framework and impact indicators have yet to be improved. 

Fight against organised crime 

The  country  has  reached  some  level  of  preparation  in  the  fight  against  organised  crime. 
Overall, some progress was made, in particular on identifying and destroying cannabis plots.  
However, police and prosecution fail to identify criminal gangs behind drug cultivation and 
trafficking, and efficient judicial follow-up in criminal proceedings is seldom secured.  There 
was  little  progress  on  fulfilling  the  recommendations  identified  last  year.  The  police  was 
modernised  and  international  police  cooperation  intensified,  especially  with  Europol. 
However,  cooperation  between  police  and  prosecution  needs  to  be  further  strengthened  so 
that they can dismantle criminal networks more effectively. The number of final convictions 
in  organised  crimes  cases  is  still  limited,  marking  only  a  slight  increase  in  recent  years. 
Financial  investigations  targeting  suspected  members  of  organised  criminal  groups  are  not 
systematically  and  effectively  used.  The  track  record  of  freezing  and  confiscating  illegally 
acquired assets remains very low. In  the  coming  year, Albania should in particular: 

→  demonstrate  further  progress  on  establishing  a  solid  track  record  of  proactive 
investigations, prosecutions and final convictions against organised crime groups, including 
confiscation of criminal assets and successfully dismantling criminal networks; 

→ align relevant laws with European standards and best practices, in particular the anti-mafia 
law, the criminal procedure code and legislation on interceptions and surveillance, time limits 
for investigations and admissibility of evidence; 

→  decentralise  specialised  police  forces,  allocate  adequate  resources  to  the  fight  against 
organised crime and implement an effective human resources policy, including  merit-based 
recruitments, promotions and transfers within police and prosecutors' offices. 

Track record 

There  was  little  progress  in  effectively  dismantling  criminal  networks.  The  number  of 
final convictions for organised crime offences (criminal organisations and structured criminal 
groups)  remained  still  very  low  and  has  only  marginally  increased  in  recent  times.  A 
relatively  high  percentage  of  organised  crime  cases  registered  by  the  Serious  Crime 
Prosecution Office are transferred to local prosecutors' offices or dismissed based on lack of 
evidence  and  /  or  poor  quality  of  referrals.  Quality  of  decisions  on  dismissals  should  be 
improved, as well as the quality of referrals. Moreover, the Serious Crime Prosecution Office 
should  coordinate  further  investigations  with  the  investigating  police  officers  and  collect 
sufficient evidence necessary to open a case. 

19 

 
There is an upward trend in investigating cases involving the laundering of proceeds of crime. 
However,  the  number  of  final  convictions  for  money  laundering  remains  limited.  The 
financial investigation capacity of the Albanian state police needs to be further improved.  

Final  convictions  for  human  trafficking  have  increased  over  the  past  years  but  remain 
overall  very  low.  Financial  investigations  are  not  systematically  and  effectively  used  to 
target  criminal  groups.  Precautionary  freezing  of  assets  is  rarely  applied  during  the  initial 
phase of an investigation. Proceeds of crime often disappear, resulting in a poor track record 
of confiscated assets at the time of the final conviction. Less than 50 % of organised crime 
cases  lead  to  confiscation  of  assets.  Leaks  to  the  press,  violations  of  the  secrecy  of 
investigations  and  endangerment  of  the  safety  of  police  officers  and  prosecutors  are  still 
frequent. 

Institutional and operational capacity 

There are 9 894 police officers, 232.8 per 100 000 inhabitants. The new police organisational 
structure  in  place  since  December  improved  its  overall  capacity.  The  specialised  units  on 
financial  and  economic  crime,  money  laundering  and  investigation  of  criminal  assets  were 
strengthened,  as  well  as  the  central  Crime  Analysis  and  Intelligence  Directorate.  However, 
there is still a lack of staff specialised in financial and fiscal matters. The high rates of staff 
turnover  continue  to  weaken  the  police  institutional  and  operational  capacity.  The  general 
level of equipment and logistics has improved, but is still inadequate, particularly in IT. 

Cooperation  between  prosecution  and  police  in  detecting  and  investigating  complex 
criminal  cases  remains  weak.  There  is  no  comprehensive  approach  to  investigations  and 
prosecutions.  Police  and  prosecutors  also  lack  direct  access  to  several  private  and  public 
national  databases.  Bureaucratic  and  lengthy  procedures  are  required  to  obtain  even  basic 
information during investigations, causing significant delays. 

Albania  has  an  operational  cooperation  agreement  with  Europol  and  since  2009  a  liaison 
officer  at  Europol  headquarters.  Albania  is  involved  in  operational  projects  and  the 
exchange  of  information  through  the  SIENA  secure  information  exchange  network 
application. However, Albania receives far more requests than it sends (959 received and 32  
sent  in  2015).  As  such,  Albania  remains  a  reactive  rather  than  a  proactive  partner  in 
international  police  cooperation.  Similar  trends were  also  noted  as  regards  cooperation  with 
Interpol. Albania should make full use of its operational agreement with Europol. 

The police's capacity to collect and process crime statistics improved. Since February 2015, 
the  police  receives  electronically  daily  notifications  about  criminal  offences  committed 
countrywide. The capacity of the Forensics Directorate has also been enhanced. However, the 
budget for the DNA unit is still insufficient to cover the costs of DNA collection, limiting the 
DNA profiling capacity. 

Legal framework 

The legal framework is not fully aligned with the acquis. The relevant legislation should be 
amended  to  address  a  number  of  weaknesses  in  the  investigation  phase.  The  law  on  the 
confiscation  of  criminal  assets  is  only  partially  aligned  with  the  acquis.  Alignment  is  still 
required  on  third  party  confiscation,  extended  confiscation  and  precautionary  freezing  of 
assets.  Amendments  to  the  anti-mafia  law  on  assets  seizure  and  confiscation  are  yet  to  be 
adopted. The law on electronic communication also needs to be amended to oblige network 
and public communication service operators to provide the police and prosecutors with swift 
access to their databases. 

20 

 
Strategic framework 

intelligence-led  policing,  proactive 

The 2015-2020 public order strategy and its 2015-2017 action plan cover important areas such 
as 
investigations, 
inter-institutional and international cooperation, and exchange of information. The state police 
continued  to  assess  main  organised  crime  threats  following  Europol  methodology,  with  the 
preparation  of  annual  national  serious  and  organised  crime  threat  assessments  (SOCTAs). 
However, the usage of Europol's strategic intelligence products remained limited.  

investigations,  criminal  asset 

The  provisions  in  the  criminal  code  on  cybercrime  are  in  line  with  the  requirements  of  the 
Council of Europe Convention on cybercrime (the Budapest Convention). 

Fight against terrorism 

Albania  has  been  affected  by  the  phenomenon  of  foreign  terrorist  fighters.  A  number  of 
unauthorised  mosques,  allegedly  linked  to  extremists  groups,  are  present  in  Albania  and 
present  risks  of  radicalisation.  This  phenomenon  requires  a  targeted  approach  by  the 
intelligence,  law  enforcement  authorities,  and  judicial  institutions.  While  international 
cooperation  has  greatly  improved  at  both  operational  and  strategic  level,  prevention 
mechanisms  involving civil society and religious communities need to be improved. 

2.4.  Human rights and the protection of minorities 

Overall situation 

The  legal  framework  for  the  protection  of  human  rights  is  broadly  in  line  with  European 
standards  and  Albania  has  ratified  most  international  human  rights  conventions.  However, 
enforcement of human rights remains to be strengthened. Shortcomings particularly affect the 
following areas: 

  Despite  the  efforts  made,  enforcement  of  property  rights  has  yet  to  be  ensured  and  the 
processes of property registration, restitution and compensation need to be completed. 

  Living  conditions  for  Roma  and  Egyptians  need  to  be  improved.  Social  exclusion  and 
discrimination  need  to  be  tackled  through  better  policy  implementation  and  better 
inter-institutional  cooperation.  Additional  efforts  are  needed  to  develop  a  track  record  of 
anti-discrimination cases. 

 
Institutional mechanisms to protect the rights of the child and to tackle gender-based and 
domestic  violence  remain  poor.  The  legislation  on  juvenile  justice  has  yet  to  be  brought  in 
line with international standards. Services for victims of domestic violence need to improve in 
quality, quantity, accessibility and geographical coverage. 

A  detailed  analysis  of  freedom  of  expression  follows  below.  For  a  detailed  analysis  of 
developments  on  other  human  rights  and  the  protection  of  minorities,  see  chapter  23  — 
Judiciary and fundamental rights. For developments on trade union rights, non-discrimination 
and equal opportunities, see also chapter 19 — Social policy and employment. 

Freedom of expression 

The country has some level of preparation / is moderately prepared in the area of freedom 
of  expression.  However,  there  was  no  progress  in  this  area  over  the  past  year.  Last  years' 
recommendation  to  enhance  transparency  of  government  advertising  in  the  media  was  not 
addressed.  The  overall  environment  is  generally  conducive  to  the  exercise  of  freedom  of 
expression, but implementation remains a challenge even in areas where there is a sound legal 
basis. In the coming year, the country should in particular: 

21 

 
 
→ introduce legislation in line with best international practice on state advertising to enhance 
transparency; 

→  bring  ownership  limitations  for  national  operators  in  line  with  the  relevant  international 
standards; 

→ further strengthen the independence of the regulatory authority and the public broadcaster. 

Intimidation of journalists 

Physical  assaults  on  journalists  remain  very  rare.  Two  cases  of  physical  assaults  against 
journalists were reported and followed up by the prosecution in 2016. The national authorities 
and media organisations reacted promptly and condemned these acts. 

Legislative environment 

Overall,  the  constitution  and  other  relevant  laws  are  in  line  with  international  human  rights 
law,  guaranteeing  individual  liberties  including  the  right  to  privacy,  freedom  of  expression 
and sanctions against incitement of hatred. Defamation remains a criminal offence, although 
prison sentences are not allowed. However, journalists are at risk of potentially large fines and 
damages. The rules on hate speech are in line with international standards. There were three 
cases  of  hate  speech  registered  by  police  and  prosecution  in  the  reporting  period.  Five 
complaints  on  hate  speech  were  submitted  to  the  Commissioner  for  the  protection  against 
Discrimination on the grounds of sexual orientation.   

The law on access to information is in line with international standards.  

Implementation of legislation/institutions 

In  July,  the  parliament  elected  four  Audiovisual  Media  Authority  (AMA)  members. 
However,  the  method  of  electing  members  is  not  free  of  political  influence  and  does  not 
ensure  the  regulator's  independence.  AMA's  decision-making  was  affected  by  the  lack  of 
quorum  for  several  months  due  to  the  absence  of  its  opposition-nominated  members,  who 
questioned the legitimacy of the board. This long-term staff shortage limited AMA's ability to 
fulfil its mandate and made it difficult for the regulator to take key decisions, particularly on 
the licensing of commercial digital operators, which resulted in it being taken to court. 

Public service broadcaster 

The regulation governing the public service broadcaster RTSH is in line with EU standards. 
However, there are concerns that the new method for electing the general director through a 
simple majority vote after three rounds, as provided for in the amended law, would limit its 
ability  to  guarantee  the  appointment  of  a  politically  consensual  figure.  Financing  is  mostly 
independent of the government. RTSH's fee collection system has been relatively stable. 

Economic factors 

Media  ownership  is  formally  transparent  and  accessible  through  the  National  Registration 
Centre.  However,  the  functioning  of  the  media  market  remains  opaque,  with  a  number  of 
media outlets surviving in a relatively small market with limited resources. Transparency of 
government  funds  channelled  to  the  media  for  advertising  or  other  purposes  needs  to 
improve.  Legislation  on  state  advertising  in  line  with  international  best  practices  should  be 
introduced. The media continued to be used as a tool to promote political and private interests. 

Internet 

The criminal code applies different definitions for offline and online hate speech, the latter not 
requiring incitement to violence. The rather broad definition of online hate speech carries the 

22 

 
risk  of  unduly  infringing  the  rights  of  online  media  if  they  are  held  liable  for  readers' 
comments. Self-regulation for the online media sector needs to be encouraged. 

Social dialogue / social conditions 

Journalism in Albania is a precarious profession with low wages and little job security. Poor 
implementation  of  the  labour  code  remained  a  major  concern  and  most  journalists  work 
without  contracts  or  have  contracts  which  can  be  terminated  arbitrarily.  Delays  in  paying 
salaries  and  missing  years  of  social  contribution  payments  are  a  widespread  phenomenon, 
often leading to self-censorship.  

There is a Union of Albanian Journalists, but it has limited influence. A significant number of 
journalists  are  not  organised  or  represented  in  any  form,  reflecting  the  country's  lack  of 
tradition of trade union organisations. Professional and ethical standards in journalism need to 
be strengthened. 

2.5.  Regional issues and international obligations 

Albania still maintains a 2003 bilateral immunity agreement with the United States, granting 
exemptions  for  US  citizens  from  the  jurisdiction  of  the  International  Criminal  Court.  In 
doing  so,  it  does  not  comply  with  the  EU  common  positions  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. 

On  regional  cooperation  and  good  neighbourly  relations,  Albania  continued  to  play  a 
constructive and  proactive role in several  regional initiatives  such as  the South East  Europe 
Cooperation  Process,  the  Adriatic-Ionian  Initiative,  the  EU  Strategy  for  the  Adriatic  and 
Ionian  Region,  the  Central  European  Initiative,  the  Western  Balkans  Six  and  the  Regional 
Initiative for Migration and Asylum. 

Albania is a committed supporter of the ‘Western Balkans 6 process’ and has engaged fully 
in  the  Western  Balkans  Six  initiative,  particularly  the  connectivity  agenda.  In  March, 
Albania  hosted  a  Western  Balkans  Six  meeting  where  countries  of  the  region  reviewed  the 
state of play of regional connectivity projects and the implementation of the soft measures on 
transport  and  energy  identified  at  the  Vienna  Conference  ahead  of  the  Paris  Summit.  The 
meeting also proposed a comprehensive cooperation agenda for the refugee crisis, putting the 
emphasis  on  further  enhancing  the  EU-Western  Balkans  partnership  on  migration.  Work 
started  on  establishing  the  Western  Balkans  Fund  and  regional  Youth  Cooperation  Office, 
both of which will have their headquarters in Tirana.   

Albania  continued  to  be  a  constructive  partner  in  the  region,  further  developing  bilateral 
relations  with  other  enlargement  countries  and  neighbouring  EU  Member  States.  Albania 
signed a convention with Montenegro on regional cooperation, under Article 13 of the SAA, 
while negotiations with Serbia are yet to be concluded.    

Relations  with  Bosnia  and  Herzegovina  remained  good,  with  no  pending  bilateral  issues. 
Albania's President visited Sarajevo in February, advocating the recognition of Kosovo.*  

Albania continued its very good relations with Kosovo and kept advocating for Kosovo's full 
membership  of  international  and  regional  organisations.  In  June,  seven  agreements  and 
memoranda of cooperation were signed in the third joint governments’ meeting in the fields 

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ 
Opinion on the Kosovo declaration of independence. 

23 

 
 
                                                            
of  customs  and  taxation,  energy,  public  administration,  transport  and  the  environment. 
Albania supports the ongoing EU-facilitated dialogue between Kosovo and Serbia. 

Relations  with  the  former  Yugoslav  Republic  of  Macedonia  were  good  and  information 
exchanges intensified after the neighbouring country was hit by the flow of refugees, in order 
to identify a possible deviation of the route through Albania. 

Relations  with  Montenegro  were  stable,  with  Albania  strongly  supporting  Montenegro's 
NATO membership bid. 

to  normalise,  with 

Relations  with  Serbia  continued 
the  government  continuously 
demonstrating political commitment to maintaining constructive dialogue. Bilateral ties were 
also strengthened under the Western Balkans 6 process and the common connectivity agenda. 
The  Serbian  and  Albanian  foreign  ministers  took  part  in  two  trilateral  meetings  with  their 
Italian  counterpart,  first  in  Rome  and  more  recently  in  Tirana.  The  Albanian  and  Serbian 
Prime Ministers opened together a business forum in Niš in October 2016. 

Albania continued to have good relations with Turkey, with a strategic partnership regulating 
bilateral  relations.  The  two  countries  have  good  cooperation  over  security  and  the  fight 
against terrorism. 

Relations with Greece remained overall positive, with frequent high-level visits. Cooperation 
over  migration  management  was  recently  stepped  up,  including  at  operational  level,  in 
response  to  the  migration  crisis,  with  trilateral  meetings  held  between  Greece,  Italy  and 
Albania. On the occasion of the 25th anniversary of Greece and Albania’s Friendship Treaty 
and  the  visit  of  Greek  Foreign  Minister  to  Tirana,  the  two  countries  discussed  the 
establishment of a joint mechanism to address outstanding bilateral issues. 

Relations  with  Italy  remained  very  good.  In  the  context  of  the  migration  crisis,  the  two 
countries stepped up information  exchanges  and signed a memorandum of  understanding  to 
boost Albania's capacity to patrol its border, thus strengthening the fight against terrorism and 
human trafficking. Economic cooperation with Italy also intensified. In April, a ‘Facility for 
feasibility studies and final level-projecting in infrastructure sector’ project was signed by the 
two countries. 

3.   ECONOMIC CRITERIA 

Key economic figures 

Gross  domestic  product  (GDP)  per  capita  (%  of 
EU28 in PPS) 

GDP growth (%) 

2014 

30 

1.8 

2015 

30 

2.8 

Unemployment rate (female; male) (%) 

17.5 (19.2; 15.2)  17.1 (17.1; 17.1) 

Economic  activity  rate  for  persons  aged  20–64: 
proportion  of  the  population  aged  20–64  that  is 
economically active (female; male) (%) 

Current account balance (% of GDP) 

Net foreign direct investment (FDI) (% of GDP) 

68.6 

-12.9 

8.1 

71.3 

-11.3 

8 

Source: Eurostat 

24 

 
 
 
In  line  with  the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  EU 
accession  requires  the  existence  of  a  functioning  market  economy  and  the  capacity  to  cope 
with competitive pressure and market forces within the Union. 

The  monitoring  of  these  economic  criteria  should  be  seen  in  the  context  of  the  central 
importance  of  economic  governance  in  the  enlargement  process.  Each  enlargement  country 
prepares  an  Economic  Reform  Programme  (ERP)  annually,  which  sets  out  a  medium-term 
macro-fiscal  policy  framework  and  a  structural  reform  agenda  aimed  at  ensuring 
competitiveness  and  inclusive  growth.  The  ERPs  are  the  basis  for  country-specific  policy 
guidance jointly adopted by the EU and the Western Balkans and Turkey at ministerial level 
in May each year. 

3.1.  The existence of a functioning market economy 

Albania  is  moderately  prepared  in  developing  a  functioning  market  economy.  Some 
progress was made in improving the budget balance, fighting informality and reforming the 
electricity  sector.  The  comprehensive  judicial  reform  started  and  needs  to  be  fully 
implemented  to  significantly  improve  the  business  environment.  Economic  growth  gained 
momentum and unemployment decreased but is still high. Public debt also remained high and 
has  yet  to  start  falling.  The  underexecution  of  the  investment  budget  continued. 
Non-performing loans in the banking sector still constrained credit growth. Business-relevant 
regulations remained cumbersome and shortcomings in the rule of law continued to hamper 
enterprises and deter investments.  

In line with the ERP policy guidance and in order to support long-term growth, in the coming 
years, Albania should pay particular attention to: 

→ pursuing efforts to improve tax revenue mobilisation to lower the public debt level whilst 
creating space for growth-enhancing spending; 

→ strenghtening financial sector stability by implementing the non-performing loans action 
plan and developing a medium-term startegy to promote the use of the local currency; 

→ increasing the coverage of active labour market policies and improving the activation of 
unemployed  and  inactive  persons,  especially  young  people,  women  and  the  long-term 
unemployed. 

Economic governance 

Albania  remained  committed  to  strengthen  macroeconomic  stability  and  implement 
market-oriented reforms. Addressing the high level of public debt remained in the focus of 
macroeconomic  policies.  Reforms  crucial  to  improving  the  business  environment  advanced 
but require further efforts to be completed. The ERP policy guidance from 12 May 2015 was 
only  partially  implemented  but  progress  was  made  in  most  fields.  Stability  and  growth  are 
bolstered by the country's compliance with the conditions of the 3-year programme with the 
International Monetary Fund (IMF), agreed in February 2014.  

25 

 
 
 
Macroeconomic stability 

Figure 1 Albania GDP growth 

60

55

40

8,0

7,0

6,0

5,0

4,0

3,0

P
D
G

f
o
%

50
45

trend 

Economic 

increasing 

Albania's economic recovery gained 
strength  on  the  back  of  rising 
growth 
investment. 
bottomed out in 2013 but has been on 
an 
then, 
supported  by  government  policies, 
increased  consumer  and  business 
confidence  and  falling  interest  rates. 
Although  external  conditions  were 
challenging,  real  GDP  growth  was 
2.8 %  in  2015  and  accelerated  further 
in  the  first  quarter  of  2016.  It  was 
driven  by  a 
in 
investment, which overturned a 3-year 
positive 
and 
contraction, 
trade. 
from 
contribution 
Despite strengthened economic activity, per capita GDP in purchasing power standards stood 
at only 30 % of the EU-28 average in 2015, practically unchanged since 2009.  

GDP per capita in purchasing power standards, EU28=100 (RHS)
GDP growth (LHS)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

a 
foreign 

revival 

strong 

since 

20
15

35
30

0,0

1,0

2,0

5
0

10

25

The  current  account  deficit  remained  high,  but  its  financing  has  been  healthy.  Albania 
has historically run a substantial trade deficit caused by a narrow production and export base, 
and partly funded by remittances from Albanians living abroad. In 2015, the current account 
deficit  narrowed  to  11.3  %  of  GDP  from  12.9  %  recorded a  year  earlier.  The  trade  balance 
improved thanks to the good performance of tourism, which offset decreasing earnings from 
goods exports, especially of oil. The value of imports also fell. At 5.8 % of GDP, remittances 
remained  much  below  their  level  from  before  the  global  financial  crisis.  Foreign  Direct 
Investment (FDI) inflows, which have been relatively high since 2007, amounted to 8.5 % of 
GDP  in  2015  and  continued  to  finance  the  bulk  of  the  current  account  deficit.  Foreign 
exchange  reserves  rose  substantially  in  2015,  driven  by  FDI  inflows  and  increased 
government borrowing on international markets. The reserves covered 6.6 months of imports 
at year-end, providing an adequate safeguard against adverse shocks.   

Inflation continued to be below the official target, prompting further monetary easing. 
Average  annual  inflation  has  remained  below  the  central  bank's  3  %  target  since  2012, 
reaching 1.9 % in 2015. It decelerated further in the first eight months of 2016 to just 1 %, 
reflecting low prices for imported products and weak domestic inflationary pressures due to 
still below-potential economic output. The central bank reacted by continuing to cut the key 
interest rate to  a record low of 1.25 %  in May 2016 and signalling its intention to keep  the 
interest rate low for an extended period.  

Loan  interest  rates  also  decreased,  but  bank  lending  was  hampered  by  risk-averse  banks 
reluctant to extend credit amid a still high level of non-performing loans (NPLs). The freely 
floating exchange rate of the leak has remained remarkably stable against the euro in the last 5 
years.  

26 

 
 
 
 
 
High public debt poses macroeconomic risks and requires sustained fiscal consolidation 
to  which  the  authorities  remain  committed.  Public  debt  relative  to  GDP  has  been  rising 
since 2011 and now exceeds 70 %, which is high compared with regional peers and Albania's 
capacity to generate revenue to pay off the debt. Most of the domestic debt is short-term and 
must  be  frequently  refinanced.  This 
refinancing  relies  mainly  on  a  few 
domestic  banks.  In  2015,  Albania 
from 
successfully 
international  markets,  enabling  the 
government to pay off some domestic 
debt  and  extend  the  average  maturity 
of the debt stock. However, as Albania borrowed in foreign currency, the country’s exposure 
to exchange rate risk increased. 

ERP policy guidance: ‘Pursue fiscal adjustment by 
ensuring  that  revenue  and  expenditure  targets  and, 
by  extension,  the  deficit  target,  are  met.  Evaluate 
and  quantify  fiscal  risks  stemming  from  all  active 
public-private  partnership  and  concession  contracts 
and from local government arrears.’ 

borrowed 

Figure 2 Albania fiscal developments 

80

70

60

P
D
G

f
o
%

50

40

30

20

10

6,0

5,0

4,0

3,0

2,0

1,0

P
D
G

f
o
%

stock 

and 
of 

sustainability 

clear 
arrears 

Under  its  ongoing  programme  with  the 
IMF,  Albania  undertook  to  strengthen 
its 
debt 
substantial 
to 
businesses.  Progress  was  made  on  both 
fronts.  The  identified  stock  of  arrears 
was  repaid  ahead  of  schedule  in  2014-
2015. The budget deficit was lower than 
planned  in  2014  and  met  the  4  %  of 
GDP target in 2015. 

0

0,0

2015

2013

2011

2010

2012
Public debt (LHS)

2014
Budget deficit (RHS)

Tax  revenue  in  2015  came  in  much 
reflecting 
lower 
overoptimistic assumptions and external 
shocks  such  as  the  oil  price  fall.  Expenditure  also  underperformed,  highlighting  significant 
and  recurrent  shortcomings  in  the  management  of  public  investments.  In  an  effort  to  tackle 
this  issue,  the  Ministry  of  Finance,  which  oversees  overall  budget  execution,  was  assigned 
responsibility  for  this  portfolio  at  the  beginning  of  2016.  Economic  growth  and  efforts  to 
improve tax compliance led to a marked increase in tax receipts in the first seven months of 
2016.  Expenditure  remained  significantly  below  budget.  Public  debt  relative  to  GDP  is 
expected to start falling this year. 

planned, 

than 

policy 

‘Underpin 

guidance: 

Several  steps  have  been  taken  to 
improve 
fiscal  governance  and 
fiscal  risks.  Ambitious 
address 
public  finance  management  reforms 
are  under  way  with  EU  budget 
support,  albeit  with  delays.  A  fiscal 
rule  was  adopted  in  June  2016.  The 
rule  mandates  a 
long-term  debt 
ceiling  of  45  %  of  GDP  and  budget 
balances  that  ensure  a  falling  debt 
ratio  until 
is  reached. 
However,  there  is  neither  a  deadline 
for the target to be reached nor an independent body to monitor compliance. Fiscal reforms 
were  adopted to  address the persistent optimism bias in economic forecasts; make  medium-
term budget plans more binding; and increase transparency over public-private partnerships. 
Albania amended the terms under which it compensates former property owners expropriated 

ERP 
fiscal 
consolidation by improving the fiscal framework; in 
particular,  (i)  strengthen  medium-term  budget  plans 
by  empowering  the  parliament  to  approve  binding 
three-year  ceilings  at  programme  level  and  by 
clearly  showing  in  the  Medium  Term  Budget 
Programme  which  funds  are  effectively  committed 
and which are new expenditure under the ceiling; (ii) 
move  decisively  towards  adopting  a  fiscal  rule 
counter-
which 
cyclicality and transparency.’ 

sustainability, 

ensures 

target 

debt 

the 

27 

 
 
 
 
 
 
 
 
under  Communism  to  make  the  scheme  more  sustainable  financially.  However,  the 
constitutionality of the new arrangement has been challenged.  

The  macroeconomic  policy  mix  has  been  appropriate.  Reducing  the  budget  deficit  is 
necessary to strengthen the sustainability of public debt. Keeping the key interest rate low is 
appropriate  as  it  helps  to  raise  weak  inflation  and  economic  activity.  Lower  domestic 
borrowing  by  the  government  also  allows  the  private  sector  to  borrow  more  to  finance 
investments and consumption. 

The functioning of product markets 

Business environment  

Procedures  for  market  entry  were  further  streamlined  and  business  registrations 
soared, but the new bankruptcy law has yet to be adopted.  A single service window for 
business  registration  and  licensing  became  operational  in  April  2016,  also  offering  online 
services.  The  number  of  newly  registered  businesses  more  than  doubled  in  2015,  reflecting 
multi-pronged  government  action  against  widespread  informality.  The  upward  trend 
continued  during  the  first  quarter  of  2016.  However,  firms'  access  to  formal  finance, 
especially  in  the  start-up  phase,  remained  a  challenge.  A  new  bankruptcy  law  to  streamline 
burdensome market exit procedures, avoid abuse and facilitate collateral recovery has been in 
the pipeline for several years but has not yet been approved.  

Businesses continued to face a cumbersome regulatory environment.  Efforts  were  made 
to  facilitate  doing  business  and  improve  government  communication  with  enterprises,  but 
they  have  yet  to  produce  tangible  results  on  the  ground.  A  draft  law  to  streamline  complex 
and inconsistent tax procedures has been prepared but has not yet been adopted. The partial 
moratorium on building permits, imposed in the wake of the local administration reform, was 
lifted, and construction activity returned to growth.  

in  the  rule  of 

ERP  policy  guidance:  ‘Strengthen  administrative 
capacities  to  ensure  smooth  legal  land  registration, 
the  full  functioning  of  the  cadastre  in  general  and 
especially  the  e-cadastre  until  2019.  Implement  the 
e-procedure for building permits in order to cut red 
tape and encourage investments.’ 

Deficiencies 
law 
continued  to  hamper  the  business 
environment, but the justice reform 
advanced.  The  informal  economy  is 
estimated  to  account  for  more  than  a 
third  of  GDP,  leading  to  tax  revenue 
losses, a lack of labour protection and 
unfair  competition  among  firms.  Inefficient  contract  enforcement,  uncertain  property  rights 
and the prevalence of corruption are major concerns repeatedly expressed by businesses. The 
wide-ranging  judicial  reform,  which  aims  to  tackle  these  interlinked  problems,  made 
significant progress with the unanimous parliamentary approval of constitutional amendments 
in  July.  Its  successful  implementation  requires  further  legislative  action  and  institution-
building.  Better  governance,  a  more  predictable  and  consistent  enforcement  of  rules  and  a 
more  efficient  delivery  of  public  services  would  substantially  enhance  the  business 
environment. 

State influence on product markets 

State  presence  in  the  economy  remained  limited  and  the  electricity  sector  is  to  be 
weaned  off  public  support.  The  share  of  public  revenue  and  spending  in  GDP  remained 
relatively  low.  Total  reported  State  aid  stood  at  0.4  %  of  GDP  in  2015  but  enforcement  of 
State  aid  rules  remained  underdeveloped.  The  electricity  sector  reform  led  to  a  substantial 
decrease  in  distribution  losses  and  some  improvement  in  bill  collection  rates,  strengthening 
the financial situation of state-owned enterprises in the sector. Albania expressed its intention 

28 

 
to  eliminate  by  2020  all  power  sector  subsidies,  including  public  guarantees  and  policy  net 
lending. 

Privatisation and restructuring 

Albania  is  advanced  in  market  liberalisation  and  privatisation.  The  private  sector 
remained  dominant  in  the  economy,  providing  more  than  80  %  of  jobs.  The  State's 
involvement in the economy remained limited and was concentrated in a few sectors such as 
energy.  The  2015  power  sector  law  provides  for  a  specific  timeframe  for  further  market 
liberalisation,  starting  from  June.  Albania  renegotiated  the  terms  of  the  concessionary 
agreement  for  the  management  of  Tirana  airport,  removing  its  monopoly  on  international 
flights.  In  April,  Albania  privatised  the  fully  state-owned  insurance  company  INSIG. 
Privatisation plans for the oil company Albpetrol were put on hold as falling oil prices have 
reduced investor interest. 

The functioning of the financial market  

Financial stability 

The  banking  system  continues  to  be  stable  but  is  exposed  to  risks.  Banks  overall 
maintained adequate buffers to absorb shocks as capital adequacy and liquidity ratios largely 
exceeded  regulatory  requirements.  Banking  sector  profitability  improved  in  2015  but  fell  in 
the first half of 2016. Banks are not reliant on foreign-based parent banks for funding because 
the ratio of loans to domestic deposits is only 53 %. Loan euroisation remained high: foreign 
currency  loans  to  unhedged  borrowers  still  make  up  around  a  third  of  the  total  loan  stock, 
making their repayment vulnerable to a sharp depreciation of the lek. Government securities 
represent almost a quarter of bank assets, exposing banks to sovereign risk as well.  

Access to finance 

There is scope for banks to expand lending and better support the economic recovery. 
The  banking  sector,  dominated  by  foreign  banks,  holds  over  90  %  of  all  financial  system 
assets.  With  loans to  businesses  and  households  amounting  to  35  %  of  GDP,  there is  much 
scope for increased bank lending. However, credit growth has been sluggish in recent years 
despite  the  gradual  fall  in  interest  rates  as  a  result  of  both  a  low  demand  for  and  a  tighter 
supply of bank loans. Banks' willingness to lend was affected by the high proportion of NPLs, 
which  was  still  21.2  %  in  July.  The 
the  central  bank 
government  and 
agreed  on  a  comprehensive  NPL 
action  plan  in  September  2015  that 
involves  legislative  and  regulatory 
measures and is expected to speed up 
NPL resolution and credit recovery.  

ERP policy guidance: ‘Continue to address risks to 
financial  stability  and 
real  economy  by 
following-up on the NPL action plan which has been 
adopted  and  developing  a  medium-term  strategy  to 
promote the use of the local currency in the financial 
system, 
stakeholders. 
Throughout 
the  central  bank’s 
monetary policy stance may remain accommodative 
insofar  as  the  path  of  fiscal  consolidation  remains 
favourable, but risks related to further policy easing 
should be carefully assessed.’ 

the  non-banking 
The 
financial 
increased  but 
remained  small.  It  comprises  the 
private 
insurance 
pension 
and 
investment  funds; 
businesses  plus 
total assets represent 6.6 % of GDP. The capital market is rudimentary and the stock exchange 
remained closed. There is great scope for expanding equity finance. 

this  process, 

including 

size  of 

relevant 

sector 

the 

all 

29 

 
 
 
The functioning of the labour market  

Strengthening  economic  activity 
improved labour market conditions 
but  unemployment,  especially  of 
young  people,  remained  high.  The 
economic  recovery  created  jobs  and 
the employment rate rose to 52.9 % in 
2015  from  a  low  of  49.9  %  in  2013 
(15-64  years).  Over  40  %  of  the 
workforce  is  employed  in  agriculture,  mostly  in  low-skilled  jobs,  and  informal  employment 
remains widespread. Labour force participation also increased, to 64.2 %, possibly reflecting 
improved employment prospects and a decreasing trend in remittances. Active labour market 
policies expanded from a low base but they still covered only around 4 % of the unemployed. 

ERP  policy  guidance:  ‘Increase  the  coverage  of 
active  labour  market  policies  and  improve  the 
activation  of  unemployed  and  inactive  persons, 
especially 
long-term 
unemployed.  Step  up  current  efforts  to  achieve  a 
comprehensive  approach  to  reducing  undeclared 
work.’ 

youth,  women 

and 

Figure  3  Unemployment  in  Albania    (%  of  Active 
population) 

Figure  4  Participation  rates  in  Albania  (%  of 
Labour Force) 

45,0

40,0

35,0

30,0

25,0

20,0

15,0

10,0

5,0

0,0

80,0

70,0

60,0

50,0

40,0

30,0

20,0

10,0

0,0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Unemployment rate

Youth unemployment rate

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Women

Men

There is a large and persistent difference in the labour force participation of women and men 
with the rate for women around 18 percentage points lower than for men, highlighting large 
structural  problems  in  the  labour  market.  The  unemployment  rate  (15-64  years)  fell  from 
17.9 %  in  2014  to  15.9  %  in  mid-2016.  The  unemployment  rate  for  young  people  (15-29 
years)  also  declined  but  remained  very  high  at  29.9  %,  highlighting  substantial  skill 
mismatches. A relatively high minimum wage might also act as a disincentive for hiring low-
skilled and young people. 

3.2. 

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

Albania has some level of preparation in terms of capacity to cope with competitive pressure 
and  market  forces  within  the  Union.  Some  progress  was  made  particularly  as  regards 
improving higher and vocational education as well as prioritising infrastructure investments. 
However, the quality of education needs to be raised at all levels to better equip people with 
skills in line with labour market needs. Gaps in transport, energy and digital infrastructure still 
hinder  Albania's  competitiveness  and  constrain  trade,  which  remains  below  potential  and 
sectorally concentrated. Albania's capacity for research, development and innovation remains 
low.  

In  line  with  the  ERP  recommendations  and  in  order  to  support  long-term  growth,  in  the 
coming year Albania should pay particular attention to: 

30 

 
 
 
→ improving the quality of the education system; 

→ further liberalising the energy market in accordance with the Energy Community Treaty, in 
particular  by  unbundling  transmission  and  distribution  activities  in  order  to  improve  energy 
security and allow the market entry of independent operators; 

→ facilitating trade through simplifying procedures and removing non-tariff barriers. 

Education and innovation 

Albania  still  has  considerable  gaps  to  close  between  education  outcomes  and  labour 
market  needs.  Public  spending  on  education  remained  low  at  less  than  3  %  of  GDP.  The 
quality of basic education is low as illustrated in the low ranking of Albanian students in the 
OECD's  PISA3  tests.  Pre-primary  (3-6  years)  enrolment  rates  are  very  low  at  33  %, 
undermining efforts to create a level playing field for the beginning of primary school.  

High  youth  unemployment  and  high  unemployment  even  among  well-educated  people  are 
signs of the need for improved quality and relevance of the education received. A large share 
of enterprises reported lack of appropriately skilled workers. 

The  new  law  on  higher  education  was  adopted  and  preparations  for  accrediting  higher 
education institutions started as well as the implementation of the new decentralised selection 
procedure  for  university  admission.  Gradual  progress  was  made  in  establishing  VET 
multifunctional centres and work continued on the national qualification framework. 

Albania's  capacity  for  technological  absorption  and  research,  development  and 
innovation  (RDI)  is  low.  Key  obstacles  include  low  expenditure  on  research  and 
development (about 0.4 % of GDP); weak links between the scientific and private sectors; as 
well as fragmentation of the national research and innovation system. As a result of this weak 
innovation  policy  infrastructure,  almost  all  sectors  of  the  economy  mainly  provide 
low-technology, labour-intensive and low-cost products and services. Increased funding and a 
more focused RDI strategy in a number of specific sectors, particularly in energy, agro-food 
and sustainable tourism, would support the country's capacity to attract investment in RDI. 

Physical capital and quality of infrastructure 

The  decline  in  investment  was  reversed  in  2015  but  further  measures  are  needed  to 
sustain capital expenditure.  

real  growth 

to  double-digit 

Investment as a share of GDP decreased from 33.9 % in 2008 to 24.6 % in 2014 and fell also 
in  nominal  terms  in  2012-2014.  However, 
in  2015  rising  energy-sector  FDI  inflows 
led 
in 
investment.  Domestic  saving  is  too  low  to 
match  the  substantial  investment  needs  of 
the  Albanian  economy,  which  remains 
reliant  on  FDI 
to  enhance 
competitiveness  and  productive  capacities. 
The  lack  of  a  functioning  cadastre  and 
clarity of land ownership is a significant impediment to investment. Some progress was made 
on  strengthening  the  investment  policy  framework,  notably  by  adopting  implementing 
regulations of the law on strategic investments and by reorganising the investment promotion 

ERP  policy  guidance:  ‘Fully  implement  the 
the  Energy  Community 
obligations  under 
Treaty 
full 
in  particular, 
including, 
unbundling  of  transmission  and  distribution 
activities  in  the  electricity  and  gas  sectors  in 
order  to  improve  energy  security  and  allow 
market entry of independent operators.’ 

inflows 

the 

3 OECD's Programme for International Student Assessment 

31 

 
                                                            
agency.  Public  investment  made  up  more  than  5  %  of  GDP  in  past  years,  but  was  often 
affected by ad hoc spending cuts.  

Albania's  transport  and  energy  infrastructure  is  still  not  sufficiently  developed.  Better 
connections  to  neighbouring  countries  and  the  EU  transport  network  would  reduce 
transportation  costs  and  facilitate  trade.  Investment  in  the  core  transport  network  has  been 
prioritised by the creation of a single sector project pipeline which includes national priority 
projects. However, Albania has not yet implemented the connectivity reform measures agreed 
under the Berlin process. 

Inadequate  electricity  supply  remained  a  key  structural  challenge  increasing  costs  to 
businesses.  Progress  was  made  on  electricity  sector  reform:  the  financial  viability  of 
state-owned utility companies was strengthened and infrastructure improved, particularly with 
the  completion  of  the  transmission  interconnection  between  Albania  and  Kosovo.  The 
construction  of  the  TAP  major  gas  pipeline  started.  There  are  plans  to  use  public-private 
partnerships  to  improve  infrastructure,  but  such  projects  will  need  to  be  transparent  and 
fiscally sound.  

The  digitalisation  of  the  economy  is  low  but  advancing.  Penetration  of  fixed  broadband 
internet is only 9 %, while mobile broadband reached 46 % of the population by end-2015. 
E-government is more advanced with a portal (e-Albania) offering the possibility for online 
applications  for  initial  business  registration,  submission  of  annual  financial  statements, 
consulting  of  business  records,  etc.  Online  banking  and  e-commerce  are  rising  and  have  a 
large potential for further expansion. 

Sectoral and enterprise structure 

The  Albanian  economy  is  dominated  by  services,  but  agriculture  still  retains  an 
important  role.  In  2015,  services  accounted  for  slightly  over  half  of  gross  value  added, 
followed by agriculture with a share of 22.1 %. Industry's share has gradually increased since 
2007,  to  14.6  %  of  the  economy,  mainly  as  a  result  of  rising  crude  oil  production.  The 
manufacturing  sector  is  relatively  small  (6.3  %  of  gross  value  added)  and  mainly  produces 
low value added and labour-intensive  products such  as textiles and footwear. Construction's 
share  of  the  economy  greatly  diminished  over  recent  years  as  private  credit  and  investment 
weakened but in 2015 it registered a first slight increase since 2007, rising to 10.8 %.  

The  sectoral  concentration  of  goods  exports  remained  high  in  2015,  with  78  %  of  the  total 
accounted for by a limited number of products: textiles and footwear (37 %); minerals, fuel 
and  electricity  (26.5  %);  and  construction  materials  and  metals  (14.5  %).  This  lack  of 
diversification  contributes  to  the  large  external  deficit  and  exposes  the  economy  to 
industry-specific shocks, as highlighted by the oil price fall’s impact on Albania's exports. 

SMEs play a significant role in the economy. They provide 80 % of employment and two-
thirds  of  value  added  in  the  non-agricultural  private  sector.  Micro-businesses  in  particular 
make up a high proportion of the number of companies and account for 43 % of jobs. Various 
state- and donor-funded schemes support SMEs' competitiveness but further steps need to be 
taken  to  strengthen  their  innovation  capacity  and  improve  their  access  to  finance,  such  as 
developing the venture capital market.  

Economic integration with the EU and price competitiveness 

The  EU  is  Albania's  dominant  trading  partner,  but  overall  trade  remains  below 
potential.  With  total  imports  and  exports  amounting  to  only  71.7  %  of  GDP,  Albania  has 
considerable scope for increasing trade. A better integration into global supply chains would 
help boost productivity and create more and better jobs.  

32 

 
The EU accounted for 75 %  of Albania's goods exports and 61.3 %  of its goods imports in 
2015.  Italy  is  the  main  destination  for  Albanian  exports,  absorbing  around  half  of  Albanian 
goods sold abroad and providing 30 % of its goods imports. 

Trade  links  with  Central  European  Free  Trade  Agreement  (CEFTA)  countries  are  also 
relatively significant, mainly on account of exchanges with Kosovo. Taken together, Albania's 
six CEFTA partners accounted for some 14 % of Albanian goods exports and 8 % of its goods 
imports in 2015. These shares are largely unchanged since 2008, pointing to a large untapped 
potential  for  future  growth  if  intra-regional  connectivity  improves.  The  existence  of  certain 
technical  barriers  to  trade  still 
inhibits further trade growth. 

Figure 5 Albania trade integration with the EU 
90,0

140

80,0

70,0

60,0

50,0

40,0

30,0

20,0

10,0

0,0

120

100

80

60

40

20

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Share of Imports from EU
Share of exports to EU
Trade with the EU (2008=100) (RHS)

the  main 
 The  EU  remains 
source  of  FDI  into  Albania 
with a share of around 65 % of 
the total FDI stock. 

the 
exchange 

In  terms  of  price  and  cost 
real 
competitiveness, 
effective 
rate 
appreciated by 3.7 % in the 12 
months  preceding  June,  while 
unit 
remained 
lower  than  in  most  regional 
peers. 

labour  costs 

4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

4.1.  Chapter 1: Free movement of goods 

The free movement of goods ensures that many products can be traded freely across the EU 
based on common rules and procedures. Where products are governed by national rules the 
principle of the free movement of goods prevents these creating unjustified barriers to trade. 

Albania has some level of preparation/is moderately prepared in the area of free movement 
of goods. There has been some progress over the past year, mainly in aligning with the New 
and  Global  Approach  acquis  and  increased  capacity  for  accreditation.  However,  further 
efforts are needed to ensure legislative alignment and strengthen the enforcement capacity of 
institutions  operating  in  this  area,  particularly  the  newly  established  Market  Surveillance 
Inspectorate. In the coming year, the country should in particular: 

→  align  its  legislation  with  the  horizontal  acquis,  notably  on  metrology,  standardisation, 
accreditation and market surveillance; 

→ ensure the Market Surveillance Inspectorate is made fully operational. 

General principles 

Regarding general principles, regulations are in place on the production, distribution and 
marketing of industrial products related to the price of products, import licences or permits 
for imported goods, and the obligation to have storage facilities in specific areas. The national 
legislation  does  not  prohibit  labelling  in  foreign  languages  but  requires  labelling  and 

33 

 
 
 
 
 
 
instructions of use for consumers to be in Albanian. Alignment with the acquis under chapter 
1  is  envisaged  in  the  2016-2020 national  plan  for  European  integration,  and  the  consumer 
protection  and  market  surveillance  strategy  2020  which  includes  quality  infrastructure. 
However, there is no specific strategy on the free movement of goods. 

Non-harmonised area 

An  action  plan  on  the  self-screening  of  national  technical  regulations  for  compliance  with 
articles  34-36  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)  is  under 
preparation.  The  General  Directorate  of  Standardisation  (GDS)  is  the  national  notification 
authority  and  enquiry  point  under  the  World  Trade  Organisation  Agreement  on  Technical 
Barriers  to  Trade  (WTO/TBT)  for  draft  standards,  draft  technical  regulations  and  draft 
conformity  assessment  procedures.  There  is  no  alert  system  for  notifications,  but  all 
WTO/TBT notifications are published on the GDS's website. 

Harmonised area: quality infrastructure 

The legal basis is partly aligned with the acquis and administrative structures are in place for 
technical  regulations,  standardisation,  conformity  assessment,  metrology,  accreditation  and 
market  surveillance.  The  relevant  structures  are  subordinate  bodies  under  the  ministry  in 
charge  of  trade  issues.  The  structure  of  the  Market  Surveillance  Inspectorate  has  been 
approved  by  the  government  in  May  2016  and  recruitment  has  been  launched.  Mutual 
cooperation  agreements  in  the  area  of  accreditation,  standardisation  and  conformity 
assessments are in place with countries in the region and other non-EU countries. 

On  standardisation,  the  GDS  is  a  full  member  of  the  European  Telecommunication 
Standards  Institute  (ETSI),  an  affiliate  member  of 
the  European  Committee  for 
Standardisation  (CEN)  and  the  European  Committee  for  Electrotechnical  Standardisation 
(CENELEC), and an associate member of the International Committee for Electro Technical 
Standardisation. National standards are regularly updated to align to European standards, but 
this is done mainly through the ‘cover page’ translation method where only the cover page is 
in the national language. The number of standards fully translated into Albanian remains low. 
In 2015, the GDS adopted 3 122 standards, of which 2 129 were European standards (CEN, 
CENELEC,  and  ETSI  standards)  and  498  international  standards  (290  standardisation 
documents  and  286  standards  amendments).  It  stepped  up  cooperation  with  international 
partners,  including  the  Czech  and  Kosovo  standardisation  structures.  However  its  capacity 
needs further reinforcement. 

The  2014  law  on  accreditation  of  conformity  assessment  bodies,  which  regulates  the 
functioning  of  the  General  Directorate  of  Accreditation  (GDA),  its  accreditation  board, 
technical committees and other procedural issues, is designed to be broadly aligned with the 
acquis. There are 46 accredited conformity assessment bodies: 29 laboratories, 11 inspection 
bodies,  and  6  conformity  assessment  bodies;  21  bodies  are  undergoing  accreditation.  The 
GDA is a full member of the European Cooperation for Accreditation, an associate member of 
the International Laboratory Accreditation Cooperation, an accreditation body member of the 
International Accreditation Forum, and a member of the Multilateral Agreement for Testing 
Laboratories  of  the  European  Cooperation  for  Accreditation.  There  is  an  official  metrology 
body,  the  General  Directorate  of  Metrology  (GDM).  Technical  regulations  on  measurement 
instruments  were  adopted  in  December,  aiming  at  further  alignment  with  the  Measuring 
Instruments Directive. Since September 2015 the GDM has carried out 4 101 inspections and 
issued 14 fines for infringements of legislation, though no fines have been collected yet. 

On  market  surveillance,  the  new  Market  Surveillance  Inspectorate,  in  charge  of  non-food 
industrial  products,  copyrights,  industrial  property  rights  and  tourism,  was  established  in 

34 

 
January and its operations launched in May 2016. Market surveillance structures that operate 
in line institutions are empowered by the legislation to take measures against non-conformity 
and risk products  in  a proportional manner starting  with  warnings, temporary  prohibition  to 
prohibition of the marketing and recall, and relevant penalties.  

Harmonised area: sectoral legislation 

In  terms  of  ‘New  and  Global  Approach’  product  legislation,  the  government  adopted 
several  technical  regulations  aiming  at  aligning  with  the  acquis  on:  efficiency  requirements 
for  hot  water  boilers  and  fluorescent  lighting;  simple  pressure  vessels;  personal  protective 
equipment; electrical equipment designed for use within certain voltage limits; equipment and 
protective system for use in potentially explosive environment; electromagnetic compliance; 
safety of lifts; machinery; noise emissions by outdoor equipment; measurement instruments; 
pressure equipment and assemblies; and gas equipment.  

The  national  legislation  on  pricing of  medical products  is not  fully aligned  with  the  acquis. 
On civil explosives, legislation aiming at alignment with the acquis is in place and economic 
operators are required to keep records. 

In  terms  of  ‘Old  Approach’  product  legislation,  the  law  on  chemical  management  was 
amended in March, with the objective to partly align it with the provisions of the Regulation 
concerning  the  Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals 
(REACH) and other related parts of the acquis. Albanian legislation foresees the registration 
of  non–EC  fertilisers  for  marketing,  six  such  fertilisers  are  registered  currently.  National 
legislation  on  chemical  classification,  labelling  and  packaging  is  not  yet  aligned  with  the 
United  Nations  Globally  Harmonised  System  of  Classification  and  Labelling  of  Chemicals, 
though  preparations  for  alignment  have  started.  On  drug  precursors,  a  national  list  of 
controlled substances is in compliance with the lists in the relevant EU acquis and legislation 
in place obliges all legal and physical persons to immediately report any suspicious condition. 
There is limited alignment in the area of procedural measures; technical regulations related 
to textile fibres and their labelling have been adopted. On 27 April the Council of Ministers 
adopted  the  national  action  plan  on  prevention  and  the  fight  against  trafficking  of  cultural 
objects but the relevant legislation remains to be aligned with the acquis. 

4.2.  Chapter 2: Freedom of movement for workers 

Citizens of one Member State have the right to work in  another Member  State and must be 
given the same working and social conditions as other workers. 

Albania  is  at  an  early  stage  in  freedom  of  movement  for  workers.  There  has  been  no 
progress in this area. In the coming year, Albania should: 

→ pursue the negotiation and implementation of new bilateral agreements on social security, 
notably with EU Member States. 

As  regards  access  to  the  labour  market,  the  law  on  foreigners  was  amended  in  August 
aiming to ensure equal treatment for EU workers in the national labour market. 

On  coordination  of  social  security  systems,  bilateral  agreements  on  social  security  with 
Belgium,  Romania,  Hungary,  the  former  Yugoslav  Republic  of  Macedonia,  Luxembourg, 
Czech Republic and Germany were ratified. Bilateral agreements with Austria and Canada are 
ready  to  be  signed,  while  preparations  are  ongoing  for  negotiations  with  other  countries 
including Croatia, Montenegro, Italy and Greece. 

35 

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

EU natural and legal persons have the right to establish themselves in any Member State and 
to provide cross-border services. For certain regulated professions, there are rules on mutual 
recognition of qualifications. Postal services are gradually being opened up to competition. 

Albania is moderately prepared in the area of right of establishment and freedom to provide 
services. There has been some progress over the last year on freedom to provide services. In 
the coming year, the country should in particular: 

→  continue  to  align  its  legislation  with  the  Services  Directive  and  the  Professional 
Qualifications Directive; 

→  strengthen  institutional  capacity  in  the  field  of  right  of  establishment  and  mutual 
recognition of professional qualifications. 

On freedom to provide cross-border services, a new general law on services was adopted in 
June. The law provides for a transitional period for completing screening of the existing sector 
legislation and establishing a fully functional single contact point. The National Registration 
Centre  and  the  National  Licensing  Centre  were  replaced  by  the  National  Business  Centre, 
which since April functions as a one-stop-shop for registering businesses and issuing licences, 
authorisations  and  permits.  Screening  of  the  sector  legislation  in  the  fields  of  tax,  social 
services and legal sectors for consistency with the Services Directive was finalised in January. 
An  action  plan  aimed  at  ensuring  full  compliance  in  all  subsectors  with  the  right  of 
establishment and freedom to provide services, and at strengthening related inter-institutional 
cooperation was adopted by the government. 

Most implementing legislation for the law on postal services was adopted. 

Regarding mutual  recognition of professional  qualifications,  the organisation of a special 
session of the state exam for the regulated profession of physicians was approved by order of 
the Minister of Education and Sports. A new law on crafts was tabled by the government in 
January  and  is  pending  enactment  by  parliament.  For  the  first  time,  the  law  provides  for  a 
model of the dual system of vocational education and training. 

4.4.  Chapter 4: Free movement of capital 

In  the  EU,  capital  and  investments  must  be  able  to  move  without  restriction  and  there  are 
common rules for cross-border payments. Banks and other economic operators apply certain 
rules to support the fight against money laundering and terrorist financing. 

Overall, Albania is moderately prepared in the area of free movement of capital. There was 
some progress in the area of payment systems through the amendment of regulations by the 
Bank of Albania. In the coming year, Albania should in particular: 

→ implement legislation effectively and strengthen its capacity to fight money laundering and 
counter financing of terrorism; 

→ implement the action plan on acquisition of property by foreigners. 

Regarding  capital  movements  and  payments,  a  working  plan  on  amending  legislation  on 
acquisition of property by foreigners has yet to be implemented. 

There was some progress in the area of payment systems. In November the Bank of Albania 
issued  a  regulation  on  licensing,  regulating  and  overseeing  private  operators  of  payment 
systems  and  clearing  houses  for  payments  with  the  aim  of  aligning  it  with  the  European 
Central  Bank  standards.  Some  amendments  to  the  regulation  on  licensing  of  activities  of 

36 

 
 
 
non-bank financial institutions operating in money transfer operations were adopted in March. 
Cooperation  between  the  Bank  of  Albania  and  the  Albania  Financial  Supervisory  Authority 
has  been  strengthened  regarding  oversight  of  security  settlement  systems  and  central 
counterparties. The National Payment System Committee held its first meeting in October and 
adopted its strategy and objectives. 

On the fight against money laundering, the  number  of  suspicious  transaction  reports  rose 
to 1 319 in 2015, an increase of 7 % from 2014. The number of convictions also rose in 2015, 
to  37 final  convictions, from 20 the year before. However, both  police and prosecution  still 
have  no  access  to  the  Financial  Intelligence  Unit  database.  The  General  Directorate  of  the 
Fight  Against  Money  Laundering  continued  to  conduct  on-site  inspections,  with  a  focus  on 
notary services which handle real-estate transactions. 

4.5.  Chapter 5: Public procurement 

EU  rules  ensure  that  the  public  procurement  of  goods,  services  and  works  in  any  Member 
State  is  transparent  and  open  to  all  EU  companies  on  the  basis  of  non-discrimination  and 
equal treatment. 

Albania has some level of preparation in public procurement. Efforts are needed to improve 
compliance  with  procedures  and  prevent  corruption  in  the  procurement  cycle.  No  progress 
was made in the past year with further aligning with the acquis, in particular on strengthening 
the public procurement review system. In the coming year, Albania should in particular: 

→  take  steps  to  align  the  public  procurement  review  system  with  the  standards  on 
independence set in the relevant acquis; 

→  take  measures  to  address  the  recommendations  of  recent  studies  in  order  to  strengthen 
compliance  with  procurement  rules  and  efficiency  of  procurement  procedures,  increase 
transparency and strengthen monitoring; 

→ further harmonise with EU public procurement rules, including in the area of concessions 
and defence procurement, and set up the concessions/public private partnerships registry. 

Institutional set-up and legal alignment 

The  legal  framework  on  public  procurement  is  largely  in  line  with  the  EU  directives  on 
classical  and  utilities  procurement,  and  relevant  administrative  and  budget  provisions.  Full 
harmonisation with the directives in the water, energy, transport and postal services sectors as 
well as in defence and security has yet to be achieved. 

The law on concessions and public private partnerships is partly aligned with the Directive on 
the  award  of  concession  contracts.  The  option  of  granting  10 %  bonuses  for  unsolicited 
proposals and the exemption of road infrastructure of national importance  from the scope of 
the  law  remain  to  be  aligned  with  the  acquis.  June  amendments  to  the  organic  budget  law 
enhanced  the  Ministry  of  Finance's  oversight  and  scrutiny  of  all  concessions  and  public 
private partnership (PPP) projects.  

Under  the  public  finance  management  strategy,  the  recommendations  of  studies  on  public 
investment  management  and  public  procurement  remain  to  be  addressed.  The  Public 
Procurement Agency (PPA) increased the number of posts to 29, of which 3 are vacant. The 
concessions treatment unit in the Ministry of Economy and Trade has 12 employees.  

37 

 
 
 
 
Implementation and enforcement capacity 

The size of the public procurement market in relation to GDP increased to 3.48 % in 2015 
from  3.2 %  in  2014.  The  planning  and  preparation  of  public  procurement  procedures 
generally respect transparency and efficiency principles and public procurement forecasts are 
published.  The  number of negotiated procedures without prior publication further increased 
during 2015 to 2 706, 67 % of which were carried out in the first quarter of the year. In terms 
of  volume  these  procedures  represented  11 %  of  the  total  budget  of  awarded  procedures. 
However, these also include extensions of existing contracts by up to 20 % value which will 
now  be  reported  separately.  Thirty-four  framework  agreement  notices  were  published  and 
139  contracts  signed  in  2015.  For  certain  types  of  procurement  a  centralised  procurement 
body  is  operational  in  the  Ministry  of  Interior.  The  e-procurement  system  is  mandatory, 
including for low-value procurement. A central public procurement portal is in place and all 
tender documents are available in e-form.  

Around 170 PPPs have been signed so far, constituting 6.1 % of GDP. Although required by 
law, value for money analysis has not been systematically carried out before approval of the 
PPPs.  There  is  no  regular  report  on  PPPs,  including  projected  receipts  and  payments  over 
contracts' lifetime. Overall, the technical skills and capacity to design and assess concession 
and PPP projects needs to be further improved. 

The  PPA  has  strengthened  its  monitoring  function  and  has  launched  the  preparation  of  a 
procurement  performance  and  compliance  monitoring  system  based  on  performance 
indicators. Further support to contracting authorities is needed, as well as the strengthening of 
the  e-procurement  system,  monitoring  of  contract  implementation  and  analysis  of  public 
procurement market trends. The PPP/concessions registry remains to be set up. 

The  contracting  authorities'  capacity  to  manage  public  procurement  procedures  needs  to 
be  improved  substantially.  Compliance  is  generally  weak,  especially  in  more  complex 
procedures. The State Audit Institution reported in 2015 a substantial number of violations. In 
2015, the PPA ran a 9-day training module for public procurement officers, but more training 
opportunities are needed, including training on the roles of evaluation commission members 
or  on  conflicts  of  interest  in  order  to  mitigate  risks  in  public  procurement.  The  State  Audit 
Institution  estimated  the  financial  loss  to  the  state  budget  from  irregularities  in  public 
procurement at EUR 18.8 million in 2015, representing 2 % of the total estimated economic 
damage, an almost threefold increase from EUR 4.8 million in 2014. 

Efficient remedies system 

The right to legal remedy is set out in the constitution and the public procurement law and is 
mostly in line with the Remedies Directive. Provisions including ineffectiveness of contracts, 
alternative punishments and ex ante voluntary transparency notice, are not yet covered. 

The  Public  Procurement  Commission  (PPC)  carries  out  administrative  reviews  of  public 
tenders  and  the  majority  of  PPC  decisions  are  corrective  and  can  be  challenged  in  the 
Administrative  Court.  PPC  has  5  members  and  16  professional  and  administrative  staff 
members.  The  recruitment  of  three  more  employees  has  been  approved.  The  institutional 
independence  of  the  PPC,  as  a  body  subordinated  to  the  government,  is  still  not  fully 
guaranteed in line with the acquis. 

In  2015,  the  PPC  handled  1 124  complaints,  up  from  834  in  2014  and  corresponding  to 
24.27 % of the public procurements published. Some 1 111 of the complaints were related to 
public  procurement,  10  to  auctions  and  3  to  concessions.  Some  564  complaints  were 
considered  unsubstantiated  and  560  accepted.  Majority  of  complaints  relate  to  small  value 
request for proposals type procedures and some 60 % of the cases relate to security services. 

38 

 
Some  49  PPC  decisions  were  challenged  in  the  Administrative  Court,  with  41  upheld. 
Processing of complaints within the legal time limit is a challenge. Setting up of an electronic 
database for PPC judgements would improve the transparency of the review system. 

Although  the  remedy  procedure  is  largely  in  place,  the  capacity  of  the  PPC  and  the 
Administrative Court to deal with the complex and increasing number of appeals has yet be 
substantially strengthened. Jointly organised specialised training courses on topics related to 
public procurement are recommended. 

4.6.  Chapter 6: Company law 

The  EU  has  common  rules  on  the  formation,  registration  and  disclosure  requirements  of  a 
company,  with  complementary  rules  for  accounting  and  financial  reporting,  and  statutory 
audit. 

Albania  is  moderately  prepared  in  the  field  of  company  law.  Some  progress  was  made 
through  measures  taken  to  strengthen  the  capacity  and  independence  of  the  Public  Audit 
Oversight Board, a key recommendation in the 2015 report, and also by establishing online 
business registration. In the coming year, the country should in particular: 

→ pursue work towards alignment with EU legislation on financial reporting and ensure full 
transparency of company financial statements in the business register. 

In  the  area  of  company  law,  the  law  on  the  National  Business  Centre  was  adopted  in 
November. The centre started operating in April, issuing licences, authorisations and permits 
as well as registering businesses in the commercial register, which was approved in October. 
The  register  is  recognised  as  a  state  database.  The  online  application  service  became 
operational in October and online registration is available through an electronic portal. 

On  corporate  accounting,  the  national  accounting  standards  for  NGOs  were  approved  in 
September  and  became  mandatory  in  January.  The  consolidated  version  of  the  international 
accounting  standards  2015  in  the  Albanian  language  was  published  online  in  April  on  the 
website  of  the  National  Accounting  Council.  Companies  must  file  a  single  set  of  financial 
statements  only  (i.e.  the  duly  approved  version)  in  the  national  business  register  but 
submission  of  financial  statements  to  entities  other  than  the  tax  administration  is  not 
regulated.  Public  access  to  companies’  financial  statements  has  improved  with  the 
establishment of the commercial register; however, the register is yet to be updated regularly. 

In  relation  to  statutory  audit,  in  April  the  parliament  adopted  amendments  to  the  statutory 
audit law aimed at strengthening the independence and capacity of the Public Audit Oversight 
Board. The amendments establish the board as  a permanent  structure  with  its own financial 
resources. 

4.7.  Chapter 7: Intellectual property law  

The EU has harmonised rules for the legal protection of intellectual property rights (IPRs), as 
well  as  rules  for  the  legal  protection  of  copyright  and  related  rights.  Rules  for  the  legal 
protection  of  IPRs  cover,  for  instance,  patents  and  trademarks,  designs,  biotechnological 
inventions and pharmaceuticals. Rules for the legal protection of copyright and related rights 
cover, for instance, books, films, computer programmes and broadcasting. 

Albania has some level of preparation regarding intellectual property rights. Some progress 
was made in the past year with the adoption of the new copyright law and the new intellectual 
property strategy, as well as the establishment of the Market Surveillance Inspectorate. In the 
coming year, Albania should in particular: 

39 

 
 
 
→ ensure effective implementation of the new copyright law; 

→ improve the functioning of collective management agencies and the payment of royalties 
to rights holders. 

In  the  area  of  copyright  and  neighbouring  rights,  in  May,  parliament  enacted  the  new 
copyright  law  with  the  aim  of  fully  aligning  the  law  with  seven  EU  directives  and  partly 
aligning it with two others.   

On industrial property rights, new amendments to the 2008 law on industrial property were 
prepared and are in the consultation phase. The 2016-2020 intellectual property rights strategy 
was adopted on 20 July. 

On  enforcement,  the  General  Directorate  of  Patents  and  Trademarks  signed  cooperation 
agreements  with  the  World  Intellectual  Property  Organisation,  the  European  Patent  Office, 
and  the  EU  Intellectual  Property  Office.  Its  cooperation  with  relevant  state  institutions  was 
strengthened,  while  its  administrative  capacity  was  increased  with  the  addition  of  24 
employees  and  six  experts.  As  a  result  of  the  General  Directorate's  awareness-raising 
activities,  since  September  2015  the  number  of  applications  to  register  trademarks  rose  by 
24.8 % compared to the same period in 2014-2015. The General Directorate participated in 24 
court  cases.  Criminal  proceedings  for  violation  of  industrial  property  rights  were  launched 
against 97 entities, 114 people were prosecuted and 23 offenders convicted. 

The newly established Market Surveillance Inspectorate is competent to inspect, control and 
enforce  copyright  and  related  rights.  Amendments  to  the  Criminal  Code  and  the  Code  of 
Criminal Procedure on IPR-related infringements are still pending. There is a pressing need to 
train judges in this area and clarify the competence of the courts in relation to IPR cases. The 
number of counterfeit products in the country remains high. 

4.8.  Chapter 8: Competition policy 

EU rules protect free competition. They include anti-trust rules against restrictive agreements 
between companies and abuse of dominant position. EU rules also prevent governments from 
granting State aid which distorts competition. 

Albania  has  some  level  of  preparation/  is  moderately  prepared  in  competition  policy. 
There was some progress on legislative alignment in all areas. However, significant efforts 
are needed to improve legislative alignment and enforcement in the area of State aid.  

In the coming year, the country should in particular: 

→  increase  the  operational  independence  of  the  State  Aid  Commission  and  strengthen  the 
capacity of the State Aid Unit; 

→ improve its enforcement record in the area of State aid control. 
Antitrust and merger 

The  legislative  framework  is  broadly  in  line  with  the  acquis  and  the  provisions  of  the 
Stabilisation  and  Association  Agreement.  The  law  on  protection  of  competition  is  largely 
aligned  with  Article  101  on  restrictive  agreements  and  Article  102  on  abuses  of  dominant 
position  of  the  TFEU.  It  also  provides  for  ex  ante  control  of  mergers,  in  line  with  the  EU 
Merger Regulation. Secondary legislation providing further substantive rules and guidance on 
how competition rules should be applied is broadly in line with the relevant EU regulations 
and Commission guidelines.  

As  regards  the  institutional  framework,  the  Albanian  Competition  Authority  (ACA)  is 
responsible  for  implementing  the  law  on  protection  of  competition.  Formally,  it  is  an 

40 

 
 
operationally independent authority reporting to parliament. Its chair and four board members 
are appointed by parliament. The ACA has adequate investigative powers, similar to those of 
the  European  Commission.  It  has  the  power  to  adopt  secondary  legislation.  The  ACA  can 
impose fines and remedies if competition rules are breached and may authorise mergers, with 
or without conditions, or prohibit them. It can conduct sector enquiries and issue on its own 
initiative  opinions  and  recommendations  on  draft  laws  that  may  affect  competition.  A 
leniency programme for companies providing information on cartel cases is in place. Parties 
may appeal ACA's decisions before the courts. 

Regarding  enforcement  capacity,  the  ACA  has  36  staff  members,  including  the  five 
commissioners.  This  is  adequate,  but  the  level  of  expertise  needs  strengthening.  On 
implementation, the number of ACA decisions slightly increased over 2013-2015, up to six 
decisions on prohibited agreements and three on abuses of dominance were adopted in 2015. 
Over  that  period,  effective  enforcement  remained  modest.  All  decisions  on  mergers  were 
positive.  The  ACA  took  only  four  decisions  imposing  fine  in  2013  and  2014,  and  none  in 
2015.  The  level  of  fines  is  low  (a  total  of  EUR  45  000  over  the  period  2013-2015).  The 
leniency programme, in force since 2009, has not yet been used. Delays in court procedures 
resulting from the limited number of specialised judges remain a concern. 

State aid 

The legislative framework is broadly in line with the acquis and with the provisions of the 
SAA. The law on state aid largely reflects articles 107 and 108 of the TFEU as regards the 
definition of compatible and incompatible state aid, as well as procedures. The law amended 
in March entered into force in April and was further aligned with the acquis, notably on aid to 
services of general economic interest,  de minimis aid and other categories of horizontal aid. 
Further alignment with the secondary EU legislation on State aid control is still needed. 

As regards the institutional framework, the State Aid Commission (SAC) is responsible for 
implementing the law on state aid. The State Aid Unit, under the internal market department 
of  the  Ministry  of  Economic  Development,  Trade,  Tourism  and  Entrepreneurship,  serves  as 
the technical secretariat to the SAC. The SAC is composed of four civil servants and chaired 
by  the  minister  in  charge  of  economic  issues  for  a  four-year  mandate.  The  SAC  cannot  be 
considered an operationally independent authority, as required by the SAA. 

The law on state aid provides that new aid measures must be notified to the SAC and found to 
be compatible before they can be put in place. The SAC can order the recovery of unlawfully 
granted, incompatible aid. Its decisions can be appealed in court. 

With only two experts in the State Aid Unit, the enforcement capacity of the SAC and the 
State  Aid  Unit  is  insufficient  and  needs  to  be  strengthened.  The  effectiveness  of  the 
implementation  of  the  law  on  state  aid  remains  to  be  demonstrated.  The  SAC  has  adopted 
few decisions: nine in 2015 (three of which were based on own initiative investigations), and 
seven in 2014 (two were own initiative). There have been no cases of negative or conditional 
decisions, or of decisions ordering recovery of unlawful aid.  Albania's inventory of existing 
aid  schemes  dates  back  to  2008.  Albania  states  that  all  schemes  in  the  inventory  have  been 
aligned  with  the  acquis.  The  training  plan  to  improve  awareness  of  State  aid  rules  at  local 
government  level  is  yet  to  become  operational.  Advocacy  must  be  stepped  up  to  ensure  ex 
ante notification of aid measures to the SAC. 

Liberalisation 

The  law  on  protection  of  competition  and  the  law  on  State  aid  are  applicable  to  public 
undertakings and undertakings with special or exclusive rights, except when their application 

41 

 
obstructs the performance of the particular tasks of services of general economic interest that 
are assigned to them. 

In 2015, the ACA conducted ex post assessments of special and exclusive rights, taking into 
account  the  protection  of  free  and  effective  competition  in  the  market.  As  a  result  of  the 
review  and  evaluation  of  all  concession  contracts,  the  ACA  reported  that  the  consultation 
procedure  before  granting  concessions  set  out  by  the  competition  law  was  generally  not 
respected.  In  October  2015,  the  ACA  issued  a  decision  stipulating  the  need  to  obtain  its 
preliminary  assessment  in  cases  of  granting  exclusive  or  special  rights  through  concession 
contracts.  As  regards  the  rules  on  financing  services  of  general  economic  interest,  their 
enforcement needs to be further demonstrated. 

4.9.  Chapter 9: Financial services 

EU  rules  aim  to  ensure  fair  competition  between  and  the  stability  of  financial  institutions, 
namely  banking,  insurance,  supplementary  pensions,  investment  services  and  securities 
markets.  They  include  rules  on  the  authorisation,  operation  and  supervision  of  these 
institutions. 

Albania is moderately prepared in the area of financial services. There was some progress 
in  this  field.  Regulations  related  to  credit  risk  management  and  amendments  to  capital 
adequacy  ratio  were  adopted;  the  Financial  Supervisory  Authority  board  structure  was 
completed. In the coming year, Albania should: 

→ step up preparations for implementing Basel III; 

→ make further progress with adopting and implementing the law on compulsory insurance in 
the transport sector. 

On banks and financial conglomerates, the capital adequacy ratio regulation was amended 
to  allow  for  the  extension,  until  the  end  of  2016,  of  the  macro-prudential  measures  for 
improving the lending climate. As part of the national action plan on non-performing loans, 
the  writing-off  procedures  and  the  regulatory  treatment  of  foreclosed  property  on  banks' 
balance sheets were amended. The level of non-performing loans remains high at above 20 % 
of total loans, while the implementation of a comprehensive action plan in the field advances. 
In  September, Albania was included in  the European  Banking  Authority's recommendations 
on equivalence of confidentiality regime. 

In  the  non-banking  sector,  the  Financial  Supervisory  Authority  (FSA)  board  decided  to 
increase the number of its employees from 59 to 97 by 2019. 

In  the  area  of  insurance  and  occupational  pensions,  the  FSA  adopted  regulations  on 
reinsurance activity and other relevant rules and procedures on management, monitoring and 
reporting  to  FSA.  It  adopted  the  code  of  ethics  of  actuaries.  The  privatisation  of  the 
state-owned insurance company INSIG was finalised. 

As  regards  financial  market  infrastructure,  there  was  no  progress  with  re-opening  the 
Tirana stock exchange. Legislation to ensure a functioning stock exchange is in place, but the 
accounting  legislation  is  not  yet  compliant  with  all  relevant  international  standards  (see 
chapter 6: Company law). 

On  securities  markets  and  investment  services,  amendments  to  the  law  on  collective 
investment undertakings were adopted. There is a lack of investment culture on securities and 
alternative investment products in Albania. 

42 

 
 
4.10.  Chapter 10: Information society and media 

The EU supports the good functioning of the internal market for electronic communications, 
electronic  commerce  and  audio-visual  services.  The  rules  protect  consumers  and  support 
universal availability of modern services. 

Albania is moderately prepared in the field of information society and audio-visual media. 
Some progress was made in the past year on creating an information society, while there was 
no  progress  in  audio-visual  policy.  The  capacity  of  the  Agency  for  Electronic  and  Postal 
Communications  (AKEP)  and  of  the  National  Agency  for  Information  Society  was  further 
improved and implementation of Albania's digital agenda and the national plan for broadband 
development  continued.  The  country  failed  to  implement  the  digital  switchover  and  legal 
guarantees  on  media  pluralism  ownership  regressed.  In  the  coming  year,  Albania  should  in 
particular: 

→ finalise the delayed digital broadcasting switchover process; 

→  subsequently  carry  out  the  authorisation  process  allowing  the  use  of  the  digital  dividend 
spectrum for broadband services; 

→ finalise and adopt RTSH'’s internal statute as a matter of urgency. 

On  electronic  communications  and  information  and  communications  technologies,  the 
regulator AKEP made further progress in implementing the frequency use plan, among other 
things  by  allocating  further  available  frequencies  on  the  bands  to  operators.  AKEP's 
administrative capacity has been increased through additional financial and human resources. 
Since February, the European emergency number 112 is operational in the area of Tirana and 
is  progressively  being  rolled  out  to  the  rest  of  the  country.  Concerns  over  the  financial  and 
institutional sustainability of 112 remain to be tackled.   

Mobile usage remains high with subscription penetration at 120 % at the end of 2015. The use 
of  fixed  telephony  services  continued  the  downward  trend  of  recent  years.  Access  to  fixed 
broadband services grew to 9 % of total coverage in the population. Significant reform efforts 
have  been  undertaken  to  implement  the  Directive  2014/61  on  measures  to  reduce  costs  for 
broadband deployment. 

In the area of the information society, implementation of Albania's 2015-2020 digital agenda 
and  the  national  plan  for  broadband  development  continued.  A  2015-2017  policy  paper  on 
cyber security was approved in December, aiming to complete the related legal framework. A 
new law on electronic identification and trust services was adopted in October. Amendments 
to  the  law  on  e-commerce  suggest  further  alignment  with  the  acquis.  The  number  of 
e-government  services  provided  through  the  e-Albania.al  portal  increased,  as  well  as  the 
number  of  users  and  electronic  payments  carried  out.  The  administrative  capacity  of  the 
National Agency for Information Society was strengthened with 20 employees. 

In  the  field  of  audio-visual  policy,  following  commercial  operators'  request  for  review,  the 
Constitutional Court abolished the ownership limitations in the audio-visual media regulation 
(see  also  section  2.4).  There  has  been  slow  progress  in  implementing  the  digital  switchover 
strategy.  An  administrative  court  ruled  that  the  Audio-visual  Media  Authority's  (AMA) 
granting  of  digital  licences  to  commercial  operators  was  illegal.  These  developments  raise 
doubts  over  media  pluralism  in  the  current  media  landscape.  AMA's  decision-making  has 
been  affected  by  a  lack  of  quorum  for  several  months  due  to  the  absence  of  its  opposition-
nominated members. AMA launched a public information campaign on the digital switchover 
process.  The  public  service  broadcaster  RTSH  has  made  progress  in  building  the  digital 
networks. The process needs to be sped up to ensure the hosting of RTSH programmes and 

43 

 
 
those  of  local  operators  on  these  networks.  The  RTSH  fee  collection  system  is  relatively 
stable, accounting for almost half of its budget. The new formula for electing the director of 
RTSH  provided  by  the  amended  law  caused  controversy  over  its  ability  to  guarantee  a 
politically  consensual  figure.  Substantial  efforts  are  needed  to  transform  the  RTSH  into  a 
sustainable, independent and accountable public broadcaster. RTSH should finalise and adopt 
its internal statute as a matter of urgency. 

4.11.  Chapter 11: Agriculture and rural development   

The  common  agricultural  policy  supports  farmers  and  rural  development.  This  requires 
strong management and control systems. There are also common EU rules for quality policy 
and organic farming. 

Preparations  are  at  an  early  stage  in  agriculture  and  rural  development.  There  was  good 
progress  in  strengthening  the  capacity  of  the  Agricultural  and  Rural  Development  Agency, 
National Authorising Officer Support Office and National Fund in preparation for entrusting 
them  with  budget  implementation  tasks  for  the  Instrument  for  Pre-accession  Assistance  for 
Rural Development (IPARD). The IPARD package for entrustment of budget implementation 
tasks was finalised and submitted to the EC on 20/09/2016 and is currently under assessment. 

In the coming year, Albania should in particular: 

→ start implementation of IPARD; 

→  intensify  the  efforts  to  set  up  an  operational  farm  register  and  consolidate  the  animal 
register (as integral parts of the future integrated administration and control system). 

As  regards  general  agricultural  issues,  the  government  has  increased  the  level  of  national 
direct  support  and  national  investment  schemes  in  agriculture  and  agro-processing,  totalling 
EUR 14.7 million in 2016.4 Agricultural statistics tasks have been transferred to the Ministry 
of Agriculture, Rural Development and Water Administration, but the results from the 2012 
agricultural census still have not been published.  Overall, administrative capacities need to be 
strengthened in the areas of: coordination of EU integration work in the sector, including both 
project  coordination  and  management,  and  legal  analysis  and  approximation  work;  policy 
analysis and overall economic analysis, monitoring and evaluation; and advisory services. 

In the area of common market organisation, the implementing legislation for the new law 
on olive oil has been adopted. Standards related to the marketing of agricultural products are 
under preparation. 

On rural development, the sectoral agreement on managing and implementing EU financial 
assistance  under  IPARD  was  ratified  in  March.  The  IPARD  II  Monitoring  Committee  was 
established  and  held  its  first  meeting  in  May.  The  capacity  for  decentralised  IPARD 
management  in  the  Agricultural  and  Rural  Development  Agency,  the  National  Authorising 
Officer  Support  Office  and  the  National  Fund  has  been  strengthened  in  line  with  the 
requirements for entrusting them with budget implementation tasks. The remaining vacancies 
in  the  IPARD  structures  are  expected  to  be  filled  in  due  course.  The  land  consolidation 
strategy has been adopted. The administrative capacity in the Ministry of Agriculture, Rural 
Development and Water Administration needs to be strengthened.  

Regarding  quality  policy,  the  Ministry  of  Agriculture,  Rural  Development  and  Water 
Administration  has  been  working  on  the  legislation  on  geographic  indicators  and  draft 
legislation on quality schemes for the amended law on industrial property rights. 

4 The coupling of the national schemes with the production does not comply yet with the principle of decoupled 
direct payments under the CAP. 

44 

 
 
                                                            
Concerning organic farming, the provision of subsidies through direct schemes and training 
on organic production continued. The law on organic farming was adopted in October 2016. 

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

EU  hygiene  rules  for  foodstuff  production  ensure  a  high  level  of  food  safety.  Animal  health 
and welfare and the safety of food of animal origin are safeguarded, together with the quality 
of  seeds,  plant  protection  equipment,  protection  against  harmful  organisms  and  animal 
nutrition. 

Albania  has  some  level  of  preparation  in  food  safety,  veterinary  and  phytosanitary  policy.  Some 
progress was made in the past year. In the coming year, Albania should in particular: 

→  train  staff  and  improve  coordination  among  relevant  institutions  with  a  view  to  strengthening 
capacity to align with EU legislation in this field; 

→ adopt the strategy for restructuring the sector; 

→  implement  food  safety  rules,  including  official  controls,  import  conditions  and  controls, 
requirements for traceability of food and feed, and maximum pesticide residue levels. 

On general food safety, the internal administrative rules of the National Food Authority were 
approved  by  the  management  board,  but  its  operational  procedures  have  not  yet  been 
endorsed.  A  risk-based  annual  inspection  plan  for  2016  was  approved  in  January.  The 
capacity to manage situations following Rapid Alert System for Food and Feed notifications 
has  been  established.  No  progress  was  made  on  risk  assessment.  The  Scientific  Committee 
and  Panels  have  not  convened,  due  also  to  budgetary  shortages.  Cooperation  with  other 
institutions involved in risk management remains weak. 

As  regards  veterinary  policy,  two  additional  mass  vaccinations  against  rabies  in  red  foxes 
and  vaccination  of  replacement  animals  against  brucellosis  in  small  ruminants  were  carried 
out with satisfactory results. Efforts have been made to reform the veterinary service in line 
with the new territorial-administrative organisation and to make it more effective. However, 
pace  of  reform  is  slow  with  and  the  service  remains  fragmented  and  understaffed.  Animal 
identification and registration has continued, but animal databases and disease reporting suffer 
from  insufficient  or  inaccurate  field  data.  Animal  waste  management  remains  a  critical 
problem due to the high risks of spreading diseases.   

With  regard  to  the  placing  on  the  market  of  food,  feed  and  animal  by-products,  the 
inspection  plan  for  2016,  based  also  on  information  generated  by  the  food  establishments 
database (AKUnet), was approved. Annual programmes for monitoring residues of undesired 
substances  such  as  veterinary  medicines,  biotoxins  and  heavy  metals  in  small  ruminants, 
swine, eggs, milk, honey and fish were approved. However, the capacity to monitor pesticide 
residues in products of plant origin is not yet established.   

Concerning  food  safety  rules,  work  has  started  on  transposing  the  EU  Regulation  on  the 
provision of food information to consumers by 2017. No improvements have been made to 
microbiological monitoring of raw milk, which is still not carried out in line with the required 
methodology. In 2015, the number of taken samples was much lower than in 2014. 

No steps have been taken to update and consolidate the legislation on specific rules for feed. 

On phytosanitary policy, a new law on plant protection has been adopted in October 2016. 
Staff dealing with phytosanitary issues is now under the Food Safety Directorate. 

There is no progress on preparing legislation on genetically modified organisms. 

45 

 
 
4.13.  Chapter 13: Fisheries 

The  common  fisheries  policy  lays  down  rules  for  management  of  fisheries,  protects  living 
resources  of  the  sea  and  limits  the  environmental  impact  of  fisheries.  This  includes  setting 
catch quotas, managing fleet capacity, rules for markets and aquaculture as well as support 
for fisheries and coastal communities. 

Preparations in this field are at an early stage. There was no progress in the past year. In the 
coming year, Albania should in particular: 

→ align legislation and procedures with EU rules on fisheries markets; implement the sector 
strategy; 

→ strengthen its institutional and administrative capacity to ensure appropriate management 
of fish resources and enforcement of regulations. 

Resource and fleet management continue to suffer from a lack of clearly defined tasks and 
responsibilities,  institutional  coordination  and  capacity.  The  vessel  register  is  not  updated 
regularly. Fish landing statistics remain inaccurate. The law on aquaculture has been adopted 
in October 2016. 

Inspection  and  control  capacity  is  insufficient.  The  Department  for  Fisheries  Services  and 
Aquaculture lacks sufficient  qualified staff to  control and eliminate illegal fishing  practices. 
The number of inspectors has dropped from 24 in 2013 to 18 in 2015. There have been some 
efforts with regard to inspections that are carried out in coordination with other bodies such as 
the  Coast  Guard  and  State  Police.  However,  such  joint  operations  take  place  on  an  ad  hoc 
basis through the Inter-Institutional Maritime Operational Centre rather than on the basis of a 
risk-based inspection strategy. No long-term solution has been provided to ensure continuous 
functioning  of  the  Vessel  Monitoring  System,  which  is  not  fully  operational  throughout  the 
year and cannot track all vessels. 

On  state  aid,  direct  government  support  for  aquaculture  continued  in  2016.  Subsidies  were 
provided of up to 25 % of operating expenditures (such as fingerlings and feed), up to 70 % of 
the interest rate or co-financing 50 % of the investment costs.  

As  regards  international  agreements,  Albania  has  initiated  procedures  for  signing  the 
agreement  on  port  state  measures  to  prevent,  deter  and  eliminate  illegal,  unreported  and 
unregulated fishing. 

4.14.  Chapter 14: Transport policy 

The EU has common rules for technical and safety standards, security, social standards, State 
aid  and  market  liberalisation  in  road  transport,  railways,  inland  waterways,  combined 
transport, aviation and maritime transport.  

Albania has some level of preparation in the area of transport policy. It has achieved good 
progress in the past year by adopting legislation, preparing strategic documents and building 
capacity.  However,  more  work  is  needed  to  strengthen  administrative  capacity  for  rail  and 
maritime  modes  of  transport.  In  addition  to  addressing  these  shortcomings,  in  the  coming 
year, Albania should continue to advance in particular: 

→ adoption of the new railway code and implementing legislation on railway sector reform; 

→ full preparation for the assessment on implementation of the European Common Aviation 
Area (first transitional phase).  

46 

 
 
 
As regards the general transport acquis, the national transport strategy for 2016-2020 and its 
action  plan  for  all  modes  were  prepared  but  remain  to  be  adopted.  The  strategy  includes  a 
‘sustainable transport plan for Albania’, which aims to improve energy saving in transport and 
ensure a sustainable transport network. The second review of the national transport plan will 
be initiated in 2017. Further approximation is required regarding the acquis on public services 
obligations, including public service contracts. Albania has not yet transposed the legislation 
on  summer-time  arrangements.  The  administrative  capacity  throughout  the  transport  sector 
needs to be improved, particularly for maritime and rail modes. The new railway code has not 
yet been adopted. Albania set up a National Investigation Body of Air Accidents/Incidents in 
2010.  Independent  railway  and  waterborne  accident  investigation  bodies  are  yet  to  be 
established.  The  resources  allocated  for  maintaining  the  road  and  railway  infrastructure  are 
insufficient, resulting in further deterioration of transport services. 

On  road  transport,  Albania  has  made  steady  progress  in  approximating  its  national 
legislation  with  the  acquis.  In  2015,  the  country  aligned  its  legislation  on  transport  of 
dangerous  goods,  licensing  for  road  hauliers  and  access  to  the  road  transport  market.  The 
General Directorate for Transport Services, tasked with implementing the law on dangerous 
goods,  needs  to  adopt  and  implement  rules  on  sanctions  and  strengthen  the  capacity  of 
inspection  officers  to  implement  the  law.  Greater  approximation  efforts  are  needed  on 
commercial vehicle inspections, traffic management systems and road safety. Albania has to 
pursue  its  efforts  to  align  with  the  safety  acquis  and  develop  enforcement  capacity.  The 
implementation  of  the  legislation  on  roadside  checks  of  commercial  vehicles  is  at  initial 
phase. The legislation on intelligent transport systems is partially aligned with the acquis.  

Regarding  rail  transport,  the  new  railway  code  aims  to  regulate  railway  transport  by 
separating train operations from infrastructure management, in line with the EU acquis. The 
railway  code  transposes  the  recast  Directive  on  a  Single  European  Railway  Area  and  EU 
safety and interoperability as of late 2015. As a result, the unbundling of train operations from 
infrastructure  management,  the  process  of  setting  up  an  independent  safety  authority  and  a 
regulatory authority have not started yet. The government let a concession on about 50 km of 
line  to  a  private  railway  undertaking,  which  includes  the  maintenance  and  renewal  of  the 
infrastructure and the capacity allocation to other railway undertakings.  

In  maritime  transport,  Albania  should  continue  its  efforts  to  follow up  on  its  membership 
application  to  the  Paris  Memorandum  of  Understanding  on  port  state  control.  Efforts  to 
improve  flag  state  control  of  vessels  under  Albanian  flag  and  port  state  control  need  to 
continue  in  order  to  further  reduce  the  detention  rate  of  Albanian  vessels.  Legislation  on  a 
Community vessel traffic monitoring and information system has not yet been transposed due 
to lack of funding. Albania has ratified the Maritime Labour Convention in 2015. Albania was 
one  of  the  first  States  to  ratify  the  2002  Protocol  to  the  Athens  Convention  relating  to  the 
Carriage of Passengers and their Luggage by Sea. Thus, the Protocol applies to Albania and 
all  carriage of passengers by sea from or  to  Albanian ports, as  well as  on Albanian-flagged 
vessels, since its entry into force in 2014, as it does in all of the EU Member States. 

There  are  no  developments  in  inland  waterway  transport.  This  transport  is  limited  to  two 
lakes which are shared with neighbouring countries and regulated by bilateral agreements. 

On  aviation,  given  the  progress  made  in  implementing  the  first  transitional  phase  of  the 
European  Common  Aviation  Area  Agreement,  Albania  should  be  prepared  for  the  final 
assessment  visit  following  completion  of  issues  in  economic  regulations  and  air  traffic 
management.  On  air  traffic  management,  Albania  has  completed  the  single  European  sky 
commitments for the first transitional period. It should now focus its efforts on phase II. 

47 

 
There is no national legislation on combined transport. The opportunities for developing it 
need to be further enhanced, including under the new national transport strategy. 

4.15.  Chapter 15: Energy 

EU  energy  policy  covers  competition  and  State  aid,  equal  access  to  resources,  the  internal 
energy market, energy efficiency, nuclear energy and nuclear safety and radiation protection. 

Albania is moderately prepared in this area. There was some progress in the gas sector and 
interconnection lines, but the country has made only marginal progress on the soft measures 
agreed for the Berlin process. Actions recommended in the previous report on the economic 
sustainability of the electricity  sector  and on implementation  of the power  sector  legislation 
remain outstanding. In addition, in the coming year, the country should in particular: 

→  adopt  the  national  energy  efficiency  action  plans  and  primary  and  secondary  legislation 
implementing the energy performance of buildings Directive; 

→ certify the unbundling of energy companies; 

→ establish a power exchange in 2017 and start coupling with neighbouring markets. 

On security of supply, Albania is at an early stage of preparation. It has not yet adopted its 
national energy strategy which should cover the development of the energy sector until 2030. 
Albania's  oil  stocks  legislation  from  2004  (amended  in  2007)  is  not  compliant  with  the  EU 
Directive on this issue but states that the number of days of oil stocks is 90 days  of average 
sales. There is no progress on establishing a central stockholding body. Albania's electricity 
system  is  interconnected  with  the neighbouring  systems  of  Greece  and  Montenegro  since 
2014, when the European Network of Transmission System Operators approved synchronous 
operation  of  the  Albanian  electricity  transmission system  with  the  continental  European 
system. The 400 kV interconnection line between Albania and Kosovo was finalised in June 
but is not yet used. This line is strategic for balancing the power market of the two countries 
and  reducing  hydrological  risk  in  Albania.  The  construction  of  the  400  kV  line  between 
Albania  and  the  former  Yugoslav  Republic  of  Macedonia  was  approved  in  June  by  the 
Council of Ministers but tendering procedure is still pending. The Vlora thermal power plant 
is still not operational. However, Albania has signed two memoranda of understanding with 
EON (Germany) and AXPO (Switzerland) for gas supplies. 

In  the  internal  energy  market,  Albania  has  adopted  framework  legislation  on  gas  and 
electricity  in  line  with  the  EU's  Third  Energy  Package.  However,  with  secondary 
implementing  legislation  not  in  place  and  the  unbundling  of  the  state-owned  transmission 
companies  not  yet  finalised  or  not  even  begun  for  distribution  companies,  compliance  with 
the  requirements  of  the  internal  energy  market  is  yet  to  be  ensured.  As  regards  gas,  the 
unbundling of Albpetrol is at an early stage. So far the company is still not compliant with the 
requirements even of the second internal energy market package, let alone the third.  

With  regard  to  the  distribution  system  operators,  unbundling  has  not  yet  begun.  Since  the 
entry  into  force  of  the  power  sector  law  in  April  2015,  the  Energy  Regulatory  Entity  has 
approved  several  licences.  Electricity  prices  are  still  regulated  but  should  be  gradually 
liberalised  once  the  primary  legislation  is  implemented.  The  freedom  for  all  customers  to 
switch  suppliers  is  stipulated  by  the  law  but  is  still  not  possible.  The  electricity  market 
remains  foreclosed  by  a  regulated  contract  between  the  state-owned  generation  and  supply 
companies  which  needs  to  be  phased-out  urgently.  The  new  Market  Model  adopted  by  the 
Cabinet of Ministers in July 2016 paves the way for the establishment of an organized market. 

48 

 
 
The  Energy  Regulatory  Entity  must  develop  into  an  independent  institution  with  sufficient 
capacity  and  expertise  for  the  many  challenges.  The  shortcomings  in  transposing  the  Third 
Energy Package with regard to the regulator's competences need to be addressed.  

On  hydrocarbons,  Albania  has  not  aligned  its  legislation  with  the  Hydrocarbons  Licensing 
Directive,  but  there  has  been  some  progress  with  secondary  legislation  transposing  certain 
provisions of this Directive. The Directive on Safety of Offshore Oil and Gas installations has 
not  been  transposed.  In  July  the  government  presented  the  "Gas  Master  Plan  for  Albania" 
which  assesses  the  needs  for  investments  for  developing  the  gas  distribution  network  until 
2040.The main gas interconnection line, the Trans-Adriatic pipeline (TAP) is progressing to 
schedule. Construction began after the TAP S.A. received certification in April 2016 on the 
basis  of  the  independent  transmission  operator  model,  part  of  the  EU's  Third  Energy 
Package. The construction of the Ionian Adriatic pipeline has not progressed. 

The  regulatory  framework  for  renewable  energy  is  still  at  an  early  stage.  In  January  the 
government endorsed its 2015-2020 national action plan for renewable energy sources (RES), 
which enabled the closure of the related infringement procedure under the Energy Community 
Treaty. By 2020, Albania aims to generate 38 % of overall consumption from RES. The draft 
law on renewable energy has not been adopted nor has a decision on support schemes, while 
provisions on the capacity of the grid in the draft law on renewable energy are still disputed 
between  the  various  interested  parties.  In  both  the  Ministry  and  the  Regulatory  Authority 
there  is  no  progress  with  increasing  capacity  to  manage  RES.  There  is  an  interest  in  the 
further  development  of  hydropower.  Such  development  should  be  in  conformity  with  the 
relevant EU legislation on environment and the assessment of potential new projects should 
take  into  account  the  impact  on  areas  of  high  nature  interest.  Support  schemes  are  applied 
only  to  hydropower  and  not  to  other  RES.  Implementation  of  sustainability  criteria  for 
biofuels and bio-liquids have been envisaged by a separated law, still to be finalised. 

The  national  energy  efficiency  action  plan  is  under  preparation,  supported  by  the  regional 
energy efficiency programme for the Western Balkans and in line with the Energy Efficiency 
Directive. The new energy efficiency law adopted in November 2015 is not fully in line with 
the  acquis  as  it  still  requires  implementing  regulations  and  the  establishment  of  associated 
bodies (Energy Efficiency Agency and the Energy Efficiency Fund). Until then the Ministry 
of Energy and Industry (Directorate for Renewable Energy Sources and Energy Efficiency) is 
the  key  body  in  charge of  energy  efficiency  matters but  its capacity  remains  insufficient.  A 
draft  law  aimed  at  alignment  with  the  Energy  Performance  of  Buildings  Directive  has  been 
prepared but is yet to be enacted. Given that the deadline for transposition expired in 2012, 
the  Energy  Community  Secretariat  has  referred  an  infringement  action  in  May  to  the 
Ministerial Council. Moreover, a case from 2013 based on the lack of adoption of the national 
energy efficiency action plan is still open. There is no progress in enhancing the capacity for 
energy efficiency and renewable energy development. 

There  has  been  no  progress  in  nuclear  energy,  nuclear  safety  and  radiation  protection. 
Albania has no nuclear power plant on its territory, nor is it planning one. There is a National 
Nuclear Agency with the mission of putting in place a system to calculate energy demand for 
the next 20-30 years. Albania has adopted some guidelines and orders on policy and strategic 
steps  for  safely  managing  radioactive  waste  and  has  ratified  a  number  of  international 
conventions.  It  is  not  a  member  of  European  Community  Urgent  Radiological  Information 
Exchange (ECURIE). Albania has partly aligned with the acquis on controlling radon and is 
preparing  to  set  up  a  national  plan  on  this.  The  task  of  Nuclear  Regulatory  Authority  in 
Albania is carried out by the Radiation Protection Commission, with the Radiation Protection 
Office (with 10 employees) as executive body. 

49 

 
4.16.  Chapter 16: Taxation 

EU rules on taxation cover value added tax and excise duties as well as aspects of corporate 
taxation.  They  also  deal  with  cooperation  between  tax  administrations,  including  the 
exchange of information to prevent tax evasion. 

Albania  is  moderately  prepared  in  the  area  of  taxation.  Some  progress  was  made,  in 
particular on legislative approximation with the acquis on value added tax (VAT) and excise. 
Revenue performance in 2015 exceeded targets, largely resulting from fighting the informal 
economy. In the coming year, the country should in particular: 

→  adopt  and  implement  an  updated  organisational  structure,  including  clearly  defined 
responsibilities within the tax administration and an independent appeal mechanism; 

→ implement the second phase of the action plan against the informal economy to promote 
voluntary tax compliance. 

On indirect taxation, amendments to the VAT law were adopted in October 2015 regarding 
exemptions for machinery and equipment directly linked to investment. The law still contains 
VAT exemptions (zero rates), which are not in line with the acquis. The refund of VAT now 
occurs  broadly  within  the  legal  deadlines  and  low-risk  VAT  refunds  are  processed 
automatically.  Excise  duties  for  some  domestic  beer  production  were  reduced,  and 
reimbursement  for  imported  biofuels  excise  introduced.  Further  steps  are  needed  to  align 
excise rates with the acquis. 

On  direct  taxation,  the  2016  budget  and  fiscal  package  reduced  the  tax  burden  on  small 
businesses.  

As regards administrative cooperation and mutual assistance, the General Directorate for 
Taxation (GDT) and that for Customs established a joint risk unit. The GDT receives support 
from  the  IMF  to  implement  the compliance  risk management  strategy,  and  from  the  United 
States  for  law  revisions  and  debt/VAT  collection.  Albania  participates  in  the  EU's  Fiscalis 
2020 programme. 

Concerning  operational  capacity  and  computerisation,  a  new  IT  risk  analysis  model 
became  operational  in  October  2015  which  helps  better  target  tax  audits.  The  new  M-TAX 
system allows tax inspectors to access and record information in real time. The first phase of 
the  fight  against  informality,  completed  in  March,  resulted  in  the  registration  of  more  than 
30 000  business  and  70 000  employees.  Some  116  cases  of  tax  fraud  and  tax  evasion  were 
reported  to  the  prosecution  between  September  2015  and  July  2016.  Revenue  collection 
surpassed the 2015 targets, and increased further in the first half of 2016. 

4.17.  Chapter 17: Economic and monetary policy 

EU rules require the independence of central banks and prohibit them from directly financing 
the public sector. Member States coordinate their economic policies and are subject to fiscal, 
economic and financial surveillance. 

Albania  is  moderately  prepared  in  the  area  of  economic  and  monetary  policy.  Some 
progress was made in particular by introducing a basic fiscal rule and strengthening medium-
term  budget  planning.  In  the  coming  year,  Albania  should  make  further  efforts  to  improve 
economic policymaking, in particular by: 

→  implementing  the  amended  organic  budget  law's  new  provisions  on  debt  reduction,  the 
oversight of public-private partnerships and election-year budget execution; 

50 

 
 
 
→  ensuring  better  internal  coordination  and  consultation  with  external  stakeholders  when 
formulating structural reform priorities. 

On monetary policy, the law on the Bank of Albania is yet to be aligned with the acquis, in 
particular  on  the  independence  of  the  Supervisory  Council’s  members  and  the  bank's 
accountability.  

On  economic  policy,  further  alignment  with  the  Directive  on  Requirements  for  Budgetary 
Frameworks  is  needed.  Albania  continued  to  partly  implement  the  European  System  of 
Accounts 2010 standards (ESA 2010) in annual GDP data; however, significant further efforts 
are needed to align fiscal statistics with ESA requirements. Revenue forecasts turned out to be 
overoptimistic  for  2015  but  strengthened  bottom-up  revenue  planning  contributed  to  tax 
receipts  meeting  the  target  in  the  first  seven  months  of  2016.  Amendments  to  the  organic 
budget law were adopted in June, aimed at eliminating the optimism bias in macroeconomic 
forecasts, strengthening the medium-term budget planning and introducing a basic fiscal rule 
which relies on a long-term debt target. However, this rule lacks a correction mechanism and 
a target deadline, as well as an independent body monitoring compliance. 

Economic  policy  formulation  needs  to  be  improved  through  better  inter-institutional 
coordination  and  consultation  with  stakeholders  as  well  as  greater  technical  and  analytical 
capacity  for  better  identifying  policy  reforms.  The  2016-2018  economic  reform  programme 
was  submitted  on  time.  It  included  a  detailed  and  consistent  macroeconomic  and  fiscal 
framework and identified appropriate reform measures to boost competitiveness and inclusive 
growth. However, the policy guidance adopted in May 2015 was only partially implemented 
until mid-2016.  

4.18.  Chapter 18: Statistics 

EU  rules  require  that  Member  States  are  able  to  produce  statistics  based  on  professional 
independence,  impartiality,  reliability,  transparency,  and  confidentiality.  Common  rules  are 
provided for the methodology, production and dissemination of statistical information.  

Albania has some level of preparation/is moderately prepared in statistics. Some progress 
was  made  in  applying  ESA  2010  and  producing  business  statistics,  but  further  efforts  are 
needed  to  improve  the  quality  of  data  and  ensure  the  alignment  of  agriculture,  tourism, 
transport  and  social  statistics.  In  addition  to  addressing  the  shortcomings  outlined  above,  in 
the coming year Albania should in particular: 

→ strengthen the position of INSTAT in the public administration through adjustments in the 
salary structures and civil servants job positions;  

→ improve the professional independence of INSTAT through changes in the statistical law, 
among  others,  guaranteeing  the  professional  independence  of  INSTAT  in  recruitment  and 
staffing. 

Regarding  statistical  infrastructure,  the  legal  framework  is  in  parts  in  line  with  the 
European statistics Code of Practice and classifications are in line with EU standards. The law 
on  official  statistics  needs  to  be  revised  regarding  the  recruitment  procedure  for  INSTAT 
Director  General,  defined  in  the  civil  servants  law  as  a  member  of  high-level  corps of  civil 
servants.  The  2017–21  statistical  programme  is  under  preparation  and  is  yet  to  be 
accompanied by a detailed action plan, detailing the human and financial resources needed for 
its  implementation.  A  memorandum  of  understanding  was  signed  with  the  Ministry  of 
Agriculture,  Rural  Development  and  Water  Administration,  while  the  one  with  the  General 
Taxation Directory was updated. INSTAT's coordinating role in the national statistical system 
needs  to  be  improved  and  strengthened.  INSTAT  needs  to  conclude  agreements  with  data 

51 

 
 
custodians  on  the  procedures  for  access  to  administrative  data,  and  influence  the  future 
development of administrative registers to facilitate statistical use. INSTAT has improved the 
range and the quality of the statistics it publishes.  

In  macro-economic  statistics,  the  annual  and  quarterly  GDP  data  are  regularly  produced 
based  on  the  production  and  expenditure  approach,  in  current  and  constant  prices.  The 
European  System  of  Accounts  (ESA)  2010  is  partially  implemented.  In  December  2015, 
INSTAT published for the first time GDP data based on the new Nomenclature of Economic 
Activities (NACE Rev. 2). In February 2016, INSTAT released supply/use tables in current 
prices  and  derived  input  and  output  tables  for  2012,  according  to  NACE  Rev.  2  and  the 
Nomenclature of Products by Activity (CPA 2008) and work is ongoing on 2013 data.  

As  regards  structural  business  statistics,  data  collection  and  production  has  improved.  In 
2015, INSTAT carried out for the first time a regular survey on innovation and another one on 
information  and  communication  technologies  in  enterprises.  In  the  field  of  trade  statistics, 
INSTAT investigated for the first time the economic characteristics of traders (TEC) in 2015. 
In price statistics, a revised basket for the consumer price index has been introduced. INSTAT 
has started to calculate a Harmonised Index of Consumer Prices, but is not fully in line with 
EU  standards.  In  the  field  of  short-term  statistics,  building  permits  and  construction  cost 
indices are published. Transport statistics are collected as part of the short-term and business 
surveys,  but  these  contain  only  partial  data  and  are  not  transmitted  to  Eurostat.  There  is  no 
survey on domestic tourism and efforts are needed to improve the business register. 

Social statistics are produced in general. A pilot survey on income and living conditions (600 
households with a 95 % response rate) was conducted in 2015 and a regular annual survey is 
being  prepared  to  be  launched  in  2016,  based  on  a  sample  of  9  200  households.  The 
household  budget  survey  is  conducted  as  annual  survey  since  2014  and  first  results  were 
disseminated in September 2015. In 2015, the sample size for the labour force survey (LFS) 
was increased from 5 000 to 9 000 in order to produce representative regional data and a new 
way of conducting interviews with tablets was introduced to allow for quicker monitoring and 
feedback to the interviewers. Micro data related to the LFS shall be sent to Eurostat. The Tax 
Authority  has  provided  a  database  with  information  for  all  employed  persons  in  Albania, 
including salary data to INSTAT. This improves the coverage of administrative labour market 
statistics, which hitherto covered only the public sector. The results of the 2012 labour cost 
survey were published and data transmitted to Eurostat, micro-data included. INSTAT is yet 
to  develop  a  labour  cost  index.  Further  efforts  will  be  needed  to  produce  health,  education, 
crime and migration statistics in line with the acquis. 

Agricultural statistics are partially aligned with the EU acquis. Milk and dairy statistics are 
being collected by INSTAT based on monthly and annual surveys, in line with EU standards 
and final data of agricultural census conducted in October 2012 have not been published yet. 
The Farm Structure Survey has not been implemented. 

Environment and energy statistics are in line with the EU acquis to a very limited extent. 
Energy  balances  improved.  Short-term  statistics  are  produced  as  volume  data  for  electricity 
only.  Data  on  air  emissions  are  produced,  but  only  partially  in  line  with  the  EU  standards. 
Environment-related tax data by economic activity are partially in line with the EU standards 
and being developed in the framework of the environmental accounts. Data on environmental 
expenditure is not yet being produced due to lack of information.  

52 

 
4.19.  Chapter 19: Social policy and employment 

EU rules in the social field include minimum standards for labour law, equality,  health and 
safety at work and non-discrimination policy. They also promote social dialogue at European 
level. 

Albania has some level of preparation in social policy and employment. Some progress was 
made,  notably  through  the  adoption  of  amendments  to  the  labour  code  and  the  law  on 
economic aid, the social protection strategy and the 2016-2020 occupational, safety and health 
policy document and  its action  plan.  Implementation  of the national jobs and skills strategy 
has  started.  The  employment  rate  and  labour  market  participation  remain  low,  and  the 
informal economy is still a significant job provider. In the coming year, the country should in 
particular: 

→ effectively implement the 2015-2020 social protection strategy, including through further 
progress in the social care reform; 

→ develop a strategic approach to tackle informality and undeclared work; 

→ improve labour market statistics and develop social statistics in line with EU surveys. 

On labour law, the amended Labour Code entered into force in June. The new law aims to 
transpose various EU directives covering non-discrimination at work, parental rights, right to 
information,  employer-employee  relations  and  teleworking.  It  also  increases  the  minimum 
working  age  from  14  to  15,  in  line  with  International  Labour  Organisation  conventions. 
However,  the  provision  on  forced  labour  remains  vague  and  the  law  does  not  provide  for 
sanctions in case of breaches. In June, the crafts law was enacted by parliament. 

As regards health and safety at work, the 2016-2020 occupational, safety and health policy 
document  and  its  action  plan  were  adopted.  Nineteen  directives  on  occupational  safety  and 
health  were  transposed,  but  their  implementation  faces  some  constraints  in  terms  of  labour 
inspectorate capacity and performance. Reported accidents increased from 121 in 2014 to 125 
in 2015 but fatalities decreased from 33 to 28. The majority of reported accidents occurred in 
the mines and quarries sector (33). Statistical data on health and safety needs to be improved 
both in quality data collection. 

Regarding  social  dialogue,  the  National  Labour  Council  continues  to  meet  regularly. 
However, significant efforts are needed to transform it into an effective social dialogue forum, 
improve collective bargaining and intensify bipartite social dialogue, in particular at local and 
enterprise level. 

On employment policy, implementation of the 2014-2020 national jobs and skills strategy is 
ongoing,  and  a  mechanism  for  its  monitoring  is  in  place.  A  first  annual  report  was  issued, 
according  to  which  most  progress  was  achieved  in  the  area  of  employment  policies  and 
services,  whereas  the  progress  was  limited  in  the  area  of  social  inclusion  and  territorial 
cohesion, as well as regards the governance system of the labour market. The unemployment 
rate estimated by the labour force survey decreased slightly from 17.5 % in 2014 to 17.1 % in 
2015  but  remains  high,  particularly  among  women,  young  people  and  persons  with 
disabilities. Unemployment rates for men fell from 19.2 % in 2014 to 17.1 % in 2015, while 
the  female  unemployment  rate  increased  from  15.2 %  to  17.1 %.  Long-term  unemployment 
increased  slightly,  from  11.2 %  in  2014  to  11.3 %  in  2015  with  a  decrease  among  men 
(11.7 %  in  2014  to  11.2 %  in  2015),  and  an  increase  for  women  (from  10.7 %  to  11.3 %). 
Labour statistics are broadly in line the acquis but need to be further improved. Agriculture, 
forestry and fisheries remain the main job providers, with 41.3 % in 2015 (against 42.7 % in 
2014). A strategic approach needs to be developed to tackle labour market challenges such as 

53 

 
 
youth  unemployment  and  informality.  The  law  on  employment  promotion  programmes  was 
finalised, but remains to be adopted by the Council of Ministers. 

There were no developments on the European Social Fund. 

As  regards  social  inclusion  and  protection,  the  new  national  strategy  on  social  protection 
and a 2015-2020 policy document on social inclusion were adopted. Both policy documents 
define  policy  objectives  for  reducing  poverty,  monitoring  cross-sector  inclusion  policies, 
enacting  reforms  in  the  area  of  non-discrimination  and  establishing  a  social  care  system.  In 
May, parliament enacted the new law on economic aid. This provides for a new country-wide 
electronic  register  of  all  families  in  the  economic  aid  programme,  a  bonus  for  all 
school-attending children vaccinated and those attending school in the programme and the full 
amount of the economic aid. Most social care services remain donor-driven and lack adequate 
budgets. Employment rates for Roma and Egyptians are very low, and with many being active 
in the informal sector. The 2016-2025 National Housing Strategy was adopted. Child labour 
remains a major concern, including in hazardous environments. More effective measures need 
to be undertaken in order to prevent child labour. 

On non-discrimination in employment and social policy, the number of cases handled by 
the  Commissioner  for  Protection  against  Discrimination  related  to  employment  increased; 
however, more outreach and a more proactive approach are required.  The Labour Code was 
amended  in  December  to  introduce  prohibition  of  discrimination  on  ground  of  gender  and 
sexual orientation in the workplace and to reverse the burden of proof to the employer. 

As  regards  equality  between  women  and  men  in  employment  and  social  policy,  in 
December the parliament enacted amendments to the Labour Code, introducing regulation on 
annual  leave,  parental  leave,  unpaid  leave,  right  to  work  part  time,  and  the  right  to  have 
reduced  working  hours  after  the  birth  of  a  child.  The  increase  in  both  unemployment  and 
long-term unemployment rates for women in 2015 show no progress was made in improving 
their  representation  in  the  labour  market  and  reducing  the  gender  gap  in  employment; 
significant efforts are needed in this respect. The 2015 World Economic Forum Gender Gap 
Index  report  ranked  Albania  70th  out  of  145  countries.  Albania  was  ranked  fifth  on  wage 
equality  for  similar  work,  but  69th  for  women's  economic  participation.  Women  are 
overrepresented as contributing family earners and the agricultural sector employs more than 
54 %  of  all  active  women.  As  a  result,  women's  dependency  on  men  who  are  regarded  as 
‘heads of the household’ is perpetuated, and the proportion of women in rural areas benefiting 
from paid maternity leave, at 19 %, is significantly lower than the 59 % rate for those in urban 
areas. Since 2015, legislation grants maternity leave for women and paternity leave for men, 
although  gender-based  stereotypical  preconceptions  persist  about  childcare  and  household 
work  being  a  woman's  responsibility.  The  absence  of  state  services  for  child  care  in  rural 
areas increases women's unpaid household work. 

4.20.  Chapter 20: Enterprise and industrial policy 

industrial  policy  strengthens  competitiveness, 

EU 
facilitates  structural  change  and 
encourages  an  enterprise-friendly  environment  that  encourages  small  and  medium-sized 
enterprises. 

Albania  is  moderately  prepared  in  this  area.  Some  progress  was  made,  particularly  by 
establishing a National Business Centre and aligning policies with the EU Small Business Act 
principles. In the coming year, the country should in particular: 

→  further  strengthen  the  capacity  of  the  Albanian  Investment  Development  Agency  in 
providing  services to  investors  and promoting  funding  opportunities  for  small  and  medium-
sized enterprises, including the COSME programme; 

54 

 
 
→ further improve policy consultation with businesses. 

In the area of enterprise and industrial policy principles, Albania continued to implement 
the  2014-2020  business  and  investment  development  strategy  in  order  to  facilitate  the 
business  environment.  According  to  the  2016 Small  Business  Act  policy  findings,  since 
2012 Albania  has  made  progress  on  several  parameters,  such  as  standardisation,  technical 
regulation  and  simplifying  business  procedures.  The  National  Business  Centre  became 
operational in April 2016, providing a single business registration and licensing window and 
offering  online  registration  services.  Challenges  ahead  include  entrepreneurial  learning  and 
women’s  entrepreneurship,  innovation  and  the  greening  of  small  and  medium-sized 
enterprises  (SMEs).  Business  continues  to  face  difficulties  due  to  court  delays,  frequent 
changes  of  tax  legislation,  cumbersome  market  exit  procedures,  informality  and  corruption. 
The  regulatory  impact  assessment  procedures  are  yet  to  be  formalised.  Amendments  to  the 
laws on chambers of commerce and industry have been submitted to parliament for adoption. 
They  provide,  among  other  things,  for  reintroducing  mandatory  membership  fees.  This  has 
generated complaints by business associations.   

Access  to  finance  remains  a  key  constraint  for  Albanian  SMEs,  while  some  funding  was 
provided by several national funds, the Italian Cooperation SME credit line programme and 
the European Fund for Southeast Europe. A fund for supporting micro and small enterprises 
that  operate  in  the  touristic/historical  areas  was  established  in  June.  No  financing  was 
provided  through  the  government's  innovation  and  women  entrepreneurs  funds.  Concerning 
EU initiatives to support SMEs, efforts to promote the COSME competitiveness programme 
have  started  but  further  substantial  measures  are  needed  to  raise  awareness  among  business 
stakeholders  about  the  funding  opportunities  available.  Albania's  participation  in  the 
European  Development  and  Innovation  Fund  remains  on  hold  pending  the  signature  of  the 
implementation agreement. 

On  sectoral  policies,  the  regulation  on  the  organisation  and  functioning  of  the  National 
Tourism  Agency  was  amended  in  April  to  task  it  with  implementing  the  National  tourism 
strategy, including promotion and marketing. However, neither the tourism strategy, nor the 
one  on  industrial  products  and  non-food  industry  has  been  adopted  yet.  Uncertainties  over 
property ownership, lack of formalisation and standardisation in services and poor access to 
basic  infrastructure,  energy  and  waste  management  remain  among  the  main  obstacles  to 
investment  and  economic 
tourism  development.  Secondary 
development  zones  was  adopted  in  December,  identifying  priority  sectors  of  investment, 
projects  of  strategic  potential  and  strategic  investment  evaluation  procedures.  Two  strategic 
investments were approved in July while, no economic zone is operational yet. In the area of 
mining an action plan 2016-2018 on development of mining activity as well as regulations on 
safety protection and issuing of permits were adopted. 

legislation  on  strategic 

4.21.  Chapter 21: Trans-European networks 

The EU promotes trans-European networks in the areas of transport, telecommunications and 
energy to strengthen the internal market and contribute to growth and employment. 

Albania  has  achieved  some  level  of  preparation  in  the  area  of  trans-European  networks. 
Some progress was made also in this reporting period in developing road infrastructure and 
interconnecting energy networks. In the coming year, Albania should in particular: 

→ pursue the development of the transport and energy networks in line with the infrastructure 
investment priorities for the core network, agreed under the regional connectivity agenda; 

55 

 
 
→ step up efforts to implement connectivity reform measures agreed at the Vienna Summit in 
2015, especially on transport infrastructure maintenance and road safety. 

On transport networks, Albania continued to participate actively in the South East Europe 
Transport  Observatory  and  the  Western  Balkans  6  process  focusing  on  improving 
connectivity  within  the  Western  Balkans  as  well  as  with  the  EU.  Transport  and  energy 
connectivity  projects  have  been  planned  and  prepared  through  the  single  priority  project 
pipeline established for the country. 

Road network improvement continued with the completion of the Rrogozhine bypass and of 
the last remaining section of the Levan-Tepelena road. Work on constructing the Fier bypass 
on the North-South corridor and the Tirana-Elbasan on the road corridor VIII is delayed. 

Work  activities  under  the  5-year  road  maintenance  programme  started  in  September  2015; 
further financial resources should be allocated for its implementation. There was no progress 
on  the  railway  network  and  the  section  from  Librazhd  to  Pogradec  remains  closed  due  to 
maintenance  issues.  There  is  no 5-year  plan  for  railway  maintenance.  As  regards  port 
infrastructure, works to improve the infrastructure in the port of Vlora are progressing. 

Concerning energy networks, the Albanian segment of the 400 kV interconnection line with 
Kosovo is under construction. The TAP is progressing as scheduled. A tender was issued for 
construction of the interconnection line with the former Yugoslav Republic of Macedonia. 

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

Regional  policy  is  the  EU’s  main  investment  policy  for  achieving  sustainable  and  inclusive 
economic  growth.  Member  States  bear  responsibility  for  its  implementation,  which  requires 
adequate  administrative  capacity  and  sound  financial  management  of  project  design  and 
execution. 

Albania  is  still  moderately  prepared  in  the  area  of  regional  policy.  Some  progress  was 
made with the completion of the entrustment process for the 2014 IPA national programme, 
although  preparations  for  indirect  management  under  this  programme  started  late.  In  the 
coming year, the country should in particular: 

→  strengthen  administrative  capacity,  especially  the  National  Authorising  Officer's  Support 
Office and the Audit Authority;  

→ accelerate the preparation of project documentation to avoid delays in the use of EU funds, 
as observed in the IPA 2014 programme; 

→ increase programming capacity in line with the sectoral approach and sectoral policies, and 
improve the design of mature sector project pipelines. 

On  the  legislative  framework,  further  efforts  are  needed  to  ensure  multiannual  sector 
programming in line with the sectoral approach under the IPA framework for 2014-2020 and 
the national medium term budget plan. The efforts needed include putting in place appropriate 
co-financing capacity for EU projects at national and local level. 

On  the  institutional  framework,  the  European  Commission  agreed  to  the  entrustment  of 
budget implementation tasks for the 2014 annual action programme under IPA II, subject to a 
number  of  conditions.  In  December,  the  Albanian  authorities  submitted  the  package  for  the 
2015 entrustment exercise, and in June the entrustment package for the management of IPA 
funds in agriculture and rural development (see also chapter 11 — Agriculture). 

Further action  is  needed  to  strengthen  the  administrative  capacity  of  the  Central  Financial 
and Contracting  Unit and the Audit  Authority  and in  particular  the capacity  of the National 

56 

 
 
Authorising Officer's Support Office to fully assume its supervisory functions in the indirect 
management system. 

On programming, coordination between the Ministry of European Integration, the Ministry 
of Finance, the Prime Minister's Office and line ministries needs to be improved to develop 
and implement realistic and budgeted sectoral development policies and programmes in line 
with  the  medium-term  budget  plan.  The  2015-2020  national  strategy  for  development  and 
integration  remains  to  be  adopted.  The  national  project  pipeline  of  investments,  including 
those for regional development, is yet to be fully aligned with the medium-term budget plan 
and the nationwide public investment planning and management. 

On monitoring and evaluation, three of the four pilot integrated policy management groups 
set  up  to  support  the  government's  Strategic  Planning  Committee  and  other  high-level 
inter-ministerial  committees  in  charge  of  key  policy  decisions  are  fully  functional.  The 
integrated  policy  management  group  on  competitiveness  is  not  yet  fully  functional.  The 
administrative capacity of the integrated policy management group secretariats, including in 
terms  of  monitoring,  needs  to  be  built  up  and  staff  continuity  ensured.  The  number  of 
integrated policy management groups should be expanded in 2016 and new sectors identified. 
The involvement of development partners, local governments and civil society organisations 
in sectoral dialogue should be improved. 

In  financial  management,  control  and  audit,  both  the  Central  Financial  and  Contracting 
Unit  in  the  Ministry  of  Finance  and  the  Audit  Authority  underwent  a  change  at  the  top 
management  level,  with  new  heads  being  nominated.  The  Audit  Authority's  financial  and 
administrative autonomy is still not guaranteed. 

4.23.  Chapter 23: Judiciary and fundamental rights 

The  EU’s  founding  values  include  the  rule  of  law  and  respect  for  human  rights.  A  proper 
functioning  judicial  system  and  an  effective  fight  against  corruption  are  of  paramount 
importance, as is the respect for fundamental rights in law and in practice. 

Albania  has  some  level  of  preparation  in  this  area.  Some  progress  was  achieved. 
Constitutional amendments adopted in July launched a comprehensive justice reform process. 
This tackles existing shortcomings in the sector, including weaknesses linked to independence 
and  accountability  of  judges  and  prosecutors,  lack  of  efficiency  and  professionalism. 
Corruption remains prevalent in many areas and continues to be a serious problem. As regards 
enforcement  of  human  rights,  additional  efforts  are  needed  in  relation  to  gender  equality, 
protection of children and other  vulnerable groups, and property rights. In  the coming  year, 
Albania should in particular: 

→  advance  implementation  of  justice  reform  including  the  re-evaluation  of  all  judges, 
prosecutors and legal advisers; 

→ address shortcomings affecting the case management system, by developing a single and 
effective system, which guarantees a random, transparent and balanced allocation of cases to 
judges; 

→ make further progress on establishing a solid track record of investigations, prosecutions 
and convictions in the fight against corruption at all levels, including asset recovery; 

→  improve  institutional  mechanisms  for  child  protection,  protection  of  victims  of  domestic 
violence and gender equality; improve efforts to bring existing legislation on juvenile justice 
in line with international standards; step up efforts to establish solid anti-discrimination case-
law and find a sustainable long-term housing solution for vulnerable Roma and Egyptians; 

57 

 
 
→  make  significant  progress  towards  completing  the  process  of  property  registration, 
restitution and compensation. (See also the specific recommendations on the judicial system, 
the fight against corruption and freedom of expression in preceding sections 2.3 and 2.4.)  

Functioning of the judiciary 

Strategic documents 

A  cross-cutting  justice  strategy  2017-2020  and  its  action  plan  have  been  adopted  in 
November 2016. 

Management bodies 

Concerns remained over the transparency of the decision-making process at the High Council 
of Justice (HCJ). Issues persist with the lack or delayed publication of decisions and/or their 
reasoning. The budget of the HCJ decreased slightly compared to last year. Two competitions 
for  prosecutors  were  run  based  on  the  regulation  on  the  functioning  of  the  Council  of 
Prosecutors as amended in 2014 and the manual on promotions of 2015. Nine candidates were 
appointed as prosecutors. 

Independence and impartiality 

The  judicial  system  remains  seriously  affected  by  politicisation,  corruption  and  weak 
inter-institutional  cooperation.  The  justice  reform  process  launched  with  the  adoption  of 
constitutional  amendments  in  July  laid  the  foundations  for  comprehensive  reorganisation  of 
the  sector.  The  justice  reform  aims  to  increase  the  independence,  impartiality  and 
transparency  of  the  country's  judicial  bodies,  including  the  Constitutional  Court,  the  High 
Court,  the  governing  bodies  of  the  judiciary  and  the  General  Prosecutor's  Office.  The 
constitutional amendments were drafted in close consultation with the Venice Commission. In 
its March opinion, the Venice Commission considered the draft amendments to be compatible 
with  European  standards  and  sound  proposals  for  the  institutional  redesign  of  the  Albanian 
judicial  system.  Around  40  legislative  texts,  including  amendments  to  codes,  are  under 
preparation.  

Three vacancies are still to be filled at the High Court. 

Accountability 

Hearings  continued  to  be  held  quite  frequently  in  judges'  offices,  favouring  potential  undue 
influence  and  corruption.  The  inspection  services  of  the  HCJ  and  of  the  Ministry  of  Justice 
have carried out several inspections, in line with their memorandum of understanding. Since 
September  2015,  disciplinary  proceedings  against  six  judges  have  resulted  in  one  dismissal 
from  office  and  the  transfer  of  one  judge  to  another  court;  an  appeal  against  the  dismissal 
from office is pending at the High Court. The cases against three other judges were dismissed 
and one case is pending subject to the outcome of an ongoing criminal investigation. Lack of 
transparency  in  handling  disciplinary  proceedings  and  the  efficiency  of  inspections  are  of 
particular  concern.  The  website  set  up  last  year  by  the  HCJ  to  file  and  monitor  complaints 
against judges is not yet operational. 

Since  September  2015,  the  General  Prosecutor's  Office  (GPO)  took  measures  against  two 
prosecutors,  acting  on  a  proposal  by  the  Council  of the  Prosecutors.  The  imposed  sanctions 
were  reprimands.  Two  requests  to  open  disciplinary  proceedings  are  pending.  Regarding 
criminal proceedings, one prosecutor was sentenced to imprisonment for a corruption offence 
and  a  trial  is  pending  against  another.  The  lack  of  transparency  in  the  GPO's  handling  of 
appointments,  requests  for  disciplinary  proceedings  and  decisions  on  dismissals  needs  to  be 
addressed. The GPO's overall lack of accountability is also a matter of serious concern. 

58 

 
Prosecutors'  assets  declarations  are  currently  being  audited  by  HIDAACI.  Since  September 
2015,  no  judge  has  been  suspended  for  failure to  declare  assets.  Following  a  conviction  for 
corruption, the HCJ dismissed one judge in January. The justice reform addresses most of the 
recommendations  made  by  the  Group  of  States  against  Corruption  (GRECO)  in  its 
fourth-round evaluation report on corruption prevention in respect of judges and prosecutors. 
Corruption in the judiciary remained an issue of serious concern. With the adoption in August 
of  the  relevant  law,  all  judges,  prosecutors  and  legal  advisors  will  undergo  a  re-evaluation 
process.  This  is  for  the  time  being  on  hold,  since  the  Constitutional  Court  is  reviewing  the 
constitutionality of the law and has suspended its application.  

Professionalism and competence 

The  assessment  of  judges'  performance  is  lagging  behind.  The  evaluation  for  the  2007-09 
period  has  been  recently  finalised  and  the  2010-12  evaluation  has  only  just  started.  The 
evaluation  of  courts'  chief  judges,  HCJ  inspectors  and  the  HCJ  chief  inspector  is  ongoing. 
Prosecutors and judicial police officers' performance in 2014 is currently being assessed. 

The status of court staff and legal advisers in administrative courts will be clarified under the 
reform.  Procedures  for  the  recruitment  of  administrative  court  judges  are  under  review  to 
address the limited number of applications. Vacancies in the administrative courts increased 
from seven  to  nine. The process of  appointing  the nine judges  who have graduated in  2015 
from the School of Magistrates was conducted in June through a new lottery procedure.   

Quality of justice 

Budget  planning  capacity  needs  to  be  improved  and  adequate  budgetary  resources  for  the 
justice  system  ensured,  in  particular  for  the  implementation  of  the  reform.  The  School  of 
Magistrates  lacks  sufficient  human  resources  and  adequate  infrastructure:  despite  a  budget 
increase  of  15 %  in  2016,  it  remains  dependent  on  foreign  financial  support.  Training  of 
judicial administrative staff needs to be stepped up. The School of Magistrates increased its 
in-service training on the EU acquis. 

An audio recording system has been installed in all first instance and appeal courts with the 
exception  of  the  Gjirokastër  Administrative  District  Court.  The  effective  use  of  the  system 
remains  to  be  assessed.  Technical  shortcomings  affecting  the  ICMIS  electronic  court  case 
management  system  need  to  be  addressed  without  delay  and  a  long-term  solution  found  so 
that  a  single  and  effective  system  ensuring  random,  transparent  and  balanced  allocation  of 
cases  to  judges  can  be  set  up  in  all  courts.  Budget  allocations  to  courts  for  IT  purposes 
continued to be insufficient.  

The  case  management  system  for  the  prosecution  service  has  been  fully  implemented  in  20 
prosecution  offices,  but  is  not  fully  operational  in  the  first  instance  prosecutors'  offices  in 
Tirana,  Durrës  and  the  office  attached  to  the  first  instance  Serious  Crime  Court  in  Tirana. 
Appropriate working and security conditions for judges and prosecutors are not ensured. 

Online access to jurisprudence is yet to be ensured and there is no searchable database. When 
published, court rulings often lack the appropriate grounds and publication deadlines are not 
always met. Judges' drafting skills need to be improved. Guidelines on anonymisation in the 
publication of court decisions have been drafted but need to be implemented. 

Since September 2015, 62 new mediator licences have been issued, bringing the total number 
of licensed mediators to 467 against 367 in 2015. In practice, only 63 mediators are actively 
working on cases and the mediation provided remains very limited, even though it increased 
from the previous year. 

59 

 
Enforcement  of  judicial  decisions  needs  to  be  significantly  improved.  The  bailiff  service  is 
underperforming  and  action  taken  by  private  bailiffs  is  generally  too  dependent  on  the 
financial  capacity  of  their  clients.  The  ALBIS  public  and  private  bailiff  case  management 
systems should be integrated and made fully functional, and the necessary budget allocation 
ensured for the integrated system’s maintenance.   

Efficiency 

The excessive length of court proceedings remained a concern and was mainly due to delays 
in  appeal  courts,  including  the  High  Court  and  the  Administrative  Court  of  Appeal.  New 
provisions are required in the codes of procedure to streamline appeal procedures and provide 
for mechanisms to filter appeals, particularly to the High Court.  

Six  new  judges  were  appointed  at  the  Administrative  Court  of  Appeal,  but  there  are  nine 
vacancies at the district administrative courts and unfilled court vacancies are widespread. A 
far  more  effective  method  of  filling  vacancies  and  replacing  judges  temporarily  off  duty  is 
needed, particularly at administrative courts.  

In 2016, the High Court handled around 4 400 applications, an increase on the previous year, 
but the Court is still handling cases from 2012. The clearance rate improved in the large first 
instance  courts,  albeit  unevenly;  it  remained  below  100 %  in  all  courts.  The  process  of 
producing and collecting court statistical data is unreliable and manual data processing should 
be phased out. Backlogs remained significant, especially in all higher courts (the High Court 
has  around  16  777  pending  cases).  The  reform  envisages  a  new  territorial  distribution  of 
courts  and  judges.  The  notification  of  court  proceedings  to  parties  is  highly  deficient  and 
needs to be changed to take into account the lack of a reliable address system. 

Fight against corruption 

Track record 

There is a positive trend in the track record of investigations, prosecutions and convictions 
in  corruption  cases.   The  overall  number  of  convictions  at  appeal  level  involving  junior  or 
middle-ranking officials increased from 103 in 2014 to 286 in 2015. In the first half of 2016, 
there were 154 convictions at appeal level, compared to 132 convictions in the same period of 
the previous year. 

Regarding convictions of high-level state officials, one judge and one lawyer were convicted 
in  2015  at  appeal  level,  and  one  case  where  a  judge  is  involved  was  sent  to  court  and  is 
pending.  In  2016,  a  former  Minister  was  sentenced  to  prison  and  one  prosecutor  was 
convicted at first instance, and one case involving a prosecutor was sent to court.  

In  2015,  HIDAACI  submitted  75  criminal  referrals  to  prosecutors,  compared  to  74 the  year 
before, and imposed 550 administrative sanctions. Out of these 75 referrals, 26 cases involved 
high state officials (compared to 21 in 2014). In 2015, three persons were convicted at appeal 
court  level  for  issues  related  to  assets  declarations.  In  the  first  half  of  2016,  HIDAACI 
referred  20  cases  to  the  prosecution  service.  Eleven  of  these  cases  involving  Heads  of 
Communes  were  sent  to  court,  out  of  which  seven  were  found  guilty  at  first  instance. 
Prevention  of  conflict  of  interest  requires an  improved  legal  framework  and  more  proactive 
checks in high-risk areas such as public procurement. 

In 2015, the High State Audit (HSA) referred 51 cases to prosecutors concerning 156 officials 
over misuse of the state budget (in 2014 there were 41 cases concerning 149 officials). The 
rate of implementation of the HSA’s recommendations by public institutions remained low. 

60 

 
The  Office  of  the  National  Coordinator  against  Corruption  (NCAC)  installed  a  corruption 
cases  monitoring  system.  Little  progress  was  made  to  set  up  an  integrated  electronic  case 
management system. The budget for maintaining and implementing this system in courts and 
prosecutors’ offices needs to be secured. 

The  use  of  audit  and  inspections  on  the  basis  of  risk  assessment  in  the  tax  and  customs 
services  increased,  but  needs  to  be  further  stepped  up.  Efforts  are  ongoing  to  address 
corruption in the tax and customs administration, which remained a concern. 

On  internal  control  mechanisms,  the  number  of  inspections  carried  out  by  the  Internal 
Control and Anti-Corruption Unit of the Ministry of Interior increased. 

On  access  to  information,  the  Commissioner  for  the  Right  to  Information  and  Data 
Protection  received  274  complaints  and  issued  47  decisions  in  2015.  The  staff  of  the 
Commissioner’s office needs to be increased. A system was established to record the overall 
number of requests made to public institutions. 

Institutional framework 

On prevention measures, capacities of the anti-corruption network in line ministries, at local 
level and in the Office of the National Coordinator against Corruption needs strengthening. 

The number of HIDAACI inspectors was increased from 12 to 20 in December. HIDAACI’s 
role  in  detecting  conflicts  of  interest  and  checking  asset  declarations  was  strengthened 
through the adoption of the whistle blower protection law, as well as through the role given to 
it  with  the  adoption  of  the  constitutional  amendments  and  the  law  on  the  re-evaluation 
process, which foresees that judges, prosecutors and legal advisors are submitted to a vetting 
process.  HIDAACI’s  administrative,  technical  and  financial  capacity  needs  to  be  further 
strengthened  so  that  it  can  cope  with  asset  declaration  checks  and  assume  the  new  powers 
given to it under the whistle blower protection law.  

The  role  of  the  HSA  in  the  overall  anti-corruption  framework  has  yet  to  be  strengthened. 
Cases involving abuse of office or public tenders referred to prosecutors have led to very few 
investigations and no convictions. 

On  political  party  financing,  the  Central  Election  Commission  is  not  sufficiently 
independent  and  accountable  to  be  able  to  audit  party  finances.  Clear  rules  for  overseeing 
party  finances  are  lacking  and  checks  of  political  parties'  financial  statements  are  a  mere 
formality.  Gaps  in  the  legal  and  institutional  framework  have  yet  to  be  addressed.  The 
legislation  does  not  provide  for  monitoring  and  reporting  on  expenditure  during  election 
campaigns or public disclosure of preliminary election campaign finances before election day. 

New  training  curricula  for  public  officials  on  good  governance  and  anti-corruption  were 
introduced  at  the  School  of  Public  Administration.  An  overall  integrity  risk  management 
system has yet to be established. 

The government continued to  implement the awareness campaign launched  in  2015 and the 
unified  procedures  for  corruption  complaints.  The  reporting  mechanism  has  proven  to  be  a 
positive  initiative.  However,  the  handling  of  citizens’  complaints  remained  difficult  at  local 
level due to limited human resources. 

The  education  sector  remains  a  high-risk  area  for  corruption.  The  names  and  rankings  of 
teachers  who  passed  the  national  exam  and  those  newly  recruited  have  yet  to  be  published 
online to ensure the full transparency of the recruitment procedure. 

Engagement  of  civil  society  in  raising  public  intolerance  to  corruption,  monitoring  and 
denouncing corruption and overseeing anti-corruption bodies' performance remained weak. 

61 

 
On  the  law  enforcement  side,  the  constitutional  reform  adopted  in  July  and  the  relevant 
organic  legislation  adopted  in  October  provide  for  the  creation  of  a  specialised  and 
independent  anti-corruption  investigative  chain,  composed  of  the  National  Bureau  of 
Investigation, special prosecution office and court.  

Access by police and prosecutors to public databases improved (see also chapter 24 — Fight 
against organised crime). The General Prosecutor's Office increased the number of staff at its 
anti-corruption  unit.  However,  concerns  remained  over  high  staff  turnover  and  insufficient 
inter-institutional cooperation. Financial, human and technical resources of law enforcement 
authorities need to be strengthened. 

Proactive and effective investigations need to be increased to develop a solid track record of 
investigations, prosecutions and final convictions in corruption cases. Amendments are still to 
be made to the legislation on interceptions and surveillance, time limits for investigations and 
admissibility of evidence before courts.  

Seizure and confiscation of criminal assets should be systematically ordered to detect and cut 
financial  flows  of  criminal  networks.  Financial  and  money  laundering  investigations  and 
prosecutions  suffer  from  the  lack  of  a  comprehensive  database  that  police  can  access  to 
conduct  in-depth  analyses  of  suspicious  transactions.  Analysis  to  identify  corruption  risk 
sectors is not conducted systematically.  

Cooperation  between  police,  prosecutors  and  the  HSA  and  procurement  services  to  fight 
corruption  in  procurement  should  be  strengthened.  The  police  remained  vulnerable  to 
corruption, despite a substantial increase in internal investigations. 

Legal framework 

The  law  on  whistle-blower  protection  was  adopted  in  June.  The  law  on  the  integrity  of 
persons elected or appointed to exercise public functions was adopted in December, putting in 
place the legal framework to promote integrity in  the public service. The law on the special 
prosecution office and court to fight corruption was approved in October 2016. 

Amendments to the criminal procedure code introducing an improved framework for effective 
investigations and a clear definition of ‘high state official’ remain to be adopted. 

The 2016 GRECO review found that Albania only partially aligned legislation with the fourth 
evaluation  round  recommendations  on  corruption  prevention  in  respect  of  members  of 
parliament, judges and prosecutors. 

Strategic framework 

The  implementation  of  the  2015-2020  strategy  against  corruption  and  its  2015-2017  action 
plan  is  monitored  by  the  anti-corruption  thematic  group  within  the  inter-institutional 
integrated  policy  management  group  for  good  governance  and  public  administration.  This 
thematic  group  is  chaired  by  the  National  Coordinator  against  Corruption  and  composed  of 
line  ministries  and  relevant  independent  institutions,  including  representatives  of  the 
anti-corruption contact points. Each implementing institution has to report on its progress on 
implementing the action plan.  

The  first  annual  monitoring  report  on  the  implementation  of  the  action  plan  in  2015  was 
finalised in April finding that a large majority of the actions had been implemented. However, 
this first exercise demonstrated that the level of accountability and responsibility of the anti-
corruption  network  remained  weak.  While  the  action  plan  includes  specific  indicators  and 
budgeting for most activities, there is still a financial gap. In addition, a sound performance 

62 

 
assessment framework has yet to be put in place. The lack of human and financial resources 
for implementing the measures and reporting on progress remained a concern. 

Fundamental rights 

Albania  continued  to  comply  with  international  human  rights  instruments.  It  has  ratified 
most  international  human  rights  and  humanitarian  conventions.  However,  it  needs  to  take 
further action to ensure their full implementation. 

Albania continued to ensure good cooperation with the European Court of Human Rights 
(ECtHR). Since September 2015, the Court has found at least one violation of the European 
Convention on Human Rights (ECHR) in nine judgments, relating mainly to the right to a fair 
trial and protection of property. A total of 166 new applications were allocated to a decision-
making  body,  bringing  the  number  of  pending  applications  to  486.  In  March,  the  ECtHR 
started reviewing the case related to the events of 21 January 2011. 

On the promotion and enforcement of human rights, the Ombudsman continued to actively 
promote the rights of vulnerable groups. In 2015, out of 349 recommendations addressed, 160 
recommendations were accepted, 68 remained without reply and 54 were refused, while the 
rest were under review. The work of the Ombudsman’s Office continued to be limited by lack 
of  funding  and  personnel,  and  the  resources  of  its  central  and  local  offices  need  to  be 
enhanced  to  ensure  that  they  can  function  satisfactorily.  In  2016,  its  budget  allocation  was 
slightly  increased,  allowing  for  the  recruitment  of  Commissioners  on  Children’s  Rights  and 
on the Prevention of Torture. However, the two commissioners are yet to be appointed, either 
due to an insufficient number of candidates or their failure to meet the legal requirements.  

Most  complaints  submitted  to  the  Ombudsman’s  Office  continued  to  relate  to  social  rights, 
mainly healthcare, pension issues, employment, education and housing and the failure of the 
state administration to act within the legal deadlines provided by law. 

As regards right to life, the March 2015 parliament resolution and recommendations on blood 
feuds still require follow up. The Coordination Council has to be reactivated. 

On prevention of  torture  and ill-treatment, the  national preventive mechanism  conducted 
130  inspections  and  monitoring  visits  in  2015.  The  resulting  67  recommendations  were 
acknowledged and most of them were addressed. In 2015, the national preventive mechanism 
and the Ombudsman’s Office handled 42 complaints about disproportionate use of force and 
violence by police officers and prison guards, of which 10 were found to have valid grounds. 
These cases are still under investigation. 

As  regards  the  prison  system,  the  release  of  968  prisoners  following  the  January  2016 
amnesty  law  considerably  reduced  the  number  of  inmates.  However,  overcrowding  remains 
an issue and risks amounting to inhuman and degrading treatment. The General Directorate of 
Prisons drafted a policy paper on reducing overcrowding. This, together with the opening of 
two  new  detention  facilities  in  Fier  and  in  Berat  and  the  renovation  of  a  prison  in  Tirana, 
should contribute to decreasing overpopulation. The confidentiality of inmates' conversations 
with  visitors,  and  adequate  health  and  hygiene  standards  remain  to  be  secured.  Serious 
concerns remained over the lack of a medical institute and appropriate healthcare services for 
detainees  with  mental  illnesses.  Mentally  ill  detainees  continued  to  be  kept  in  inadequate 
conditions in the Kruja prison hospital.  

The use of alternatives to custody  increased by 48 %, from 4 003 cases in 2014 to 5 927 in 
2015.  Use  of  electronic  monitoring  also  increased,  from  eight  cases  in  2013  to  15  cases  in 
2015. The number of probation service staff still remains to be increased. The memorandum 
of cooperation between the Ministry of Justice and the Ministry of Social Welfare and Youth 

63 

 
over  setting  up  vocational  courses  in  prisons  as  part  of  pre-release  programmes  is  yet  to  be 
implemented in practice. Existing penitentiary legislation needs to be effectively implemented 
and  brought  into  line  with  European  standards.  Corruption  in  the  prison  system  remains  a 
serious concern. 

On protection of personal data, the office of the Commissioner for the Right to Information 
and Data Protection continues to be understaffed. The total number of complaints submitted 
to the Commissioner for the Right to Information and Data Protection increased to 477 in the 
reporting  period,  against  232  complaints  in  the  same  period  the  preceding  year.  The  free 
phone number and online mechanism for citizens’ complaints continued to be functional. The 
number of awareness campaigns increased, while the number of training sessions for the staff 
of the Commissioner's Office should be further augmented.  

The Commissioner’s remit and workload increased due to new legal provisions tasking it with 
monitoring  implementation  of  the  law  on  the  right  to  information.  However,  this  extended 
mandate has not been matched by an increase in capacity and budget. No steps were taken to 
enhance  the  Commissioner’s  independence,  especially  on  appointments  and  dismissals.  The 
publication of court decisions does not always respect data protection principles.  

Freedom of thought, conscience and religion was generally upheld. A government initiative 
to  include  religious  education  and  history  as  a  compulsory  course  in  schools,  aimed  at 
preventing  radicalisation  and  supporting  inter-religious  dialogue,  faced  criticism  from 
academia and civil society. No measures were taken to implement the initiative. The Albanian 
Autocephalous  Orthodox  Church  raised  concerns  over  the  implementation  of  the  agreement 
with the government on restitution of properties seized during the communist regime.  

As  regards  freedom  of  expression,  two  cases  of  physical  assaults  against  journalists  were 
reported  and  followed up  by  the  prosecution  in  2016.  Media  outlets  reported some  cases  of 
alleged  intimidation  against  journalists,  although  it  has  yet  to  be  confirmed  whether  these 
were triggered by journalistic work or private and business interests. 

The implementation of the law on audiovisual media has been slow overall, mainly due to the 
lack  of  quorum  within  the  Audiovisual  Media  Authority  (AMA)  board  and  the  delays  in 
filling AMA vacancies. The vacancies of the board were filled in July. AMA started a public 
information campaign on the digitalisation process and is working with the public broadcaster 
on  the  terms  of  the  digitalisation  services  it  will  offer.  However,  it  failed  to  grant  digital 
licences  to  commercial  operators  within  the  deadline.  AMA  was  restructured  and  the  staff 
increased.  AMA  also  approved  a  Code  of  Ethics  and  the  Code  of  conduct  for  its  members, 
and set up its Council of Ethics.  

A  government  proposal  in  November  to  re-criminalise  libel  and  defamation  was  withdrawn 
after harsh criticism by human rights organisations and the media community. There were no 
cases  of  defamation  lawsuits  by  politicians  against  journalists.  However,  further  action  is 
needed to ensure effective implementation of the amendments on defamation and guidelines 
on setting damages at a reasonable level. The main means to achieve this is through training 
for the judiciary. Further efforts are also needed to implement the rules on public complaints 
against  media,  as  set  out  in  the  law  on  audiovisual  media,  and  to  establish  bodies  and 
initiatives  that  address  reader/viewer  complaints  effectively.  In  July,  the  steering  council  of 
the public broadcaster (RTSH) constituted its Council of Viewers and Listeners. 

Following  the  constitution  of  RTSH’s  steering  council  in  April,  a  deadlock  in  the  voting 
process led to a delay in appointment of the general director and consequently to a failure by 
RTSH  to  adopt  its  statute,  elect  new  management  structures  and  adopt  other  guidelines. 

64 

 
A new director was appointed in May following amendments to the law on audiovisual media 
introducing a new election method.  

The  funding  of  the  public  broadcaster  is  relatively  stable  thanks  to  collection  of  the  licence 
fee. RTSH is yet to approve its internal statute, with a particular focus on responsibility at all 
management  levels,  with  due  defence  of  editorial  independence.  The  public  broadcaster 
should also finalise its institutional strategy and editorial guidelines. 

In  May,  at  the  request  of  major  audiovisual  media  companies,  the  Constitutional  Court 
abolished  the  ownership  limitations in  the  audiovisual  media  regulations,  thus  annulling  the 
legal  mechanism  that  sought  to  guarantee  pluralism  of  media  ownership.  In  order  to  ensure 
transparency  of  media  financing  Albania  should  introduce  legal  provisions  on  state 
advertising that meet best international standards. The media continued to be used as a tool to 
promote political and private interests. 

Amendments  seeking  to  establish  rules  under  the  e-commerce  regulation  on  comments  on 
websites remain to be adopted. Self-regulation in online media needs to be introduced in order 
to  curb  user-generated  hate  speech.  Online  hate  speech  should  be  defined  in  terms  that  are 
similar  to  the  offline  hate  speech  definitions  (i.e.  as  speech  inciting  violence)  so  that  the 
definition does not vary depending on the type of technology used. 

Freedom  of  assembly  and  association  was  respected.  Overall,  protests  and  political 
demonstrations were held without major incidents. 

On  property  rights,  a  new  law  on  compensation  for  property  confiscated  during  the 
communist  era  was  adopted  in  December.  It  provides  for  the  setting  up  of  a  national 
mechanism for compensation, together with a compensation formula and the financial means 
to enforce the process. The law entered into force in February. However, its constitutionality 
has been challenged in the Constitutional Court following appeals over lack of transparency, 
legal  certainty  and  equality  of  treatment,  and  the  risk  of  the  law’s  effectiveness  being 
undermined by the absence of a comprehensive cadastre. Upon request by the Constitutional 
Court, Venice Commission adopted an amicus curiae brief, assessing consistency of the law 
with European norms. The Venice Commission highlighted that compliance would depend on 
the effective implementation of the law and its execution by the authorities.  

On  the  enforcement  of  decisions  of  the  ECtHR,  financial  compensation  is  ongoing  but 
outstanding  payments  remained,  including  of  default  interest.  The  2012-2020  strategy  on 
property  rights  needs  to  be  updated  to  reflect  the  new  legal  provisions  and  provide  for 
coordination  between  the  restitution,  compensation  and  legalisation  processes.  A  national 
coordinator  for  property  rights  should  be  appointed.  The  ongoing  process  of  property 
registration and mapping, including the property digitalisation process, has to be finalised and 
overlaps in land ownership must be phased out. 

On  non-discrimination,  the  Commissioner  for  Protection  against  Discrimination  (CPD) 
handled  a  slightly  decreased  number  of  cases,  while  it  increased  the  amount  of  actions  it 
brought of its own initiative. Its participation in judicial processes doubled compared to 2014. 
In the reporting period, the CPD issued 11 sanctions.  

On  hate  crimes,  the  state  police  appointed a  dedicated  focal  point.  However,  the number  of 
reported cases remained insignificant and no judicial prosecution has yet been initiated. Data 
collection  on  hate  crime  continued  to  be  lacking.  The  CPD  dealt  with  hate  speech  cases 
targeting the LGBTI community and in two cases decided to fine the perpetrators. The CPD 
continued  to  organise  awareness  campaigns  and  training  activities.  Anti-discrimination 
case-law needs to be further developed and its implementation improved. 

65 

 
On equality between women and men, a national strategy on gender equality was prepared, 
but  is  yet  to  be  adopted.  A  number  of  laws  continued  to  contain  gender-discriminatory 
provisions. Concerns remain over discrimination against and lack of appropriate legislation or 
measures for the protection of women and girls belonging to disadvantaged and marginalized 
groups.  Further  work is needed to  ensure  women’s  unhindered  access  to  the  justice  system, 
raise  awareness  about  existing  laws,  and  to  ensure  the  execution  of  court  orders  to  enforce 
women’s rights. In the past year, the government increased its efforts to make gender equality 
central to  planning and budgeting for  national development and EU integration, introducing 
gender-responsive  budgeting  in  nine  ministries  and  initiating  it  in  seven  municipalities. 
Application  of  gender  mainstreaming  in  the  medium-term  budget  programme  at  municipal 
level  is  yet  to  be  reflected  in  the  corresponding  national  legislation.  Gender  equality  focal 
points have not been established at national or local level.  

While  enforcement  of  gender  equality  policies  generally  progressed,  challenges  over 
implementation  remained.  Domestic  violence  remained  a  serious  concern.  In  2015,  3 886 
cases  of  domestic  violence  and  other  crimes  in  families  were  reported  by  the  police,  with 
2 148 resulting in protection orders. In 1 300 cases of domestic violence, criminal proceedings 
were  initiated  and  sent  for  prosecution.  74 %  of  domestic  violence  victims  were  women, 
which illustrates the gender dimension of violence.  

The  online  system  for  reporting  gender-based  violence  still  only  operates  in  29  out  of  61 
municipalities.  There is  a  need  for better  coordination  between  equality  bodies and relevant 
actors at all levels, including the national referral mechanism, in order to maximise results in 
the  fight  against  gender-based  violence.  Services  for  victims  of  domestic  violence  should 
improve in quality, quantity, accessibility and geographical coverage. 

On the rights of the child, a revision of the current law on the protection of children’s rights 
was  initiated.  In  October,  a  comprehensive  mapping  of  the  child  protection  system  was 
finalised. As a follow-up, a policy document outlining the government’s vision for the future 
integrated system was published in December.  

The joint directive adopted by four ministries in early 2015 has increasingly been applied to 
ensure  cooperation  between  central  and  sub-national  bodies  on  cases  requiring  protection 
measures. A comprehensive national agenda for child safety online is being prepared.  

During 2015, 243 children living or working on the street and their families were taken under 
protection, as well as an additional 102 children in the first half of 2016. Services offered to 
the  families  included  counselling,  enrolment  of  children  in  schools,  kindergartens  and 
nurseries, applications for financial assistance, and medical care. 

There is a need to improve data collection and reporting mechanisms in child protection, and 
to improve cross-sector and inter-institutional coordination and cooperation mechanisms.  

The territorial reform had a disruptive impact on the functioning of child protection units due 
to high rates of staff turnover, in particular of staff trained in child protection, and the reduced 
ratio  of  child  protection  workers  per  capita,  in  particular  in  rural  areas.  It  is  of  utmost 
importance that child protection services are improved.  

The  emigration  of  unaccompanied  minors  from  Albania  to  EU  Member  States  remained  a 
matter of serious concern. An inter-institutional working group was set up in October to revise 
related  legislation  with  a  view  to  dealing  with  this  phenomenon.  Between  September  2015 
and March 2016, 18 cases were referred to the prosecutor for mistreatment of minors. 

More  efforts  are  needed  to  bring  existing  legislation  on  juvenile  justice  into  line  with 
international  standards  and  move  away  from  the  punitive  approach  for  juveniles  in  conflict 

66 

 
with the law. A number of laws are being revised under the justice reform to bring juvenile 
justice  into  line  with  UN  standards.  A  specific  juvenile  justice  code  and  a  children's  justice 
strategy are being drafted. In 2015, 130 fewer children were sent to pre-trial detention than in 
2014 and the average detention time was reduced. However, appropriate planning, budgeting 
and community-based re-education and reintegration programmes for children in conflict with 
the law are still lacking. Certain categories of children, such as those from ethnic minorities, 
children with disabilities, girls and children living in rural areas, face particular challenges in 
accessing judicial protection. 

On the rights of persons with disabilities, framework legislation is in place and is partially 
compliant  with  the  UN  Convention  on  the  Rights  of  Persons  with  Disabilities  (CRPD). 
A number of articles, in particular Article 12 of the CPRD, were not yet transposed into the 
national  legislation.  A  government  decision  to  remove  environmental  and  infrastructural 
barriers in providing public services was adopted in December. The action plan 2016-2020 on 
persons  with  disabilities  was  adopted  in  June.  However,  municipalities  and  most  line 
ministries are yet to appoint an official in charge of disability issues, as provided for by law.  

Overall,  people  with  disabilities  continued  to  face  difficulties  in  accessing  education, 
employment, healthcare, social services and decision-making, including obstacles preventing 
them  from  freely  exercising  the  right  to  vote.  Monitoring  of  the  implementation  of 
disability-related measures is impeded by a lack of available data. Despite  some efforts, the 
number of adjunct teachers in schools to assist children with disabilities is insufficient. 

On  the  rights  of  lesbian,  gay,  bisexual,  transgender  and  intersex  (LGBTI)  persons, 
a 2016-2020 action plan on rights of LGBTI persons was adopted in May. Sexual orientation 
and gender identity are now protected grounds from discrimination in the labour code. 

The shelter for LGBTI people, which is almost entirely donor-supported, continued to provide 
services  to  members  of  the  community  in  need.  In  February,  a  cooperation  agreement  was 
signed between the Ministry of Social Welfare and the shelter. A fundraising event was held 
in May to collect the resources needed to continue the functioning of the shelter. Also in May, 
a  number  of  events  were  organised  around  the  international  day  against  homophobia, 
transphobia and biphobia. Public awareness and social acceptance remained low, particularly 
in  rural  areas.  Amendments  to  the  family  code  to  introduce  the  concept  of  cohabitation  of 
same-sex couples have not yet been adopted. 

Issues of Labour and trade union rights are covered in chapter 19. 

On procedural rights, more should be done to ensure the right to information, access to legal 
aid  and  advice  and  specific  safeguards  for  suspects,  accused  persons  and  victims  of  crime. 
Some  basic  procedural  safeguards  for  children  are  in  place,  but  more  efforts  are  needed  to 
increase  the  level  of  protection  provided  by  the  existing  legislation.  Even  though  basic 
procedural rights for victims and their families are provided for in the law, further efforts are 
necessary  to  ensure  proper  implementation,  which  protects  victims  and  their  families  in  the 
context  of  criminal  proceedings,  including  providing  free  legal  aid.  There  are  no  legal 
provisions  in  place  which  ensure  victims’  right  to  access  support  services,  including 
procedural,  emotional  and  psychological  support,  in  accordance  with  victims’  and  family 
members’  needs.  On  access  to  justice,  the  State  Commission  for  Legal  Aid  has  not  yet 
developed effective mechanisms for outreach and access to its services, including at regional 
level. The vast majority of cases involving vulnerable groups are still handled by civil society 
organisations,  with  donor  support.  A  reform  of  the  legal  aid  system  is  envisaged  under  the 
ongoing justice system reform. 

67 

 
As  regards  respect  for  and  protection  of  minorities,  some  steps  were  taken  to  improve  the 
legal  framework.  The  Ministry  of  Foreign  Affairs  established  a  working  group  to  draft 
a comprehensive law for the protection of minorities. A broad consultation process took place 
involving  independent  institutions,  minorities’  associations,  civil  society  and  international 
organisations.  The  working  group  should  now  swiftly  complete  its  work  and  finalize  the 
drafting process of the law that should aim to ensure equal access to rights for persons from 
all  minorities.  Albania  has  still  not  adopted  the  European  Charter  for  regional  and  minority 
languages. The role and the capacity of the State Committee on Minorities remained limited 
and need to be reinforced. Overall, inter-ethnic relations remained good. 

Roma and Egyptians continued to face very difficult conditions and frequent discrimination, 
particularly  on  access  to  education,  employment,  housing,  health  and  civil  registration.  The 
2016-20 action plan for their integration was adopted in December. The national budget will 
finance 55 % of the actions, while the remaining part is to be provided by donors. The third 
EU-Albania  seminar  on  the  inclusion  of  Roma  and  Egyptian  communities,  held  in  April, 
resulted in operational conclusions, which set the main priorities for the next two years.  

Living conditions remained poor, with a substantial part of Roma households lacking access 
to piped water. The 2016-2025 national housing strategy was adopted. It aims to improve the 
institutional,  legal  and  regulatory  framework  for  middle  and  low  income  households, 
including  Roma.  Roma  children  living  or  working  on  the  street  remained  a  concern  despite 
efforts  to  reduce  this  phenomenon  by  taking  street  children  and  their  families  under 
protection.  Child  marriage  remained  a  worrying  practice,  involving  around  2.9 %  of  Roma 
children  in  the  15-18  age  group.  Civil  registration  improved,  but  further  efforts  are  needed, 
particularly  to  ease  the  transfer  of  registration  between  municipalities  and  of  children  born 
abroad. Lack of registration often prevents access to social support.  

The inclusion of Roma children in the education system continued improving, but remains the 
lowest  in  the  region.  School  segregation  is  a  matter  of  serious  concern.  The  electronic  data 
collection system Romalb is partially functional and in-service training is necessary to ensure 
that it is used by all local government units.  

As a result of the dialogue held by the Tirana municipality with the 72 families affected by the 
planned eviction in the Bregu i Lumit area, the eviction was stopped and efforts were made to 
find  alternative  housing  solutions.  This  was  a  clear  progress  in  the  handling  of  evictions 
compared  to  the  previous  case  at  the  Tirana  artificial  lake,  where  some  44  families  were 
evicted in October 2015 without proper dialogue with the families concerned. Albania has yet 
to  develop  guidelines  on  evictions  in  line  with  international  standards  and  train  local  and 
national institutions on procedures to be followed before, during and after evictions. 

4.24.  Chapter 24: Justice, freedom and security 

The EU has common rules for border control, visas, external migration and asylum. Schengen 
cooperation entails the lifting of border controls inside the EU. There is also cooperation in 
the  fight  against  organised  crime  and  terrorism,  and  judicial,  police  and  customs 
cooperation.  

Albania has some level of preparation to implement the acquis and European standards in 
this  area.  Some  progress  was  achieved.  Steps  were  taken  to  improve  the  institutional 
capacity  on  border  management,  asylum  and  the  fight  against  terrorism.  The  Counter-
terrorism  Directorate  increased  its  capacity.  Organisational  changes  in  law  enforcement 
agencies were introduced and key legislation adopted, especially on the new organisation of 
the police. However, the police does not yet have direct access to key public registries. Little 
progress  was  made  on  fulfilling  the  recommendations  identified  last  year.  The  use  of 

68 

 
 
intelligence-led  joint  investigations  remained  limited.  The  number  of  unfounded  asylum 
applications  lodged  by  Albanian  nationals  in  the  EU  remained  at  a  sustained  level  and 
requires concrete action. In the coming year, Albania should in particular: 

→ make greater use of intelligence-led and financial investigations on money laundering and 
drug trafficking, and increase confiscations of criminal assets; 

→  further  increase  the  operational  and  logistical  capacities  of  the  Counter-terrorism 
Directorate, especially  as  regards  special  investigations  and operations  such  as  surveillance 
and interceptions; 

→  demonstrate  further  progress  on  establishing  a  solid  track  record  of  investigations, 
prosecutions and convictions in the fight against organised crime; 

→  take  immediate  and  determined  action,  including  via  the  post-visa  liberalisation 
monitoring mechanism, to effectively address unfounded asylum applications in the EU and 
further improve its capacity to deal with mixed migration flows. 

(See also the specific recommendations on the fight against organised crime in section 2.3.) 

Legal and irregular migration 

Institutional set-up and legal alignment 

The legal framework is broadly in line with the acquis. In March, Albania adopted the law 
on the identification and registration of Albanian citizens living abroad. Amendments to the 
law on aliens (covering legal/irregular migration) were approved by parliament in July.  

The absence since 2010 of a cross-sector national strategy on migration remains an issue of 
concern. Measures taken to mainstream migration issues in several national sector strategies, 
including social protection and inclusion, employment, business and development, integrated 
border management and the fight against human trafficking, produced limited results.  

The implementation period of the strategy on the reintegration of returned Albanian citizens 
came  to  an  end  in  2015.  Work  on  a  new  strategy  has  not  started  yet.  A  specific  section  on 
migration  was  included  instead  in  the  2015-2020  national  strategy  on  development  and 
integration approved in May. 

The 2012-2014 extended migration profile was adopted in December. The Ministry of Interior 
implements  and  coordinates the migration policy in  cooperation with  the  Ministry of Social 
Welfare and Youth and the Ministry of Foreign Affairs.  

Implementation and enforcement capacity 

The  overall  staffing  of  the  Directorate-General  for  Borders  and  Migration  is  limited  (1 653 
employees),  in  particular  against  the  background  of  the  migration  crisis  affecting  the  entire 
region. Albania needs to ensure appropriate training of its border police staff in compliance 
with  the  EU  border  guard  basic  training  standards,  such  as  the  European  Border  and  Coast 
Guard Agency (Frontex) common core curriculum.   

Albania  has  one  reception  centre  for  irregular  migrants  in  Karrec  with  a  total  capacity  of 
150  beds.  The  centre  is  equipped  to  accommodate  men,  women  and  families  in  three 
departments. There is no facility for  unaccompanied minors. The centre’s poor maintenance 
has  led  to  it  deteriorating  and  immediate  renovation  is  required.  In  2015,  294  people  were 
detained in Karrec, while in the first half of 2016 there were 363 people detained.  

Albania needs to increase its capacity to host irregular migrants, in particular near its border 
with Greece. In 2015, 2 009 irregular migrants were intercepted, mainly entering the country 
from  Greece. The vast majority  of  these  occurred during the first half of 2015 (1 971).  The 

69 

 
second  half  of  the  year  marked  a  sudden  drop  after  the  former  Yugoslav  Republic  of 
Macedonia  introduced  legislative  changes  providing  refugees/migrants  with  freedom  of 
movement during 72 hours. Despite the arrest of a few smugglers, there is no evidence so far 
of organised smuggling networks active in Albania. 

The number of effectively returned people to their country of origin remained low. Only two 
people agreed to voluntary return in the past 12 months. Most of the irregular migrants were 
returned  to  the  country  from  which  they  entered  Albania  (mainly  Greece)  with  a  voluntary 
leave order. 

The readmission agreement with the EU is implemented in a satisfactory manner. However, 
the  country needs to  finalise  the  negotiations  on  its  readmission  agreement  with  Russia  and 
the  implementation  protocols  with  Greece  and  Spain.  Albania  also  needs  to  conclude 
readmission agreements with a number of countries of origin of irregular migration including 
Morocco, Afghanistan, Iraq and Iran.  

Further efforts are needed to ensure that the policy framework on emigration for employment 
purposes is coherent and implementation is not weakened by contradictory legal provisions.  

Asylum 

Institutional set-up and legal alignment 

Albania  is  party  to  the  Geneva  Convention  and  adopted  in  2014  a  new  asylum  law,  which 
brought  its  legal  framework  generally  in  line  with  the  acquis.  However,  since  several  EU 
directives  were  further  updated,  some  issues  remain  to  be  addressed  over  procedural 
safeguards  and  guarantees.  In  particular,  Albania  needs  to  avoid  detention  of  vulnerable 
people and minors; ensure the right to legal assistance to asylum seekers; and ensure access to 
information about asylum rights and procedures for apprehended third country nationals. 

Albania  needs  to  strengthen  its  reception  capacity  for  asylum  seekers,  particularly  closer  to 
the  border  with  Greece.  In  March,  the  government  approved  a  list  of  safe  third  countries, 
which includes all EU and NATO Member States. 

The country has the necessary institutions and procedures in place to handle asylum claims. 
The Directorate for Asylum is the first instance body in the Ministry of Interior, which is also 
responsible  for  overall  policy  coordination  in  this  field.  Appeals  can  be  lodged  in  principle 
with the National Commission for Refugees and Asylum. However the Commission has not 
been fully set up thus far, despite its establishment was approved in March. 

A  final  judicial  appeal  can  be  lodged  with  the  High  Court.  In  September  2015,  Albania 
prepared  a  contingency  plan  for  a  possible  mass  influx  of  migrants  and  asylum  seekers, 
including an operational plan covering preparedness and response activities as well as related 
needs  and  gaps  analysis.  The  contingency  plan  was  updated  in  April;  however,  it  was  not 
open to public consultation and has not been formally adopted yet. 

Implementation and enforcement capacity 

The  Directorate  for  Asylum  is  now  adequately  staffed  (six  people).  As  regards  the  asylum 
procedure, the capacity to assess individual asylum claims remained weak. More training is 
needed  in  this  regard,  particularly  on  countries  of  origin,  and  cases  involving  vulnerable 
people and people who have entered the country in an irregular manner.  

Weak  referral  mechanisms  and  limited  availability  of  interpreters  are  a  matter  of  concern. 
Training of interpreters is needed on refugee law issues and interviewing techniques. Efforts 
to facilitate social and economic integration of refugees need to be backed up by  a credible 
budget.  Data  management  also  needs  to  be  strengthened.  Although  biometric  data  are 

70 

 
collected by the border and migration police and registered in a registry, the Directorate for 
Asylum  does  not  have  access  to  this  database,  limiting  its  capacity  to  manage  the  cases 
effectively. No cases of refoulement at the borders were reported. 

In 2015, 586 people applied for asylum, of which 480 were from the People’s Mujahedeen of 
Iran (PMOI) and 106 from other nationalities. The Directorate for Asylum issued 39 positive 
decisions, three on complementary protection and two negative decisions. At the end of 2015, 
830  asylum  seekers  were  awaiting  status  determination.  The  recognition  rate  for  those  who 
undergo  a  full  asylum  procedure  is  over  50 %,  all  nationalities  combined.  From  January  to 
August 2016, 1 443 people applied for asylum, of which 1 355 were from the PMOI. So far, 
Albania  is  still  a  transit  country.  With  the  exception  of  the  well-organised  resettlement  of 
PMOI Iranian exiles and former residents of the Camp Hurriya temporary transit location in 
Iraq, the vast majority of asylum applicants disappear in the course of the asylum procedure.  

There is one reception centre in Babrru with a capacity of 80 beds, which could be expanded 
to a maximum of 100 beds. There is no suitable accommodation for unaccompanied minors. 
Lack of appropriate reception capacity in Tirana and in particular along the country’s southern 
border is a source of concern. Albania cooperates with the European Asylum Support Office 
(EASO),  but  this  cooperation  is  not  based  on  a  formal  agreement.  In  2015  staff  of  the 
Ministry of Interior participated in three training sessions organised by EASO. 

Visa policy 

Albania  has  yet  to  align  its  legislation  with  the  EU  ‘positive’  and  ‘negative’  lists.  During 
summer  months,  Albania  lifts  its  visa  regime  for  several  countries  on  the  EU  negative  list. 
The visa-free travel regime between Albania and the EU continued unhindered. However, the 
flow  of  manifestly  unfounded  asylum  applications  to  EU  member  states  and  Schengen 
associated countries remains at a sustained level, with an average of above 2 400 applications 
per  month  in  the  first  eight  months  of  2016.  In  2015,  Albanian  nationals  lodged  68 750 
asylum  requests  in  EU  Member  States  and  Schengen  associated  countries,  an  increase  of 
297 %  on  2014.  From  January  to  August  2016,  there  were  almost  20  000  asylum  requests. 
Albanian nationals were the biggest group of asylum seekers from visa-free Western Balkan 
countries  (54 %)  and  the  highest  number  of  illegal  stayers  and  illegal  border  crossings. 
Albania tightened its border control procedures, but awareness raising was limited to sporadic 
public appearances by government officials.  

The fall in the number of asylum applications lodged by Albanian nationals in EU Member 
States and Schengen associated countries since September 2015 was mainly due to measures 
by the most affected countries, and less due to proactive measures taken by Albania. Albania 
needs  to  considerably  strengthen  its  efforts  to  address  this  negative  phenomenon,  and  take 
immediate and determined action via the post-visa liberalisation monitoring mechanism. The 
country needs in particular to improve its information exchange with countries of destination, 
and start analysing data on returnees so that it can map the most affected geographical areas in 
the  country  and  prioritise  awareness  raising  and  socioeconomic  support  accordingly.  All 
efforts need to continue systematically and with adequate allocation of resources. 

Unaccompanied minors from Albania remained a matter of concern. Albania needs to engage 
in  awareness  raising  among  government  stakeholders  to  ensure  that  unaccompanied  minors 
are identified and protected. 

71 

 
Schengen and external borders 

Institutional set-up and legal alignment 

The  law  on  border  control,  which  entered  into  force  in  August,  and  associated  by-laws  are 
aligned  with  the  acquis.  However,  the  legislative  framework  for  the  management  of 
Albania’s external borders is not yet fully aligned with EU standards. The Directorate General 
for Borders and Migration is a specialised civilian body within the Ministry of Interior. It has 
one risk analysis unit at central level and local risk analysis units in all seven regional offices. 
It  includes  seven  regional  offices  and  local  stations,  including  a  mobile  unit.  Its  staff, 
including 1 566 border guards, receives basic and to some extent specialised training from the 
Police Academy and through the agreement concluded with Frontex. Albania should continue 
risk analysis training at all levels and ensure sufficient training for border police, in particular 
by  including  protection-sensitive  migration  management  in  the  curriculum  of  the  Police 
Academy.  

The  current  2014-2020  integrated  border  management  strategy  is  fully  aligned  with 
European standards. 

Implementation and enforcement capacity 

The  implementation  of  the  integrated  border  management  strategy  and  action  plan 
continued  smoothly  with  a  focus  on  the  regulatory  and  institutional  framework;  human 
resources  and  training;  communication  and  exchange  of  information;  and  infrastructure  and 
equipment for border control and surveillance.  

Two  border  crossing  points  with  Montenegro  and  Kosovo  are  being  reconstructed.  In  July 
Albania  started  carrying  out  exit  checks  at  its  border  with  Kosovo.  The  ‘TETRA’  special 
radio communication network for law enforcement forces is only partially functional. Out of 
150  fishing  vessels,  only  80  are  equipped  with  a  blue  box.  Night  vision  goggles  and 
thermographic  cameras  are  in  use  for  green  border  surveillance.  More  resources  need  to  be 
devoted  to  modernising  border  infrastructure  and  stepping  up  surveillance  of  the  green  and 
blue borders. 

Inter-agency cooperation between border guards and customs worked well, including over 
mutual  access  to  databases.  The  Inter-institutional  Maritime  Operations  Centre  and  the 
maritime  surveillance  and  communication  systems  are  fully  operational. The  detection  of 
false or fraudulent documents remained low, in particular at the international airport. A track 
record of detection, investigation and prosecution of cross-border crime in coordination with 
all competent law enforcement authorities is gradually being established. The border police’s 
investigative  powers  need  to  be  strengthened,  in  particular  for  the  detection  of  people 
smuggling and trafficking cases.  

Cooperation  with  neighbouring  countries  continued  to  be  good,  particularly  at  technical 
level.  The  country  concluded  cross  border  police  cooperation  agreements  with  Montenegro, 
Kosovo and the former Yugoslav Republic of Macedonia, but not yet with Greece. Albania is 
conducting  joint  patrols  with  Kosovo,  Montenegro  and  the  former  Yugoslav  Republic  of 
Macedonia.  It  established  bilateral  centres  for  cross-border  police  cooperation  with  Kosovo 
and  the  former  Yugoslav  Republic  of  Macedonia.  The  protocol  on  the  establishment  and 
functioning  of  the  trilateral  centre  in  Plav  is  yet  to  be  adopted.  Work  is  ongoing  to  set  up 
another centre at the border with Greece. Agreements on joint border control were concluded 
with  Montenegro  for  two  border  crossing  points  and  with  Kosovo  for  three  others.  The 
agreement  with  Frontex  needs  to  be  updated.  As  regards  anti-corruption  measures,  64 
disciplinary measures were taken against border police staff in the first half of 2016. 

72 

 
Judicial cooperation in civil and criminal matters 

Albania  intensified  judicial  cooperation  in  civil  and  criminal  matters,  including  with  EU 
Member  States.  However,  international  cooperation  needs  to  be  further  improved,  especially 
over  timely  ratification  and  implementation  of  multilateral  instruments  and  institutional 
capacity. Regarding judicial cooperation in criminal matters, Albania should make greater use 
of existing instruments, particularly the setting up of joint investigation teams under Article 
20  of  the  Second  Additional  Protocol  to  the  European  Convention  on  Mutual  Assistance  in 
Criminal Matters.  

Albania addressed Eurojust recommendations on data protection standards; negotiations on a 
cooperation agreement should start before the end of the year. In 2015 Albania was involved 
in  12  cases  (four  in  2014)  registered  at  Eurojust.  Italy  and  Greece  registered  the  highest 
number of cases involving Albania, which mainly related to drug trafficking. 

Fight against organised crime 

Institutional set-up and legal alignment 

In  September  2015,  the  government  approved  the  new  state  police  regulation  to  ensure  the 
effective implementation of the law on state police that entered into force in March 2015. The 
regulation is in line with the main recommendations of the European code of police ethics of 
the Council of Europe. In December, Albania ratified the Council of Europe Convention on 
Trafficking  in  Human  Organs.  Some  steps  were  taken  to  amend  the  joint  instruction  on 
handling of seized drugs and narcotic substances. Sampling and drying processes and storage 
are not in line with relevant acquis and international standards. 

Albania updated and continued to implement the strategy and action plan  on  the  fight  against 
organised  crime  and  trafficking. The 2015-2017  strategy on cyber  security was approved by 
the government in December. The 2014-2017 strategy on the fight against human trafficking 
and  its  accompanying  action  plan  were  adopted  in  November.  In  February,  as  part  of  its 
strategy on the fight against human trafficking, the government adopted the 2015-2017 action 
plan for the economic and social reintegration of women and girls who are victims / potential 
victims of trafficking. In March, the Ministry of Interior approved the 2016 action plan on the 
prevention  and  fight  of  cultivation  of  narcotic  plants.  Working  groups  were  established  at 
national and local levels to implement the action plan. 

Implementation and enforcement capacity 

The police underwent profound organisational changes to modernise its structures and modus 
operandi. The new police organisational structure was adopted in December in line with the 
new  administrative  division  of  the  country.  12  local  police  directorates,  50  police 
commissariats  and  15  police  stations  have  been  foreseen  in  the  reform.  The  fight  against 
internal  corruption  continued.  The  number  of  disciplinary  proceedings  in  2015  was  172, 
compared  to  153  in  2014.  The  police  still  experiences  corruption  and  political  pressure, 
hindering in-depth investigation of organised crime. 

In October 2015, the re-established Security Academy inaugurated its first academic year with 
the launch of study programmes on public security and crime investigation. The resumption 
of police higher education after more than a decade is an important step towards developing a 
professional police force.   

Some progress was made in providing police and prosecutors with direct access to national 
electronic public registries, such as the register of civil status, the register of judicial status 
(criminal  records),  the  management  information  system.  A  memorandum  was  signed  in 
August between the state police and the General Directorate of Taxes, the automated system 

73 

 
for customs data and the register of the Agency on Legalisation, Urbanisation and Integration 
of Informal Zones/Constructions.  

In March, the General Prosecutor’s Office signed a memorandum of understanding with the 
Ministry of Justice to have access to the following registries: the Judicial Bailiff’s office, the 
Notary  Registry,  the  Immovable  Property  Registration  Office  and  the  court  integrated  case 
management  system.  However,  for  technical  reasons,  the  access  to  these  databases  has  not 
yet been ensured. 

The  police  promptly  exchanges  information  with  the  Directorate  General  for  Money 
Laundering  /  the  Financial  Investigation  Unit  using  the  electronic  platform  developed  in 
2014. However, the police still lacks access to 24 national public databases and mobile phone 
companies’ and internet service providers’ subscribers data. This causes delays and hampers 
proactive investigations.  

In 2015, the Forensics Directorate entered 124 profiles into the combined DNA index system 
and  1 200  identifications  through  the  automated  fingerprint  identification  system  /  advance 
passenger information system. 

In December, the Ministry of Interior, the General Prosecutor’s Office and the Albanian state 
police signed a memorandum of understanding to set up a task force in charge of reviewing 
cases of human trafficking that were dismissed or not initiated. 

As regards Albania’s track record on criminal offences related to criminal organisations and 
structured criminal groups (articles 333 and 333a of the criminal code), in 2015 there were 
18 new criminal proceedings involving various offenders, and six in the first half of 2016. The 
number of defendants finally convicted  slightly increased, though it is still low. In 2015 the 
Serious Crime Court rendered four final guilty verdicts, and 13 in the first semester of 2016. 

The framework for combating human trafficking was further developed, and sanctions were 
made  harsher.  However,  Albania  needs  to  step  up  efforts  in  preventing  human  trafficking, 
paying  particular  attention  to  unaccompanied  children  and  child  victims  of  trafficking, 
especially among children in street situation. The legal framework needs to be further aligned 
to the EU acquis. Albania is among the top five non-EU countries of citizenship for registered 
victims of human trafficking. However, the number of related convictions remains rather low. 
Police reported 69 cases of human trafficking in 2015 (compared to 34 in 2014) and 38 in the 
first half of 2016. Most of the referrals involved adults, while reportedly child trafficking is on 
the rise. In 2015, 21 people received final convictions for human trafficking, and only two in 
the first half of 2016. Identification of minors who are victims of trafficking continued to be 
low.  There  is  no  synergy  with  other  ongoing  identification  mechanisms,  such  as  the  field 
teams working to identify children in street situation.  

The number of final convictions over cybercrime remained low, five in 2015 and six in 2014.   

On money laundering, the number of suspicious transaction reports rose to 1 319 in 2015, a 
7 % annual increase on 2014. Eight people were finally convicted for laundering the proceeds 
of crime in 2015, and four in the first half of 2016. The  Court of Appeal for Serious Crimes 
issued  11  decisions  over  the  seizure  of  property,  covering  bank  accounts,  cars,  apartments, 
restaurants, land and hotels. However, there was no final decision on property confiscation 
by the Serious Crimes Court in 2015. 

Overall,  the  increased  number  of  police  operations  led  to  increased  detection  rates  for 
criminal  offences  and  to  more  offenders  being  arrested.  However,  this  is  not  yet  feeding 
through  into  the  number  of  final  convictions  for  organised  criminal  association,  which 
remained negligible. 

74 

 
Fighting  organised  crime  and  corruption  remains  fundamental  to  countering  criminal 
infiltration in the political, legal and economic systems. 

Fight against terrorism 

According  to  the  Ministry  of  Interior  and  the  State  Secret  Service  (SHISH),  approximately 
120 Albanian  citizens  have  joined  war  zones  in  the  Middle  East.  According  to  the  same 
sources,  no  Albanian  foreign  fighter  has  reportedly  left  Albania  since  2015.  In  May,  the 
Tirana  Serious  Crimes  Court  sentenced  three  self-proclaimed  imams  and  six  collaborators 
accused of recruiting at least 70 foreign fighters. The government announced plans to include 
a  specific  course  in  schools’  curricula  on  the  history  of  religion  in  order  to  prevent 
radicalisation and support inter-religious dialogue. 

International set-up and legal alignment 

Albania  has  a  comprehensive  legal  framework  for  the  prevention  and  fight  against  the 
financing  of  terrorism.  The  country  is  party  to  all  Council  of  Europe  conventions  on 
counter-terrorism,  including  seizure  and  confiscation  of  the  proceeds  from  crime  and 
financing of terrorism. In June, the government ratified the additional protocol of the Council 
of  Europe  Convention  on  the  Prevention  of  Terrorism.  The  criminal  code  and  criminal 
procedure code were amended in 2014 to include a provision allowing for up to 15 years of 
imprisonment for citizens involved in armed conflicts outside Albanian territory. 

The national counter-terrorism strategy expired in December 2015. A new strategy is under 
preparation  and  is  expected  to  be  finalised  by  end-2016.  In  November,  the  government 
adopted  a  national  strategy  and  action  plan  on  countering  violent  extremism  (CVE),  with  a 
focus  on  community  outreach,  policing,  education  and  countering  extremist  propaganda. 
Some steps have been taken to implement the strategy and establish a CVE regional centre in 
Tirana. In August, the government appointed a national CVE coordinator. 

The main institution in charge of countering terrorism is the Counter-terrorism Directorate of 
the  Albanian  state  police.  The  state  police’s  community  policing  personnel  is  involved  in 
preventing  radicalisation  and  in  the  fight  against  violent  extremism.  An  inter-ministerial 
committee and its technical secretariat at the Ministry of Interior have been set up to increase 
coordination among public institutions in the fight against terrorism. 

Implementation and enforcement capacity 

The  Albanian  state  police  increased  its  efforts  to  prevent  radicalisation  through  community 
policing  and  close  cooperation  with  relevant  religious  communities.  The  Counter-terrorism 
Directorate  enhanced  its  capacity  through  additional  training,  personnel  and  equipment. 
However,  its  operational  and  logistical  capacities  remained  limited,  especially  for  special 
investigations and operations such as surveillance and interceptions.  

In  2015,  11  new  criminal  offences  related  to  terrorism  were  reported  to  the  Serious  Crimes 
Prosecutor’s Office, and three in the first semester of 2016. Four joint international operations 
were carried out in 2015 with Italy, the United States and Norway, and one new operation in 
the  first  semester  of  2016  with  Bosnia  and  Herzegovina.  No  case  of  financing  of  terrorism 
through money laundering was reported by the Financial Investigation Units. 

The  technical  secretariat  of  the  inter-ministerial  committee  for  combating  terrorism  is  not 
fully functional. The committee’s work was hampered by limited inter-institutional exchange 
of  information  and  poor  cooperation  with  the  police.  The  new  counter-terrorism  strategy 
should establish the secretariat as a permanent body and give it the means to support its work 
as  an  effective  coordination  body.  Bilateral  agreements  on  cooperation  in  the  fight  against 
terrorism were signed with Kosovo and Slovenia. 

75 

 
Cooperation in the fight against drugs 

Cooperation with the European Monitoring Centre for Drugs and Drug Addiction continued. 
Drug educational programmes were undertaken in schools to prevent drug use among young 
people. According to specialised UN bodies, profits from the illicit opiate trade continued to 
constitute  considerable  financial  incentives  for  organised  criminal  groups  in  Albania.  Illicit 
proceeds  of  narcotics  account  for  a  significant  proportion  of  Albania’s  GDP  (2.60 %, 
compared to 0.07-0.19 % for countries such as France, Germany, Italy and United Kingdom). 

Albania intensified the fight against drug cultivation (mainly cannabis sativa), which remains 
a serious challenge. In 2015, the police conducted 240 operations against drug cultivation and 
trafficking, which resulted in the identification of 4 634 cultivated parcels, the arrest of 402 
offenders  and  the  destruction  of  797 422  narcotic  plants,  246 008  more  than  in  2014.  The 
positive trend continued in 2016, with remarkable drug seizures and destruction of cannabis 
plants during the summer. Latest trends show that cultivation of cannabis is also carried out in 
greenhouses. More efforts are needed to improve the eradication of cannabis plots. 

On drugs trafficking, in 2015 36.9 kg of heroin, more than 11 tonnes of marijuana and 27.1 kg 
of  cocaine  were  seized  (against  73.5  kg  of  heroin,  97  tonnes  of  marijuana  and  10.3  kg  of 
cocaine in 2014). This fall in seizures may be explained by a re-routing of illegal trafficking 
through other countries, combined with a lack of proper intelligence and subsequently a lower 
number  of  interceptions.  Following  the  adoption  of  the  new  police  organisational  structure, 
the opening of eight new commissariats  should ensure a better control over the territory for 
the purpose of preventing and destroying drug cultivation. 

Despite the intensification of the fight against drug cultivation and trafficking, the number of 
final  convictions  remained  low.  Penalties  and  sentences  are  not  effective  deterrents  and 
confiscation  of  criminal  assets  is  limited.  Investigations  and  prosecutions  do  not  go  high 
enough up the drug supply chain and are not systematically accompanied by parallel financial 
investigations.  In  2015,  the  police  submitted  to  prosecutors  1 008  cases  related  to  drug 
production and trafficking (344 less than 2014). Only 359 were sent to court (372 in 2014). 

Capacities to handle, store and destroy seized drugs remain very weak. The disposal of seized 
narcotics needs to be improved. A protocol should be prepared to entrust the Ministry of the 
Environment  with  tasks  on  the  handling  of  narcotics,  such  as  air  and  soil  sampling  and 
monitoring. Drugs should be destroyed immediately or shortly after seizure and only a small 
amount should be kept for analysis at the Scientific Institute. In addition, a unit trained to deal 
with illegal laboratories for the synthesis of illicit drugs should be established. 

Customs cooperation 

The 24-hour digital camera monitoring system continues to be fully operational. The number 
of  cases  of "abuse  of  office"  by  customs  officials  increased  compared  with  previous  years. 
As regards cases of corruption, the Directorate of Internal Investigation and Anti-corruption 
opened 33 cases in 2014, 38 cases in 2015, and already over 40 cases in the first semester of 
2016. According to the Ministry of Finance, in 2015, 131 disciplinary measures were taken 
against customs officials, including 25 terminations of service. In the first half of 2016 there 
were 45 such measures, including nine terminations of service. 

76 

 
 
 
4.25.  Chapter 25: Science and research 

The  EU  provides  significant  support  for  research  and  innovation.  All  Member  States  can 
benefit  from  the  EU’s  research  programmes,  especially  where  there  is  scientific  excellence 
and solid investment in research. 

Preparations  are  at  an  early  stage  in  the  area  of  science  and  research.  Some  progress  has 
been made over the last year. In the coming year, the country should in particular: 

→ adopt a comprehensive strategy on research and innovation; 

→  build  capacity  and  increase  investment  in  research  in  line  with  European  Research  Area 
priorities. 

On research and innovation policy, the 2015- 2020 national strategy on science, technology 
and  innovation  has  yet  to  be  adopted.  Investments  in  research  and  measures  to  strengthen 
research  and  innovation  capacity  at  national  level  need  to  be  stepped  up.  The  level  of 
investment  in  research  is  very  low  at  about  0.4 %  of  GDP.5  Inter-institutional  cooperation 
needs to be strengthened, in particular regarding decisions on innovation measures. 

AS regards framework programmes, Albania participates in the EU research and innovation 
‘Horizon  2020’  programme  as  an  associated  country.  During  2015-2016,  the  number  of 
Albanian  applicants  increased  to  146, from  66  in  2014-2015.  However,  the  number  of 
successful  candidates  remains  comparatively  low.  Private  sector  participation  in  the 
programme remains very low. The Research, Technology and Innovation Agency underwent 
restructuration  and  became  the  National  Agency  for  Research  and  Innovation.  Currently 
under  the  Ministry  of  Education  and  Science,  the  agency  has  extended  responsibilities, 
including being the coordinator of the national contact points for Horizon 2020 and managing 
the national database on research, infrastructure and PhD/research publications.  

On  integration  into  the  European  Research  Area,  bilateral  memoranda  of  understanding 
were signed with Austria, the former Yugoslav Republic of Macedonia and Slovenia.  

On  the  Innovation  Union,  the  government  adopted  decisions  establishing  the  Innovation 
Fund and a voucher scheme, but they have yet to be implemented. 

4.26.  Chapter 26: Education and culture  

The  EU  supports  cooperation  in  education  and  culture  through  funding  programmes  and 
through  the  open  method  of  coordination.  Member  States  must  also  prevent  discrimination 
and facilitate the education of children of EU migrant workers. 

Albania  is  moderately  prepared  in  the  field  of  education  and  culture.  Some  progress  has 
been  made  in  education,  especially  by  adopting  the  pre-university  education  strategy  and 
implementing the higher education reform. Further efforts are needed to develop liaison with 
employers, continuous curriculum development and integrated work-based learning schemes. 
In the coming year, Albania should in particular: 

→  ensure  the  pre-university  education  strategy  and  the  law  on  higher  education  are 
implemented effectively, and improve teacher training; 

→  adopt  the  law  on  vocational  education  and  training  (VET),  enhance  links  between  skills 
and  labour  demand,  develop  databases  and  make  online  resources  available  for  VET 
providers. 

5 This figure is still the subject of discussion between INSTAT and other stakeholders since it does not include the business 

sector’s investment in R&D. 

77 

 
 
 
                                                            
On  education,  training  and  youth,  Albania  adopted  the  pre-university  education  strategy 
and  started  implementing  the  law  on  higher  education.  However,  the  quality  of  education 
needs to be evaluated and improved, especially since emigration by young, skilled people is 
high while job opportunities are lower. As PISA results indicate, Albania is far below OECD 
and EU average in terms of basic skills of 15 year olds. More cooperation between education 
institutions  and  the  business  sector  is  needed  to  better  prepare  graduates  for  the  evolving 
labour market. The new law on VET, related implementing legislation and quality assurance 
mechanisms are yet to be adopted. The lack of a modernised VET legal framework is a major 
constraint for implementing a number of measures in the jobs and skills strategy effectively. 
Private  sector  involvement  in  designing  and  implementing  labour  market  and  VET  policies 
remains a critical need. Employment and VET services need to be extended to rural areas and 
the most vulnerable groups. Education remains a high risk sector for corruption and political 
influence, especially in higher education. 

Enrolment rates for Roma and Egyptian children increased slightly during the academic year 
2015/2016.  Their  enrolment  in  pre-school  education  increased  by  4.9 %,  in  elementary 
schools by 25 %, in middle school and high school by 27 % and in pre-university education 
by 22 %. However, enrolment rates remain very low overall. (See also chapter 19 — Social 
policy  and  employment)  More  needs  to  be  done  to  deploy  adequate  human  and  financial 
resources to ensure that every child has access to education. 

Albania continues to actively participate in the Erasmus+ programme.  

Regarding  culture,  a  new  law  on  cultural  heritage  was  prepared  to  improve  the  protection, 
evaluation  and  administration  of  cultural  heritage,  including  by  combating  illegal  traffic  in 
cultural goods. Albania continued to participate in the EU’s Creative Europe programme. 

4.27.  Chapter 27: Environment and climate change 

The  EU  promotes  strong  climate  action,  sustainable  development  and  protection  of  the 
environment. EU law contains provisions addressing climate change, water and air quality, 
waste  management,  nature  protection,  industrial  pollution,  chemicals,  noise  and  civil 
protection. 

Albania  has  some  level  of  preparation  in  the  fields  of  environment  and  climate  change. 
There  was  some  progress  in  alignment  and  enforcement.  Efforts  were  made  to  integrate 
climate  change  considerations  into  other  sectoral  policies.  However,  industrial  control  and 
monitoring  of  emissions,  water  quality  and  waste  management  still  remain  poor.  Resources 
and investments remain limited. In the coming year, the country should in particular: 

→ improve the legal and policy framework related to both environment and climate change, 
in particular by adopting the relevant national sectoral strategies; 

→  strengthen  monitoring  of  the  quality  of  the  environment  by  increasing  related 
administrative  and  financial  capacity,  the  number  of  measurement  stations,  data  quality  and 
frequency, transparency and public access to data; 

→ advance financing of major investments, consolidate the national infrastructure pipeline / 
investment plan and reflect the priorities in the mid-term budget 2017-2019; 

→  establish  systematic  strategic  planning  on  climate  change  and  pursue  implementation  of 
the Paris Climate Agreement. 

Environment 

As regards horizontal legislation, the 2015-2020 cross-cutting environmental strategy has not 
been approved yet. Albania is at an early stage of building administrative capacity to enforce 

78 

 
 
legislation. Inspection capacity has developed but should be further strengthened. Alignment 
to the Directive on environmental impact assessments (EIA) is at an early stage. Quality and 
implementation  of  EIAs  need  to  be  improved,  especially  in  the  hydropower  and  mining 
sectors. Strategic environmental assessment requirements are not applied in the energy sector 
and  shall  be  expanded  to  cover  all  relevant  plans  and  programmes.  Alignment  and 
implementation  of  the  Directive  on  Environmental  Liability  are  at  an  early  stage.  The 
INSPIRE Directive6 and the Directive on Environmental Crime are not transposed yet. 

Legislative  alignment  with  the  acquis  on  air  quality  is  relatively  advanced.  The  Council 
Directive  relating  to  the  Sulphur  Content  of  Certain  Liquid  Fuels  has  been  recently 
transposed, rectifying breaches due to late transposition. The Directive on National Emission 
Ceilings for Certain Atmospheric Pollutants has yet to be transposed. A national strategy for 
air quality was adopted in 2014, but not yet implemented. A national action plan on air quality 
is being prepared. Monitoring of air quality does not fully meet the standards established by 
the relevant EU directives. There are no local ambient air quality plans and no activities have 
been initiated to prevent known breaches of the limit values. 

Legislative  alignment  with  the  acquis  on  waste  management  is  advanced  except  for  the 
acquis on ship recycling, mining and electronic waste. In September 2016, an amendment of 
the 2011 law on integrated management of waste was adopted. It aims at further aligning with 
the  acquis  as  it  allows  also  for  the  import  of  waste,  albeit  only  for  recycling  purposes.  Its 
implementation  requires  that  Albania  develops  the  necessary  infrastructure,  institutions  and 
a system for monitoring control and reporting of waste movements. Waste dumping sites are 
mapped throughout the country, pending their closure and reclaiming. Rules on the control of 
ship-generated  waste  from  marine  transport  need  to  be  enforced.  Waste  segregation  is 
non-existent and waste collection for recycling purposes is largely informal. The institutional 
capacity to manage waste still remains weak at all levels. Waste disposal remains largely non-
compliant with environmental protection standards. Industrial waste management is poor due 
to  lack of investments  and weak law enforcement.  The national waste management strategy 
and action plan, approved in 2011 and currently under revision, as well as the regional plans 
have  not  been  implemented  yet.  The  construction  of  a  regional  landfill  in  the  Korça  region 
and a feasibility study for Vlora have started. Albania has approved the construction of two 
incinerators in Elbasan and Fier. 

Legislative alignment with the acquis on water quality and administrative capacity for water 
management  are  weak.  The  Water  Framework  and  Bathing  Water  Directives  have  been 
largely  transposed,  and  responsibilities  partly  clarified  in  the  2015  local  government  law. 
However, alignment with the directives on urban waste water treatment, drinking water and 
groundwater  is  insufficient  and  regulations  to  strengthen  implementation  are  lacking.  The 
strategic  framework  is  partly  in  place,  including  the  2011-2017 national  strategy  on  water 
supply  and wastewater treatment  plants,  which is  currently being  updated,  a  master  plan on 
water supply and wastewater treatment plants,  and a first pipeline of priority projects  under 
the Western Balkans Investment Framework (2015). Only one river basin management plan 
exists (for the Mati river) but it is not implemented. However, the elaboration of water river 
basins  management  plans  for  three  other  rivers  (Drin-Buna,  Semani  and  Shkumbin)  is 
ongoing and expected to be completed by 2018. 

Policy,  strategic  and  action  documents  as  well  as  a  consolidated  national  investment  plan 
relevant to  integrated  water management are lacking,    apart from a  few  programmes.  Water 
quality  monitoring  is  in  place  under  the  National  Environment  Agency,  including  annual 
reporting  on  bathing  waters to  the  EU  Environment  Agency since  2013. However,  drinking 

6 Directive 2007/2/EC of March 2007 establishing an Infrastructure for Spatial Information in the European Community. 

79 

 
                                                            
water and groundwater quality remains unreported. Bathing water quality is not satisfactory, 
with  about  40 %  of  coastal  water  quality  stations  classified  as  poor  under  the  revised  EU 
Bathing  Water  Directive  based  on  2012-2015  data.  The  number  of  operational  waste  water 
treatment  plants  increased from 5 to  7, serving only  13 % of the population. Their capacity 
needs to be substantially increased, notably in coastal, urban and touristic areas. Mapping of 
flood hazards and risks was done for the Shkodra region and is expected to start for the Vlora 
region in 2016. 

On nature protection, there is only partial alignment with the acquis, including the Birds and 
Habitats Directives. The 2016-2020 strategic policy document on protecting biodiversity was 
adopted in January. The recognition of five Natura 2000 sites by 2017 is under preparation. 
Since  the  previous  ban  on  hunting  showed  progress  in  protecting  fauna,  the  ban  has  been 
extended for a further 5 years. The ecological impacts of hydropower plants and projects are 
not properly assessed to ensure compliance with relevant EU nature legislation. Some 44 of 
71  hydropower  stations  are  still  under  construction  within  protected  areas.  The  National 
Agency of Protected Areas  has developed a database  on hydropower constructions. Albania 
needs  also  to  consider  the  cumulative  impact  of  investments  such  as  hydropower  on  the 
landscape,  water  resources,  fauna  and  flora.  In  February,  the  parliament  adopted  a  10-year 
moratorium on forest timber exploitation for business purposes. There was some progress in 
strengthening  inspection  capacity.  Regulations  on  timber  and  on  forest  law  enforcement, 
governance and trade are yet to be transposed. 

On  industrial  pollution  and  risk  management,  large-scale  investment  will  be  needed  to 
ensure full compliance with the Industrial Emissions Directive. The Large Combustion Plants 
and the Integrated Pollution Prevention and Control (IPPC) Directives are transposed. There 
is  no  progress  on  monitoring  of  implementation.  The  Seveso  III  Directive  has  not  been 
transposed.  There  has  been  some  progress  in  strengthening  inspection  capacity,  but  more 
efforts  are  needed  to  establish  a  solid  inspection  system.  Compliance  with  IPPC/industrial 
emissions  remains  a  concern.  No  progress  has  been  made  on  integrated  permits  and  the 
authorities  are  still  issuing  multiple  permits  for  a  single  technical  installation.  There  is  no 
progress on the quality of permits. A large number of permits have been issued which do not 
comply with the legal requirements. 

As regards chemicals, Albania is partially aligned with EU requirements on REACH; export 
and  import  of  dangerous  chemicals;  on  the  regulation  on  the  classification,  labelling  and 
packaging  of  substances  and  mixtures;  persistent  organic  pollutants;  animal  experiments; 
asbestos; biocides; and mercury. The framework law on chemicals management was adopted 
in March, but several pieces of secondary legislation are pending. A centre for the collection 
and  treatment  of  hazardous  chemicals  was  established  in  October  2015  in  Elbasan.  Work 
needs to progress for the adoption of secondary legislation. Environmental protection policies 
and  practices  for  the  use  of  chemicals  in  agriculture  are  yet  to  be  developed.  Data  on  the 
implementation  of  chemicals  legislation  is  neither  reported  nor  made  public.  Albania  has 
ratified  the  Minamata  Convention  on  Mercury,  the  Rotterdam  Convention  on  the  Prior 
Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International 
Trade and the Stockholm Convention on Persistent Organic Pollutants. 

Alignment with the acquis on environmental noise is at an early stage. Noise level standards 
for outdoor use of equipment were adopted in December, but by-laws are yet to be adopted 
and  enforcement  capacity  is  weak.  Breaches  of  noise  limits  are  persistent  in  several  cities. 
Noise is not covered by spatial planning. There are no specific programmes and statistics on 
the health effects of noise. Reporting on the implementation of the national noise plan did not 
progress. 

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As  regard  civil  protection,  Albania  is  not  a  participating  state  to  the  EU  Civil  Protection 
Mechanism but will soon start preparations. The rules for cooperation by institutions in civil 
emergency  situations  were  established  in  December  2015.  The  national  strategy  for  disaster 
risk  reduction  and  civil  protection  is  awaiting  adoption.  There  is  some  progress  with  line 
ministries establishing information and civil emergency management and crisis offices, but no 
progress  at  local  or  regional  level.  Installations  located  in  river  flood  plains  still  receive 
construction permits despite evidence of recent flooding. Albania is gradually implementing 
the  emergency  communication  system,  in  accordance  with  the  single  European  emergency 
number 112. The institutional capacity and cooperation between monitoring institutions need 
to be strengthened to ensure effective responses to emergency situations. 

Climate change 

The  level  of  alignment  and  administrative  capacity  is  still  limited  despite  some  progress  on 
the policy level and on increasing climate awareness. Work has started on a national strategy 
for  climate  change,  a  national  action  plan  for  mitigation  and  a  specific  law  on  climate 
change.  The  strategy  reviews  inter  alia  the  Intended  Nationally  Determined  Contribution  - 
INDC  (2030  and  2050  targets).  The  Inter-ministerial  Working  Group  on  Climate  Change 
coordinated  the  integration  of  climate  change  considerations  including  INDCC  targets  into 
other  sectoral  strategies,  especially  in  the  areas  of  energy,  industry,  transport  and 
infrastructure.  Albania  also  needs  to  ensure  coherence  of  the  Climate  Strategy  with  the  EU 
2030 Framework on Climate and Energy Policies. Climate change adaptation also forms part 
of several horizontal and cross-sectoral strategies in the area of environment and at regional 
and local level. Albania participates in the Global Network for Adaptation.  

Under the UN Framework Convention on Climate Change, Albania is currently finalising 
its  3rd  National  communication  report  as  well  as  the  national  adaption  plan,  which  assesses 
climate related risks and adaptation scenarios for the coastal region. Albania ratified the 2015 
Paris Climate Agreement. An inter-ministerial Working Group on Climate Change established 
by the Ministry of Environment coordinates the work between line ministries, particularly on 
energy and transport issues.  

In the area of transparency of climate action, Albania is currently finalising a decision on 
Monitoring  Mechanism  Regulation.  As  for  emission  reductions  from  transport,  draft 
sustainable  transport  plan  has  been  prepared.  Further  efforts  are  required  to  align  with  the 
regulations  on  ozone  depleting  substances  and  fluorinated  greenhouse  gases,  as  well  as 
directives on emissions trading and geological storage of CO2. 

4.28.  Chapter 28: Consumer and health protection 

EU rules protect consumers in relation to product safety, dangerous imitations and liability 
for  defective  products.  The  EU  also  ensures  high  common  standards  for  tobacco  control, 
blood, tissues, cells and organs, patients’ rights and communicable diseases. 

Preparations are still at early stage in the area of consumer and health protection. There was 
some  progress  over  the  last  year,  notably  through  the  approval  of  the  national  strategy  on 
consumer  protection  and  market  surveillance,  and  the  establishment  of  the  Market 
Surveillance Inspectorate. In the coming year, the country should in particular: 

→  further  align  legislation  with  the  acquis  on  tobacco  control,  substances  of  human  origin 
and medical products; 

→ implement the national strategy on consumer protection and market surveillance; 

→ ensure that the Market Surveillance Inspectorate is operational. 

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On  horizontal  aspects  of  consumer  protection,  the  2020  national  strategy  on  consumer 
protection  and  market  surveillance  was  adopted  by  the  government  in  September  2015.  A 
decision on the criteria to be fulfilled by court dispute resolution bodies, aimed at transposing 
the Directive on Alternative Dispute Resolution for Consumers, remains to be adopted. Two 
awareness campaigns were organised on the rights of e-consumers. The Consumer Protection 
Unit remains understaffed but has received more training. 

In  product  safety-related  issues,  the  Market  Surveillance  Inspectorate  was  established  in 
January but is not yet operational. 

In non-safety-related issues, a standard draft contract between consumers and travel agencies 
was prepared, which the latter were asked to implement.  

As  regards  cross-cutting  aspects  of  public  health,  according  to  INSTAT  data  the 
completeness of child death registrations is estimated at only 57 %, so significant efforts are 
needed to improve the quality and coverage of statistics for alignment with the relevant EU 
guidelines.  International  cooperation  agreements  were  signed  in  the  field  of  health  and 
medicine with Croatia and Israel. Further efforts are needed to strengthen the governance of 
public hospitals and healthcare quality based on EU standards. 

On  tobacco  control,  the  law  on  health  protection  against  tobacco  products  has  been 
implemented.  

On communicable diseases, in March parliament adopted a law on the control of infectious 
diseases aimed  at aligning with  the relevant EU  acquis. People with HIV/AIDS  continue to 
experience  difficulties  accessing  healthcare.  A  mosquito  control  strategy  and  action  plan 
remains  to  be  adopted.  Reporting  systems  on  communicable  diseases  and  microbiology 
laboratories are not integrated with the national electronic health record system. Capacity of 
microbiology  laboratories  needs  strengthening  to  ensure  effective  disease  surveillance, 
outbreak recognition and investigation and support to actions against antimicrobial resistance. 

On  blood,  tissues,  cells  and  organs,  legislation  is  not  fully  aligned  to  the  acquis  on  blood 
safety.   

Legislation on pharmaceuticals is not fully in line with the acquis. Decisions were adopted 
on reimbursable drugs and on the rules for controlling the activity of the National Agency of 
Drugs and Medical Devices. 

No developments can be reported in the area of mental health. 

On  health  inequalities,  amendments  to  the  law  on  compulsory  healthcare  were  adopted  to 
secure  free  visits  to  family  doctors  also  for  uninsured  persons.  This  measure  particularly 
targets vulnerable groups, including Roma and Egyptian communities, who were  also given 
the  possibility  to  receive  health  cards  by  April  2016.  The  government  is  supporting  a  civil 
society  initiative  to  identify  and  train  Roma  health  mediators.  Further  work  is  needed  to 
combat child malnutrition. 

A structure for cancer screening services and a cancer registry system remains to be set up. 
Several breast cancer screening awareness activities were undertaken by mobile units across 
the  country.  Guidelines  and  protocols  for  cervical  cancer  screening  based  on  primary 
healthcare were prepared and are pending approval. 

4.29.  Chapter 29: Customs union 

All Member States are part of the EU customs union and follow the same customs rules and 
procedures.  This  requires  legislative  alignment,  adequate  implementing  and  enforcement 
capacity, and access to the common computerised customs systems. 

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Albania is moderately prepared in the area of the customs union. Some progress was made 
on  further  approximating  legislation  with  the  acquis  and  addressing  informality.  In  the 
coming year, the country should in particular: 

→ pursue the fight against smuggling and imports of counterfeit products; 

→ prepare the legal provisions, develop and test a New Computerised Transit System (NCTS) 
compatible system; 

→ continue fighting corruption and malpractice in the customs administration. 

On  customs  legislation,  the  2016  Combined  Nomenclature  of  Goods  and  regulations  to 
enforce  intellectual  property  rights,  aimed  at  aligning  with  the  EU  acquis  in  the  area,  were 
adopted  in  December  and  entered  into  force  in  January.  The  law  on  excise  duties  was 
amended  in  December  and  related  regulations  adopted  in  January.  These  establish  fiscal 
stamps  in  fiscal  warehouses,  extend  supervision  of  the  production  and  stocking  of  raw 
materials  for  tobacco  products,  and  increase  penalties.  Amendments  in  October  2015 
decreased  the  customs  declaration  ‘scanning  fee’  and  corrected  cases  of  double  payment. 
Nevertheless,  the  law  continues  to  contravene  Article  33.1  of  the  SAA  which  prohibits 
customs  duties  or  charges  having  equivalent  effect  on  trade  between  the  EU  and  Albania.  
Preparations for implementing the New Computerised Transit System have started; a gaps and 
needs assessment based on the Customs blueprints method was conducted. 

As regards administrative and operational capacity, electronic local customs clearance has 
been  completed,  but  the  customs’  IT  systems  are  not  yet  fully  interconnected  with  other 
government  systems.  However,  since  the  beginning  of  this  year,  the  police  and  prosecution 
have direct access to customs data. The General Directorate of Customs (GDC) participated 
actively  in  the  national  campaign  against  informality.  Inspections  from  October  2015  to 
August 2016 resulted in decisions related to unpaid customs  duties worth EUR 22.9 million 
and administrative fines of EUR 51.1 million. The GDC engaged in international operations 
in  the  fight  against  cigarette  smuggling  and  tobacco  products.  Customs  revenue  increased 
during the first half of 2016. The GDC continued to increase the professional competence of 
its  officials  through  further  training  while  continuing  to  root  out  corruption.  In  the  period 
September  2015-July  2016,  90  disciplinary  measures  were  taken  against  customs  officials, 
including 13 terminations of service. 

4.30.  Chapter 30: External relations 

The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements and autonomous measures. There are also EU rules in 
the field of humanitarian aid and development policy. 

Albania remains moderately prepared in the area of external relations. Some progress was 
made  in  this  field,  particularly  within  the  World  Trade  Organisation  (WTO)  with  its 
ratification  of  the  Trade  Facilitation  Agreement.  In  the  coming  year,  the  country  should  in 
particular: 

→ strengthen the capacity of trade policy coordination bodies; 

→ take further steps in aligning its legislation with the  acquis on export control of dual use 
goods and enhancing its administrative and control capacity. 

Albania has continued to coordinate its policy with the EU common commercial policy and 
its line in the WTO. In May 2016 it accepted the WTO Trade Facilitation Agreement and also 
completed  its  and  completed  the  second  WTO  Trade  Policy  Review.  Albania  established  a 
National Inter-ministerial Working Group on Trade Policy Coordination and Facilitation. 

83 

 
 
Preparations  for  alignment  with  the  acquis  on  export  credits  and  dual-use  goods  are  at  an 
early  stage.  Accession  to  the  Wassenaar  Arrangement  could  facilitate  preparations  to 
implement the acquis on dual-use goods export control.  

In  the  area  of  bilateral  agreements  with  third  countries,  Albania  concluded  bilateral 
investment  treaties  with  the  United  Arab  Emirates  and  Kosovo  and  a  memorandum  of 
understanding  in  the  field  of  tourism  cooperation  with  Lithuania.  Negotiations  continue  on 
bilateral investment protection agreements with Canada and Iceland and on an economic and 
technical  cooperation  agreement  with  China.  Albania  also  has  a  free  trade  agreement  with 
Turkey but is yet to start negotiations on liberalisation of trade in services and investment. It 
continues to participate actively in Central European Free Trade Agreement activities. 

No  progress  was  made  in  alignment  with  the  acquis  in  the  area  of  development  policy  or 
humanitarian aid. The country needs to join the EU Civil Protection Mechanism. 

4.31.  Chapter 31: Foreign, security and defence policy 

Member  States  must  be  able  to  conduct  political  dialogue  in  the  framework  of  the  foreign, 
security and defence policy, to  align with  EU  statements, to take part in  EU  actions and to 
apply agreed sanctions and restrictive measures. 

Albania  has  a  good  level  of  preparation  in  foreign  security  and  defence  policy  and  made 
some  progress  over  the  last  year.  The  destruction  of  surplus  conventional  ammunition  was 
completed.  The  online  register  of  weapons  and  ammunitions  under  the  management  of  the 
Albanian  State  Police  is  fully  operational.  On  the  common  foreign  and  security  policy 
Albania has continued to demonstrate a clear commitment in supporting positions promoted 
by the EU on peace and security and aligning itself, when invited, with all relevant common 
positions, EU declarations and Council decisions. An agreement on the exchange and mutual 
protection of classified information with the EU was signed. Albania continued to participate 
in  civil  and  military  crisis  management  missions.  In  the  coming  year  the  country  should  in 
particular: 

→  finalise  the  destruction  of  the  remaining  stockpile  of  small  arms  and  light  weapons  and 
improve the condition of storage facilities. 

The regular political dialogue between the EU and Albania on foreign security policy issues 
continued.  (For  more  information  on  relations  with  other  enlargement  countries  and  EU 
Member States, see Political criteria 2.3 — Regional issues and international obligations). 

On the common foreign and security policy, Albania has de facto maintained full alignment 
with  all  relevant  EU  declarations  and  Council  conclusions.  Albania  fully  aligned itself  with 
restrictive measures introduced by the EU. 

As regards non-proliferation, Albania has made further progress in implementing the action 
plan  for  destroying  surplus  weaponry.  The  destruction  of  surplus  conventional  ammunition 
was  finalised  in  January.  Clearance  of  hotspots  is  well  on  track.  Removal  of  hazardous 
chemicals and final closure of unneeded depots and renovation of permanent depots remains 
to  be  completed.  The  destruction  of  4 500  small  arms  and  light  weapons  (SALWs)  is  not 
finalised  yet.  The  upgrading  of  armament  and  storage  security  is  still  pending.  The  online 
register  of  weapons  and  ammunition  under  the  management  of  the  Albanian  State  Police  is 
fully  operational.  In  June,  a  National  Inter-institutional  Commission  for  SALWs  was 
established,  though  it  is  not  operational  yet.  The  aim  of  the  commission  is  to  coordinate, 
monitor  and  inspect  all  activities  related  to  the  control  of  weapons  in  Albania,  including 
registration, tracking, control of import and export, and awareness raising. Work on a strategy 
for the control of SALWs has also started. The strategy should be adopted by the end of 2016. 

84 

 
 
Albania  should  bring  its  legislation  related  to  the  import  and  export  of  military  goods  and 
dual-use goods into line with the EU acquis. 

Some steps have been taken to implement the national strategy on CVE and the new strategy 
on  counter-terrorism  is  being  drafted.  (As  regards  the  International  Criminal  Court,  see 
Political criteria 2.3 — Regional issues and international obligations). Regarding chemical, 
biological  and  radio-nuclear  threats,  efforts  on  border  control  and  towards  creating  a  solid 
export control system should be stepped up. The 2007 law on state import-export control of 
military goods and dual-use goods, and technologies needs to be aligned with the more recent 
EU acquis which takes into consideration pressing security challenges. 

Albania has continued to engage actively in cooperation with international organisations. 
It maintained three observers to the OSCE mission in Ukraine. 

On  security  measures,  the  security  agreement  with  the  EU  on  the  exchange  and  mutual 
protection of classified information was signed in Tirana in March. Albania has continued to 
participate  in  civil  and  military  crisis  management  operations  under  the  common  security 
and defence policy, in particular in the EUFOR Althea mission in Bosnia and Herzegovina 
(with  one  military  officer),  and  in  the  EU  Training  Mission  in  Mali  (with  three  military 
officers). 

4.32.  Chapter 32: Financial control 

Based  on  international  standards,  the  EU  promotes  the  reform  of  national  governance 
systems  to  enhance  managerial  accountability  and  sound  financial  management  of  income 
and  expenditure.  The  financial  control  rules  further  protect  the  EU’s  financial  interests 
against fraud in the management of EU funds and the euro against counterfeiting. 

Albania  is  moderately  prepared  in  this  area.  Some  progress  was  made  in  the  past  year, 
especially in amending the public internal financial control (PIFC) legislation in line with the 
international  standards,  refocusing  the  role  of  the  Central  Harmonisation  Units  (CHUs)  on 
more strategic activities and updating external audit manuals in line with the standards of the 
International  Organisation  of  Supreme  Audit  Institutions  (INTOSAI).  However,  many 
institutions do not implement managerial accountability and internal control in line with the 
PIFC legislation. This also affects proper development of external audit, as the SAI continues 
to  focus  primarily  on  compliance  audits  and  detection  of  irregularities.  In  the  coming  year, 
Albania should in particular: 

→ provide an assessment of those major spending institutions, which still do not have or fully 
apply internal regulations  and procedures  on financial  management and control and internal 
audit,  and  ensure  that  the  government  issues  instruction  and  recommendations  to  these 
institutions so that their operations comply with the legal requirements;  

→  ensure  effective  follow-up  to  the  annual  PIFC  assessment  addressing  the  systemic 
weaknesses especially in the areas of delegation of tasks and performance reporting; 

→ increase the number of the pilot financial and compliance/regulatory audits by the SAI in 
accordance with the updated audit manuals and the INTOSAI auditing standards. 

Public internal financial control 

The  PIFC  reform,  set  out  in  the  PIFC  Policy  Paper,  is  being  implemented  in  line  with  the 
2014-2020 public financial management reform strategy and its action plan. In March the 
government adopted the 2015 annual monitoring report on implementation of the strategy. It 
shows  that  internal  control  reforms  are  slowly  progressing.  The  PIFC  Council,  an  advisory 
body to the Ministry of Finance, has yet to become operational. 

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The number of staff of the CHUs for financial management and control and for internal audit 
increased.  The  CHUs  provide  methodological  guidance  and  monitor  public  sector 
implementation of internal control, including internal audit, by analysing the self-assessment 
reports and conducting on-site visits. The 2015 annual report on implementation of PIFC was 
adopted  and  submitted  to  parliament  in  June.  It  analyses  budget  management  and  financial 
management  control 
internal  audit  effectiveness,  providing 
recommendations endorsed by the government. The CHUs provide guidance and monitor how 
institutions  implement  the  recommendations.  However,  the  government  needs  to  ensure  a 
more systematic follow-up to the recommendations. 

indicators,  as  well  as 

Primary and secondary legislation on financial management and control has been amended 
and  is  largely  in  line  with  the  internal  control  framework  of  the  Committee  of  Sponsoring 
Organisations  model  and  the  INTOSAI  guidelines.  Implementation  is  not  systematic  by  all 
institutions.  Some  104  budget  institutions  (93 %)  have  internal  control  procedures  in  place. 
Risk management is still at an early stage, although institutions are increasingly preparing risk 
registers.  Written  rules  and  practices  to  signal  irregularities  are  lacking,  as  is  confidence  in 
delegating responsibilities from the authorising officers to their subordinates. Internal control, 
including  reporting,  is  considered  purely  financial  and  does  not  include  information  on 
performance.  The  law  on  centralised  financial  inspection,  which  complements  internal 
control,  has  been  amended.  The  Financial  Inspection  Directorate  in  the  Ministry  of  Finance 
has  4 inspectors  who are supported by around 85 inspectors from different institutions on a 
case-by-case basis. Five inspections were carried out in 2015 and ten in the first half of 2016. 
Two cases have been referred to the General Prosecutor’s Office. Mismanagement of public 
funds  is  mainly  related  to  civil  emergencies,  arrears  payments,  civil  works,  supplies  and 
services contracts. Supervision of state-owned enterprises is limited. 

The  legislation  on  internal  audit  is  in  line  with  international  standards.  Manuals,  codes  of 
ethics and internal audit charters are in place. Audit activity is based on annual plans. In 2015, 
28 of the 103 public internal audit units were not sufficiently staffed. The share of certified 
auditors  in  the  public  sector  increased  to  90 %  in  2015  from  82 %  in  2014.  The  revised 
national  certification  scheme  has  not  yet  been  put  in  place.  In  2015  the  main  internal  audit 
findings  related  to  weaknesses  in  the  internal  control  systems  and  overlapping  of  internal 
audit  services  between  superior  and  subordinate  institutions.  Although  the  role  of  internal 
auditors  is  better  understood,  they  are  still  regularly  used  for  inspection-type  work.  The 
number  of  recommendations  is  large,  7  459,  yet  they  mainly  focus  on  financial  aspects. 
Increased focus on improving business processes and performance is required. 

External audit 

The SAI’s functional, operational and financial independence is set out in the constitutional 
and legal framework in line with the INTOSAI standards. Full implementation of the legal 
framework will need to be further ensured. 

Concerning  institutional  capacity,  in  2015,  the  SAI  had  125  auditors  out  of  around  170 
employees, compared to 119 in 2014 and 113 in 2013. The SAI focuses on compliance audits 
determining economic damage and violations of rules, rather than on audits that could help to 
prevent such damage in the first place. Financial audits do not yet result in professional audit 
opinions although the SAI is gradually starting to address them.  

As outlined in the 2015-2017 strategic development plan, the SAI is committed to improving 
the  quality  of  audit  work  in  line  with  the  INTOSAI  standards.  Compliance  and  financial 
audit  manuals  have  been  updated  accordingly  and  their  application  is  ongoing.  The  SAI 
adopted its 2016 audit plan according to a risk assessment methodology. 

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The impact of audit work is still limited due to focus on compliance audits and detection of 
irregularities. In 2015, the SAI completed 158 audits, uncovering irregularities totalling EUR 
919.9  million,  half  of  which  relate  to  the  audit  of  the  state-owned  electricity  distribution 
operator.  This  represents  a  substantial  increase  compared  to  2014,  when  EUR  87.5  million 
worth irregularities were uncovered. The SAI presented 51 cases to the General Prosecutor’s 
Office  concerning  159  officials  (of  whom  56  were  high  officials),  up  from  41  cases 
concerning 149 officials in 2014. SAI's recommendations include legislative, administrative, 
organisational and  indemnification measures as  well as  recommendations  for penal charges. 
The  Ministry  of  Finance  developed  an  action  plan  to  follow  up  on  the  SAI’s  findings,  but 
more  systematic  implementation  is  needed.  Out  of  the  SAI’s  2 510  organisational 
recommendations  in  2015,  817  were  fully  and  335  partially  implemented.  Half  of  the 
administrative and disciplinary measures were complied with. Audit reports are summarised 
quarterly and published on a regular basis on the SAI website. The SAI 2015 annual audit was 
submitted to parliament but is yet to be discussed. 

Protection of the EU’s financial interests 

As regards  acquis  alignment, the main elements  are in  place. Based on amendments to  the 
law on financial inspection, the National Anti-Fraud Coordination Service (AFCOS) was 
established in the Ministry of Finance but still has limited operational capacity. An AFCOS 
network, involving other relevant authorities, has been set up. The irregularity management 
manual  was  approved  and  the  cooperation  agreements  with  relevant  national  institutions 
were signed in 2016. Its cooperation with the European Commission includes irregularity 
reporting and cooperation during on-the-spot missions. There is no antifraud strategy that 
would  address  the  EU’s  financial  interests.  The  Ministry  of  Finance  has  access  to  the 
Irregularity Management System since 2015, with one case reported through the system so 
far.  Effective  capacity  to  carry  out  investigation  activities  is  yet  to  be  ensured  and  a  solid 
track record on investigations and reporting needs to be further developed. 

Protection of the euro against counterfeiting 

Albania  has  not  yet  ratified  the  1929  International  Convention  for  the  Suppression  of 
Counterfeiting  Currency.  Acquis  alignment  is  partially  ensured  with  the  definition  of 
counterfeiting  banknotes  and  coins,  as  well  as  the  procedures  for  gathering,  storing  and 
withdrawing them from circulation. Albania has an agreement with Europol on cooperation in 
fighting the counterfeiting of currency and means of payment since 2014. Technical analysis 
of counterfeit money is performed by the national bank’s National Analysis Centre, which has 
three experts. Cooperation at the national and international level is ongoing. A  cooperation 
agreement with the European Commission on coins is in place, while an agreement with the 
European  Central  Bank  on  banknotes  is  pending.  Albania  participates  in  the  Pericles  2020 
programme and the regional Balkan Network for Euro Protection initiative. 

4.33.  Chapter 33: Financial and budgetary provisions 

Rules for funding the EU budget provide for contributions based mainly on the gross national 
income of each Member State as well as from VAT and customs duties. 

Albania has some level of preparation in this area. Some progress was made by amending 
the  organic  budget  law  and  defining  the  basic  elements  of  a  fiscal  rule.  Solid  coordination 
structures, administrative capacity and implementing rules are need in due course.  

There  have  been  no  major  developments  on  traditional  own  resources,  value  added  tax-
based  resources  and  gross  national  income-based  resources.  ESA  2010  standards  are 

87 

 
 
partially implemented and further efforts are needed to fill the gaps for cross-annual statistics. 
Considerable efforts are necessary to ensure the exhaustiveness of the national accounts and 
GNI calculations. Further efforts are still needed to ensure effective measures to formalise the 
grey  economy  and  fight  fiscal  evasion  and  customs  duty  fraud.  (See  also  chapters  17- 
Economic Criteria, 18-Statistics, 16-Taxation, 29-Customs Union and 32-Financial Control). 

On  administrative  infrastructure,  Albania  will  need  to  work  on  setting  up  the  relevant 
institutions, the coordination body and implementing rules to ensure that it will be able, from 
accession, to correctly calculate, forecast, account for, collect, pay, control and report to the 
EU on own resources in line with the acquis. 

88 

 
 
 
 
ANNEX I – RELATIONS BETWEEN THE EU AND ALBANIA 

The Stabilisation and Association Agreement between Albania and the EU came into force 
in April 2009. Albania presented its application for membership of the European Union on 28 
April  2009.  Following  a  request  by  the  Council,  the  Commission  submitted  its  Opinion  on 
Albania’s  application  in  November  2010.  In  December  2010,  the  Council  noted  that  the 
opening  of  accession  negotiations  would  be  considered  once  the  Commission  has  assessed 
that  the  country  has  achieved  the  necessary  degree  of  compliance  with  the  membership 
criteria and, in particular, has met the key priorities set out in the Commission’s Opinion. In 
view of the progress made by Albania, the Commission recommended in October 2013 that 
Albania be granted candidate status, on the understanding  that it continues  to  take action in 
the  fight  against  organised  crime  and  corruption,  and  the  Commission  identified  five  key 
priorities  for  opening  accession  negotiations.  In  December,  the  Council  stated  that  it  would 
decide  on  whether  to  grant  candidate  status  in  June  2014,  in  the  light  of  a  report  by  the 
Commission focusing on Albania’s implementation of its judicial reform strategy and on the 
fight  against  organised  crime  and  corruption.  The  Council  stressed  that  sustained 
implementation  of  reforms  and  fulfilment  of  all  key  priorities  would  be  necessary  for  the 
opening  of  negotiations.  In  a  report  published  in  June  2014,  the  Commission  confirmed  its 
recommendation  that  the  Council  should  grant  Albania  candidate  status.  The  European 
Council of June 2014 endorsed the decision of the General Affairs Council granting Albania 
candidate status. 

In the past year, Albania has implemented smoothly its obligations under the Stabilisation and 
Association Agreement (SAA). Regular political and economic dialogue between the EU and 
Albania has continued through the relevant structures under the SAA. The SAA Committee 
and Council met in June and September 2016, respectively. Meetings of subcommittees and 
of  the  special  group  on  public  administration  reform  were  held.  The  Stabilisation  and 
Association Parliamentary Committee held meetings in November and May. Overcoming the 
polarisation  on  the  Albanian  side  between  the  ruling  majority  and  the  opposition,  a  joint 
statement was agreed at the meeting in May. Albania continued to actively engage also in the 
context of the high level dialogue; the last being held in March 2016 in Tirana.  

Albania has continued to make steady progress in addressing all of the five key priorities for 
the opening of accession negotiations, pursuing a set of reforms necessary to advance in the 
EU  integration  path.  Achievements  related  to  public  administration  reform  continued  to  be 
consolidated.  As  regards  the  rule  of  law,  constitutional  amendments  were  adopted  in  July 
2016,  paving  the  way  for  thorough  and  comprehensive  reform  of  the  judicial  system.  It  is 
essential  to  build  on  the  progress  made  and  keep  the  reform  momentum.  Albania  needs  to 
demonstrate  progress  with  a  view  to  establishing  a  solid  track  record  of  investigations, 
prosecutions  and  final  convictions  in  organised  crime  and  corruption  at  all  levels.  The 
implementation of effective measures to reinforce the protection of human rights, including of 
Roma  citizens  and  other  vulnerable  groups  within  the  society,  and  anti-discrimination 
policies,  as  well  as  the  implementation  of  property  rights  remain  of  the  utmost  importance. 
Albania  should  pursue  economic  reforms  aimed  at  increasing  competitiveness  and  tackling 
high unemployment, as well as improve the business environment.  

Beyond  the  framework  of  the  five  key  priorities,  Albania  has  achieved  the  adoption  of  the 
legislation  for  the  exclusion  of  criminal  offenders  from  public  offices.  This  was  a  very 
important legislative development. Implementation is proceeding on track, after the necessary 
by-laws  were  adopted  in  March  and  all  nominated  and  elected  officials  had  to  submit  their 
self-declarations on assets and criminal records. This process is key to send an additional sign 

89 

 
 
of unequivocal commitment to values of integrity and professionalism throughout the public 
sector.  Preparations  have  also  started  for  electoral  reform.  Politicisation  of  the  electoral 
administration and issues related to transparency in party financing require utmost attention, 
amongst other relevant outstanding recommendation by the OSCE-ODIHR.  

Visa liberalisation for citizens of Albania travelling to the Schengen area has been in force 
since December 2010. As part of the monitoring mechanism in place since visa liberalisation, 
the  Commission  has  been  regularly  assessing  the  progress  made  by  the  country  in 
implementing  reforms  introduced  under  the  visa  roadmap.  The  monitoring  mechanism  also 
includes  an  alert  mechanism  to  prevent  abuses,  coordinated  by  Frontex.  A  readmission 
agreement between the European Union and Albania has been in force since 2006. 

The  EU  provided  financial  assistance  to  Albania  under  the  Instrument  for  Pre-accession 
Assistance (IPA) for the period 2007-2013 with a total allocation of EUR 594 million. The 
assistance  has  been  predominantly  implemented  under  direct  management  by  the  EU 
Delegation  in  Tirana.  The  indirect  management  modality  has  been  introduced  with  a  pilot 
approach  for  the  IPA  2013  national  programme.  Under  IPA  II,  Albania  will  continue  to 
benefit from pre-accession assistance for 2014-2020 in line with the priorities set  out  in the 
indicative  strategy  paper,  with  a  total  indicative  allocation  of  EUR  649.4  million.  The 
Framework Agreement for IPA II entered into force in April. The 2014 action programme for 
Albania  provides  approximately  EUR  67  million  to  promote  reforms  in  key  sectors  such  as 
democracy  and  governance  and  rule  of  law  and  fundamental  rights.  It  includes  a  budget 
support  operation  for  public  finance  management  and  a  set  of  actions  for  support  to  public 
administration  reform,  participation  in  union  programmes  and  economic  and  social 
empowerment of minority groups, as well as an EU integration facility. Albania continues to 
benefit  from  support  under  the  IPA  multi-country  programme.  It  continues  to  participate  in 
five cross-border  cooperation programmes with  neighbouring  Western Balkan  countries and 
Member  States,  as  well  as  in  transnational  cooperation  programmes  under  the  European 
Regional  Development  Fund  and  the  IPA  Adriatic  cross-border  programme.  Albania 
participates in the following EU programmes, with IPA support: Erasmus+, Creative Europe 
(Culture  and  Media  strands),  Employment  and  Social  Innovation,  Horizon  2020,  Customs 
2020, Fiscalis 2020, Competitiveness of Enterprises and Small and Medium-Sized Enterprises 
Programme (COSME). 

90 

 
 
 
 
ANNEX II – STATISTICAL ANNEX 

STATISTICAL DATA (as of 5.10.2016) 
Albania 

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

Note 
1) 

2003 
3 045e 
28 748 

2011 
2 907e 
28 748 

2012 
2 902e 
28 748 

2013 
2 898e 
28 748 

2014 
2 895e 
28 748 

2015 
2 892e 
28 748 

Note 

2003 
677 738 

2011 
1 300 624 

2012 
1 332 811 

2013 
1 350 053 

2014 
1 394 419p 

National accounts 
Gross domestic product (GDP) (million national 
currency) 
Gross domestic product (GDP) (million euro) 
GDP (euro per capita) 
GDP (in Purchasing Power Standards (PPS) per 
capita) 
GDP (in Purchasing Power Standards (PPS) per 
capita), relative to the EU average (EU-28 = 100) 
Real GDP growth rate: change on previous year of 
GDP volume (%) 
Employment growth (national accounts data), relative 
to the previous year (%) 
Labour productivity growth: growth in GDP (constant 
prices) per person employed, relative to the previous 
year (%) 
Unit labour cost growth, relative to the previous year 
(%) 
**3 year change (T/T-3) in the nominal unit labour 
cost growth index (2005 = 100) 
Labour productivity per person employed: GDP (in 
PPS) per person employed relative to EU average 
(EU-27 = 100) 
Gross value added by main sectors 
Agriculture, forestry 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 (%) 
Gross fixed capital formation by the general 
government sector, as a percentage of GDP (%) 

Business 
Industrial production volume index (2010 = 100) 
Number of active enterprises (number) 
Birth rate: number of enterprise births in the 
reference period (t) divided by the number of 
enterprises active in t (%) 
Death rate: number of enterprise deaths in the 
reference period (t) divided by the number of 
enterprises active in t (%) 
People employed in SMEs as a share of all persons 
employed (within the non-financial business 
economy) (%) 
Value added by SMEs (in the non-financial business 
economy) (EUR million) 
Total value added (in the non-financial business 
economy) (EUR million) 

4 929 
1 600 
: 

: 

5.5 

9 268 
3 200 
7 300 

28 

2.5 

: 

: 

: 

: 

: 

25.0 
9.4 
18.0 
47.6 
91.4 

35.9 
: 
20.8 
46.2 
: 

: 

: 

: 

: 

: 

21.0 
13.5 
14.6 
50.9 
89.3 

29.4 
2.0b 
34.0 
56.7 
: 

9 586 
3 300 
7 800 

30 

1.4 

: 

: 

: 

: 

: 

21.7 
13.3 
13.1 
51.9 
88.8 

26.5 
1.8 
33.4 
52.0 
: 

9 625 
3 300 
7 700 

29 

1.0 

: 

: 

: 

: 

: 

22.4 
14.6 
11.8 
51.2 
91.1 

26.1 
2.0 
28.7 
47.0 
: 

2015 
1 435 751
p 

10 274p 
3 600 
8 600 

9 962p 
3 400 
8 300 

30 

30 

1.8p 

2.8p 

: 

: 

: 

: 

: 

22.9p 
14.7p 
10.0p 
52.4p 
93.0p 

24.6p 
2.2p 
28.2p 
47.2p 
: 

: 

: 

: 

: 

: 

22.1p 
14.6p 
10.8p 
52.5p 
: 

: 
: 
: 
: 
: 

Note 

2) 

2003 
: 
51 945 
15.3 

2011 
111.9 
109 039 
11.8 

2012 
118.7 
106 837 
12.0 

2013 
135.1 
111 083 
10.9 

2014 
139.2 
112 537 
15.4 

2015 
142.4 
152 288 
: 

: 

: 

: 

: 

: 

74.1 

81.5 

81.7 

81.0 

79.6 

479 

1 596b 

2 126 

1 961 

2 062 

886 

2 316b 

3 077 

2 948 

3 080 

: 

: 

: 

: 

3) 

3) 

91 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inflation rate and house prices 
Consumer price index (CPI), change relative to the 
previous year (%) 
**Annual change in the deflated house price index 
(2010 = 100) 

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) 
**3 year backward moving average of the current 
account balance relative to GDP (%) 
**Five year change in share of world exports of 
goods and services (%) 
Net inward foreign direct investment (FDI) (million 
euro) 
Foreign direct investment (FDI) abroad (million euro) 
of which FDI of the reporting economy in the EU-28 
countries (million euro) 
Foreign direct investment (FDI) in the reporting 
economy (million euro) 
of which FDI of the EU-28 countries in the reporting 
economy (million euro) 
**Net international investment position, relative to 
GDP (%) 
Year on year rate of change in gross inflow of 
remittances (in national currency) from migrant 
workers (%) 

Public finance 
***General government deficit / surplus, relative to 
GDP (%) 
***General government gross debt relative to GDP 
(%) 
Total  government revenues, as a percentage of 
GDP (%) 
Total government expenditure, as a percentage of 
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) 
**Annual change in financial sector liabilities (%) 

Note 
4) 

2003 
3.3 

2011 
1.7 

2012 
2.4 

2013 
1.9 

2014 
0.7 

2015 
2.0 

: 

: 

: 

: 

: 

: 

Note 
5) 

2003 
-350 

2011 
-1 225 

2012 
-978 

2013 
-1 049 

2014 
-1 287 

2015 
-1 105 

5) 

5) 

5) 

5) 

5) 
5) 

5) 

5) 

-1 177 

-2 242 

-1 999 

-1 979 

-2 216 

-2 299 

-72 

132 

767 

53 
-7.9 

: 

135 

-25 

906 

29 
-13.3 

213 

-72 

880 

33 
-11.6 

226 

24 

680 

17 
-11.4 

323 

-119 

725 

9 
-11.3 

525 

-99 

768 

6 
-11.7 

: 

: 

: 

: 

: 

156.9 

608.9 

647.8 

923.2 

811.5 

818.4 

0.0 
: 

21.4 
: 

17.9 
: 

21.6 
: 

57.7 
: 

71.9 
: 

5) 

156.9 

630.4 

665.8 

944.8 

869.2 

890.4 

: 

: 

: 

5) 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

-3.9 

1.6 

-19.6 

8.5 

0.7 

Note 

2003 
-4.9 

2011 
-3.5 

58.8 

59.4 

24.1 

25.4 

29.0 

28.9 

Note 

2003 
25.1 

2011 
53.5 

2012 
-3.4e 

62.1 

24.8 

28.2 

2012 
57.5 

2013 
-5.0 

70.4 

24.2 

29.2 

2013 
66.1 

2014 
-5.2 

71.8 

26.2 

31.3 

2014 
69.6 

2015 
-4.0 

72.5 

26.3 

30.3 

2015 
73.9 

5) 

122.7 

157.3 

172.3 

230.3 

246.3 

281.5 

1 033 

1 973 

2 023 

2 109 

2 524 

2 749 

2 555 

4 611 

4 816 

4 942 

5 161 

5 181 

3 225 

7 626 

8 080 

8 192 

8 538 

8 717 

381 

3 862 

3 990 

3 906 

4 001 

3 914 

: 

: 

: 

: 

: 

: 

92 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
**Private credit flow, consolidated, relative to GDP 
(%) 
**Private debt, consolidated, relative to GDP (%) 
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) 
Trade-weighted effective exchange rate index (2005 
= 100) 
**3 year change (T/T-3) in the trade-weighted 
effective exchange rate index, 42 countries (2005 = 
100) 
Value of reserve assets (including gold) (million euro) 

External trade in goods 
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 * 100) (number) 
Share of exports to EU-28 countries in value of total 
exports (%) 
Share of imports from EU-28 countries in value of 
total imports (%) 

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

Labour market 
Economic activity rate for persons aged 20–64: 
proportion of the population aged 20–64 that is 
economically active (%) 
*Employment rate for persons aged 20–64: 
proportion of the population aged 20–64 that are in 
employment (%) 
Male employment rate for persons aged 20–64 (%) 
Female employment rate for persons aged 20–64 
(%) 
Employment rate for persons aged 55–64: proportion 
of the population aged 55–64 that are in employment 
(%) 
Employment by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
People employed in the public sector as a share of 
total employment, persons aged 20–64 (%) 
People employed in the private sector as a share of 
total employment, persons aged 20–64 (%) 
Unemployment rate: proportion of the labour force 
that is unemployed (%) 
Male unemployment rate (%) 
Female unemployment rate (%) 

6) 
7) 
8) 

Note 

: 

: 

: 

: 

: 

: 

: 
: 
12.23 
8.31 
137.51 

: 

: 

: 
5.07 
11.17 
5.87 
140.33 

: 

: 

: 
3.96 
10.28 
5.38 
139.04 

: 

: 

: 
3.53 
9.52 
4.17 
140.26 

: 

: 

: 
2.55 
7.66 
1.92 
139.97 

: 

: 

: 
1.92 
7.77 
1.35 
139.74 

: 

: 

818 

1 912 

1 972 

2 015 

2 192 

2 880 

2003 
1 648 
89 
-1 559 
100 

2011 
3 867 
1 400 
-2 467 
78 

77.3 

72.8 

76.1 

65.3 

2012 
3 797 
1 531 
-2 267 
83 

75.6 

63.2 

2013 
3 699 
1 761 
-1 938 
86 

76.7 

64.3 

2014 
3 941 
1 827 
-2 114 
86 

77.4 

61.1 

2015 
3 882 
1 728 
-2 154 
86 

75.5 

61.8 

Note 

2003 
9.3 

2011 
: 

2012 
: 

2013 
5.3e 

2014 
5.2e 

2015 
3.7e 

8.4 

: 
: 

: 

: 
: 

: 

: 
: 

: 
: 

7.9 

7.9 

: 

: 
: 

2015 
71.3e 

76.4e 
80.3e 

2014 
68.6e 

Note 

2003 
: 

2011 
75.6e 

2012 
71.9e 

2013 
67.6e 

: 

: 
: 

: 

: 
: 
: 
: 
: 

: 

9) 
9) 
9) 
9) 

64.9e 

62.4e 

56.7e 

56.6e 

59.3e 

72.8e 
57.2e 

70.1e 
54.9e 

64.8e 
49.3e 

65.2e 
48.5e 

68.1e 
50.7e 

54.7e 

56.3e 

51.1e 

51.2e 

53.6e 

45.4e 
10.6e 
8.2e 
35.7e 
: 

46.1e 
9.1e 
8.2e 
36.6e 
15.7e 

44.0e 
9.7e 
7.1e 
38.8e 
17.8e 

42.7e 
11.0e 
6.4e 
39.4e 
17.5e 

41.3e 
11.6e 
6.9e 
40.2 
16.7e 

: 

84.3e 

82.2e 

82.5e 

83.3e 

10) 

15.0 

14.0e 

13.4e 

15.9e 

17.5e 

17.1e 

10) 
10) 

12.9 
18.2 

13.6e 
14.4e 

14.6e 
11.7e 

17.8e 
13.5e 

19.2e 
15.2e 

17.1e 
17.1e 

93 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Youth unemployment rate: proportion of the labour 
force aged 15–24 that is unemployed (%) 
Long-term unemployment rate: proportion of the 
labour force that has been unemployed for 12 
months or more (%) 
Unemployment rate for persons (aged 25–64) having 
completed at most lower secondary education 
(ISCED 0–2) (%) 
Unemployment rate for persons (aged 25–64) having 
completed tertiary education (ISCED 5 & 6) (%) 

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 inflation index) 
(2000 = 100) 
GINI coefficient 
Poverty gap (%) 
*Early leavers from education and training: 
proportion of the population aged 18–24 with at most 
lower secondary education who are not in further 
education or training (%) 

Standard of living 
Number of passenger cars relative to population size 
(number per thousand population) 
Number of mobile phone subscriptions relative to 
population size (number per thousand population) 
Mobile broadband penetration (per 100 inhabitants) 
Fixed broadband penetration (per 100 inhabitants) 

Infrastructure 
Density of railway network (lines in operation per 
thousand km²) 
Length of motorways (kilometres) 

: 

: 

: 

: 

23.6e 

29.8e 

31.4e 

39.0e 

39.8e 

10.2e 

10.3e 

11.5e 

11.2e 

11.3e 

12.1e 

10.5e 

13.6e 

13.4e 

12.0e 

10.1e 

11.8e 

11.7e 

13.7e 

15.9e 

Note 

2003 
21 325 

2011 
46 665 

2012 
50 093 

2013 
52 150 

2014 
53 025 

2015 
54 000 

127.8 

223.5 

238.2 

: 

234.4 

243.6 

: 
: 
: 

: 
: 
35.2e 

: 
3.0 
31.6e 

: 
: 
30.6e 

: 
: 
26.0e 

: 
: 
21.3e 

Note 

2003 
57.4 

2011 
103.5 

2012 
102.4 

2013 
117.7 

2014 
130.6 

2015 
139.6 

361.6e 

1 841.8 

2 015.0 

1 822.5s 

1 686.5 

1 687.0 

: 
: 

: 
: 

: 
: 

: 
: 

: 
: 

: 
: 

Note 

2003 
15.0 

2011 
13.9 

2012 
13.9 

2013 
12.0 

2014 
12.0 

2015 
13.2s 

3 

: 

: 

: 

: 

: 

Innovation and research 
Public expenditure on education relative to GDP (%) 
*Gross domestic expenditure on R&D relative to 
GDP (%) 
Government budget appropriations or outlays on 
R&D (GBAORD), as a percentage of GDP (%) 
Percentage of households who have internet access 
at home (%) 

Note 

2003 
3.0 
: 

: 

: 

2011 
3.2 
: 

: 

: 

Environment 
*Index of greenhouse gas emissions,  CO2 
equivalent (1990 = 100) 
Energy intensity of the economy (kg of oil equivalent 
per 1 000 euro GDP at 2010 constant prices) 
Electricity generated from renewable sources relative 
to gross electricity consumption (%) 
Road share of inland freight transport (based on 
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) 

Note 

94 

Note 

2003 
99 

2011 
: 

: 

29 

: 

2003 
1 016 

360 
19 

: 

26 

: 

2011 
1 494 

895 
2 

2012 
3.3 
: 

: 

14.3 

2012 
: 

: 

31 

: 

2012 
1 676 

1 031 
2 

2013 
3.3 
: 

: 

: 

2014 
3.3 
: 

: 

: 

2013 
: 

2014 
: 

: 

35 

: 

2013 
2 041 

1 207 
2 

: 

28 

: 

2014 
2 021 

1 368 
0 

2015 
: 
: 

: 

: 

2015 
: 

: 

33p 

: 

2015 
1 984p 

1 273p 
0p 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (at producer prices) (previous year = 100) 
Utilised agricultural area (thousand hectares) 
Livestock numbers: live bovine animals (thousand 
heads, end of period) 
Livestock numbers: live swine (thousand heads, end 
of period) 
Livestock numbers: live sheep and live goats 
(thousand heads, end of period) 
Production and utilisation of milk on the farm (total 
whole milk) (thousand tonnes) 
Harvested crop production: cereals (including rice) 
(thousand tonnes) 
Harvested crop production: sugar beet (thousand 
tonnes) 
Harvested crop production: vegetables (thousand 
tonnes) 

12 
1043 
2 058 
4.8 

2003 
102.9 

1 121 
684 

15 
668 
2 162 
4.0 

2011 
105.0 

1 201 
492 

15 
320 
2 014 
4.7 

2012 
103.9 

1 201 
498 

16 
567 
2 346 
7.0 

2013 
100.8 

1 190 
498 

28 
653 
2 340 
4.7 

2014 
101.1 

1 178 
500 

30p 
420p 
2 203p 
5.9 

2015 
: 

1 175 
504 

Note 

132 

163 

159 

152 

172 

171 

2 919 

2 517 

2 619 

2 723 

2 804 

2 850 

1 060 

1 101 

1 105 

1 131 

1 133 

1 131 

488 

701 

697 

703 

700 

696 

0 

0 

0 

0 

0 

0 

675 

890 

914 

924 

950 

1 030 

: = not available 
b = break in series 
e = estimated value 
p = provisional 
s = Eurostat estimate 
* = Europe 2020 indicator 
** = Macroeconomic Imbalance Procedure (MIP) indicator 
*** = The government deficit and debt data of enlargement countries are published on an "as is" basis and without any 
assurance as regards their quality and adherence to ESA rules. 

  Footnotes: 

1)  2003 and 2011–12: based on retro projection made by INSTAT. 
2)  The Albanian government is implementing an action plan to reduce the informal economy. As result, 56 787 active 

enterprises were registered for the first time in the statistical business register in 2015. Most of them are not new 
entities for 2015. 

3)  2003: based on NACE Rev. 1.1; coverage is Divisions 05 to 93 excluding 65-67, 75-85 and 92. 2011–14: based on 

NACE Rev. 2; coverage is NACE Rev. 2: Divisions 05 to 96 excluding 64-66, 84 and 94. 
4)  2003: variation between December of one year compared with December of the previous year. 
5)  2013–2015 (subject to availability): based on balance of payments manual edition 6 (BPM6). 
6)  Annual average of the overnight rate exchanged in money market. 
7)  Average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity. 
8)  Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 

12-month maturity. 

9)  2013 and 2014: the sum of the shares in the analysis of employment by activity does not sum to 100% due to cases 

where persons have not or cannot be classified to a particular activity. 

10)  2003: administrative data. 

95