COMMISSION STAFF WORKING DOCUMENT Albania 2018 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 2018 Communication on EU Enlargement Policy
Date: 2018-04-17
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Albania, accession criteria, accession negotiations, pre-accession strategy

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 17.4.2018  SWD(2018) 151 final  COMMISSION STAFF WORKING DOCUMENT Albania 2018 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 2018 Communication on EU Enlargement Policy {COM(2018) 450 final} - {SWD(2018) 150 final} - {SWD(2018) 152 final} - {SWD(2018) 153 final} - {SWD(2018) 154 final} - {SWD(2018) 155 final} - {SWD(2018) 156 final}  
 
 
Table of Contents 

1.  

INTRODUCTION .................................................................................................................... 3 

1.1. Context ............................................................................................................................. 3 

1.2. Progress on meeting the conditions for opening accession negotiations ......................... 3 

1.3. Summary of the report ..................................................................................................... 5 

2.  FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS ......................... 7 

2.1. Functioning of democratic institutions and public administration reform ...................... 7 

2.1.1 Democracy ................................................................................................................. 7 

2.1.2. Public administration reform .................................................................................. 12 

2.2.Rule of law and fundamental rights ................................................................................ 16 

2.2.1. Chapter 23: Judiciary and fundamental rights ........................................................ 16 

2.2.2. Chapter 24: Justice, freedom and security .............................................................. 31 

3.  FUNDAMENTALS FIRST: ECONOMIC DEVELOPMENT & COMPETITIVENESS .......................... 43 

3.1.The existence of a functioning market economy ............................................................ 44 

3.2.The capacity to cope with competitive pressure and market forces within the Union ... 49 

4.  REGIONAL ISSUES AND INTERNATIONAL OBLIGATIONS ...................................................... 51 

5.   ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ................................................... 53 

5.1. Chapter 1: Free movement of goods .............................................................................. 53 

5.2. Chapter 2: Free movement of workers .......................................................................... 55 

5.3. Chapter 3: Right of establishment and freedom to provide services ............................. 56 

5.4. Chapter 4: Free movement of capital ............................................................................ 57 

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

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

5.7. Chapter 7: Intellectual property law .............................................................................. 60 

5.8. Chapter 8: Competition policy ...................................................................................... 61 

5.9. Chapter 9: Financial services ......................................................................................... 63 

5.10. Chapter 10: Information society and media ................................................................ 64 

5.11. Chapter 11: Agriculture and rural development .......................................................... 65 

5.12. Chapter 12: Food safety, veterinary and phytosanitary policy .................................... 66 

5.13. Chapter 13: Fisheries ................................................................................................... 68 

5.14. Chapter 14: Transport .................................................................................................. 69 

5.15. Chapter 15: Energy ...................................................................................................... 71 

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5.16. Chapter 16: Taxation ................................................................................................... 73 

5.17. Chapter 17: Economic and monetary policy ............................................................... 74 

5.18. Chapter 18: Statistics ................................................................................................... 75 

5.19. Chapter 19: Social policy and employment ................................................................. 77 

5.20. Chapter 20: Enterprise and industrial policy ............................................................... 79 

5.21. Chapter 21: Trans-European networks ........................................................................ 80 

5.22. Chapter 22: Regional policy and coordination of structural instruments .................... 82 

5.25. Chapter 25: Science and research ................................................................................ 83 

5.26. Chapter 26: Education and culture .............................................................................. 84 

5.27. Chapter 27: Environment and climate change ............................................................. 85 

5.28. Chapter 28: Consumer and health protection .............................................................. 88 

5.29. Chapter 29: Customs union ......................................................................................... 89 

5.30. Chapter 30: External relations ..................................................................................... 90 

5.31. Chapter 31: Foreign, security and defence policy ....................................................... 92 

5.32. Chapter 32: Financial control ...................................................................................... 93 

5.33. Chapter 33: Financial and budgetary provisions ......................................................... 96 

ANNEX I – RELATIONS BETWEEN THE EU AND ALBANIA ........................................................... 97 

ANNEX II – STATISTICAL ANNEX ............................................................................................... 99 

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1.  

INTRODUCTION  

1.1. Context   
Albania  has  continued  to  implement  the  Stabilisation  and  Association  Agreement  and  the 
meetings  of  the  joint  bodies  under  the  agreement  took  place.  In  November  2016  the 
Commission  recommended  the  opening  of  accession  negotiations  subject  to  credible  and 
tangible progress in the implementation of the justice reform, in particular the re-evaluation of 
judges  and  prosecutors  (vetting).  The  Commission  has  continued  to  monitor  thoroughly  the 
developments in the context of the Five Key Priorities. 

1.2. Progress on meeting the conditions for opening accession negotiations   
Key Priority 1: Albania was requested to reform the public administration with a view 
to  enhancing  its  professionalism  and  de-politicisation.  The  relevant  legal  and  strategic 
frameworks are now in place. Implementation of public administration reform has continued 
consistently, following the adoption of the civil service legislation, advancing further towards 
a  professional  and  merit-based  civil  service.  The  transparency  and  quality  of  merit-based 
recruitment  and  selection  procedures  for  public  posts  were  enhanced,  particularly  for  the 
central level of governance; the capacity of the institutions responsible for management and 
monitoring  of  the  civil  service  was  strengthened;  the  operational  infrastructure  of  service 
delivery  was  improved  through  one-stop-shops  and  further  implementation  of  the  territorial 
administrative reform (see section 2.1.2 Public administration reform). 

Key  Priority  2:  Albania  was  requested  to  take  further  action  to  reinforce  the 
independence,  efficiency  and  accountability  of  judicial  institutions.  A  thorough  and 
comprehensive  justice  reform  is  being  implemented.  It  was  launched  with  a  set  of 
amendments that changed to one third of the country's constitution. The main features of the 
ongoing reform can be summarised around the following pillars: measures to fight corruption, 
including  by  establishing  a  new  Special  Anti-Corruption  and  Organized  Crime  Structure 
(SPAK);  measures  to  reduce  the  influence  by  the  parliament  and  the  executive  on  the 
judiciary; measures to increase the independence and effectiveness of the High Court, as well 
as the independence, impartiality and transparency of the Constitutional Court and the High 
Council of Justice and Prosecution system; measures to increase accountability of judges and 
prosecutors,  including  by  setting  up  the  new  High  Judicial  Council,  the  new  High 
Prosecutorial  Council,  as  well  as  a  High  Justice  Inspector;  measures  to  increase  justice 
efficiency and access to justice. Implementation of the various  components of the reform is 
progressing well, in line with the legal provisions, in terms of steps and calendar. The work on 
the  establishment  of  the  new  bodies  for  the  self-government  of  the  judiciary  is  also 
progressing. In addition to the institutional restructuring of the judiciary, the reform process 
foresaw the launch of a generalised re-evaluation (vetting) of all judges and prosecutors. This 
entails that around 800 professionals are currently undergoing scrutiny. The vetting has now 
started.  The  Albanian  vetting  institutions  have  completed  the  assessment  of  the  top  priority 
cases (i.e. all judges at the Constitutional Court, the President of the High Court and the Chief 
Prosecutor). The first hearings resulted in the dismissal of a Constitutional Court judge and of 
a Court of Appeal judge, also candidate to the High Judicial Council. Seventeen high ranking 
judges and prosecutors resigned (some at the very start of the process, refusing their assets to 
be verified, some asked to retire or leave service upon reaching the end of their mandates, and 
some just before the hearings, after receiving notification of the findings to be discussed in the 
hearing).  Another  hearing  in  early  April  resulted  in  the  confirmation  in  duty  of  a 
Constitutional Court judge (see section 2.2.1 Chapter 23: Judicial and fundamental rights). 

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Key  Priority  3:  Albania  was  requested to  make  further determined  efforts  in the  fight 
against  corruption,  including  towards  establishing  a  solid  track  record  of  proactive 
investigations, prosecutions and convictions. In recent years, substantial work was done to 
improve the legal framework and the institutional set-up (including SPAK) to strengthen the 
system  to  prevent  and  fight  corruption.  As  regards  the  efforts  towards  establishing  a  solid 
track record in the fight against corruption, the positive trend of recent years continued. There 
is an increase of activity at different points of the investigation chain. The police increased the 
number of referrals of corruption cases and the number of corruption cases sent to court also 
maintained  an  increasing  trend  in  recent  years.  The  overall  number  of  first  and  second 
instance convictions involving junior or middle-ranking officials has constantly increased in 
recent years. Regarding convictions of high-level state officials, important results have been 
achieved in the judiciary. Convictions have been rendered against prosecutors and judges. As 
regards the opening of new cases against high-state officials, these also increased. However, 
the number of final convictions of high-state officials remains very low.  

The  establishment  of  a  solid  track  record  of  proactive  investigations,  prosecutions  and 
convictions  in  the  fight  against  corruption  remains  nonetheless  a  long-term  objective  that 
continues to require further structured and consistent efforts. The efforts noted since the Five 
Key  Priority  framework  was  established,  seem  nevertheless  adequate  to  consolidate  further 
progress  in  this  area,  which  will  remain  a  core  aspect  of  EU  engagement  in  the  context  of 
future negotiations (see section 2.2.1 Chapter 23: Judicial and fundamental rights). 

Key  Priority  4:  Albania  was  requested to  make  further determined  efforts  in the  fight 
against organised crime, including towards establishing a solid track record of proactive 
investigations, prosecutions and convictions. Tangible results were achieved in particular in 
the fight against the cultivation and trafficking of cannabis. In 2017, a substantial reduction of 
cannabis  cultivation  and  a  considerable  increase  of  seizures,  in  particular  of  stocks  of 
cannabis,  were  detected.  Large  scale  law  enforcement  operations  also  led  to  successful 
confiscation of large quantities of cannabis stockpiled from previous crops and, recently, also 
cocaine from Latin America and covered also trafficking of human beings and property rights 
abuses. Work continues on preparing for the vetting of police forces (law adopted in principle 
by  the  Assembly  at  the  end  of  February).  As  regards  the  track  record  in  the  fight  against 
criminal organisations and structured criminal groups, the number of referrals has increased in 
the  past  years,  and  has  particularly  intensified  in  the  past  months,  but  the  number  of 
indictments  and  final  convictions  remain  very  low  and  has  only  marginally  increased.  As 
regards  statistics  on  serious  crimes  not  linked  to  criminal  organisations  and  structured 
criminal  groups,  the  trend  of  people  convicted  is  increasing,  against  the  background  of  a 
higher number of reported cases. Such crimes are mostly related to production and cultivation 
of narcotics, followed by money laundering. 

The  establishment  of  a  solid  track  record  of  proactive  investigations,  prosecutions  and 
convictions  in  the  fight  against  organised  crime  remains  nonetheless  a  long-term  objective 
that continues to require further structured and consistent efforts. The efforts noted since the 
Five  Key  Priority  framework  was  established,  seem  nevertheless  adequate  to  consolidate 
further  progress  in  this  area,  which  will  remain  a  core  aspect  of  the  EU  engagement  in  the 
context of future negotiations (see section 2.2.2 Chapter 24: Justice, freedom and security) 

Key  Priority  5:  Albania  was  requested  to  take  effective  measures  to  reinforce  the 
protection of human rights, including of Roma, and anti-discrimination policies, as well 
as implementing property rights. The legal framework for the protection of human rights is 

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broadly  in  line  with  European  standards  and  Albania  has  ratified  most  international  human 
rights  conventions.  The  Ombudsman  has  been  actively  promoting  the  rights  of  vulnerable 
groups,  including  by  submitting  special  reports  and  recommendations.  The  policy  and  legal 
framework on non-discrimination is broadly in line with European standards. Important steps 
have  been  taken  to  improve  the  legal  framework  on  the  protection  of  minorities,  for  which 
secondary  legislation  is  now  under  preparation,  as  well  as  juvenile  justice,  child  protection 
and property rights (financial means have been earmarked to implement ECtHR rulings). As 
for  the  integration  of  Roma  and  Egyptians1,  progress  was  achieved  in  early  childhood  and 
primary education, as well as access to healthcare and the labour market. The housing budget 
has  also  increased.  Freedom  of  thought,  conscience  and  religion  was  generally  upheld.  The 
overall  legislative  environment  is  conducive  to  the  exercise  of  freedom  of  religion  and 
progress was made in strengthening the independence of the regulatory authority and public 
broadcaster.  Efforts  for the  enforcement  of  human  rights  will  have  to  continue. (see  section 
2.2.1 Chapter 23: Judicial and fundamental rights ) 
1.3. Summary of the report2 
As regards the  political criteria, strong polarisation persisted in  the political establishment. 
Parliamentary activities were affected by a prolonged boycott by the opposition in early 2017, 
which also delayed the appointment of the judicial vetting institutions. In May, an agreement 
between the main ruling party and the opposition allowed resuming parliamentary activities, 
triggering  some  changes  to  the  electoral  legislative  framework.  This  was  conducive  to  the 
smooth  organisation  of  the  general  elections  in  June,  although  a  number  of  OSCE/ODHIR 
recommendations still remained outstanding. Some progress was made towards improving the 
functioning of the National Council for Civil Society. Additional efforts are needed to better 
involve civil society organisations as part of an inclusive policy dialogue.  

Albania is moderately prepared in the reform of its public administration. Efforts continued, 
resulting in some progress in the efficiency and transparency of public services delivery, the 
training  of  civil  servants,  more  transparent  recruitment  procedures,  and  the  overall 
strengthening  of  merit-based  civil  service  procedures.  Consolidation  of  these  achievements 
should  advance  further,  to  ensure  a  more  efficient,  depoliticised,  and  professional  public 
administration. 

level  of  preparation.  The 

Albania's  judicial  system  has  some 
implementation  of 
comprehensive and thorough justice reform has continued, resulting in good progress overall. 
The re-evaluation of all judges and prosecutors (vetting process) has started and is delivering 
first  tangible  results.  This  process  has  cross-party  support,  is  carried  out  by  an  independent 
authority,  is  subject  to  international  monitoring  and  its  compatibility  with  the  European 
Convention  on  Human  Rights  has  been  confirmed  by  the  Venice  Commission.  Under  the 
aegis of the European Commission, an International Monitoring Operation has been deployed 
to oversee the process throughout its implementation. The auxiliary institutions supporting the 
process have completed their first reports on the proficiency assessments, background checks 
and asset declarations.  

1 All these groups are considered under the wider "Roma" umbrella term under the EU Framework for National 
Roma Integration Strategies. 
2  This  report  covers  the  period  from  October  2016  to  February  2018.  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.  

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Albania maintains some level of preparation in the fight against corruption. Good progress 
was made, notably with the adoption of amendments to the criminal procedure code. A chain 
of  specialised  anti-corruption  bodies,  including  a  special  prosecuto's  office,  is  being 
established. The number of final convictions involving junior or middle-ranking officials has 
increased  compared  to  the  previous  reporting  period.  Convictions  of  high-level  officials 
occurred  mostly  in  the  judiciary  (judges  and  prosecutors);  however,  the  rate  of  final 
convictions for high-ranking officials remains overall very low. Corruption remains prevalent 
in many areas and continues to be a serious problem.  

Albania  has  some  level  of  preparation  in  the  fight  against  organised  crime.  Overall  there 
was some  progress in the  reporting period, notably in the fight  against cannabis cultivation. 
Albania needs to build on operational results in this area, intensifying confiscation of assets 
belonging to criminal gangs and pursuing the destruction of all existing cannabis stockpiles. 
Amendments  to  the  anti-mafia  law  and  the  Criminal  Procedure  Code  have  created  the 
conditions  for 
investigations.  Albania  participated 
successfully in international police cooperation, intensifying its interactions particularly with 
EU Member States. At domestic level, effective police-prosecution cooperation remains to be 
improved. As regards the track record, there has been little progress in dismantling organised 
criminal groups. The number of final convictions in organised crime cases remained very low 
and  has  only  marginally  increased.  More  efforts  are  needed  to  tackle  money  laundering, 
criminal assets and unjustified wealth. 

increased  efficiency  of  criminal 

Albania has ratified most international human rights conventions and has developed its legal 
framework  in  line  with  European  standards.  Enforcement  and  monitoring  of  human  rights 
protection  mechanisms  remain  to  be  strengthened.  As  regards  the  freedom  of  expression, 
Albania has some level of preparation/is moderately prepared. There has been some progress 
in  strengthening  the  independence  of  the  regulatory  authority  and  public  broadcaster  but 
transparency of state advertising in the media remains to be enhanced. Progress remains to be 
made  in  the  area  of  property  rights  with  the  update  of  the  current  legislation  and 
reinforcement  of  institutional  coordination.  Institutional  mechanisms  to  protect  the  rights  of 
the  child  and  to  tackle  gender-based  violence  remain  weak.  Important  steps  were  made  to 
improve  the  legal  framework  for  the  respect  for  and  protection  of  minorities  but  relevant 
secondary legislation needs to be developed. Living conditions for Roma and Egyptians need 
to be improved.  

Albania  has  continued  to  participate  actively  in  regional  cooperation  and  maintain  good 
neighbourly relations. Important steps have been taken to address bilateral issues with Greece. 

As  regards  the  economic  criteria,  Albania  has  made  some  progress  and  is  moderately 
prepared in developing a functioning market economy. The public debt-to-GDP ratio and the 
current  account  deficit  have  been  reduced.  Economic  growth  increased  further  and 
unemployment decreased but is still high. Non-performing loans (NPLs) in the banking sector 
have  been  reduced,  but  bank  lending  to  businesses  remains  sluggish.  Reforms  crucial  to 
improving  the  business  environment  progressed  but  require  further  efforts,  including  the 
reduction of the informal economy. The comprehensive judicial reform advanced but needs to 
be fully implemented. The new bankruptcy law entered into force and should strengthen the 
insolvency  regime.  However,  business-relevant  regulations  remained  cumbersome  and 
shortcomings in the rule of law continued to hamper businesses and deter investments. 

Albania  has  made  some  progress  and  has  some  level  of  preparation  in  terms  of  capacity  to 
cope with competitive pressure and market forces within the EU. Specifically, progress was 

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made on energy and transport infrastructure and digitalisation, although shortcomings remain 
which hinder Albania’s competitiveness and trade. The quality of education needs to be raised 
at all levels, not least to better equip people with skills that the labour market needs. Foreign 
trade  remains  below  potential  and  sectorally  concentrated.  Albania’s  capacity  for  research, 
development and innovation remains low. 

Albania continued to align its legislation to EU requirements in a number of areas, enhancing 
its ability to take on the obligations of membership. The country is moderately prepared in 
many  areas,  such  as  in  financial  control,  education  and  culture,  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  transport  and  energy  networks,  also 
with a view to improving connectivity throughout the region. The administrative capacity and 
professional  standards  of  bodies  which  would  be  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  showed  commitment 
and adopted a number of measures, including strengthened bilateral cooperation with relevant 
EU Member States. These measures yielded positive results. Further decisive actions have to 
continue, including in the framework of the post-visa liberalisation monitoring mechanism, to 
effectively  address  this  phenomenon.  Albania  needs  to  put  in  place  a  return  mechanism  for 
irregular  migrants,  which  is  in  line  with  the  EU  acquis,  as  well  as  to  align  its  visa  policy 
progressively with the EU’s.  

2. 

FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS 

2.1. Functioning of democratic institutions and public administration reform 

2.1.1 Democracy 
The  political  environment  remained  characterised  by  strong  polarisation  throughout  the 
reporting  period,  particularly  in  the  first  half  of  2017,  when  parliamentary  activities  were 
affected by a prolonged boycott by the opposition. This also delayed the appointment of the 
judicial vetting institutions. An agreement between the two main ruling and opposition parties 
in May allowed parliamentary work to resume ahead of the electoral recess. More recently, a 
number of bipartisan initiatives have been taken, including the wide cross-party consensus on 
the vote of principle to the law for the vetting of the police, the establishment of investigative 
committees, as well as continued dialogue in the ad hoc committee on electoral reform. 

Elections 

The  2017  parliamentary  elections  were  held  in  an  orderly  manner  and  its  results  were 
accepted  by  all  parties.  The  May  2017  cross-party  political  agreement  resulted  in  the 
opposition’s participation in the election and a less aggressive electoral campaign. It also led 
to  some  changes  to  the  electoral  legislative  framework.  In  its  report,  the  Office  for 
Democratic Institutions and Human Rights of the Organisation for Security and Cooperation 

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in  Europe (OSCE/ODIHR)  highlighted  the  persistent  politicisation  of  electoral  bodies, 
widespread  allegations  of  vote-buying  and  pressure  on  voters.  High-level  political 
commitment is required to improve and properly implement the legal framework. The newly 
established  ad  hoc  parliamentary  committee  on  electoral  reform  should  address  outstanding 
OSCE/ODIHR  recommendations  in  an  inclusive  manner,  well  ahead  of  the  2019  local 
elections. 

The  18 May  political  agreement  between  the  Prime  Minister  and  the  leader  of  the  main 
opposition  party  ended  4  months  of  parliamentary  boycott  by  the  opposition  and  secured 
participation  by  the  latter  in  the  25  June  parliamentary  elections.  It  granted  six  ministerial 
positions to the opposition in sectors key to elections. A task force, chaired by a deputy prime 
minister  from  the  opposition,  was  established  to  monitor  and  coordinate  the  public 
administration’s conduct during the campaign and on election day. The agreement contributed 
to  a  less  polarised  campaign  and  a  largely  incident-free  election.  However,  OSCE/ODIHR 
expressed  concerns  over  the  low  level  of  public  trust  in  the  electoral  process  and  the 
continued  politicisation  of  the  election-related  bodies.  It  reported  widespread  allegations  of 
vote-buying, as well as concerns over abuse of state resources and pressure on voters. 

Some OSCE/ODIHR recommendations on sanctions for electoral violations, transparency and 
accountability  of  campaign  financing,  and  the  rights  of  observers  were  partially  addressed 
through  the  amendments  to  the  legislative  framework  and  sub-legal  acts  of  the  Central 
Election Commission adopted in May. However, the ad hoc electoral reform committee failed 
to  achieve  comprehensive  reform  through  broader  amendments  to  the  Electoral  Code.  All 
outstanding OSCE/ODIHR recommendations should be addressed as a priority through both 
legislative  and  administrative  measures.  A  new  ad  hoc  parliamentary  committee  was 
established in October 2017 to address OSCE/ODIHR recommendations outstanding from the 
last three elections (2013, 2015 and 2017). It is jointly chaired by the two main majority and 
opposition parties and includes representatives of all parties in Parliament. 

Parliament 

The last year of the outgoing parliament was marked by a high degree of polarisation and an 
extended  opposition  boycott.  Overall,  the  role  of  the  Parliament  in  initiating  and  amending 
legislative proposals, as well as consultations in parliamentary committees, has increased. The 
new  legislature  has  so  far  demonstrated  commitment  to  electoral  reform  and  improved 
conduct in plenary sittings. Implementation of the so-called Decriminalisation Law led to the 
removal of four members of Parliament during the reporting period. More efforts are required 
to achieve effective oversight, strengthen constituency links, increase transparency and ethical 
conduct, and strengthen Parliament’s research capacity. 

Political  polarisation  and  the  extended  opposition  boycott  hindered  political  dialogue  and 
parliamentary  work.  The  opposition  boycotted  parliamentary  activity  between  February  and 
May  2017  and  threatened  not  to  take  part  in  elections.  The  political  agreement  of  18  May 
2017  led  to  the  opposition  returning  to  Parliament,  enabling  the  completion  of  the  vetting 
commissions.  Parliament  elected  former  Speaker  Ilir  Meta  as  President  of  the  Republic  in 
April 2017, with the votes of the governing majority. 

The 2017 parliamentary election gave the Socialist Party 74 seats and the mandate to govern 
alone. The Democratic Party and Socialist Movement for Integration became the two largest 
opposition parties, with respectively 43 and 19 seats. About one third of the 2017-2021 MPs 
were  elected  for  the  first  time  and  the  number  of  women  representatives  elected  rose  to  40 

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(28.5 %).  In  September  2017  Parliament  nominated  its  Speaker  and  the  Prime  Minister  and 
voted through the government’s political programme. 

Four  members  of  Parliament  (and  one  mayor)  lost  their  mandates  under  the  so-called 
decriminalisation  process  in  December  2016  and  January  2018.  Overall,  seven  MPs  lost  or 
forfeited their mandates in the reporting period, and an eighth was found to have had business 
interests  incompatible  with  a  parliamentary  mandate.  The  Constitutional  Court  decided  in 
autumn  2016  that  the  mandates  of  two  other  MPs  were  compliant  with  constitutional 
provisions. At the request of the prosecution, in October 2017 Parliament partially lifted the 
immunity of MP Tahiri, former Minister of Interior. 

Despite  improved  conduct  in  plenary  sittings,  procedural  rules  are  sometimes  not  respected 
and  public  expectations  are  often  not  met.  The  Code  of  Ethics,  which  has  been  in 
parliamentary  procedure  since  early  2016,  still  awaits  approval.  Coverage  of  all  12  regions 
with  constituency  offices  has  yet  to  be  ensured.  Communication  channels  between  citizens 
and MPs need to be formalised and strengthened. 

Regarding Parliament’s legislative role, the number of laws and amendments put forward by 
MPs  and  the  regularity of  hearings  with  government  and  interest  groups  at  committee  level 
has increased. Parliament accepted three presidential decrees returning laws for parliamentary 
review.  Overall,  the  opposition  gave  its  approval  to  a  limited  number  of  laws.  Parliament 
adopted  17  laws  requiring  a  qualified  majority  vote,  most  of  which  form  part  of  the  justice 
reform package. 

Parliamentary rules of procedure should 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 has been strengthened by a dedicated support unit, which remains to be 
fully staffed. The Council has held a number of consultations and training sessions, but is yet 
to fully assume its role as a forum for broad involvement and consultation on EU integration 
issues.  The  EU  Integration  Committee  held  a  number  of  oversight  hearings  during  the 
reporting  period.  Parliament’s  overall  capacity  to  monitor  the  implementation  of  new 
legislation  and  its  compliance  with  the  acquis  remains  limited.  Coordination  with  the 
executive branch needs to be improved. 

On  Parliament’s  oversight  function,  the  work  of  inquiry  committees  remained  highly 
conflictual  and  lacked  results.  The  mandates  of  the  two  inquiry  committees  established  in 
2016  on  the  privatisation  and  renationalisation of  the  Electricity  Power  Distribution  System 
Operator  were  extended  in  January  and  February  2017.  An  inquiry  committee  on  telephone 
surveillance was established in October 2016 at the request of the opposition and another on 
cannabis  cultivation  and  the  case  of  former  Minister  Tahiri  was  recently  established.  Other 
oversight  mechanisms  remained  underused.  In  the  last  year  there  were  few  Prime  Minister 
and  cabinet  questions  and  oversight  hearings  at  committee  level.  Parliament  conducted  a 
structured review of annual reports from independent institutions and adopted 15 resolutions, 
which are however not discussed in plenary. The April 2017 decision to establish a system for 
following  up  and  monitoring  recommendations  by  Parliament  and  independent  institutions 
marked a step towards stronger oversight in this regard. 

The  Ombudsman,  as  well  as  the  chair  and  one  member  of  the  Central  Election 
Commission, were appointed as part of the 18 May political agreement. The assembly has yet 
to  finalise  a  second  process  for  electing  the  Commissioner  for  Protection  against 
Discrimination, after failing to elect one in March 2017. 

9 

 
 
 
As  regards  transparency  and  accountability,  Parliament  has  overall  ensured  access  to 
documents and activities. A two-year communications strategy was approved in May 2017. A 
review has continued of the internal rules of organisation of Parliament’s administration and 
training, including activities undertaken under the EU Twinning Project.  

Political parties have partially reflected OSCE and EU recommendations on transparency of 
party  funding,  agreeing  on  legal  amendments  ahead  of  the  2017  parliamentary  elections. 
Further  reform,  including  amendments  to  the  Electoral  Code,  is  required.  Issues  persist  in 
relation to internal party democracy and due implementation of statutes.  

Governance 

The  government  remained  committed  to  the  EU  integration  process  but  the  pace  of  reform 
was affected by the electoral campaign and changes at ministerial level. The new government, 
established  after  the  June  elections,  reconfirmed  that  Albania’s  EU  accession  was  a  key 
priority.  The  government  has  launched  a  restructuring  of  the  whole  public  administration 
which  aims  to  reduce  the  number  of  ministries  and  state  agencies  while  delivering  services 
more efficiently. Further progress was made at local government level, with the adoption of 
the laws on local finances and on the organisation and functioning of local governance. The 
Consultative  Council  was  established  and  started  operating  as  the  main  mechanism  for 
institutional coordination between central and local governments.  

During  the  reporting  period,  the  government  was  reshuffled  three  times  and  changed  once. 
Two  reshuffles  took  place  in  January  and  March  2017  within  the  ruling  coalition  of  the 
Socialist  Party  and  the  Socialist  Movement  for  Integration.  Following  the  18  May  2017 
agreement  mentioned  above,  the  opposition  Democratic  Party  was  granted  six  ministerial 
posts  with  responsibilities  linked  to  the  elections.  The  reshuffle  included  the  position  of 
deputy  prime  minister  and  the  chairmanship  of  some  key  state  agencies.  This  joint 
government  decreased  public  tension  and  polarisation  and  demonstrated  some  cross-party 
ability  to  overcome  stalemate.  However,  cooperation  between  the  two  main  parties  stalled 
after the elections. 

In September 2017, a new government took office, with the Socialist Party Chair receiving an 
absolute  majority  for  a  second  mandate.  The  restructuring  process  proposed  by  the  new 
government has started. The central government underwent a full restructuring of ministries 
and of the Prime Minister’s office: the number of ministries was reduced from 19 to 11 and 
policy  functions  streamlined  in  new  ministerial  departments.  The  restructuring  led  to  a 
significant redistribution of competencies and merging of administrations. The lower number 
of ministers was balanced by an increase in the number of deputy ministers to 33. The new 
government marks  a clear commitment to  gender equality, with  7 out  of 14  ministers being 
women,  including  the  Deputy  Prime  Minister.  Further  to  these  steps  already  taken,  state 
agencies  and  independent  bodies  will  be  reduced  in  size  and  streamlined  with  the  aim  of 
optimising  consistency  and  efficiency  in  administrative  performance.  Key  measures  in  the 
restructuring are the dismantling of agencies with mixed functions, the merging of those with 
overlapping  functions  and  the  devolution  of  institutions  to  the  four  development  regions  in 
coherence  with  territorial  administrative  reform.  The  restructuring  process  created  a 
temporary vacuum in some areas of governance, which shall be swiftly overcome, in order to 
prevent losses of efficiency in the continuation of reform implementation. 

With  the  new  government,  a  dedicated  State  Minister  for  relations  with  the  diaspora  was 
nominated.  

10 

 
 
 
The  Constitutional  Court  issued  71  decisions  in  2017,  two  of  which  were  related  to  the 
justice  reform  and  one  to  property  rights.  The  constitutionality  of  the  vetting  process  was 
contested twice before the Constitutional Court but the latter rejected these appeals. 

Regarding  local  government,  the  implementation  of  territorial  reform  continued  and  the 
newly  created  municipalities  were  further  consolidated,  administratively  and  financially. 
Appointments in breach of the civil service law continue to be a common practice hindering 
merit based civil service. The implementation of the 2015-2020 national cross-cutting strategy 
for  decentralisation  and  local  governance  continued.  Under  the  territorial  administrative 
reform,  the  Law  on  Local  Self-Governance  Finances  was  adopted  in  April  2017.  It  aims  to 
strengthen the fiscal autonomy of local governments and ensure a predictable, transparent and 
inclusive process for allocating funds that is responsive to local governments’ needs. The Law 
‘On Qark’s Prefect’, adopted in October 2016, strengthened the role of prefects in overseeing 
the implementation of legislation and delegated functions by local government units.  

The Consultative Council, established in December 2016, is operating as the main mechanism 
for  institutional  coordination  between  central  and  local  governments.  In  January  2018  the 
Agency for Implementation of Territorial Reform was transformed into the Agency for Local 
Self  Government  Support,  widening  its  scope  under  the  responsibility  of  the  Ministry  of 
Interior.  

With  regard  to  public  participation  in  local  decision  making,  further  progress  has  been 
made  in  the  area  of  access  to  information:  an  increasing  number  of  municipalities  have 
disclosed  public  information  and  nominated  a  local  coordinator  responsible  for  the  right  to 
information.  The  institutional  framework  for  public  participation  in  local  decision-making, 
particularly in the budgeting process, needs to be strengthened for all municipalities. 

On  territorial  planning  there  has  been  some  progress,  with  increasing  numbers  of 
municipalities drafting ‘general local plans’ supported by the government. 

Additional efforts are needed to increase the capacity of local government units to carry out 
their expanded responsibilities, improve training and manage their finances more efficiently. 
Full  implementation  of  the  law  on  civil  servants  at  local  government  level  has  yet  to  be 
ensured. Arrears continue to be a potential source of financial instability. 

A network of 61 Local EU coordinators has been created. Each municipality is setting up an 
'EU  desk'  with  the aim  to  strenghten  municipal  EU  related  governance  capacities  and  reach 
out to Albanian citizens and local administrations with information about the EU, its policies, 
funds and programmes.  

Civil society 

Some progress was made towards improving the functioning of the National Council for Civil 
Society and through approval of the Law on Social Enterprises. Substantial efforts are needed 
to  ensure  meaningful  consultations  with  civil  society  actors  as  part  of  an  inclusive  policy 
dialogue. The financial sustainability of civil society organisations remains a challenge due to 
fiscal and legal frameworks. 

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.  The  2014  Law  on  Public  Consultation  laying  down  the  procedural  norms  for 
transparency and public participation in decision-making is in line with European standards. 

11 

 
 
 
However,  the  registration  process  is  still  a  problem  due  to  the  high  financial  cost  of 
registration, lengthy procedures and lack of specialised judges. Implementation of the laws on 
volunteering and on social enterprises is hampered by the lack of sub-legal acts. 

In 2017, the National Council for Civil Society (NCCS) had two meetings. The first one, held 
in February 2017, was organised with the support of the Agency for Support to Civil Society 
acting as a technical secretariat. An interinstitutional working group was established to follow 
up  the  implementation  of  the  roadmap  for  engagement  with  civil  society.  The  set-up  of  the 
NCCS  needs  to  be  aligned  with  the  structural  composition  of  the  new  government.  In 
December  2017  the  NCCS  adopted  its  rules  of  procedures  and  elected  a  new  deputy  head 
coming from civil society. Consultation of civil society in legislative and executive processes 
has increased but needs to be more systematic, transparent and with adequate time frames at 
the central and local levels. So far, civil society participation still remains occasional. 

No  significant  developments  took  place  in  the  legal  and  regulatory  framework  of  the  tax 
regime for civil society organisations (CSOs), which remains a problem. This is a significant 
financial  burden  for  CSOs  and  the  current  legal  environment  does  not  support  alternative 
funding sources. Tax incentives for corporate donations do not stimulate donations to CSOs, 
while individual donations are not recognised. Public funding for CSOs remains limited and is 
not yet legally regulated at central and local level.  

2.1.2. Public administration reform 
Albania is moderately prepared with the reform of its public administration. Some progress 
was made, especially in improving the efficiency and transparency of public services delivery, 
recruitment  procedures  and 
training  civil  servants,  establishing  more 
strengthening 
recruitment. 
the  administration’s  capacity 
Implementation of the public administration reform and public financial management reform 
strategies  has  continued,  although  for  the  past  few  months  some  steps  in  the  process  have 
been  on  hold,  following  the  general  elections  and  central  government  restructuring.  Any 
further reorganisation of the public administration needs to be carried out in a consistent and 
evidenced-based  manner.  The  Commission’s  recommendations  from  2016  were  partially 
addressed.  

transparent 
to  undertake  merit-based 

In the coming year, Albania should in particular: 

→  implement regulatory and fiscal impact assessments across all ministries with a view to 
improving the quality of legislative and policy proposal, reflection of their financial estimates 
and their costing and budgeting of Medium Term Budget Plan; 

→  develop  a  comprehensive  salary  policy  for  a  fair,  transparent  and  merit-based  salary 
scheme  in  public  institutions  and  enable  automated  payroll  through  the  human  resource 
management information system and the treasury; 

→  ensure effective implementation of the Code of Administrative Procedure by completing 
the harmonisation of relevant regulations with the code. 

12 

 
 
 
 
 
 
Policy development and coordination 

The legal basis and the institutional set-up are in place to ensure a consistent policy-making 
system,  including  for  European  integration.  Policy  planning  remains  fragmented  among 
various  centre-of-government  institutions  and  line  ministries.  Harmonisation  of  central 
planning documents with sector strategies in line with government priorities remains limited. 
Alignment  of  policy  and  fiscal  planning  needs  to  be  further  strengthened.  Institutional 
capacity for coordinating, reviewing and monitoring policy needs to be further improved. 

The institutional responsibility for coordinating the national plan for European integration is 
assigned  to  the  new  Ministry  for  Europe  and  Foreign  Affairs.  Monitoring  and  reporting  of 
implementation of such plan have improved, but the rate of implementation remains low and 
has decreased from 56 % in 2016 to 25.5 % in 2017, particularly due to delays following the 
ministerial restructuring.  

The  administration  needs  to  further  strengthen  its  capacity  to  develop  inclusive  and 
evidence-based policy and legislation, including the acquis. While procedures for legislative 
alignment with the acquis are in place, the impact of such alignment is not properly analysed 
and implementation costs are not duly forecasted. Two pilot ministries have started to apply 
regulatory impact assessments, but more systematic use of such assessments needs to be put 
in place and the relevant staff need to be trained. Inter-ministerial consultation and the quality 
of  analysis  supporting  new  policy  proposals  needs  to  be  further  improved.  Public 
consultation  is  regulated  but  needs  to  be  fully  implemented.  The  electronic  web  portal  for 
public consultations became operational in 2017, but it is not yet used by all ministries. 

Public  scrutiny  of  government  work  is  still  limited,  especially  because  monitoring  and 
reporting  on  government  activities  is  not  coherently  regulated,  coordinated  or  implemented. 
Monitoring  and  reporting  is  often  limited  to  the  implementation  of  activities  and  rarely 
assesses their results. 

Public financial management 

The  government  continued  to  regularly  monitor  implementation  of  the  public  financial 
management reform strategy for 2014-2020 and published the second monitoring report for 
2016. The report assesses progress against a more robust result indicator matrix with baselines 
and targets. The main improvements in public financial management relate to the 2017 budget 
preparation  in  line  with  the  revised  Organic  Budget  Law;  adoption  of  the  law  on  local 
government  finances;  amendments  to  the  Public  Procurement  Law  to  improve  the 
independence of the Public Procurement Commission; increased  clearance of arrears; online 
access to the treasury system; a campaign to combat the informal economy; and the piloting 
of external audit manuals. The mandate of the Ministry of Finance was broadened to include 
the  mandate  of  the  former  Ministries  of  Economy,  Labour,  and  Employment.  Such 
reorganisation  mirrored  only  an  increase  from  293  to  323  staff  in  the  new  ministry,  its 
capacity to deliver reform needs to be maintained. Reforms in the next period are focussed on: 
improving budget planning and management; strengthening internal control standards across 
government; preventing arrears, at central and local government level; following-up internal 
and  external  audit  recommendations;  improving  investment  planning  and  management; 
improving  the  public  procurement  review  and  compliance  with  procurement  rules;  granting 
online  access  to  the  treasury  for  more  institutions;  analysing  the  fiscal  risks  of  state-owned 
enterprises;  and  establishing  the  fiscal  cadastre  and  value-based  property  taxation  (see  also 
chapters 5, 16, 29 and 32). 

13 

 
 
 
Budget  transparency  has  improved  further  with  government  publishing  seven  out  of  eight 
key  budget  documents  in  a  timeframe  consistent  with  international  standards.  The  2018 
budget, the citizens’ budget for the 2018 draft budget and the list of public investments under 
the  medium-term  budget  programme  have  been  published,  but  public  participation  in  the 
budget process needs to be further strengthened. The 2016 budget implementation report was 
published  but  its  structure  remains  weak  in  reporting  on  state  assets  and  in  the  degree  of 
comparison it allows with the original budget. In-year reporting is available but the mid-year 
report covers 5 instead of 6 months.  

Public service and human resources management 

The  Civil  Service  Law  provides  a  clear  scope  for  the  civil  service.  Public  employees  in 
institutions  delivering  services  directly  to  citizens  are  covered  by  the  Labour  Code.  As  a 
result,  uniform  standards  on  merit-based  recruitment,  promotion  and  dismissal  of  all  public 
administration staff have yet to be applied. 

The Civil Service Law provides a solid basis for merit-based recruitment and promotion. 
The recruitment process has become more efficient (with 86 % of the planned vacancies filled 
in 2016 in comparison to 66.5 % of the planned vacancies filled in 2015). The recruitments 
are more transparent as a result of improved examination procedures, the introduction of an 
online application system and the evaluation of electronically written tests. There has been a 
significant decline in the average number of applicants per position. Mobility within the civil 
service  increased  due  to  a  rise  in  transfers  between  institutions  (from  75  in  2015  to  146  in 
2016) and in promotions (from 29 in 2014 to 101 in 2015 and 188 in 2016). The civil service 
law remains weakly implemented at the local level. Appointments in breach of civil service 
law remain problematic for the local level of public administration. 

While  the  number  of  dismissals  has  decreased  since  2015,  the  implementation  of  court 
decisions favourable to dismissed civil servants remains very low.  

The capacity of the Department of Public Administration to lead the management of human 
resources was improved thanks to a staff increase from 53 to 58. The use of human resources 
management  information  system  (HRMIS)  is  still  not  fully  functional,  hampering  strategic 
human  resources  planning  and  monitoring.  Further  data  on  public  service  organisations  and 
employees  was  added  to  the  HRMIS,  but  it  does  not  yet  cover  the  whole  civil  service. 
Generation  of  payroll  reports  were  piloted  in  30  institutions,  but  the  link  with  the  treasury 
system is not operational. Public institutions cooperate effectively with the Commissioner for 
Oversight  of  the  Civil  Service,  but  the  Commissioner's  administrative  capacity  needs  to  be 
further strengthened to better ensure the oversight role. 

The remuneration system for public servants is in principle transparent and based on a job 
classification  system.  While  salary  levels  for  selected  positions  were  increased  in  2017,  a 
reform  of  the  whole  job  classification  system  is  pending.  The  application  of  salary 
supplements is not uniform across various public institutions and information is not publicly 
available.  Salary  increase  is  not  linked  to  the  promotion  and  performance  appraisal  system. 
Progress in unifying salary schemes across the public administration remains insufficient. 

The training programmes implemented by the School of Public Administration contribute to 
the professional development of civil servants. However, an integrated training management 
cycle is  needed  to  be  more responsive to  institutional  needs. The budget  is  not  sufficient  to 
cover  the  increasing  number  of  training  courses  needed  following  the  restructuring  process. 

14 

 
 
 
The integrity and prevention of corruption of public officials and civil servants is regulated, 
and institutional capacity for asset and conflict of interest declarations has been reinforced. 

Accountability of the administration 

The legal framework on the organisation of the central administration is in place and regulates 
the accountability lines between institutions. However, it is hard to distinguish between the 
functions  of  subordinated  bodies  and  those  of  autonomous  agencies.  The  ongoing 
restructuring  process  needs  to  result  in  a  clear  framework  for  all  subordinate  bodies. 
Managerial  accountability  within  institutions  is  still  focused  on  processes  rather  than  the 
achievement  of  results,  and  there  is  no  delegation  of  responsibility  to  middle  management 
(see chapter 32). 

Citizens’ right to good administration is limited in practice because oversight institutions’ 
recommendations  have  not  been  adequately  implemented.  Fewer  than  30  %  of  the 
Ombudsperson’s  recommendations  were  implemented  in  2017.  The  right  to  access  public 
information is regulated by the Law on the Right to Information, but its implementation has 
revealed  shortcomings  in  the  legal  framework.  Increasingly,  more  public  authorities  have 
adopted  transparency  programmes,  but  more  efforts  are  needed  to  promote  proactive 
disclosure  of  information  by  public  institutions.  The  capacity  of  the  Commissioner  for  the 
Right  to  Information  and  Protection  of  Personal  Data  to  oversee  the  process  needs  to  be 
increased. 

The legislative framework for the right to administrative justice is in place. The capacity of 
the  administrative  court  system  to  deal  with  the  backlog  of  cases  has  improved  at  the 
first-instance level, but there is a backlog of cases at the appeal court level due to the country 
having only a single administrative court of appeal. The legislation for protecting the right of 
citizens to seek compensation is in place but court cases remain rare due to limited public 
awareness  of  this  right.  Due  to  the  lack  of  data  collection,  it  is  not  possible  to  assess  the 
effectiveness of the liability regime. 

Service delivery to citizens and businesses 

The institutional set-up and the strategic and legal framework for coordinating the delivery of 
public  sector  services  are  in  place  to  promote  user-oriented  administration.  The  Law  on 
Delivery  of  Front  Office  Services  is  in  place.  It  foresees  the  reduction  of  administrative 
barriers  and  promotes  transparent  services  to  citizens  to  reduce  the  risk  of  corruption.  The 
Agency for the Delivery of Integrated Services has  introduced standards to  improve service 
delivery. It has also started measuring user satisfaction and set up one-stop-shops across the 
country.  E-services  need  to  be  further  developed  and  easily  accessible  information  about 
public services needs to be provided to all citizens. 

The legislative framework for simplifying administrative procedures is in place, following 
the entry into force of the Code of Administrative Procedure in May 2016. However, progress 
in  adopting  the  necessary  implementing  legislation,  reviewing  the  special  administrative 
procedures and adjusting the sector legislation has been limited. This is due to the lack of a 
lead coordinating institution. 

Strategic framework for public administration reform 

The  public  administration  reform  strategy  for  the  period  2015-2020  is  in  place  and  the 
second  annual  implementation  report  was  published  in  March  2017,  accompanied  by  a 
mid-term  review.  A  new  action  plan  for  2018-2020  is  still  under  preparation,  as  there  have 

15 

 
 
 
been delays due to the ongoing restructuring process. The political responsibility for PAR has 
been assigned to the Deputy Prime Minister, ensuring continued administrative and political 
support  for  reform.  The  technical support  on  PAR  has  been  assigned to  the  Department  of 
Public  Administration,  which  will  have  the  role  of  the  technical  secretariat,  in  cooperation 
with  the  Department  of  Development  and  Good  Governance.  Financial  sustainability  has 
been  improved  by  closing  the  financial  gap  from  29  %  to  19  %  from  2016  to  2017.  The 
costing of the new action plan needs to be aligned with the medium-term budget programme 
and ensured in the annual budgets. 

2.2.  Rule of law and fundamental rights 

2.2.1. Chapter 23: Judiciary and fundamental rights 
The EU’s founding  values  include the rule of law and respect for  human rights. A properly 
functioning  judicial  system  and  an  effective  fight  against  corruption  are  of  paramount 
importance, as is respect for fundamental rights in law and in practice.  

Albania has  some level of  preparation to implement the  acquis and European  standards in 
this  area.  Good  progress  was  made,  in  particular  through  the  continuation  of  the  justice 
reform  and  the  adoption  of  the  full  legal  package.  The  new  legislation  tackles  many 
shortcomings  related  to  the  justice  system’s  lack  of  independence,  efficiency  and 
professionalism.  However,  corruption  is  widespread  and  remains  an  issue  of  concern.  The 
impact of various measures has yet to be seen. There has been further progress in enforcing 
human rights, especially at the local level, and on strengthening the institutional mechanisms 
to  defend  the  rights  of  children,  tackle  gender-based  and  domestic  violence  and  protect 
vulnerable groups. Albania should in particular: 

→  advance the implementation of justice reform. This should include completing the set-up 
of the new judicial structures (the High Council of Justice, the High Prosecutorial Council, the 
High Justice Inspector and the Justice Appointment Council) and achieving first results in the 
process of re-evaluating judges and prosecutors; 

→  progress  further  in  establishing  a  solid  track  record  of  investigations,  prosecutions  and 
convictions in combating corruption at all levels, including asset recovery; 

→  make  significant  progress  towards  the  protection  of  property  rights  (including 
compensation and registration). 

Functioning of the judiciary 

Albania  has  some  level  of  preparation.  Good  progress  was  made  through  continued 
implementation of the justice reform. The process of re-evaluating all judges and prosecutors 
has  started  and  is  delivering  the  first  tangible  results.  Following  the  establishment  of  the 
vetting institutions, the first set of priority cases is being reviewed. The auxiliary institutions 
supporting  the  process  have  completed  their  first  reports  on  the  proficiency  assessments, 
background  checks  and  asset  declarations.  Appeals  against  the  vetting  law  and  the  related 
underlying  legislation  of  the  judicial  reform  have  been  adjudicated  by  the  Constitutional 
Court. The latter confirmed the Vetting Law’s constitutionality. A number of provisions in the 
laws on the governance of the judiciary and on the status of judges and prosecutors have been 
declared  unconstitutional  and  were  annulled,  thus  requiring  legislative  follow  up.  There  has 
been  no progress in carrying  out the recommendations on making more effective use of the 
case  management  system,  on  issuing  reasoned  adjudications  in  due  time  and  on  allocating 
cases randomly to judges and prosecutors.  

16 

 
 
 
In the coming year, Albania should in particular: 

→  achieve further results in the process of re-evaluating judges and prosecutors; 

→  finalise the creation of the new independent judicial institutions, namely the High Council 
of  Justice,  the  High  Prosecutorial  Council,  the  High  Justice  Inspector  and  the  Justice 
Appointment Council; 

→  continue to pursue a sector approach to the justice reform under the cross-cutting strategy 
for  2017-2020  and  ensure  adequate  governance,  monitoring  and  reporting  mechanisms 
through  well-developed 
its 
implementation. 

indicators  coupled  with  adequate  financial  support  for 

The judiciary of Albania is currently undergoing a comprehensive and thorough transitional 
re-evaluation  process  (vetting).  The  vetting  was  launched  with  the  overall  objectives  of 
strengthening  professionalism  across  the  sector,  eradicating  corruption,  consolidating 
independence and impartiality and, ultimately, rebuilding public confidence in the judiciary. 
The  process  rests  on  three  pillars:  proficiency  assessment;  asset  verification,  which  is 
performed  on  all  assessees,  as  well as  on  all  their  close  relatives  for  wealth  accumulated in 
Albania and abroad; and links to organised criminal networks. Following a request from the 
Albanian authorities, the European Commission has deployed under its aegis the International 
Monitoring Operation (IMO), which has the mandate to oversee the process throughout, while 
decision making remains within the remits of the vetting authorities of Albania. These include 
an Independent Qualification Commission (IQC), two Public Commissioners, and an Appeal 
Chamber.  

From  October  2017  onwards,  the  IQC  started  the  analysis  of  the  first  priority  dossiers.  A 
batch  of  nine  "top  priority"  dossiers  included  the  members  of  the  Constitutional  Court,  the 
President  of  the  High  Court  and  the  General  Prosecutor.  The  remaining  cases  to  be  treated 
with  priority  (47  amongst  the  highest  ranking  members  of  the  judiciary)  were  also  already 
allocated  to  IQC  panels  and  the  respective  rapporteurs  were  identified.  Their  assessment  is 
ongoing,  in  parallel  with  the  review  conducted  by  the  IMO  International  Observers.  The 
auxiliary bodies (HIDAACI, in charge of assets verification, and the working group chaired 
by the National Security Agency, in charge of background checks) have already delivered to 
the  IQC  and  the  IMO  a  significant  number  of dossiers,  including  all  those  related  to  all 
priority  cases.  The  High  Inspectorate  at  the  High  Council  of  Justice  and  the  Ad  Hoc 
Commission within the General Prosecutor’s Office delivered the proficiency assessment for 
the  top  priority  cases  and  they  are  advancing  on  delivering  the  reports  on  all  remaining 
priority assessees.  As from January  2018, based on the progress achieved in  the revision  of 
dossiers and on the operating procedures, the IQC allocates to their respective rapporteurs a 
batch of 36 new cases every two months.  

First tangible results have been noted since the vetting law started to be implemented. When 
the  process  was  initially  launched,  seven  members  of  the  judiciary  (one  High  Court  judge, 
two judges, one prosecutor and three senior legal assistants) resigned, refusing to submit their 
assets and patrimonies for verification. Later in 2017, when the vetting institutions started to 
operate, one judge from the constitutional court and five judges from the High Court opted to 
leave duty respectively at the retirement time and at the end of their legal mandate. According 
to  the  legal  provisions  they  were  obliged  to  stay  in  office  until  the  appointment  of  the 
successors and thus undergo the vetting and be placed amongst the priority dossiers, based on 
their  role  and  functions.  In  addition  to  these,  a  senior  legal  assistant  and  a  prosecutor  also 

17 

 
 
 
resigned. Once the Independent Qualification Commission started to complete the first sets of 
investigations, two top ranking members of the judiciary resigned from service and requested 
their vetting to be terminated, these were a Constitutional Court judge and the former General 
Prosecutor. The first hearing in March 2018 resulted in the dismissal of a Constitutional Court 
judge. A second hearing in early April resulted in the confirmation in duty of a Constitutional 
Court judge. A third hearing in April resulted in the dismissal of a judge at a Court of Appeal, 
who was also a candidate to the High Judicial Council. 

In  addition  to  the  activities  of  the  vetting  bodies,  some  members  of  the  judiciary  were 
dismissed  from  service  or  suspended  during  the  reporting  period,  in  connection  with  court 
decisions  or  investigations  against  them.  Specifically,  three  judges  have  been  dismissed 
(Berat, Tirana, Elbasan  District)  following a final court  decision convicting them.  Based on 
criminal  investigations,  five  judges  have  been  suspended  from  duty,  pending  a  final  court 
decision; out of these, the High Council of Justice decided also to suspend three judges of the 
Appeal Court of Durrës (one being also the Chair of the Court) based on a request from the 
Serious Crimes Prosecution Office, where they are under criminal investigation for abuse of 
power.  

Strategic documents 

The  cross-sectoral  justice  strategy  for  2017-2020  and  its  action  plan  were  adopted  in 
November  2016.  The  estimated  budget  for  its  implementation  is  EUR  98  million,  of  which 
35 %  is  provided  by  international  donors.  The  establishment  of  appropriate  monitoring, 
evaluation  and  reporting  mechanisms  remains  outstanding.  A  monitoring  body  has  been 
appointed within the Ministry of Justice.  

Management bodies 

The  justice  reform  package  envisages  setting  up  a  High  Judicial  Council  and  High 
Prosecutorial  Council  as  the  two  main  self-governing  bodies  of  the  judiciary  that  are 
independent  from  the  government.  The  councils  will  gather  the  majority  of  members  from 
within  the  judiciary  but  five  members  will  be  selected  from  advocacy,  academia  and  civil 
society.  The  councils  are  empowered  to  appoint,  promote  and  evaluate  judges  and 
prosecutors.  In  contrast  to  previous  structures,  the  members  of  the  councils  will  serve  full 
time  for  a  five-year  term  without  possibility  of  re-election.  Annual  reports  produced  by  the 
councils and all relevant findings and recommendations should be made public. The councils 
should report annually to Parliament. The Minister of Justice may participate in the meetings 
of the High Judicial Council when issues of strategic planning and budget are discussed, but 
does not have voting rights or any responsibility for the inspection and evaluation of judges. 

The selection process is based on objective criteria. The list of the lay member candidates has 
been  approved,  following  a  lottery  at  the  Parliament,  as  per  the  unblocking  mechanism 
provided  for  in  the  relevant  law.  Candidates  coming  from  the  ranks  of  the  judges  and 
prosecutors are elected to the two new separate councils by the General Assembly of Judges 
and  the  General  Assembly  of  Prosecutors  respectively.  The  application  process  is  run 
respectively  by  the  High  Court  and  the  General  Prosecution  Office.  Candidates  to  both 
Councils have already been shortlisted, but they can be voted by their peers only once their 
vetting is carried out. The creation of the new councils is pending. Until they are established, 
the existing High Council of Justice acts with limited competences. 

Independence and impartiality 

18 

 
 
 
The  principles  of  impartiality  and  judicial  independence  are  set  out  in  the  Constitution  and 
reflected  in  the  laws  on  the  governance  of  the  judiciary  and  on  the  status  of  judges  and 
prosecutors.  The  reform  has  given  prosecutors  greater  autonomy  and  reduced  the 
centralisation of the system around the General Prosecutor. Judges and prosecutors cannot be 
transferred  without  their  consent.  Exceptions  concern  disciplinary  measures,  structurally 
justified changes or temporary needs. Judges can be dismissed only for serious misconduct or 
if  sentenced  for  a  criminal  offence.  The  dismissal  decision  may  be  appealed  at  the 
Constitutional Court. 

However, attempts at interference, including by authorities internal to the judiciary, have been 
an  issue  of  concern  and  need  to  be  addressed  beyond  the  vetting  process.  The  allocation  of 
cases  should  be  conducted  randomly  by  lot  and  through  electronic  means.  However,  the 
electronic  case  management  system  has  shown  many  shortcomings.  Random  allocation  of 
cases to prosecutors is partially used, but prosecution offices often fail to make full use of the 
system and to produce reliable data. The laws provide for strict procedures in case of undue 
influence over a court case or when judges consider their independence to be jeopardised. 

Accountability 

The  Code  of  Ethics  for  judges  and  prosecutors  is  now  regulated  by law  and  is  no  longer  a 
non-compulsory document produced by the National Conference of Judges. Once established, 
the new High Judicial Council and the High Prosecutorial Council should be responsible for 
approving the ethics rules and code of conduct and ensuring their monitoring. While the High 
Council  of  Justice  has  improved  evaluation  forms  and  adapted  these  to  the  new  legal 
standards, the performance  of judges  continues for the  most  to  be  measured on the basis of 
numbers  of  complaints  and  final  court  convictions.  Until  the  establishment  of  the  High 
Justice Inspector, the High Council of Justice and the General Prosecutor should continue to 
investigate disciplinary misconduct. Based on the latest reform, disciplinary proceedings have 
to  be  initiated  by  the  High  Justice  Inspector  and  no  longer  by  the  Minister  of  Justice. 
However,  the  latter  retains  the  right  to  submit  a  complaint  and  to  request  the  High  Justice 
Inspector HJI to carry out an examination of prosecutors. 

Improvements  in  the  recruitment  process  for  the  School  of  Magistrates  have  included  an 
integrity  test  and  a  psychological  assessment  related  to  the  integrity  and  moral  standards  of 
candidates. 

Judges  and  prosecutors  are  obliged  to  declare  their  assets  on  an  annual  basis.  Under  the 
vetting law, the High Inspectorate for the Declaration and Control of Assets and  Conflict of 
Interest  administers  and  verifies  all  data  obtained  through  the  declarations  of  assets  and 
private interests of all those vetted. Lack of compliance with this obligation is to be followed 
by automatic dismissal. 

Professionalism and competence 

The  system  for  recruiting,  selecting,  appointing,  transferring  and  dismissing  judges  and 
prosecutors  has  been  improved.  Constitutional  and  legal  changes  have  reduced  political 
influence during the appointment process, ensuring a merit-based career system. 

The High Court is  currently composed  of 19  members, with only  eight members exercising 
their functions. Former members have mostly resigned after the termination of their mandate 
and one judge has been suspended after being found guilty of corruption, with her dismissal 

19 

 
 
 
pending  a  final  court  decision.  Vacancies  in  the  High  Court  will  be  filled  once  the  High 
Judicial Council is established. 

Appointments  to  the  Constitutional Court  are  awaiting  the formation  of  the  members  of the 
Justice Appointment Council (JAC), who are undergoing vetting. The JAC is the independent 
institution responsible for verifying and ranking the legal, professional and moral criteria for 
the  appointment  of  judges  in  the  Constitutional  Court  and  for  the  candidates  of  the  High 
Justice Inspector. The procedures to form the JAC have been initiated. 

The  General  Prosecutor  (GP)  should  be  elected  following  a  proposal  by  the  High 
Prosecutorial Council and approval by a qualified majority in Parliament. The mandate of the 
current  GP  ended  in  December  2017.  Since  the  new  GP  cannot  be  elected  until  the  High 
Prosecutorial  Council  is  formed,  the  transitional  provisions provided  for  the  possibility  of  a 
temporary  GP  elected  by  a  simple  majority  in  Parliament.  The  responsibilities  of  the 
temporary GP are also limited under the law. 

The vetting process for all judges and prosecutors also provides for the professional abilities 
of all those vetted to be re-evaluated. The School of Magistrates is preparing the proficiency 
testing for non-magistrates assessees. 

Quality of justice 

Albania has 408 full-time judges (13 per 100 000 inhabitants) and 336 full-time prosecutors 
(11 per 100 000 inhabitants). There are 44 lawyers per 100 000 inhabitants. According to the 
European  Commission  for  the  Efficiency  of  Justice  (CEPEJ),  the  European  average  is  21 
judges/11  prosecutors  per  100 000  inhabitants.  The  2017  budget  for  courts  was  EUR  98 
million (compared to EUR 91.7 million in 2016). This amounts to EUR 5.41 per inhabitant, 
with EUR 4.3 per inhabitant for the prosecution offices. General government expenditure on 
courts represents 0.13 % of GDP, a 0.1 % reduction from 2016.  

Total expenditure provided in the 2017 budgetary plan for the justice sector was EUR 12.15 
million, 2.5 % less than the 2016 budget. The creation of the new judicial institutions will be 
supported by a multiannual action plan of EUR 3.7 million allocated from the reserve fund of 
the Treasury. Judicial infrastructure remains poor overall and future budget allocations shall 
take this aspect in due account.  

Some hearings continue to be held in judges’ offices as spending on court premises has not 
been prioritised due to the establishment of the new judicial institutions. The realisation of a 
new court mapping is being planned by the Ministry of Justice in cooperation with the High 
Council of Justice. This new structure should ensure a more efficient use of court resources. 

The  School  of  Magistrates  is  responsible  for  initial  and  continuous  in-service  training  of 
judges  and prosecutors.  The  training  needs  are identified  by  the  School  in  cooperation  with 
stakeholders  within  the  judiciary.  The  new  legislation  provides  for  extending  the  School’s 
responsibilities,  which  should  include  training  for  legal  advisers  at  all  court  levels,  court 
chancellors,  court  administrators  and  the  state  advocates.  However,  the  2017  budget 
envisaged  an  8.6 %  cut  for  the  School.  The  institution  therefore  continues  to  rely  on  donor 
support  instead  of  enjoying  a solution  that  provides  sustainability in  the  long  term.  Most  of 
the training related to the new legislation has been conducted with donor support. The School 
has limited capacity in terms of academic staff, qualified specialised trainers and premises. Its 
overall  capacity  needs  to  be  improved  as  a  matter  of  priority  in  order  to  progress  with 
recruiting  new  members  of  the  judiciary  while  the  transitional  re-evaluation  of  judges  and 

20 

 
 
 
prosecutors advances. A structured needs assessment and proper evaluation mechanism shall 
also be developed in order to strengthen the overall effectiveness of the school.  

The High Council of Justice monitors and evaluates court activities on a monthly basis. All 
courts  are  required  to  send  a  monthly  report  to  the  High  Council  of  Justice  and  they  also 
produce  annual  activity  reports.  However,  the  High  Council  of  Justice’s  annual  report  for 
2016 is still under preparation and institutions often lack the capacity to produce reports. All 
courts  have  websites  which  are  publicly  accessible,  although  the  data  is  not  always  fully 
updated  due  to  lack  of  capacity,  including  full  functionality  of  the  electronic  management 
system. 

The High Court issued two rulings unifying case-law in 2016, both related to administrative 
case-law. 

The  impact  of  alternative  dispute resolution  continues  to  be  low.  The  total  number  of  cases 
referred to and solved through mediation was 2 077 compared to 1 260 in 2016. 

Efficiency 

Consolidated reports are still lacking on the efficiency of the justice system, which includes 
the  length  of  proceedings,  clearance  rate  and  pending  cases  at  all  court  levels  including  the 
Constitutional  Court.  The  clearance  rate  is  lowest  for  the  appeal  courts,  particularly  for  the 
Appeal Administrative Court (37 %), due to a high number of appeals and the low number of 
judges allocated to the Court. The highest clearance rate (100 %) is in the first-instance court 
of  serious  crimes.  The  highest  number  of  pending  cases  is  in  the  High  Court,  where  the 
backlog  is  currently  estimated  at  approximately  22 500  cases.  There  are  224  pending 
applications  at  the  European  Court  of  Human  Rights;  in  2016-2017  the  court  issued  131 
judgments, of which 117 have been executed. 

Changes  in  the  procedural  codes  under  the  reform  have  provided  for  improved  legal 
provisions on the length of proceedings, and a human resource strategy should be developed 
by the High Judicial Council. 

In addition to the overall length of court proceedings, the execution of court decisions remains 
a  cause  of  concern.  Furthermore,  shortcomings  persist  in  the  case  management  system, 
affecting  its  proper  functioning.  The  system  also  requires  proper  maintenance  and 
standardised  procedures  since  it  is  still  not  producing  reliable  statistical  data.  The  system 
should also be integrated with other relevant databases.  

Fight against corruption 

Albania has some  level of  preparation in  the fight against corruption.  Good  progress was 
made, notably with the adoption of amendments to the Criminal Procedure Code, the Law on 
the  Declaration  and  Audit  of  Assets,  Financial  Obligations  of  Elected  Persons  and  Certain 
Public  Officials,  the  Anti-Mafia  Law  and  the  Law  on  Political  Party  Financing.  The 
recommendations of the last Albania report were either fully or partially fulfilled. The number 
of  final  convictions  involving  junior  or  middle-ranking  officials  has  further  increased. 
Convictions  of  high-level  officials  occurred  mostly  in  the  judiciary;  however,  final 
convictions for high-ranking officials remain very low overall. Substantial work was done to 
improve the legal framework on interceptions and surveillance, time limits for investigation, 
admissibility  of  evidence  before  courts  and  on  political  party  financing.  The  specialised 
institutions  to  fight  corruption  have  yet  to  be  established.  Direct  access  to  databases  for 
prosecutors and the police continued to improve.  

21 

 
 
 
In the coming year, Albania should in particular: 

  step up efforts to increase the use of financial investigations in line with the standards of 
the  Financial  Action  Task  Force  (FATF),  and  establish  a  track  record  of  seizure  and 
confiscation/recovery of criminal assets resulting from corruption-related offences; 

  establish  an  effective  chain  of  well-resourced  and  specialised  anti-corruption  bodies, 
composed  of  the  Special  Anti-Corruption  and  Organized  Crime  Structure  (SPAK)  and 
National Bureau of Investigation (NBI) and Court to address high-level corruption; 

  continue  to  improve  access  to  national  electronic  registries  for  prosecutors  and  police, 
notably  by  establishing  an  integrated  case  management  system  between  police,  prosecution 
and courts. 

Track record 

As  regards  the  track  record  of  investigations,  prosecutions  and  convictions  in  the  fight 
against  corruption,  the  positive  trend  of  recent  years  continued.  The  number  of  final 
convictions involving  junior  or  middle-ranking officials  increased  compared to  the  previous 
reporting period (there were respectively 316 convictions in 2016 and 331 in 2017, compared 
to 286 in 2015). The overall number of referrals to the prosecution has also increased (1 977 
in 2015, 1 910 in 2016 and 2 342 in 2017). 

Regarding  convictions  of  high-level  state  officials,  the  judiciary  has  achieved  some  initial 
good results. Convictions have been obtained against prosecutors and judges (6 first-instance 
and 2 second-instance convictions in 2016 for passive corruption, and 3 first-instance and 4 
second-instance  convictions  in  2015).  In  2017,  one  first-instance  and  4  second-instance 
convictions  were  issued,  including  a  conviction  against  a  Supreme  Court  judge.  The  High 
Council of Justice suspended two judges, one of whom was arrested. There have been 72 new 
cases opened against high-level state officials in 2016, 61 in 2017, compared to 39 in 2015. 
However, the number of final convictions of high-ranking state officials remains very low. 

As  regards  asset  declarations  by  high  state  officials,  the  High  Inspectorate  of  Declaration 
and Audit of Assets and Conflicts of Interest (HIDAACI) referred 22 cases to the prosecution 
in  2017  and  29  cases  in  2016.  Of  the  2016  cases,  7  heads  of  commune  were  convicted  for 
refusing to declare their assets. In total, HIDAACI submitted 72 criminal referrals of low- and 
mid-ranking  officials  to  the  prosecution  services  in  2016  (of  which  20  resulted  in  final 
convictions). Seizure and confiscation of criminal assets should be systematically ordered to 
detect and cut the financial flows of criminal networks. An analysis to identify sectors at risk 
of corruption is not conducted systematically. The number of investigations started ex-officio 
needs  to  be  increased,  and  a  solid  track  record  of  investigations,  prosecutions  and  final 
convictions in corruption cases needs to be established. 

The  rate  of  implementation  of  the  State  Audit  Institution’s  general  recommendations  by 
public institutions remains low. 

The National Coordinator against Corruption installed a corruption cases monitoring system. 
Little  progress  was  made  to  set  up  an  interface  between  the  different  electronic  case 
management  systems  of  the  police,  prosecution  and  courts.  The  budget  for  their 
implementation needs to be secured. 

The  use  of  audits  and  inspections  on  the  basis  of  risk  assessment  in  the  tax  and  customs 
services  increased,  but  needs  to  be  further  stepped  up.  Efforts  are  continuing  to  address 

22 

 
 
 
corruption in the tax and customs administration, notably with the restructuring of the General 
Directorate of Taxation and of the General Directorate of Customs.  

Implementation of the Law on whistle-blowing and whistle-blower protection started in 2017. 
At both central and local institutions, 156 units responsible for protecting whistle-blowers and 
for  reporting  cases  to  HIDAACI  have  been  established.  During  2017,  private  entities  with 
more  than  100  employees  were  identified  and  429  units  responsible  for  the  protection  of 
whistle-blowers established. 

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

On  access  to  information,  the  Commissioner  for  Information  and  Data  Protection  received 
684 complaints and issued 36 decisions in 2016 while 560 complaints were received in 2017. 
A system was established to record the overall number of requests made to public institutions. 

The  impact  of  anti-corruption  measures  in  particularly  vulnerable  areas  (customs,  tax 
administration,  education,  health,  public  procurement  etc.)  remains  limited.  There  is  still  a 
strong and urgent need to improve and strengthen internal checks and inspection mechanisms 
within  the  public  administration  and  to  improve  their  cooperation  with  law  enforcement 
authorities. 

Institutional framework 

Prevention of corruption 

The capacity of the anti-corruption network in line ministries, at local level and in the Office 
of  the  National  Coordinator  against  Corruption  (NCAC)  needs  to  be  strengthened.  Since 
September 2017, the Ministry of Justice serves as the new NCAC and structures are being put 
in place. Coordination between the latter and the Council of Ministers’ Unit for Transparency 
and Anti-Corruption has to be ensured. 

The role of HIDAACI in detecting conflicts of interest and checking asset declarations was 
strengthened with the adoption of the Law on whistle-blowing and whistle-blower protection 
and with the implementation of the Law on the transitional re-evaluation process. The latter 
provides  for  judges,  prosecutors  and  legal  advisers  to  undergo  vetting.  The  number  of 
inspectors  at  HIDAACI  was  increased  from  20  to  28.  Its  administrative,  technical  and 
financial capacity needs to be further strengthened to cope with asset declaration checks. An 
online asset declaration system has yet to be established. 

The  role  of  the  High  State  Audit  (HSA)  in  the  overall  anti-corruption  framework  has  to  be 
strengthened,  in  order  to  identify  systematic  weaknesses.  The  inspection  capacity  in  public 
procurement  needs  to  be  further  improved.  E-procurement  is  expected  to  achieve  more 
transparency and reduce opportunities for abuse. 

The Central Electoral Commission monitored the 2017 parliamentary elections and sanctions 
were issued for nearly all violations.  

New  training  curricula  for  public  officials  on  good  governance  and  combating  corruption 
were  introduced  at  the  School  of  Public  Administration.  Integrity-related  secondary 
legislation  is  in  place  but  an  overall  integrity  risk  management  system  has  yet  to  be 
established. No integrity plans have been developed for ministries. 

An  online  portal  allows  members  of  the  public  to  submit  complaints  about  corruption. 
Twenty-one cases were referred to the Prosecutor’s Office in 2016, and six in the first half of 

23 

 
 
 
2017. Complementarity with the newly created government platform on ‘co-governance with 
the public’ needs to be clarified. 

Law enforcement 

Specialised  anti-corruption  bodies  in  charge  of  investigating,  prosecuting  and  sanctioning 
corruption are in the process of being established. These include the SPAK, NBI and a Court 
to address high level corruption cases. The police and prosecution have been granted access to 
additional  private  and  public  national  registries.  However,  an  obstacle  hampering  the  law 
enforcement authorities’ capacity to operate as well as the efficiency of investigations remains 
their  lack  of  direct  access  to  20  key  national  registries.  Concerns  remain  over  high  staff 
turnover  and  insufficient  interinstitutional  cooperation.  The  financial,  human  and  technical 
resources  of  enforcement  authorities  need  to  be  strengthened.  Cooperation  between  police, 
prosecutors  and  the  HSA  and  procurement  services  in  fighting  corruption  should  be 
strengthened.  The  police  remain  vulnerable  to  corruption  and  to  political  interference  in 
operational activities, despite an increase in internal investigations. 

Legal framework 

Albania  has  ratified  all  relevant  international  conventions,  but  implementation  remains 
uneven.  Laws  on  excluding  criminal  offenders  from  public  posts  and  protecting 
whistle-blowers were adopted. Concealment of assets and falsification and non-declaration of 
assets by public officials have been made criminal offences. Only one recommendation made 
by the Council of Europe’s Group of States against Corruption in its latest evaluation report 
has  been  fully  implemented.  The  nine  others  have  been  only  partially  implemented  so  far. 
Albania should prioritise their correct and swift implementation. 

To increase the efficiency of investigations, the legislative framework was amended in 2017. 
The time limit for investigations of corruption was extended from 3 to 6 months. Furthermore, 
amendments  to  the  Law  on  Electronic  Interception  extended  the  scope  of  application  of 
interceptions to include corruption offences and allow for the decentralisation of interception. 
However,  the  amendments  did  not  provide  for  the  recording  of  interceptions  to  be 
decentralised, allowing only for listening in real time at district level. Amended in April 2017, 
the Anti-Mafia Law now includes all passive and active corruption offences and defines the 
role of the prosecutor more clearly. Amendments to the Criminal Procedure Code introducing 
a clear definition of ‘high state official’ have yet to be adopted. 

The  Law  on  the  Declaration  and  Audit  of  Assets,  Financial  Obligations  of  Elected  Persons 
and  Certain  Public  Officials  was  amended  in  April  2017,  increasing  the  independence  of 
HIDAACI. The chair’s mandate was extended from 5 to 7 years and the requirement for the 
chair’s  election  in  Parliament  was  increased  to  a  three-fifths  majority.  The  new  law  also 
prescribes that members of Parliament’s assets be audited every 2 years. However, according 
to  the  target  dates  set  in  the latest  amendments  to  the  law,  the  full  operability  of the  online 
asset declaration system cannot not be ensured before 2022. This has to be addressed, in order 
to ensure that the system is up and running within a shorter timeframe.  

The latest amendments to the Law on Political Party Financing envisage the publication of 
financial reports on the election campaign of political parties, election campaign monitoring 
reports and financial audit reports. 

All  the  secondary  legislation  for  the  legal  framework  on  integrity  is  in  place  but  it  remains 
highly complex and fragmented.  

24 

 
 
 
 
Strategic framework 

Implementation of the inter-sectoral strategy against corruption and its 2015-2017 action plan 
has further advanced. Implemented by the Ministry of Justice, a broad majority (86 %) of the 
envisaged  actions  were  either  entirely  or  partially  implemented  in  2016.  The  monitoring 
mechanism and its accountability need to be strengthened. Furthermore, 23 % of the amount 
needed for implementing the action plan is still missing and remains problematic.  

A  comprehensive  sound  performance  assessment  framework  is  being  finalised.  The  lack  of 
staff and funding for implementing the measures and reporting on progress remains a concern. 

Fundamental rights 

Albania  has  ratified  most  international  human  rights  conventions  and  developed  its  legal 
framework in line with European standards. New legislation has been adopted on children’s 
rights  and  the  protection  of  minorities.  However,  the  institutional  mechanisms  remain  weak 
and  more  efforts  are  needed  to  implement  existing  commitments.  Social  care  services  for 
vulnerable  groups,  employment  and  living  conditions  for  Roma  and  Egyptians  need  further 
improvements.  Despite  the  efforts  made,  protection  and  enforcement  of  property  rights  has 
yet to be ensured.  

In the coming year, Albania should: 

  improve institutional mechanisms for protecting children, protecting victims of domestic 
violence, and guarantee gender equality; 

  step up efforts to establish solid anti-discrimination case-law; find a sustainable long-term 
housing and employment solution and tackle segregation in the education field for vulnerable 
groups, in particular for Roma and Egyptians; 

  further consolidate the entrenchment of property rights, notably by advancing the revision 
of  property  deeds,  implementation  of  the  compensation  scheme,  and  make  the  necessary 
progress on the digitalising and mapping of property. 

Albania  complies  with  international  human  rights  instruments  and  has  ratified  most 
international conventions. It has yet to ratify the Optional Protocol to the Convention on the 
Rights of Persons with Disabilities and the Optional Protocol to the International Convention 
on  Economic,  Social  and  Cultural  Rights.  Overall,  the  implementation  of  such  instruments 
should be improved. 

Albania continued to ensure good cooperation with the European Court of Human Rights 
(ECtHR).  Since  September  2016,  the  European  Court  of  Human  Rights  (ECtHR)  has 
found  violations  of  the  European  Convention  on  Human  Rights  (ECHR)  in  6  cases  relating 
mainly  to  the  right  to  a  fair  trial.  During  the  reporting  period,  133  new  applications  were 
registered by the Court. On 1 February 2018, the total number of applications pending before 
the  Court  was  532.  There  are  currently  25  cases  against  Albania  under  the  enhanced 
supervisory procedure.  

On  the  promotion  and  enforcement  of  human  rights,  the  Ombudsman  has  an  A-status 
awarded  by  the  Global  Alliance  of  National  Human  Rights  Institutions  in  2014.  During  the 
reporting  period,  the  Ombudsman  continued  to  promote  the  rights  of  vulnerable  groups  as 
well  as  focusing  on  the  implementation  of  the  justice  reform.  In  2017,  the  Ombudsman 
submitted a total of 188 recommendations (out of which 123 were accepted, 29 rejected, 24 
without response and 12 in process). In May 2017, a new Ombudsman was nominated by the 

25 

 
 
 
Parliament,  based  on  a  political  agreement  between  the  two  main  parties  and  without  fully 
completing  all  the  steps  foreseen  in  the  consultation  process.  Owing  to  the  current  legal 
framework,  and  despite  several  attempts  by  the  Ombudsman  to  propose  amendments  to  the 
legislation, all five Commissioner positions at the Ombudsman’s Office remain vacant.  

As  regards  the  right  to  life,  the  Authority  on  Access  to  Information  on  the  former  State 
Security  Service  was  established  and  a  strategy  was  adopted  in  June  2017.  However,  the 
resolution  and recommendations  on blood  feuds still require follow-up. Following a visit  to 
the  country  in  December  2016,  the  UN  Working  Group  on  Enforced  or  Voluntary 
Disappearances (WGEID) issued several recommendations  to  Albania to address the crimes 
committed during the communist dictatorship period. For instance, the WGEID recommended 
that  Albania recognise  the enforced  disappearances of the past and guarantee non-repetition 
through  an  appropriate  mechanism.  It  also  called  for  the  creation  of  a  mechanism  taking  a 
global  approach, instead of fragmented measures, to  deal with  prejudices resulting from the 
past  political  repression.  The  number  of  people  who  have  been  secretly  abducted  or 
imprisoned  during  the  dictatorship  remains  unknown,  but  it  is  estimated  that  around  6  000 
persons went missing. 

On  the  prevention  of  torture  and  ill-treatment,  the  National  Preventive  Mechanism 
conducted 124 inspections in 2017, resulting in 95 recommendations. During this period, 29 
complaints  of  violence  in  police  facilities  and  penitentiary  institutions  were  processed.  In 
October 2017 the Ombudsman launched criminal proceedings against a State Police officer on 
grounds  of  torture.  However,  the  prosecutor's  office  decided  not  to  initiate  criminal 
proceedings.  This  case  is  related  to  the  use  of  handcuffs  on  an  offender  hospitalised  at 
Tirana’s prison hospital. The European Committee for the Prevention of Torture (CPT) visited 
the  country  in  February  2017  and  published  a  report.  Particular  attention  was  paid  to  the 
treatment and conditions of detention of persons in police custody and the situation of remand 
prisoners and forensic psychiatric patients. The recommendations issued by the CPT have not 
been implemented by the Albanian authorities. 

As  regards  the  prison  system,  a  strategic  action  plan  to  improve  detention  conditions  was 
prepared in 2014 but its implementation has not been monitored. The release of 750 prisoners 
following  the  amnesty  of  January  2017  was  not  implemented  in  line  with  risk  evaluations. 
The  laws  on  prisons  and  prison  police  have  yet  to  be  amended  to  ensure  compliance  with 
European standards. During the reporting period, 22 prison directors were dismissed and the 
Prison  Directorate  Director  was  replaced  four  times.  Several  former  managers  are  being 
charged and investigated for abuse of office and corruption. Furthermore, the verification and 
revaluation  process  of  prison  personnel  has  already  achieved  some  preliminary  results: 
disciplinary measures have been taken against 49 prison police officers and 65 other officers 
have been criminally prosecuted.  

The use of alternatives to custody increased compared to the previous reporting period (there 
were respectively 5 577 cases in 2016 and 6 046 in 2017, compared to 5 952 in 2015). The 
use electronic monitoring has also increased (39 cases in 2015, 187 in 2016 and 113 in 2017). 
The specialist monitoring of convicts by the Probation Service increased from 74 in 2016 to 
84 in 2017.  

On  the  protection  of  personal  data,  the  country  has  ratified  the  Council  of  Europe 
Convention  for  the  Protection  of  Individuals  with  regard  to  the  Automatic  Processing  of 
Personal  Data  and  its  additional  protocol.  The  office  of  the  Commissioner  for  the  Right  to 
training  programme.  The 
Information  and  Data  Protection 

its  staff  and 

increased 

26 

 
 
 
Commissioner  received  120  complaints  from  data  subjects,  carried  out  184  administrative 
inspections,  issued  22  decisions  and  imposed  36  administrative  sanctions  in  2016.  Further 
efforts should be made to align the personal data protection legislation with the General Data 
Protection Regulation and the Directive on the protection of natural persons.  

Freedom  of  thought,  conscience  and  religion  was  generally  upheld.  In  October  2016,  the 
Parliament  passed  a  resolution  condemning  communist  regime  crimes  against  religious 
persons. A special unit to tackle religious estate was established and property certificates for 
hundreds  of  religious  buildings  were  delivered.  However,  the  restitution  of  properties 
belonging to religious groups remains an issue. The government allocated EUR 740 000 to the 
five  official  religious  communities  in  April  2017.  The  electricity  fee  for  religious  buildings 
was lowered and the capacity of the State Committee on Cults was increased. 

Freedom of expression 

The country has some level of preparation/is moderately prepared in the area of freedom 
of  expression.  There  has  been  some  progress  in  strengthening  the  independence  of  the 
regulatory  authority  and  the  public  broadcaster.  The  overall  legislative  environment  is 
conducive to the exercise of freedom of expression, but implementation remains a challenge. 
Legislation on public advertising, intended to improve transparency in line with international 
best practices, needs to be introduced.  

In the coming year, Albania should in particular: 

→ bring ownership limitations for national operators into line with international standards; 

→  introduce  legislation  in  line  with  international  best  practice  on  public  advertising  to 
increase transparency; 

→  enforce  implementation  of  the  Labour  Code  and  strengthen  the  protection  of  Albanian 
journalists’ labour and social rights. 

Intimidation of journalists 

Physical assaults on journalists remain very rare. A case was reported in March 2017 and was 
swiftly  condemned  by  the  authorities.  Investigations  were  launched  and  led  to  the 
perpetrator’s arrest. The case reached appeal level and is still ongoing. A TV programme was 
closed down and two journalists were dismissed following an investigative story involving a 
local official in October 2016, no official complaints were submitted. Three defamation court 
cases against nine journalists were registered. Cases are still ongoing and no convictions have 
been issued so far.  

The authorities are expected to pursue zero tolerance of threats or attacks against media, and 
refrain from making statements that may create an environment not conducive to freedom of 
expression. 

Legislative environment 

The  Constitution  and  relevant  laws  are  in  line  with  international  human  rights  law.  They 
guarantee  individual  liberties  including  the  right  to  privacy,  freedom  of  expression  and 
sanctions  against  incitement  to  hatred.  Defamation  remains  a  criminal  offence,  although 
prison sentences are not allowed. However, journalists are at risk of large fines and damages. 
The rules on hate speech are in line with international standards.  Five cases of hate speech 
were  registered  and  two  complaints  were  submitted  to  the  Commissioner  for  the  Protection 

27 

 
 
 
against Discrimination on the grounds of gender identity and sexual orientation. Albania still 
needs to introduce legislation strengthening transparency in public advertising. 

Access to information about procurement contracts, audits and salaries of officials should be 
strengthened. Decisions of the Commissioner for the Right to Information are non-binding on 
public administration officials. 

Implementation of legislation/institutions 

The  Audiovisual  Media  Authority  (AMA)  approved  its  2017-2019  strategic  action  plan  in 
March 2017. AMA has doubled its revenue and changed its structure to focus more strongly 
on  supervisory  and  inspection  activities  to  identify  illegal  broadcasting.  The  digital 
switchover has entered the final stage of implementation. 

Public service broadcaster 

The  public  broadcaster  RTSH  has  a  new  internal  structure  reflecting  the  digital  switchover 
process.  RTSH  has  developed  and  approved  editorial  principles  to  guard  against  political 
interference. The OSCE/ODIHR report on the June parliamentary elections stated that RTSH 
showed  a  balanced  approach  to  campaign  reporting.  However,  RTSH  needs  to  ensure  its 
financial sustainability. 

Economic factors 

Audiovisual media ownership and the transparency of media funding and public advertising 
remain key issues. The editorial direction of private media continues to be strongly influenced 
by political and business interests. Media funding remains key to improving media freedom, 
especially given new challenges such as ‘fake news’ and third-party influence. Among others, 
self-censorship  and  the  precarious  nature  of  employment  for  journalists  remain  issues  of 
strong concern. 

Internet 

The government does not restrict internet access or censor online content. Self-regulation for 
the media sector has to be encouraged. 

Social dialogue/social conditions 

Job  security  for  journalists  needs  to  be  strengthened.  Media  owners  do  not  formalise  work 
contracts and the Labour Code needs to be properly implemented for journalists. 

Freedom of assembly and association was respected. Protests and political demonstrations 
were held without major incidents. 

As  regards  property  rights,  progress  has  yet  to  be  made  towards  improving  the  legal 
framework  for  registration,  expropriation  and  compensation.  The  2012-2020  strategy  on 
property  rights  has  yet  to  be  updated  and  institutional  coordination  should  be  improved.  In 
relation  to  the  Manushaqe  Puto  case,  reflecting  the  effectiveness  of  compensation  schemes, 
there are 89 cases are pending before the ECtHR. The Integrated Land Management (ILMR) 
Secretariat  was  established.  Further  progress  is  dependent  on  the  budget  allocation  for 
integrated land management and on follow-up legislation. The Agency for the Treatment of 
Property  has  received  887  applications  so  far  where  183  decisions  have  been  executed  for 
evaluation of property. 

The policy and legal framework on non-discrimination is broadly in line with EU standards. 
However,  the  Law  on  Protection  against  Discrimination  does  not  address  multiple 

28 

 
 
 
discriminations. Implementation of the legal framework needs to be strengthened through the 
specialised  training  of  judges  and  prosecutors.  In  2017,  the  Commissioner  for  Protection 
against Discrimination handled 203 cases of alleged discrimination (against 288 in 2015 and 
239 in 2016). The Commissioner participated in 59 judicial proceedings (against 37 in 2015 
and  45  in  2016)  and  imposed  13  penalties  (against  14  in  2015  and  10  in  2016).  Awareness 
campaigns  were  organised  across  the  country,  but  homophobia  and  anti-gypsyism  remain 
widespread. The number of reported hate-crime cases is very low and data collection on hate 
crimes is still lacking. 

The  national  strategy  and  action  plan  (2016-2020)  on  Gender  Equality  was  adopted  in 
October 2016. However, a certain funding gap persists. At the central level, the Deputy Prime 
Minister is assigned as the National Coordinator for Gender Equality mechanism. Regarding 
the legislative framework, a number of laws still contain gender-discriminatory provisions. In 
2017, efforts were made to make gender equality an integral part of planning and budgeting 
for national development and EU integration, but these still need to be reflected at the local 
level.  With  the  new  government,  11  gender-champions  employees  were  appointed  at  the 
central  level  and  58  at  local  level.  Women  are  equally  represented  in  the  new  government. 
The  percentage  of  women  parliamentarians  also  increased  from  16 %  to  28.5 %  in  the  new 
parliament.  In  December  2017,  the  Parliament  adopted  a  resolution  on  the  fight  against 
gender-based  violence  and  established  a  parliamentary  sub-committee  on  gender  equality. 
Further efforts are required to ensure that all strategies and policies and strategies are gender 
mainstreamed. 

Domestic  violence  remains  a  serious  concern.  During  2017,  3 243  cases  were  reported 
(against 3 700 in 2016) and 2 593 protection orders were issued (against 2 207 in 2016). For 
2017, 129 of these protection orders were not respected (against 119 in 2016). Furthermore, 
1 950  cases  of  domestic  violence  against  women  and  children  were  registered  as  criminal 
offences in 2016. While the number of local mechanisms for reporting gender-based violence 
has  increased,  efforts  should  be  stepped  up  to  establish  them  in  all  municipalities.  The 
Ministry  of Justice established  a new office to  coordinate efforts against  domestic violence. 
There  is  also  a  need  to  ensure  cross-sectoral  coordination  with  child  protection  and 
anti-trafficking mechanisms at local and regional level. Since December 2016, a donor-funded 
national  emergency  number  for  victims  of  domestic  violence  has  been  operational.  Overall, 
more work is needed to ensure that women have access to justice.  

The legislative and policy framework on the rights of the child was reinforced in 2017 with 
the  adoption  of  the  Law  for  the  Protection  of  Children’s  Rights,  the  Criminal  Justice  for 
Children Code and the ‘Children’s Agenda 2020’. The Law for the Protection of Children’s 
Rights provides for a child protection system. However, related bylaws are needed to make it 
operational. Interinstitutional cooperation, data collection and reporting mechanisms on child 
protection should be improved. Further efforts are also needed to ensure the child protection 
system  functions  effectively.  In  2016  and  up  to  June  2017,  586  street  children  and  their 
families  were  taken into  protection. The  Criminal  Justice  for  Children Code  in  March  2017 
ensured  Albania’s  de  jure  compliance  with  international  standards  on  juvenile  justice.  The 
code  needs  to  be  completed  with  secondary  legislation.  The  adoption  of  the  ‘Justice  for 
Children’  strategy,  encompassing  both  juvenile  justice  and  equitable  access  to  justice  for 
children, is still pending. The Law on Legal Aid adopted in December 2017 aims to ensure 
children’s  access  to  legal  aid.  The  Ministry  of  Justice  has  established  a  section  on  criminal 
justice  for  children  and  developed  an  online  system  for  tracking  cases  of  children  that 
committed offences.  

29 

 
 
 
Albania’s  framework  legislation  on  the  rights  of  persons  with  disabilities  is  partially 
compliant  with  the  UN  Convention  on  the  Rights  of  Persons  with  Disabilities.  During  the 
2017 elections, more than half of the polling stations were not accessible to disabled people. 
People  with  disabilities  continued  to  face  difficulties  in  accessing  education,  employment, 
healthcare  and  social  services  and  in  participating  in  decision-making  and  there  are  still 
difficulties  in  removing  environmental  and  infrastructural  barriers.  Most  of  the  secondary 
legislation  related  to  the  law  on  inclusion  and  accessibility  from  2014  needs  to  be  adopted. 
Despite  efforts to  ensure  inclusive  education,  the  quality  of  education  for  disabled children, 
especially  deaf  children,  is  a  cause  for  concern  and  children  are  still  placed  in  institutions. 
Monitoring of how disability-related measures are being implemented is hampered by a lack 
of data. 

Despite  the  fact  that  the  Constitution  does  not  include  references  to  sexual  orientation  and 
gender  identity,  Albania's  anti-discrimination  legislation  prohibits  discrimination  against 
lesbian, gay, bisexual, transgender and intersex (LGBTI) persons. However, more efforts 
are  needed  to  protect  LGBTI  persons  from  discrimination.  An  inter-ministerial  team 
responsible for the monitoring of the 2016-2020 National Action Plan for LGBTI Persons in 
Albania  is  functional.  Police  officers,  prosecutors  and  gender  focal  points  of  line  ministries 
have been given training on preventing discrimination on the basis of sexual orientation and 
gender identity. According to LGBTI organisations, the attitude and awareness of the police 
has improved significantly in recent years. The donor-funded shelter for LGBTI persons has 
continued to provide care, support and advocacy to homeless LGBTI individuals. During the 
reporting  period,  no  court  rulings  in  cases  related  to  sexual  orientation  and  gender  identity 
have been made. In addition, public awareness and acceptance of LGBTI persons remain low, 
particularly in rural areas. Hate speech and discriminatory language continue to be a problem 
in  the  media,  especially  online  media.  On  a  positive  note,  the  sixth  edition  of  Tirana  Gay 
Pride took place without any incident. 

Issues  of  labour  and  trade  union  rights  are  covered  in  Chapter  19:  Social  policy  and 
employment. 

On  procedural  rights,  the  new  Law  on  Legal  Aid  broadens  the  category  of  people  that 
benefit from legal aid and introduces primary and secondary legal aid concepts. The rights of 
victims were strengthened through amendments to the Criminal Procedure Code in May 2017. 
Victims can  now have  full access to information  on the investigation file, be given medical 
and psychological assistance and have an interpreter to communicate in their own language. 
Furthermore,  specific  categories  of  victims  are  recognised  by  the  code,  including  those  that 
have been sexually abused or victims of trafficking in human beings. Nevertheless, the legal 
aid  scheme  still  needs  to  develop  an  outreach  mechanism  and  access  to  services.  The  vast 
majority  of  cases  involving  vulnerable  groups  are  still  handled  by  civil  society  with  donor 
support. 

Important steps were taken to improve the legal framework on respect for and protection of 
minorities. In October 2017, a framework Law on the Protection of National Minorities was 
adopted, which abolished the differentiation between national minorities and ethno-linguistic 
communities and introduced the principle of self-identification. Secondary legislation needs to 
be developed swiftly, with the involvement of all relevant stakeholders, in line with European 
standards, along with a revision of existing relevant legislation. These steps are necessary to 
ensure implementation in practice of all the principles and rights enshrined in the framework 
law, including the right to free self-identification. 

30 

 
 
 
The  revised  State  Committee  on  National  Minorities  needs  to  be  made  functional  and  its 
financial  viability  ensured.  The  OSCE/ODIHR  report  on  the  June  parliamentary  elections 
noted that national minorities were given a fair opportunity to participate, both as candidates 
and  voters.  In  September  2017,  the  public  broadcaster  started  to  offer  programmes  in  five 
minority languages on a channel dedicated to national minorities. 

The implementation of the 2016-2020 national action plan for the integration of  Roma and 
Egyptians  is  ongoing.  The  2017  report  on  its  implementation  noted  progress  in  early 
childhood and primary education and in access to healthcare and labour market. Albania does 
not have a central interdisciplinary body coordinating the Roma integration policy. However, 
informal employment continues to be very high in the Roma community and unemployment 
rates  have  continued  rising  in  recent  years,  reaching  55 %  (the  second  highest  rate  in  the 
Western  Balkans).  The  enrolment  of  Roma  and  Egyptian  boys  and  girls  in  pre-school  and 
basic education has increased considerably (from 4 996 in 2015 to 12 801 in 2016) but the gap 
between Roma and not Roma enrolment increased. Despite this progress, Albania has one of 
the  lowest  completion  rates  of  compulsory  education  in  the  region  (44 %).  The  limited 
number of enrolments in secondary education among Roma children also remains a challenge. 
Roma  children  benefit  from  free  textbooks  and  transportation  to  remote  schools.  However, 
segregation in schools remains widespread. 

The housing budget has increased but remains insufficient to meet the needs for housing and 
infrastructure,  with  residential  segregation  rising  in  Roma  settlements.  In  2017,  255  Roma 
families benefited from projects to improve housing conditions, a considerable increase from 
previous  years  (187  in  2016).  Albania  has  the  region’s  lowest  rate  of  access  by  the  Roma 
population  to  piped  water  (48 %)  and  electricity  (84 %).  Civil  registration  for  Roma  has 
improved  but  further  efforts  are  needed,  particularly  to  ease  the  transfer  of  registration 
between  municipalities  and  ensure  registration  of  children  born  abroad  who  are  at  risk  of 
statelessness.  Most  unemployed  Roma  and  Egyptians  have  difficulties  accessing  healthcare 
due  to  complicated  procedures  for  obtaining  health  cards.  In  fact,  overall  access  to  public 
services for Roma remains difficult, particularly in rural areas.  

2.2.2. Chapter 24: Justice, freedom and security 
Albania has some level of preparation to implement the acquis and European standards in 
this  area.  Some  progress  was  achieved  in  improving  the  institutional  capacity  on  border 
management, asylum and countering terrorism and violent extremism. Reception capacity to 
deal  with  mixed  migration  flows  increased.  Organisational  changes  in  law  enforcement 
agencies were introduced and key legislation adopted, especially on reorganising the police. 
The number of unfounded asylum applications lodged by Albanian nationals in the EU has 
decreased  but  requires  continuous  and  sustained  efforts, 
the 
phenomenon of unaccompanied minors. There was some progress in combatting organised 
crime but sustained efforts are needed to target organised crime networks and their leaders.  

including  addressing 

In the coming year, Albania should in particular: 

→  develop  a  strategic  approach  towards  financial  investigations,  including  by  (i)  adopting 
the  FATF  concept  on  financial  investigations;  (ii)  automatically  implement  financial 
investigations when dealing with organised crime, terrorism, money laundering and serious 
corruption  cases;  (iii)  start  financial  investigations  from  the  very  start  of  the  criminal 
investigation;  and  (iv)  apply  a  multidisciplinary  and  proactive  approach  to  financial 
investigations; 

31 

 
 
 
→  make  the  National  Centre  for  Countering  Violent  Extremism  fully  operational  with 
adequate funding and staff;  

→  further  increase  the  measures  taken  in  recent  months  to  address  effectively  the 
phenomenon of unfounded asylum applications in the EU as well as unaccompanied minors.   

Fight against organised crime 

The country has some level of preparation in the fight against organised crime. Overall there 
was  some  progress  in  the  reporting  period,  notably  in  terms  of  increased  police  operations 
and  in  combating  cannabis  cultivation.  Albania  should  ensure  that  these  initial  results  are 
sustained  and  therefore  should  intensify  the  search  for,  confiscation  and  destruction  of 
cannabis  stockpiles.  In  view  of  previous  recommendations,  some  progress  was  made  on 
aligning  relevant  legislation  with  European  standards  and  best  practices.  Albania  adopted 
amendments  to  the  Anti-Mafia  Law  and  the  Criminal  Procedure  Code  to  make  criminal 
investigations more effective. Some progress was also made on confiscating criminal assets, 
relating  mostly  to  preventive  seizures.  International  police  cooperation,  especially  with  EU 
Member  States,  has  intensified.  Cooperation  between  the  police,  prosecution  and  other 
relevant agencies and bodies needs to be improved. More efforts are needed to tackle money 
laundering,  criminal  assets  and  unjustified  wealth.  In  the  coming  year,  Albania  should  in 
particular: 

→  progress  further  towards  establishing  a  solid  track  record  of  proactive  investigations, 
prosecutions  and  final  convictions  against  organised  crime  groups;  this  should  include 
intensifying investigations and prosecuting high-level members of organised crime groups; 

→  set  up,  equip  and  build  up  the  capacity  of  the  Special  Anti-Corruption  and  Organised 
Crime  Structure  and  National  Bureau  of  Investigation  to  fight  organised  crime,  and  ensure 
coordination between relevant existing structures; 

→  intensify  the  fight  against  money  laundering  through  the  more  effective  use  of  criminal 
intelligence, identification, tracing, freezing and confiscation of crime proceeds; make reports 
of suspicious transactions admissible as evidence in court; introduce the concepts of extended 
confiscation  and  financial  ceiling  in  cash  transactions;  and  strengthen  the  capacity  of  law 
enforcement authorities to deal with tax fraud and tax evasion. 

→ establish or designate a centralised agency in charge of the identification and tracking of 
criminal  assets  (asset  recovery  agency)  in  order  to  further  enhance  the  effectiveness  of  the 
national  asset  recovery  system  and  facilitate  operational  cooperation  with  asset  recovery 
offices in the EU Member States. 

Institutional set-up and legal alignment 

There  are  9 867  officers  in  the  Albanian  State  Police  (ASP),  equivalent  to  257  per  100 000 
inhabitants,  compared  to  the  EU  average  of  211  in  2015.  Albania  reorganised  the  police 
structures  in  December  2015  and  is  currently  working  on  a  new  restructuring  of  the  police, 
which  should  make  it  more  efficient  through  department  mergers  and  new  accountability 
lines.  

The  legal  framework  has  been  further  aligned  with  the  acquis.  In  March  and  April  2017 
Albania  adopted  amendments  to  the  Anti-Mafia  Law  and  the  Criminal  Procedure  Code  to 
ensure  effectiveness  in  criminal  investigations.  The  amendments  relate  to  the  extension  of 
criminal investigations from three to six months, admissibility of evidence, the introduction of 

32 

 
 
 
the  principle  of  free  evidence  and  the  concept  of  preliminary  investigation  judge,  witness 
protection and controlled deliveries, where police secretly monitor deliveries of illegal goods.   

Some  legal  amendments  concerning  unjustified  wealth  are  outstanding.  These  include  the 
introduction  of  the  concept  of  extended  confiscation  and  of  legal  financial  ceilings  in  cash 
transactions; the admissibility of suspicious transactions reports as evidence in court; and the 
establishment  of  a  central  registry  of  bank  accounts.  The  Law  on  the  Organisation  and 
Functioning of the Institutions  for Combating  Corruption and Organised Crime entered into 
force in November 2016.  

In  September  2017  the  Ministry  of  Interior  issued  a  policy  document  on  the  10  top  public 
order  and  security  priorities  for  the  next  4  years  including  objectives  and  key  measures. 
Re-evaluating  (vetting)  officers  of  the  ASP,  Republican  Guard  and  Internal  Affairs  and 
Complaints  Service  is  one  of  the  priorities.  This  will  be  based  on  personal  integrity, 
professional capacity and verification of their assets.  The re-evaluation is expected to affect 
about 13 000 individuals. On 6 March 2018 the law on the vetting of police ranks, setting the 
principle,  criteria  and  procedures  of  the  re-evaluation  process  was  approved  by  the 
Parliament.  In  November  2017  the  Ministry  of  Interior  adopted  the  action  plan  on  the  fight 
against  organised  crime  (operation  ‘Power  of  law’),  which  provides  for  setting  up  multi-
disciplinary  task  forces  to  monitor  and  implement  it,  with  a  special  focus  on  recovery  of 
proceeds  of  crime.  In  this  framework,  the  Ministry  of  Interior  and  the  General  Prosecutor 
Office  signed  in  February  2018  a  cooperation  agreement  on  jointly  tackling  serious  crimes 
and corruption. The agreement will be in force and applicable until the establishment of the 
special prosecutor’s office (SPAK). Following investigations on criminal groups, Albania has 
identified  40  groups  and  their  assets.  Most  of  them  are  operating  in  the  country  mainly  in 
cannabis cultivation and trade. 

Albania updated and continued to implement the strategy on the fight against  trafficking in 
human beings and its action plan for 2014-2017, which came to an end in December 2017. 
The  new  strategy  and  action  plan  for  2018-2020  have  been  finalised  and  their  adoption  is 
pending.  The  legislative  framework  for  victims  to  obtain  access  to  justice  was  improved 
through amendments to the Criminal Procedural Code, with the inclusion of additional rights 
for sexually abused victims and victims of trafficking in human beings. On money laundering, 
the police approved a new action plan to tackle criminal assets and unjustified wealth. 

On  trafficking  in  weapons,  Albania  adopted  a  law  on  weapons  in  2014,  which  is  partially 
aligned  with  the  provisions  of  the  Directive  (EU)  2017/853.  Albania  has  yet  to  introduce 
sub-categorisation  of  weapons,  and  to  harmonise  its  legislation  with  the  latest  EU 
amendments on weapons. 

Implementation and enforcement capacity 

As regards Albania’s track record, the number of operations carried out by the police is high 
and  has  particularly  increased  in  the  past  months,  leading  to  more  offenders  being  arrested 
(including  39  individuals  arrested  for  suspected  illegal  trafficking  of  Albanian  citizens  and 
public  officials  of  a  municipality  arrested  for  abuse  of  office,  and  misappropriation  of  land 
property). While some criminal groups have been dismantled, investigations and prosecutions 
do  not  cover  yet  the  upper  echelons  of  the  criminal  organisation  and  the  number  of  final 
convictions  remains  limited.  New  investigations  of  criminal  organisations  and  structured 
criminal  groups  have  also  increased  (from  23  in  2015,  to  46  in  2016,  and  31  in  2017). 
However,  final  convictions  in  organised  crime  cases  remained  very  low  and  have  only 

33 

 
 
 
marginally increased. In February 2018 four people have been convicted in final instance for 
membership  of  a  structured  criminal  group  involved  in  drug  cultivation  and  trafficking 
(Lazarat  case).  Overall,  there  is  still  a  relatively  high  percentage  of  cases  that  are  initially 
reported  as  organised  crime  cases  but  subsequently  transferred  to  local  prosecutors’  offices 
(therefore not considered organised crime cases anymore) or dismissed for lack of evidence 
and/or due to the poor quality of referrals.  

Statistics  on  serious  crimes  that  are  not  linked  to  criminal  organisations  and  structured 
criminal  groups  indicate  an  increasing  trend  of  crimes  related  to  the  production  and 
cultivation of narcotics: almost 54 % in 2015, 66.5 % in 2016 and 72.3 % in 2017. They are 
followed by money laundering, trafficking in vehicles, money counterfeiting and forgery, and 
trafficking  in  human  beings.  In  these  cases,  too,  there  remains  a  serious  gap  between  the 
numbers of final convictions and of finalised investigations.  

The  government  is  making  a  concerted  effort  to  improve  the  law  enforcement  capacity  to 
tackle  organised  crime  and  has  improved  the  law  enforcement  and  security  institutions 
through legal and institutional reforms. The quality of investigations in criminal proceedings 
has  been  improved  through  the  use  of  special  investigation  techniques.  However,  the  law 
enforcement authorities’ response to organised crime is often delayed and limited. This is due 
to a combination of factors: inadequate resources; undue influence and pressure on police and 
prosecution services; frequent and unjustified turnover of State Police personnel; low salaries; 
and the limited equipment made available to the judicial police. 

The police and prosecution have been granted access to additional private and public national 
registries but still lack direct access to 20 key national registries. This includes the electronic 
register  of  mobile  phone  subscribers.  Steps  have  been  taken  to  improve  cooperation  and 
mutual trust between police, prosecution and other relevant agencies and bodies in detecting 
and  investigating  complex  criminal  cases.  This  should  now  lead  to  operational  results.  Law 
enforcement structures should be given specific training in financial investigation techniques 
to  improve  their  capacity  to  tackle  unjustified  wealth.  Investigations  of  large  criminal 
networks should be started proactively and in a more systematic way. Albania is encouraged 
to  establish  Joint  Investigation  Teams.  Fighting  organised  crime  remains  fundamental  to 
countering criminal infiltration of the political, legal and economic systems. 

The Prosecutor’s Office registered 220 investigations into money laundering in 2015, 227 in 
2016,  and  309  in  2017.  Despite  the  increasing  trend,  the  number  of  convictions  for  money 
laundering  at  first  instance  level  remains  low (three  in  2015,  eight  in  2016  and  only  two  in 
2017).  Only  15  people  have  been  finally  convicted  for  money  laundering  in  the  past  four 
years.  Limited  law  enforcement  resources,  weak  legal  institutions,  corruption  and  a  largely 
cash-based  economy  with  substantial  informal  sectors  make  Albania  vulnerable  to  money 
laundering. 

Confiscation of criminal assets should become a strategic priority in Albania’s fight against 
organised  crime  and  terrorism.  Criminal  groups  engage  in  an  increasingly  wide  range  of 
profitable  illegal  activities.  Albania  has  developed  tools  for  freezing,  managing  and 
confiscating  criminal  assets  through  amendments  to  the  Anti-Mafia  Law.  These  include  the 
possibility  for  non-conviction  based  confiscation  (allowing  confiscation  of  criminal  assets 
where  a  criminal  conviction  is  not  possible,  in  particular  because  the  suspect  is  deceased, 
permanently  ill  or  has  fled),  and  third-party  confiscation  (confiscating  criminal  assets  that 
were purposely transferred from the suspect to a third party). Albania should however focus 
on adopting and implementing rules on confiscating assets which are not directly linked to a 

34 

 
 
 
specific  crime  but  which  clearly  result  from  similar  criminal  activities  committed  by  the 
convicted  person  (extended  confiscation);  and  ensure  that  the  relevant  authorities  are  more 
systematic in temporarily freezing assets that risk disappearing if no action is taken, subject to 
confirmation by a court as soon as possible (precautionary freezing). Albania should urgently 
step up its capacity to manage frozen or confiscated assets so that they do not lose economic 
value  (asset  management).  Albania  has  not  yet  established  an  assets  recovery  office.  A 
national  asset  recovery  strategy  is  currently  being  drafted.  Albanian  should  establish  or 
designate  an  Asset  Recovery  Office  in  charge  of  the  identification  and  tracking  of  criminal 
assets in order to further enhance the effectiveness of the national asset recovery system and 
facilitate operational cooperation with asset recovery offices in the EU Member States. 

Cybercrime is a growing concern. The number of registered criminal proceedings related to 
computer fraud increased. However, final convictions (at Appeal Court level) remained low: 
five in 2017, against one in 2016 and four in 2015. 

On  trafficking  in  human  beings,  the  Prosecutor’s  Office  registered  52  new  criminal 
proceedings in 2015, 24 in 2016 and 19 in 2017. Most of the referrals involved adults. The 
number of related convictions remains low. Albania remains a source country for trafficking 
in  human  beings.  Vulnerable  Albanian  minors  are  victims  of  sexual  exploitation  both  in 
Albania  and  in  some  EU  Member  States.  The  National  Referral  Mechanism  for  Victims  / 
Potential Victims of Trafficking was fully functional during the reporting period. In 2017 no 
victim  benefited  from  the  right  to  financial  compensation.  The  task  force  in  charge  of 
reviewing dismissed  and not  initiated cases  of trafficking  in human beings achieved limited 
results.  Cooperation  between  the  police  and  the  prosecution  in  sharing  investigation  acts 
improved,  and  administrative  procedures  were  simplified.  However,  Albania  should 
strengthen  its  criminal  justice  system  and  step  up  efforts  to  prevent  trafficking  in  human 
beings.  It  should  pay  particular  attention  to  unaccompanied  children  and  child  victims  of 
trafficking,  especially  among  children  begging  in  the  streets.  Moreover,  Albania  is 
encouraged to implement the principle of non-punishment for child victims of trafficking and 
provide them with adequate protection, such as witness protection programmes and temporary 
residence  permits.  Adequate  protection  should  be  granted  irrespective  of  their  ability  or 
willingness to cooperate with the prosecutorial authorities. 

On  trafficking  in  weapons,  the  security  upgrade  of  the  Albanian  State  Police  central 
armament storage and two evidence rooms in main police stations is expected to be completed 
in  2018.  Albania  is  encouraged  to  establish  a  Firearms  Focal  Point  in  the  Albanian  State 
Police. Albania contributed and participated in the planning and implementation of the Joint 
Action Days coordinated by Europol in 2016 and 2017, between the EU and Western Balkans 
law enforcement agencies, planned under the European Multi-Disciplinary Platform Against 
Criminal Threats (EMPACT) for firearms. 

On 9 December 2013 Albania and Europol signed an agreement on operational and strategic 
cooperation. Following the signature of the operational agreement with Europol, Albania has 
taken  further  steps  to  strengthen  operational  police  cooperation  with  EU  agencies  and 
Member  States.  The  ASP  continued  to  assess  the  main  organised  crime  threats  in  line  with 
Europol  methodology  by  preparing  annual  national  serious  and  organised  crime  threat 
assessments.  A  growing  number  of  messages  are  exchanged  through  the  Europol  Secure 
Information Exchange Network Application: in 2017 there were 6 457 exchanges of messages 
with  Europol  (4 771  sent  by  Europol  and  1 686  sent  by  Albania  to  Europol),  compared  to 
4 587  in  2016  (3 415  sent  by  Europol  and  1 172  by  Albania).  However,  Albania  remains  a 

35 

 
 
 
reactive  rather  than  a  proactive  partner  in  international  police  cooperation.  Its  use  of 
Europol’s strategic intelligence products remained limited. It is planned to deploy a Europol 
liaison  officer  in  Albania  in  summer  2018.  Albania’s  law  enforcement  should  make  use  of 
regional  initiatives,  such  as  the  Joint  Operational  Office  in  Vienna,  serving  as  a  regional 
operational platform for international investigations into migrant smuggling organised crime 
groups.  The  office  has  the  benefit  of  having  a  direct  secure  connection  to  the  European 
Migrant Smuggling Centre in Europol.  

There have been positive developments in the cooperation with Interpol. In May 2017, a joint 
police  cooperation  centre  between  Montenegro,  Albania  and  Kosovo* was  set  up in  Plav.  It 
aims to improve cross-border cooperation in fighting crime.  

Fight against terrorism 

Institutional set-up and legal alignment 

Albania has a comprehensive legal framework for preventing and combating 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. 

Since 2015, Albania has a national strategy to counter violent extremism (CVE), with a focus 
on  community  outreach,  policing,  education  and  countering  extremist  propaganda.  In  July 
2016  the  government  appointed  a  national  coordinator  for  CVE  who  is  charged  with 
overseeing  the  implementation  of  the  national  strategy.  The  CVE  Office  was  established  in 
October of that year and the following month the government adopted a new national counter-
terrorism  strategy.  The  Counter-Terrorism  Directorate  of  the  ASP  is  the  lead  body.  Other 
agencies active in this field are the State Intelligence Service and the Defence Intelligence and 
Security Agency. In addition, the State Police’s community policing personnel is involved in 
preventing  radicalisation  and  combating  violent  extremism.  Albania  should  proactively 
implement the counter terrorism strategy and action plan. 

Implementation and enforcement capacity 

The  Counter-Terrorism  Directorate  has  improved  its  capacity  through  additional  specialised 
training, personnel and equipment. However, its operational and logistical capacity remained 
limited,  especially  for  special  investigations  and  operations  such  as  surveillance  and 
interceptions.  Links  between  organised  crime  and  terrorism  should  be  assessed.  Regional 
cooperation and exchange of sensitive information with international partners is satisfactory. 
Swift cooperation has taken place with Interpol for urgent verifications of suspected terrorists 
following  attacks in  EU Member States. In  November 2016 a coordinated regional counter-
terrorism operation led to the arrests of four individuals in Albania. The operation disrupted a 
potential attack targeting a World Cup qualifying football match between Albania and Israel, 
scheduled to take place in Shkoder. In 2017 five other operations were conducted where 12 
suspects  were  arrested  on  charges  of  terrorism  offences.  Between  2012  and  2015 
approximately  144  Albanian  citizens  travelled  to  Syria  and  Iraq  to  join  the  armed  conflicts 
there.  No  Albanians  are  reported  to  have  left  the  country  to  become  foreign  fighters  since 
2015.  Some  45  fighters  have  returned,  26  died  and  73  remain  on  the  battlefield  (the  latter 
figure includes 18 fighters and 55 family members). 

* 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. 

36 

 
 
 
                                                            
The  limited  resources  allocated  to  the  CVE  Office  continue  to  hamper  its  impact  and 
performance. The announced upgrade of the Office into the long-awaited CVE Centre should 
be  matched  with  enough  funding  and  staff  to  enable  it  to  perform  its  tasks  effectively.  The 
government  needs to  improve programmes  to reintegrate returnees and their families and to 
prevent radicalisation  in prisons.  International cooperation has  improved but  prevention and 
monitoring  mechanisms  involving  civil  society  and  religious  communities  need  to  be 
strengthened.  Online  radicalisation  content  in  Albanian  is  on  the  rise.  The  government  also 
needs to step up efforts to counter external influences that could lead to further radicalisation. 
The overall assessment of regional cooperation and the exchange  of sensitive information is 
positive.  In  2017,  three  joint  operations  were  conducted  with  security  forces  from 
neighbouring countries. Albania has cooperated swiftly with Interpol on urgent verifications 
of suspected terrorists following attacks in EU Member States. 

Legal and irregular migration 

Institutional set-up and legal alignment 

The institutional framework on migration management changed in September 2017 and the 
development  and  implementation  of  migration-related  policies  and  measures  needs  to  be 
further  clarified.  The  legal  framework  is  broadly  in  line  with  the  acquis.  However,  the 
government  lacks  a  comprehensive  cross-sector  national  migration  strategy.  The  national 
strategies on migration and on the reintegration of returned Albanian citizens ended in 2010 
and  2015  respectively.  The  Ministry  of  Interior  has  started  working  on  a  new  cross-sector 
strategy which  should be adopted in the fourth quarter of 2018. The new State Minister  for 
Diaspora launched a new strategy on diaspora and migration in October 2017. As part of the 
broader migration and development nexus, efforts to address diaspora engagement objectives 
should continue. 

Migration issues are covered by the national development and integration strategy for 2015-
2020  and  the  national  employment  and  skills  strategy  for  2014-2020.  The  latter  also  covers 
labour  migration  policies  and  concrete  measures  such  as  cooperation  agreements  with  non-
profit organisations providing guidance for returnees. In September 2015 Albania prepared a 
contingency plan for a possible mass influx of migrants and asylum seekers which is updated 
every 6 months. The agreement, initialled on 12 February 2018 with the European Border and 
Coast  Guard  Agency  (EBCGA),  will  allow  the  Agency  to  assist  the  Albanian  authorities  in 
the external border management and to swiftly deploy teams on Albania territory in case of a 
sudden  shift in  migration flows. It will also  strengthen  border controls and the fight  against 
migrant smuggling. 

Implementation and enforcement capacity 

The overall staffing of the renamed Department for Borders and Migration is limited (1 653 
employees).  Albania  needs  to  ensure  appropriate  training  of  its  border  police  staff  in 
compliance with basic training standards for the EU border guard, such as the common core 
curriculum  of  the  EBCGA.  Albania  has  one  reception  centre  for  irregular  migrants  in 
Karrec with a total capacity of 150 beds. A number of improvements have been made to bring 
the  facilities  up  to  the  required  standards.  However,  there  is  no  facility  for  unaccompanied 
minors. The centre’s security system and accommodation require renovation. Alternatives to 
detention  should  be  put  in  place  for  children  and  women  at  risk  and  people  with  serious 
medical  conditions,  as  envisaged  in  the  Law  on  Foreigners.  Border  police  staff  should  be 
trained in identifying vulnerable categories and referring them for assistance. 

37 

 
 
 
Albania increased its capacity to host irregular migrants near its border with Greece. A new 
centre for registration and temporary accommodation for irregular migrants was established in 
June  2017  close  to  the  Kakavija  border  crossing  point  with  Greece.  In  2017,  1 047  people 
were intercepted and pre-screened by the Border and Migration Police at the border (mainly 
with  Greece),  compared  to  915  in  2016.  In  the  first  two  months  of  2018,  the  Border  and 
Migration Police registered an increase in the number of people intercepted, with 661 cases, 
compared to 144 in the same period of 2016. The most prevalent country of origin is Algeria, 
followed by Syria and Libya.  

The number of people returned to their country of origin remained low. Most of the irregular 
migrants were returned to the country from which they entered Albania (mainly Greece) via 
informal  return.  Albania  is  encouraged  to  apply  the  return  procedures  which  are  compliant 
with  the  Law  on  Foreigners  and  to  ensure  its  return  mechanism  for  irregular  migrants  is  in 
line with the EU acquis.   

The readmission agreement with the EU is being implemented in a satisfactory manner, with 
Albania swiftly honouring readmission requests from Member States. However, the country 
needs  to  finalise  implementation  protocols  with  Greece.  Additional  efforts  are  required  on 
providing services to returned Albanian citizens (291 Albanian returnees have been registered 
at  the  migration  counters  in  2017).  Training  of  staff  working  at  the  migration  counter  and 
regional  employment  offices  should  be  strengthened.  Negotiations  on  implementation 
protocols  with  Spain  were  finalised  and  negotiations  on  readmission  agreements  are  being 
conducted with a number of countries of origin including Russia, Morocco, Afghanistan, Iraq 
and Iran.  

Asylum 

Institutional set-up and legal alignment 

Albania  is  party  to  the  1951  Geneva  Convention  and  in  2014  adopted  a  new  asylum  law 
which  brought  its  legal  framework  generally  into  line  with  the  acquis.  However,  since 
several  EU  directives  have  been  further  updated,  some  issues  still  need  to  be  addressed  as 
regards  procedural  safeguards  and  guarantees.  In  particular,  Albania  needs  to  ensure  that 
asylum seekers have the right to legal assistance and apprehended third country nationals have 
access to information about asylum rights and procedures. 

The instruction regulating pre-screening, detention, return and readmission should be revised 
and  aligned  with  international  standards.  The  revised  version  should  include  procedural 
safeguards  for  all  categories  of  vulnerable  persons.  It  should  align  its  content  with  the  new 
Law  on  Child  Protection  and  refer  specifically  to  compliance  with  the  non-refoulement 
principle and language rights.  

The country has the necessary institutions and procedures in place to handle asylum claims. 
The Directorate for Asylum (now Directorate for Asylum and Citizenship) has undertaken a 
re-structuring process in December 2017 resulting in the appointment of a new director and 
two  out  of  four  specialists.  Efforts  are  required  in  order  to  enhance  the  capacity  of  the 
Directorate. Appeals can be lodged in principle with the National Commission for Refugees 
and Asylum, established in 2017. However the Commission has only taken three decisions in 
2017,  upholding  the  first-instance  decisions.  Judicial  appeals  can  be  lodged  at  the 
administrative  courts.  Procedural  safeguards  to  guarantee  fair  procedures  for  the  most 
vulnerable  individuals  should  be  improved  through  cooperation  by  the  Ministry  of  Interior 

38 

 
 
 
with other relevant ministries. This is of particular importance when it comes to identifying 
and registering minors and determining the best interest of children. 

Implementation and enforcement capacity 

As regards the asylum procedure, asylum requests are recorded by the Border and Migration 
Police  during  pre-screening  and  are  then  referred  to  the  Directorate  for  Asylum. 
Improvements in the implementation of pre-screening were noted in the second half of 2017, 
as well as the positive impact of monitoring by UNHCR, civil society and more recently the 
Ombudsman’s  Office.  There  is  consensus  among  stakeholders  that  the  pre-screening 
instructions should be amended to include additional safeguards and involve the participation 
of other relevant ministries, notably for persons with specific needs. A more direct input from 
the  Directorate  for  Asylum,  with  regular attendance  at  interviews  and  support to  the  police, 
would improve the whole asylum procedure. Moreover, it has been observed that reports of 
procedural  shortcomings  and  abuse  during  pre-screening  have  increased  when  non-border 
police  security  forces  are  present  at  the  border  points.  It  is  therefore  necessary  to  clarify 
command structures for pre-screening when other security forces operate at the border. 

Although  the  overall  administrative  procedure  in  processing  asylum  requests  is  very  short, 
some  delays  were  reported.  More  training  is  needed  in  how  to  assess  individual  claims, 
particularly information on country of origin and cases involving vulnerable people. Access to 
information  about  asylum  procedures  and  interpretation  has  improved  but  should  be 
guaranteed  without  exception.  Data  management  needs  to  be  strengthened.  The  Directorate 
for Asylum should be granted access to biometric data collected by the Border and Migration 
Police.  No  cases  of  refoulement  at  the  borders  were  reported.  There  have  been  cases  of 
migrants returned to Greece without being pre-screened (six incidents, involving 36 persons 
have been reported).  

During  the  reporting  period  Albania  strengthened  its  reception  capacity  to  host  asylum 
seekers, in the border areas as well as in Tirana. The national reception centre in Tirana and 
the centre for elderly persons in Gjirokaster were renovated. In 2017, 309 people applied for 
asylum in Albania, up from 241 in 2016. As most asylum applications were withdrawn after a 
few days, the system does not have backlogs. Nonetheless, the status of some 2 700 Iranians 
(from the People’s Mujahedeen of Iran), relocated to Albania in 2015 and 2016, has yet to be 
decided. They currently hold temporary residence permits on humanitarian grounds. Albania 
cooperates on an informal basis with the European Asylum Support Office.  

Visa policy 

Albania  has  yet  to  align  its  visa  policy  progressively  with  the  EU’s,  including  with  the  EU 
lists  of  countries  whose  citizens  require  a  visa  and  those  who  are  exempted.  During  the 
summer  months,  Albania  lifts  its  visa  requirement  for  citizens  from  Saudi  Arabia,  Belarus, 
Georgia,  Qatar,  Oman  and  Russia  which  is  not  in  line  with  the  EU  acquis.  Albania  has  in 
place  the  E  -  Visa  system,  used  to  register  all  foreign  nationals  applying  for  a  visa  when 
entering  Albania.  The  system  is  operational  within  TIMS  –  Total  Information  Management 
System. 

Overall,  the  visa  liberalisation  benchmarks  continue  to  be  fulfilled.  Further  improvement  of 
the  implementation  is  expected,  in  particular  to  address  the  irregular  migration  challenges. 
The  flow  of  manifestly  unfounded  asylum  applications  to  Member  States  and  Schengen-
associated  countries  remained  at  a  sustained  level.  This  was  especially  the  case  in  France, 
Germany  and  Greece  (with  average  applications  per  month  in  2017  of  1  010,  508  and  204 

39 

 
 
 
respectively). In January 2018, France registered 720 asylum applications and Germany 300, 
respectively 30 % and 52.7 % less compared to January 2017. 

In  2017,  25  528  applications  were  lodged  by  Albanian  citizens  in  EU  Member  States  and 
Schengen-associated  countries,  almost  20  %  fewer  than  in  2016  (31  737  applications).  This 
was  equivalent  to  an  average  of  2  127  applications  per  month  in  2017.  Albanian  nationals 
remained  the  biggest  group  of  the  asylum  seekers  from  visa-free  Western  Balkan  countries 
and the highest number of illegal stayers and cases of illegal entry. In the first half of 2017 the 
number  of  refusals  of  entry  into  EU  Member  States  and  Schengen-associated  countries 
increased by 50 % compared to the same period of 2016, to 16 906 from 11 251. The number 
of illegal stayers fell by 13 % from 14 405 to 12 542. Albania has already started putting in 
place  additional  temporary  measures  to  prevent  abusive  asylum  applications.  These  include 
tighter  checks  at  border  crossing  points,  more  thorough  exit  interviews  and  information 
campaigns.  In  2017,  12 403  Albanian  citizens  were  refused  permission  to  exit  Albanian 
territory at border crossings (10 796 adults and 1 607 minors) compared to 3 307 (3 061 adults 
and 246 minors) in the first two months of 2018. The awareness-raising campaigns should be 
better  targeted  to  potential  asylum  seekers.  Albania  intensified  its  dialogue  with  the  most 
affected Member States and in June 2017 the government adopted an action plan to prevent 
asylum  abuse  in  EU  and  Schengen  countries.  Thirty-six  migration  desks  have  been 
established across the country to provide support to those returning to Albania. In December 
2017  Albania  signed  an  agreement  with  France  on  strengthening  operational  police 
cooperation and regulating the deployment in France of four French-speaking Albanian police 
officers.  They  will  support  the  dismantling  of  criminal  organisations  of  Albanian  origin, 
including those involved in organising asylum seekers’ journeys to France. 

Albania needs to continue and strengthen its efforts to tackle the phenomenon of unfounded 
asylum  applications  and  address  the  ‘push  factors’  behind  it.  Immediate  and  determined 
action should be taken under the post-visa liberalisation monitoring mechanism. In particular, 
the country needs to ensure close  cooperation with  countries of destination. It also  needs to 
start  analysing  data  on  returnees  in  order  to  map  the  most  affected  areas  and  so  prioritise 
awareness-raising and socioeconomic support. 

Unaccompanied  minors  from  Albania  travelling  to  EU  Member  States  remain  a  matter  of 
great concern and should be prioritised. The June 2017 action plan covers the identification 
and  referral  of  criminal  offences  related  to  the  abandonment  of  minors  by  parents  or  the 
accompanying person. Since August 2017 the State Police carry out tighter checks on children 
travelling abroad with one or both parents. In 2017, 54 cases of abandonment of minors were 
reported to the prosecution, and only four in 2016. The State Police has added an alert system 
in the TIMS border control database for cases where a parent or companion returns to Albania 
without the accompanied minor. 

Schengen and external borders 

Institutional set-up and legal alignment 

The Law on Border Control and associated implementing legislation 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 Department for Borders and Migration 
is a specialised civilian body within the Ministry of Interior, with 1 645 employees, including 
1 566  border  guards.  The  staff  receives  basic  and  some  specialised  training  from  the  Police 
Academy and from the European Border and Coast Guard Agency. The 2014-2020 integrated 

40 

 
 
 
border management strategy and action plan is fully aligned with European standards. Albania 
is a member of the Western Balkan Risk Analysis Network (WB-RAN) led by EBCGA. 

Implementation and enforcement capacity 

Implementation  of  the  integrated  border  management  strategy  and  action  plan  continued 
smoothly. The focus was 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 one with Kosovo are being constructed. The 
Integrated Sea Surveillance System of radars for the ‘blue’ (sea) border is operational. Funds 
have  been  allocated  to  upgrade  the  radar  software  in  2018.  The  system,  requiring 
improvements through the addition of new radar sites, provides more area coverage to detect 
smaller boats. The TETRA (Terrestrial Trunked Radio) special radio communication network 
for law enforcement forces is now functional. Overall, more resources need to be devoted to 
modernising  border  infrastructure  and  stepping  up  surveillance  of  the  ‘green’  and  ‘blue’ 
borders. 

Preventive  measures  against  corruption  are  implemented  at  the  border  crossing  points, 
however their real impact remains to be assessed. A special system with telephone numbers 
and  email  addresses  where  citizens  can  denounce  corruption  cases  is  operational.  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. 

Inter-agency  cooperation  is  increasing.  Joint  and  integrated  blue  border  patrols  have  been 
conducted  regularly  between  the  Albanian  Navy,  the  Coast  Guard  and  Border  Migration 
Police and an annual plan has been adopted. Cooperation between border guards and customs 
worked  well,  including  on  mutual  access  to  databases.  The  number  of  false  or  fraudulent 
documents detected 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  continues  to  be  established.  The  border  police’s 
investigative  powers  need  to  be  strengthened,  in  particular  to  detect  people  smuggling  and 
trafficking  cases. In  2017  the  Department  of  Border  and  Migration  initiated  disciplinary 
measures against 65 police officers: 27 were removed from the police ranks. 

Operational  cooperation  with  neighbouring  countries  continued  to  be  good.  Albania 
conducted joint patrols with Italy, Kosovo, Montenegro and the former Yugoslav Republic of 
Macedonia. Cross-border police cooperation agreements were signed with Italy, Kosovo and 
the former Yugoslav  Republic of Macedonia. In  February 2018 Albania initialled the status 
agreement  for  operational  cooperation  with  the  European  Border  and  Coast  Guard  Agency 
(EBCGA),  which  will  allow  the  deployment  of  EBCGA  teams  with  executive  powers  on 
Albanian territory, and ensure a better management of irregular migration.  

Judicial cooperation in civil and criminal matters 

Albania  continued  to  intensify  judicial  cooperation  in  civil  and  criminal  matters,  including 
with EU Member States. It addressed Eurojust recommendations on data protection standards 
and a draft cooperation agreement has been submitted by Eurojust to the Council for approval. 
Albania has been included in the Eurojust list of priority counterparts since 2008. There are 
currently three Eurojust counterparts in the country (Ministry of Justice, General Prosecutors’ 

41 

 
 
 
Office and Serious Crime Prosecutor Office). In 2017 Albania was involved in four Eurojust 
cases (16 in 2016 and 12 in 2015), mainly dealing with drug trafficking, fraud and organised 
property  crime.  Albania  participated  in  one  joint  investigation  team  supported  by  Eurojust. 
Albania  signed  the  EU  Justice  programme  and  started  to  build  the  capacity  needed  to 
implement it. The Memorandum of Understanding on the drugs component of the EU Justice 
Programme was signed in February.  

On judicial cooperation in civil matters, in 2017 Albania received 200 requests and sent out 
104 requests of mutual legal assistance. On judicial cooperation in criminal matters, in 2017 
the country received 1 311 requests and sent out 1 177 requests for mutual legal assistance. 
The  country  issued  89  extradition  requests  and  received  181.  There  were  three  incoming 
requests and three outgoing requests for transfers of criminal proceedings. 

Albania  needs  to  further  improve  international  cooperation,  the  timely  implementation  of 
multilateral instruments and its institutional capacity. Further efforts are necessary to further 
align legislation with the acquis and promote exchange of best practices in the field of judicial 
cooperation. The Ministry of Justice should allocate specific staff to follow and manage the 
EU Justice programme. 

Cooperation in the fight against drugs 

Cooperation  with  the  European  Monitoring  Centre  for  Drugs  and  Drug  Addiction 
(EMCDDA) continued. Preparations are ongoing in view of establishing a working agreement 
between Albania and EMCDDA, which will facilitate information exchange. Albania has no 
national  drug  observatory  and  no  functional  Early  Warning  System  on  new  psychoactive 
substances. The national drug strategy and action plan 2012-2016 came to an end. The new 
strategy and action plan 2017-2020 are currently being drafted.  

In  March  2017  the  government  adopted  the  2017-2020  strategy  and  action  plan  against 
cannabis  cultivation  and  trafficking,  and  set  up  the  central  task  force  against  cannabis 
cultivation.  Special  police  units  were  set  up  to  control  identified  high-risk  areas  (risk 
analysis). The coordinated approach between the Albanian institutions, the cooperation with 
Member  States  (especially  with  Italy  in  carrying  out  airborne  monitoring  of  the  Albanian 
territory)  and  the  controls  and  inspections  by  the  Albanian  police  have  brought  positive 
results.  Moreover,  data  show  that  cannabis  cultivation  in  Albania  significantly  decreased  in 
2017  compared  to  2016.  Statistics  indicate  that  in  2017  the  police  identified  and  destroyed 
66 927 plants. This was a decrease of 91.6 % compared with 2015 (797 422 plants destroyed) 
and of almost 97.4 % compared to 2016 (2 536 288 plants destroyed), mainly due to the fall in 
cannabis  cultivation 
tonnes  of 
cannabis/marijuana,  a  61.6 %  increase  from  2016  (30  tons).  Nevertheless,  Albania  remains 
the main source of cannabis herb trafficked to the European Union. Albania should now also 
intensify  the  search  for,  confiscation  and  destruction  of  stockpiles.  A  new  laboratory  for 
collecting and analysing data allows for faster processing and response on the destruction of 
the plants. In 2017, 100 % of the detected cannabis plants were destroyed on the spot by the 
police.  In  2017,  104  disciplinary  measures  have  been  taken  against  police  officers  for 
disciplinary breaches related to prevention, detection and fighting cannabis cultivation. Forty 
police officers have been dismissed from the police. 

the  police  also  seized  78.2 

in  Albania.  In  2017 

According to ECMDDA, Albania is also considered a transit country for hard drugs such as 
heroin and cocaine. Heroin seizures amounted to 21.5 kg in 2017 compared to 57.3 kg in 2016 
and 17.5 kg in the first two months of 2018. As for cocaine, 3.7 kg was seized in 2017 after 

42 

 
 
 
7.2 kg the year before. In February, the ASP seized a record amount of 613 kg and 350 grams 
of cocaine from Colombia. This represents the largest single seizure of cocaine or heroin in 
several years.  

On the track record, while there is an increasing number of offenders being arrested for drug 
trafficking, the number of final convictions remains negligible. In 2017 the police submitted 
to  the  Prosecutor’s  Office  2  071  cases  of  drug  production  and  trafficking  involving  2  485 
possible offenders. This was 451 cases and 391 people more than in 2016 (1 620 and 2 094). 
In  2017  the  Prosecutor’s  Office  registered  1  766  cases;  most  cases  have  been  dismissed  or 
suspended  and  805  cases  were  sent  to  court.  Some  534  offenders  were  convicted  at  first 
instance (391 in 2016. Albania should make use of special investigation techniques, proactive 
investigations and asset confiscation. It should systematically  launch financial investigations 
in drug trafficking cases.   

Customs cooperation 

Albania’s legislation on the use of technology for customs purposes is partially aligned with 
the acquis. Bilateral agreements exist with 12 EU Member States. Regarding implementation 
and  enforcement  capacity,  risk  analysis  has  been  further  developed,  and  risk  profiles  for 
transit, goods used by terrorists and extremist organisations, and imported seeds are regularly 
updated. A cooperation agreement with the General Directorate of Road Transport Services 
was signed to  exchange data to  address  vehicle and illicit trafficking,  and tax evasion. The 
fight against fraud is supported by 16 mobile anti-smuggling units at the land border and six 
units  at  the  sea  border.  The  General  Directorate  of  Customs  has  14  investigators  and  eight 
judicial police officers with investigative powers. GDC periodically performs integrity tests 
at  customs  houses  and  publishes  information  online  and  at  the  customs  houses  on  how  to 
lodge  complaints  and  denunciations.  In  2017,  95  disciplinary  measures  were  taken  against 
customs  officials,  including  seven  terminations  of  service,  compared  to  115  disciplinary 
measures, including 10 terminations of service in 2016. 

3. 

FUNDAMENTALS FIRST: ECONOMIC DEVELOPMENT & COMPETITIVENESS 

Key economic figures 

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

GDP growth (%) 

Unemployment rate (male; female) (%) 

Economic  activity  rate:  proportion  of  the 
population aged 15–64 that is economically 
active (male; female) (%) 

2015 

29 

2.2 

2016 

29 

3.4 

17.5 (17.5; 
17.5) 

15.6 (16.4; 
14.6) 

64.2 (73.4; 
55.1) 

66.2 (74.0; 
58.3) 

2017* 

n.a. 

3.9 

14.3 (15.4; 
12.7) 

66.6 (75.6; 
57.4) 

Current account balance (% of GDP) 

Net foreign direct investment (% of GDP) 

-8.6 

8.0 

-7.6 

8.7 

-6.3 

8.0 

* First 3 quarters 

43 

 
 
 
 
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 has made some progress and is moderately prepared in developing a functioning 
market economy. The public debt-to-GDP ratio and the current account deficit were reduced. 
Economic  growth  increased  further  and  unemployment  decreased  but  is  still  high. 
Non-performing loans (NPLs) in the banking sector have been reduced, but bank lending to 
businesses  remains  sluggish.  Reforms  crucial  to  improving  the  business  environment 
progressed but require further efforts. The comprehensive judicial reform advanced but needs 
to  be fully implemented. The new bankruptcy law entered into  force and should strengthen 
the  insolvency  regime.  However,  business-relevant  regulations  remained  cumbersome  and 
shortcomings in the rule of law continued to hamper businesses and deter investments. 

To support long-term growth, Albania should pay particular attention to: 

→ continue fiscal consolidation to meet the medium-term target for public debt reduction and 
create more room for manoeuvre for fiscal policy; 

→ bolster financial stability further by continuing to promote the resolution of NPLs and the 
use of the domestic currency; 

→ reduce the informal economy, including undeclared work. 

Economic governance 

to 

policy, 

strengthen 

Figure 1 Albania GDP growth 

Albania 
continued 
its 
macroeconomic  stability  and 
implement 
the 
market-oriented  reforms.  Addressing 
high level of public debt remained the focus of 
fiscal 
of 
although 
consolidation  has  slowed  down.  The  fiscal 
rules,  adopted  with  an  amendment  to  the 
Organic  Budget  Law  in  June  2016,  have  been 
complied with. Ambitious finance management 
reforms  are  under  way  with  EU  budget 
support. A fiscal risks unit has been established 
in the Ministry of Finance and first efforts have 
Source: Eurostat, national sources 
risks.  The 
been  made 
stipulated  procedure  for  adopting  the  2018  budget  was  not  fully  respected  which  impaired 
parliamentary  discussions.  Stability  and  growth  have  been  bolstered  by  the  three-year 
programme  with  the  International  Monetary  Fund  (IMF)  completed  in  February  2017. 

identify  such 

pace 

the 

to 

44 

 
 
 
 
Reforms crucial to improving the business environment advanced but require further efforts. 
The policy guidance jointly adopted in May 2017 has been partially implemented. 

Macroeconomic stability 

The  Albanian  economy  has  continued  to  expand  thanks  to  both  domestic  demand  and 
foreign trade. Annual GDP growth in real terms increased from 3.4 % in 2016 to 3.9 % in the 
first three quarters of 2017. All components of domestic demand have contributed positively 
to output expansion. Capital spending has been the main driver, benefitting from large foreign 
direct  investment  (FDI)  in  the  energy  sector.  Private  and  public  consumption  have  also 
recovered  over  the  past  2  years.  Net  exports  added  to  GDP  growth  between  mid-2016  and 
mid-2017 based on very strong services export (including tourism) and a recovery of goods 
export.  Despite  stronger  economic  activity,  per  capita  GDP  in  purchasing  power  standards 
stood at only 29 % of the EU-28 average in 2016, practically unchanged since 2009.  

The  substantial  current  account  deficit  has  narrowed  and  been  more  than  covered  by 
FDI  inflows.  Albania  has  historically  run  a  large  trade  deficit  partly  funded  by  remittances 
from Albanians  living abroad. Since 2015, the current account  balance has  been improving, 
cutting the deficit as a percentage of GDP from 10.8 % in 2014 to 6.3 % in the 12 months to 
the end of September 2017. This has exclusively been the result of a sharply higher surplus on 
the  balance  for  services  trade,  while  the  trade  deficit  for  goods  has  remained  very  high. 
Revenues  from  foreign  tourism  increased  strongly  in  2016  and  2017,  but  the  contribution 
from  other  services  (which  include  manufacturing  services)  was  even  greater.  Remittances 
remained relatively stable in absolute terms, but their share of GDP fell to 5.5 %. FDI inflows, 
recently  mainly  associated  with  the  construction  of  the  Trans  Adriatic  Pipeline  and  a  large 
hydropower project, amounted to 8.0 % of GDP in the year to the end of September 2017. As 
in  2016,  they  thereby  exceeded  the  current  account  deficit.  The  gross  external  debt-to-GDP 
ratio  declined  to  67.9 %  at  the  end  of  September  2017.  Foreign  exchange  reserves  have 
remained stable over the past 2 years at close to 25 % of GDP. They cover 6-1/2 months of 
imports of goods and services, providing an adequate safeguard against adverse shocks.   

Inflation remained below the  official target but prompted no further  monetary easing. 
Average annual inflation has been below the central bank’s 3 % target since 2012, falling to 
1.3 %  in  2016.  A  weather-related  spike  in  food  prices  in  the  winter  of  2016-2017  raised 
annual  average  inflation  to  2.0 %  in  2017,  but  underlying  price  pressures  have  remained 
subdued  helped  by  a  strong  lek  in  foreign  exchange  markets.  The  Bank  of  Albania  has 
maintained a very accommodative monetary policy by keeping the key policy rate (the repo 
rate) at the record low of 1.25 % since May 2016. The freely floating exchange rate of the lek 
appreciated 1.7 % against the euro over 2017 and 5.6 % since June 2015. 

45 

 
 
 
 
 
 
 
 
 
 
 
Figure 2 Albania fiscal developments 

The government's fiscal deficit has been 
more  than  halved  since  2015.  The 
general  government’s  overall  deficit 
corresponded  to  1.8  %  of  GDP  in  2016, 
down  from  4.1  %  in  the  previous  year. 
Most  of  the  deficit  narrowing  was  due  to 
the government completing the repayment 
of old arrears in 2015, thus eliminating an 
important expenditure item. But higher tax 
revenues  also  contributed  significantly  to 
the  lower  deficit,  although  they  remained 
below  budgetary  projections.  The  realised 
fiscal  deficit  was  nevertheless  0.4 
percentage points below the original target 

Source: Eurostat, national sources 
as a result of a significant under-execution of expenditures. 

The  2017  budget  has  a  deficit  target  of  2.0  %  of  GDP  and  the  preliminary  data  on  budget 
realisation suggest that the target has been met. The budget was amended twice to take into 
account  drought-related  emergency  support  to  the  electricity  sector  and  a  government 
reorganisation. The revisions raised planned revenues and expenditures by a similar, relatively 
modest  rate  and  left  the  budget  target  unchanged.  The  fiscal  rule  banning  overspending  in 
election years was complied with. 

The  public  debt-to-GDP  ratio  has  declined,  but  further  consolidation  is  required  to 
achieve the medium-term fiscal  target.  The public debt-to-GDP ratio started  to  decline in 
2016 after having risen significantly in the previous 5 years. The government estimates that 
the debt ratio fell further to 69.9 % at the end of 2017. The current fiscal framework operates 
with a medium-term debt objective of 45 % of GDP and annual budget balances that ensure a 
falling  debt ratio  until  the  target  is reached.  Within this  framework,  the  current  government 
has committed to reduce the debt ratio to below 60 % by 2021. This would probably require 
additional consolidation efforts compared to current fiscal plans. 

Albania’s  level  of  public  debt  remains  high  compared  with  regional  peers  and  is 
associated  with  risks  to  macroeconomic  stability  in  case  of  adverse  shocks.  In  recent 
years, the authorities have been able to lengthen the average maturity of the public debt stock 
significantly and to shift it increasingly towards external creditors. Almost half of the debt is 
now  denominated  in  foreign  currencies,  most  of  which  in  euros.  The  shifting  debt 
composition means that the rollover risk has been lowered, but interest rate and exchange rate 
risks have increased. Just over half of the public debt is still held domestically, mainly by the 
banking sector, and much of it is still short-term and has to be refinanced frequently. 

The macroeconomic policy mix was appropriate. Fiscal policy was prudent in 2017 despite 
it being an election year, but further reducing the budget deficit during the current economic 
upturn  is  necessary to  make  public  debt  more  sustainable. Fiscal  consolidation  also  reduces 
public borrowing, providing space for increased lending to the private sector, particularly for 
investment. Keeping the key interest rate low is appropriate as it helps to raise weak inflation 
and support economic activity.  

46 

 
 
 
 
 
 
The functioning of product markets 

Business environment  

In  spite  of  new  legislation  and  other  measures,  the  business  environment  remains  a 
constraint  on  Albania’s  competitiveness  and  growth  performance.  The  new  bankruptcy 
law entered into force in May 2017 and should strengthen the insolvency regime, streamline 
burdensome  market  exit  procedures,  prevent  abuse  and  facilitate  collateral  recovery. 
However, its implementation still awaits the adoption of regulations, especially on insolvency 
administrators, and out-of-court restructuring still needs to be facilitated. The Private Bailiffs 
Law has also been amended to protect the rights of lenders and strengthen the enforcement of 
loan  collateral,  but  the  bylaw  to  fully  implement  the  reform  still  needs  to  be  revised. 
Procedures  for  business  registration,  licensing  and  building  permits  have  been  improved. 
Reforms  in  the  electricity  sector  have  improved  its  finances,  but  getting  electricity  remains 
lengthy,  complicated  and  costly  for  users.  Redundant  regulatory  and  procedural  hurdles 
constitute another significant impediment for business. Access to formal finance, especially in 
the start-up phase, remained a challenge for firms. 

Shortcomings  in  the  rule  of  law  continued  to  hamper  the  business  environment, 
although  the  justice  reform  advanced.  In  spite  of  measures  taken  to  address  the  informal 
economy, it is estimated to account for at least one third of GDP. This is causing tax revenue 
losses,  a  lack  of  labour  protection  and  unfair  competition  among  firms.  Ineffective  contract 
enforcement,  uncertain  property  rights  and  the  prevalence  of  corruption  are  major  concerns 
repeatedly expressed by businesses. Progress on judicial reform needs to be translated into a 
more  favourable  business  environment.  Better  governance,  a  more  predictable  tax  system, 
consistent  enforcement  of  rules,  and  more  efficient  delivery  of  public  services  would 
substantially improve the business environment. 

State influence on product markets 

State presence and public subsidies remained limited in the Albanian economy with the 
notable  exception  of  the  electricity  sector.  The  share  of  public  revenue  and  spending  in 
GDP  remained  relatively  low.  Total  reported  State  aid  stood  at  0.15 %  of  GDP  in  2016, 
mainly  in  the  form  of  horizontal  aid  in  the  area  of  training,  research  and  development, 
employment,  culture  and  support  to  small  and  medium-sized  enterprises.  Reform  in  the 
electricity sector has substantially decreased distribution losses, improved bill collection rates 
and  strengthened  the  financial  situation  of  state-owned  enterprises  in  the  sector.  Although 
budget  allocations  to  the  energy  sector  had  originally  been  reduced  significantly  in  2017,  a 
drought  and  a  difficult  financing  situation  obliged  the  government  to  provide  a  substantial 
loan to  the sector in  August, requiring a budget  revision. The government  has  expressed  its 
intention to eliminate all power sector subsidies, including public guarantees  and policy net 
lending, by 2020. 

Privatisation and restructuring 

Albania  is  well  advanced  in  market  liberalisation  and  privatisation.  The  private  sector 
remained dominant in the economy, providing about 84 % of all jobs. The state’s involvement 
in  the  economy  remained  limited  and  was  concentrated  in  public  utilities  (railways, 
electricity, water and oil extraction). Albania has moved ahead with separating the production 
of  gas  and  electricity  from  transmission  and  distribution.  Shortcomings  remained  in  the 
corporate  governance  of  state-owned  electricity  companies.  Further  liberalisation  of  the 
electricity  market  would  enable  private  operators  to  enter  the  market,  thereby  increasing 

47 

 
 
 
competition and quality of supply. An action plan for the privatisation or liquidation of state 
companies in non-strategic sectors was adopted in March 2017. 

The functioning of the financial market 

Financial stability 

The  stability  of  the  banking  system  improved  as  the  number  of  NPLs  was  reduced. 
Albania’s banks are generally well capitalised, with a capital adequacy ratio which rose over 
the course of 2017 and is well above the regulatory minimum. The banking sector’s liquidity 
ratios  also  remain  well  above  the  minimum  regulatory  levels.  Deposits  remain  the  main 
source of funding, covering almost twice the volume of total bank loans. The ratio of NPLs to 
total  loans  declined  to  13.2 %  at  the  end  of  2017,  5.1  percentage  points  (pps)  lower  than  a 
year earlier, mainly as a result of mandatory write-offs. 

Banking sector profitability improved in 2017. The sector’s financial result more than doubled 
in the first half of the year on a year-on-year basis. Return on assets and equity stood at 1.5 % 
and  15.7 %,  respectively,  in  December  2017,  more  than  double  their  levels  a  year  earlier. 
However,  use  of  the  euro  for  loans  has  remained  high:  foreign  currency  loans  to  unhedged 
borrowers  still  account  for  around  one  quarter  of  total  private  sector  credit,  making  their 
repayment  vulnerable  to  a  depreciation  of  the  domestic  currency.  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  about  37 %  of  GDP,  there  is 
much scope for increased bank lending. However, credit to the business sector has stagnated 
in recent years despite low interest rates as a result of both low demand for and tight supply of 
bank loans. With the ratio of NPLs declining, lending to the business sector recorded slightly 
positive growth in the third quarter of 2017 when adjusted for loan write-offs.  

The  non-banking  financial  sector  remained  relatively  small.  It  includes  insurance 
companies,  savings  and  loan  associations,  private  supplementary  pension  funds,  investment 
funds,  and  some  other  non-banking  financial  institutions.  Their  total  assets  corresponded  to 
close to 10 % of total financial sector assets in 2017, little changed from the preceding 2 years 
but  up  from  6.6 %  in  2012.  The  capital  market  is  rudimentary  and  the  stock  exchange 
remained closed. There is significant scope for expanding equity and corporate bond finance 
provided  the  supervision  capacity  is  strengthened  and  transparency  and  governance  in  the 
private sector is improved. 

The functioning of the labour market  

Stronger  economic  activity  improved  labour  market  conditions,  but  unemployment 
remained high. The economic upswing continued to create new jobs in 2017, but at a lower 
rate than in the preceding year. In the first three quarters, employment in the 15-64 age group 
increased  by  a  relatively  modest  2.5  %  compared  with  a  year  earlier.  This  allowed  the 
unemployment  rate  to  decline  to  14.3 %  from  16.0  %  in  the  corresponding  period  in  2016. 
The youth unemployment rate (covering the 15-29 age group) fell from 29.2 % to 26.3 %. In 
addition to substantial skill mismatches, persistently high unemployment reflects rigidities in 
labour market legislation and lack of incentives to work. 

48 

 
 
 
Labour force participation - the number of people employed or looking for work - continued 
to  rise,  possibly  reflecting  improved  employment  prospects.  Two  thirds  of  the  working  age 
population were now employed or looking for a job. However, the gap between the male and 
female  participation  rates  widened  significantly.  42  %  of  the  workforce  was  employed  in 
agriculture,  mostly  in  low-skilled  and  low-productivity  jobs,  and  informal  employment 
remained  widespread.  Active labour  market policies have  continued to  be implemented, but 
they  still  covered  only  5.5%  of  the  unemployed  in  2017  which,  however,  was  an  increase 
from  previous  years.  The  end  of  the  public  wages  freeze  in  March  2017  drove  up  average 
public sector wages by about 11%. 

Figure 2 Unemployment in Albania (% 
of Active population) 

Figure 3 Participation rates in Albania (% of 
Labour Force) 

Source: Eurostat, national sources 

3.2.  The  capacity  to  cope  with  competitive  pressure  and  market  forces  within  the 
Union 
Albania has made some progress and has some level of preparation in terms of capacity to 
cope with competitive pressure and market forces within the EU. Specifically, progress was 
made on energy and transport infrastructure and digitalisation, although shortcomings remain 
which hinder Albania’s competitiveness and trade. The quality of education needs to be raised 
at all levels, not least to better equip people with skills that the labour market needs. Foreign 
trade  remains  below  potential  and  sectorally  concentrated.  Albania’s  capacity  for  research, 
development and innovation remains low.  

To support long-term growth, in the coming year Albania should pay particular attention to: 

→ improve the quality of the education system, including increasing capacity; 

→ develop the capacity for technological absorption, research, development and innovation; 

→ enhance public investment in infrastructure in a transparent and fiscally responsible way. 

Education and innovation 

The quality of Albania’s education system is relatively poor. Compared to 2012, Albania 
improved its scoring in the OECD's 2015 PISA assessment of the performance of 15-year-old 
students in science, reading and mathematics, but the overall ranking remained below all EU 
Member States. Public spending on education remains low. Total expenditures from the state 
budget  for  vocational  education  and  training  have  increased,  but  still  accounted  for  only 
0.13 %  of  GDP  in  2017.  Particularly  in  remote  rural  areas,  school  infrastructure  and  the 
quality of teachers are inadequate. The World Bank reports a functional illiteracy rate above 

49 

 
 
 
 
 
 
50 %. The level of funds available for teacher training in all fields of education is insufficient. 
Reforms  in  higher  education  and  science  have  continued  but  further  improvements  are 
needed. The total number of teachers in the pre-university education system in 2016-2017 was 
2 % lower than a year earlier.  

The  capacity  for  technological  absorption,  research,  development  and  innovation 
remains  low.  The  Education  Ministry’s  budget  for  research  and  development  has  remained 
very  modest.  Some  State  aid  was  granted  in  2016  for  research  and  innovation.  Substantial 
efforts  to  strengthen  the  link  between  business  and  academic  and  research  institutions  are 
needed.  Upgrading  the  economy  from  low-technology,  labour-intensive  and  low-cost 
production areas requires more research and innovation. This is particularly the case in sectors 
like  agriculture  &  food,  energy,  and  sustainable  tourism  which  are  crucial  for  Albania’s 
economic development. Statistical data on research and development needs to be improved. 

Physical capital and quality of infrastructure 

The  level  of  investment  has  stabilised  but  remains  dependent  on  foreign  inflows. 
Investment  has  accounted  for  one  quarter  of  GDP  in  recent  years,  much  of  it  by  foreign 
companies. In 2017, when the construction of hydro power plants on the river Devoll and the 
Trans  Adriatic  Pipeline reached  their  peak,  FDI  inflows  amounted  to  about  8 %  of  GDP.  A 
fully  functioning  cadastre  is  not  yet  in  place;  together  with  uncertainties  about  land 
ownership,  this  is  a  significant  impediment  to  investment.  Large  investments  are  often 
delayed  by  lengthy  land  expropriation  procedures,  which  in  most  cases  require  a  proper 
registration  of  the  rightful  owners  first.  Public  investment,  amounting  to  4-5 %  of  GDP  in 
recent years, has often been hampered by weaknesses in public investment management. 

Albania’s  transport  and  energy  infrastructure  made  some  progress  but  is  still 
insufficiently  developed.  Improvements  to  the  road  network  continued  and  a  new  railway 
law  was  adopted  in  early  2017.  However,  better  connections  to  neighbouring  countries  and 
the  EU  transport  network  still  need  to  be  established  to  reduce  transportation  costs  and 
facilitate  trade.  There  has  been  some  progress  on  energy  infrastructure,  but  inadequate  the 
electricity supply remains a key structural challenge that increases costs to businesses.  

The digitalisation of the economy is gradually being developed. Major advances have been 
the establishment of online platforms for business registration, licensing, tax filing, e-banking, 
e-commerce,  e-signature,  mobile  payment  of  bills,  and  issuance  of  civil  registry-related 
certificates. Broadband coverage and users have increased. 

Sectoral and enterprise structure 

The  Albanian  economy  is  led  by  the  services  sector,  but  agriculture  still  retains  an 
important  role.  In  2016,  services  again  increased  their  share  of  gross  value  added  (to 
53.2 %).  Agriculture  remained  the  second  most  important  sector  (at  22.9 %).  Industry 
(13.3 %) has gradually increased its share of the economy over the past 10 years, mainly as a 
result  of  rising  crude  oil  production.  Within  industry,  manufacturing  is  relatively  small 
(6.4 %) and mainly produces low value added and labour-intensive products such as textiles 
and footwear. Construction (10.5 %) has seen its share of the economy decline sharply over 
the past 10 years.  

Exports continue to be concentrated in a few sectors. 76.0 % of goods exports in the first 
eight  months  of  2017  came  from  three  product  categories:  textiles  and  footwear  (43.6 %); 
minerals, fuel and electricity (16.6 %); and construction materials and metals (15.9 %). This 

50 

 
 
 
lack  of  diversification  contributes  to  the  large  external  deficit  and  exposes  the  economy  to 
industry-specific shocks like sharp swings in energy prices. 

SMEs play a significant role in the economy. SMEs provide 80 % of employment and two 
thirds of value added in the non-agricultural private sector. Various state- and donor-funded 
schemes  support  SMEs’  competitiveness.  However,  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 

Figure  5  Albania  trade  integration  with 
the EU 

Source: Eurostat, national sources 
investment at the end of September 2017. 

total 

foreign 

The  EU  is  Albania’s  dominant  trading 
partner,  but  overall  trade  remains  below 
potential.  Albania’s 
trade 
(exports  and  imports  combined)  increased 
from  72.1 %  of  GDP  in  2015  to  74.8 %  in 
2016. A better  integration into  global supply 
chains  would  help  boost  productivity  and 
create  more  and  better 
jobs.  The  EU 
accounted  for  76.6 %  of  Albania’s  goods 
exports  and  61.3  %  of  its  goods  imports  in 
the  first  8  months  of  2017.  Within  the  EU, 
Italy  is  the  main  destination  for  Albanian 
than  half  of 
exports,  absorbing  more 
Albanian  goods  sold  abroad  and  providing 
almost  30 %  of  imported  goods.  The  EU 
remains the main source of FDI into Albania 
and  held  57.6 %  of  the  total  stock  of  such 

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  about  15 %  of  Albanian  goods  exports  and 
7.5 %  of  its  goods  imports  in  2017.  These  shares  are  largely  unchanged  since  2008, 
suggesting  a  large  untapped  potential  for  future  growth,  if  intra-regional  connectivity 
improves and some technical barriers to trade are eliminated. The development of a Regional 
Economic  Area  based  on  EU  rules  and  standards,  to  which  all  Western  Balkan  economies 
have committed, has the potential to generate untapped growth.  

Regarding price and cost competitiveness, the real effective exchange rate was 4.2 % higher 
than a year earlier at the end of 2017. 

4. 

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.  As 
mentioned in the previous report, Albania needs to align with the EU position. 

51 

 
 
 
 
 
Regional  cooperation  and  good  neighbourly  relations  form  an  essential  part  of  Albania’s 
European  integration  process.  Albania  has  continued  to  participate  actively  in  regional 
initiatives  such  as  the  South  East  European  Cooperation  Process,  the  Regional  Cooperation 
Council,  CEFTA,  the  Western  Balkans  Six,  the  Energy  Community  Treaty,  the  European 
Common  Aviation  Area  Agreement,  the  Central  European  Initiative,  the  Regional  Initiative 
for  Migration  and  Asylum,  and  the  ‘Brdo-Brijuni  process’.  The  country  is  a  committed 
supporter  of  the  Berlin  process.  At  the  Trieste  Summit  in  July  2017  Albania  endorsed  the 
Regional Economic Action Plan adopted there and signed the Transport Treaty. Albania also 
hosted  a  follow-up  meeting  of  prime  ministers  in  Durrës  in  August  2017  to  support  the 
implementation  of  the  action  plan.  Albania  hosts  both  the  Western  Balkans  Fund  and 
Regional Youth Cooperation offices. 

Albania  has  continued  to  strengthen  bilateral  relations  with  the  countries  of  the  region, 
applying  the  mechanism  of  joint  government  meetings  with  many  of  them  to  deepen 
cooperation. It is also a constructive partner with neighbouring EU Member States. 

Relations with Bosnia and Herzegovina have seen some positive developments. An honorary 
consulate was opened in Sarajevo during the official visit of the Albanian Foreign Minister in 
October  2016.  The  Prime  Minister  of  the  Federation  of  BiH  visited  Tirana  in  March  2017. 
During the reporting period, a set of agreements was signed on movement of citizens with ID 
cards and on maritime commercial transport. 

Albania reconfirmed its very good relations with Kosovo by signing several new agreements 
in  key  areas  of  cooperation  during  the  fourth  governments'  meeting  in  November  2017  and 
announced  readiness  to  host  a  Custom  Office  of  Kosovo  in  Albania’s  Port  of  Durres.  A 
framework  Memorandum  on  cooperation  with  the  diaspora  was  signed.  Common  consular 
offices were inaugurated in Munich and Milan. Albania continued to advocate for Kosovo’s 
full  membership  of  international  and  regional  organisations  and  to  support  the  dialogue 
between Kosovo and Serbia.  

Relations with  the former  Yugoslav Republic  of  Macedonia  have  intensified since the new 
government took office on 31 May 2017. The first joint session of the governments took place 
in December 2017 and was a step forward which raised bilateral relations to a higher level. It 
was  followed  by  the  signature  of  bilateral  agreements  aimed  at  improving  cooperation 
between the two countries. The government of the former Yugoslav Republic of Macedonia 
provided financial support and humanitarian aid for the areas in Albania affected by floods. 

Relations  with  Montenegro 
remained  positive,  with  Albania  strongly  supporting 
Montenegro’s  accession  to  NATO.  The  Prime  Minister  of  Albania  visited  Montenegro  in 
April  2017.  In  May  2017  the  Joint  Centre  for  Police  Cooperation  between  Montenegro, 
Albania and Kosovo was opened in Plav. In December 2017 Montenegro's President visited 
Albania.  Albania  also  cooperates  with  Montenegro  under  the  Albania-Montenegro-Croatia 
Trilateral, established in 2017, as part of the Adriatic-Ionian dialogue. Two trilateral meetings 
took place during the reporting period.  

The  relationship  with  Serbia  continued  through  the  strengthening  of  business  cooperation. 
The Albania-Serbia Joint Chamber of Commerce was established in Tirana. The first visits in 
decades by Albanian’s President to Serbia, in March and November 2017 were a major step 
forward.  Bilateral  ties  were  also  strengthened  on  the  occasion  of  regional  and  international 
events  attended  by  both  Prime  Ministers.  Albania  also  cooperates  with  Serbia  under  the 
Albania-Serbia-Italy Trilateral. The latest trilateral meeting took place in February 2018. 

52 

 
 
 
Albania  maintained  its  good  relations  with  Turkey.  A  series  of  high-level  exchanges  took 
place in the reporting period. The increase in Turkish investment in Albania continued with a 
focus on infrastructure and energy sectors. Albania announced the establishment of a national 
airline with the support of Turkey. Turkey continued to provide education and training for the 
Albanian Army and security forces.    

Relations with Greece have intensified. A renewed political dialogue on outstanding bilateral 
issues  was  initiated  at  ministerial  level  in  November  2017  and  it  is  expected  to  lead  to  the 
signing  of  a  partnership  agreement  between  the  two  countries.  A  Memorandum  of 
Understanding on energy was signed in April 2017 between the countries’ energy ministries. 
This  is  seen  as  an  important  cooperation  mechanism  which  will  promote  regional  energy 
connectivity  and  the  diversification  of  natural  gas  sources  lines  and  suppliers,  including  the 
Trans Adriatic Pipeline. The process of searching for, exhuming and identifying the remains 
of Greek soldiers who fell in Albania during the Second World War was started. In February 
2018,  Greece  withdrew  its  reservation  on  Albania’s  accession  to  the  Apostille  Convention 
with immediate effect with a positive practical impact mainly on Albanian citizens living and 
working in Greece. Bilateral cooperation on migration is satisfactory overall. 

Relations  with  Italy  remained  very  good.  Political  dialogue  intensified  with  key  high-level 
visits  on  both  sides.  Italy  provided  key  support  for  monitoring  the  cannabis  situation  in 
Albania.  In  November  2017,  a  Protocol  on  the  fight  against  terrorism  and  trafficking  in 
human  beings  was  signed  by  the  two  Ministers  of  the  Interior.  In  October  2016,  a 
Memorandum of Understanding on cooperation on agriculture was signed. In March 2017, a 
cooperation agreement was signed between the transport ministries which scraps the fixed fee 
and road tax for Albanian carriers. The two countries renewed their framework agreement on 
education. 

5.  

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

5.1.   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. This has been mainly regarding 
efforts  to  align  with  ‘New  and  Global  Approach’  acquis  and  increased  capacity  for 
accreditation, as well as in the process of removing unjustifiable barriers to the free movement 
of goods. However, further efforts are needed to ensure legislative alignment and strengthen 
enforcement in this area.  

In the coming year, the country should in particular: 

→  continue  to  align  its  legislation  with  the  horizontal  acquis,  notably  on  metrology  and 
standardisation; 

→ further strengthen the enforcement capacity of the Market Surveillance Inspectorate. 

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 

53 

 
 
 
 
the  obligation  to  have  storage  facilities  in  specific  areas.  Further  efforts  towards  alignment 
with the acquis are envisaged in the 2016-2020 national plan for European integration, as well 
as in the 2020 consumer protection and market surveillance strategy, which includes quality 
infrastructure. However, there is no specific strategy on the free movement of goods. 

Non-harmonised area 

Despite the completion of the methodology for comparative analysis of Albanian legislation, 
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  still  in 
preparation. 

There has been some progress in removing unjustifiable trade barriers through amendments to 
the laws on mandatory inspection for imported packed lubricants and transportable pressure 
equipment. 

Harmonised area: quality infrastructure 

Legislation in the area of accreditation and market surveillance is partly aligned with the EU 
acquis.  Administrative  structures  are  in  place  for  technical  regulations,  standardisation, 
conformity  assessment,  metrology,  accreditation  and  market  surveillance  as  subordinate 
bodies under the Ministry of Economic Development, Tourism, Trade and Entrepreneurship. 
Recruitment of more competent and specialised staff to the Market Surveillance Inspectorate 
is necessary. Mutual cooperation agreements on accreditation, standardisation and conformity 
assessments are in place with countries in the region and other non-EU countries. 

On  standardisation,  the  General  Directorate  of  Standardisation  (GDS)  is  a  full  member  of 
the  European  Telecommunication  Standards  Institute  (ETSI),  an  affiliate  member  of  the 
European  Committee  for  Standardisation  (CEN)  and  of  the  European  Committee  for 
Electrotechnical  Standardisation  (CENELEC),  and  an  associate  member  of  the  International 
Electrotechnical  Commission  (IEC).  GDS  has  adopted  about  98%  of  CEN  and  CENELEC 
standards and 80% of ETSI standards as Albanian Standards. Since September 2016, the GDS 
has adopted 3,748 standards, of which 2,550 were European standards (CEN, CENELEC and 
ETSI standards) and 928 were other standards (ISO and IEC standards).  

The  2014  law  on  accreditation  of  conformity  assessment  bodies  is  partly  aligned  with  the 
acquis.  It  regulates  the  functioning  of  the  General  Directorate  of  Accreditation,  its 
accreditation board, technical committees and other procedural issues. There are 58 accredited 
conformity  assessment  bodies:  41  laboratories,  12  inspection  bodies  and  5  certification 
bodies.  The  General  Directorate  of  Accreditation  is  a  full  member  of  the  European 
Cooperation  for  Accreditation  (EA),  a  member  of  the  International  Accreditation  Forum 
(IAF)  and  of  the  Multilateral  Agreement  for  Testing  Laboratories  of  the  European 
Cooperation  for  Accreditation,  and  an  associate  member  of  the  International  Laboratory 
Accreditation Cooperation (ILAC). The General Directorate of Metrology has 104 employees 
and is increasing its capacity. 

The  State  Inspectorate  for  Market  Surveillance  (SIMS)  was  established  in  2016,  and  the 
inspection sector of metrology, copyright and accommodation structures was merged into it in 
the second half of 2016. The SIMS currently has 50 staff and is recruiting more. In May 2017, 
the  internal  regulation  laying  down  SIMS’s  tasks  and  responsibilities  was  approved  by  the 
Ministry  of  Economic  Development,  Tourism,  Trade  and  Entrepreneurship.  During  2017 
more than 400 inspections were carried out. As a result, 11 importers of toys received fines, 

54 

 
 
 
corrective  measures  were  taken  concerning  three  retailers  of  pre-packaged  products  and 
approximately  700  products  were  blocked  and  prepared  for  destruction  based  on  RAPEX 
(Rapid Alert System for dangerous non-food products) notifications. 

Harmonised area: sectoral legislation 

For  the  ‘New  and  Global  Approach’  product  legislation,  the  government  adopted  several 
technical  regulations  designed  to  align  with  the  acquis  on:  low  voltage  equipment,  gas 
appliances,  toys,  energy  labelling,  measuring  instruments  and  medical  devices.  However, 
alignment has not yet started on cableways, electromagnetic compatibility, radio & telecoms 
equipment,  explosive  atmospheres  equipment,  construction  products,  recreational  craft, 
pyrotechnic articles, eco-design and non-automatic weighing instruments. 

The national legislation on pricing of  medical devices is designed to be partly aligned with 
the acquis. On civil explosives, alignment has not started. 

In terms of ‘Old Approach’ product legislation, the law on chemical management is partly 
aligned  with  the  provisions  of  the  Regulation  concerning  the  Registration,  Evaluation, 
Authorisation  and  Restriction  of  Chemicals  (REACH)  and  other  related  parts  of  the  acquis. 
National legislation on chemical classification, labelling and packaging is still not aligned 
with  the  United  Nations  Globally  Harmonised  System  of  Classification  and  Labelling  of 
Chemicals.  

On  drug  precursors,  the  list  of  controlled  substances  is  in  compliance  with  the  lists  in  the 
relevant EU acquis. There is partial alignment in the area of  procedural measures, notably 
on: firearms; textile labelling and mixtures; and medicinal products pricing. The legislation on 
defence  products  and  procurement  and  on  return  of  cultural  objects  unlawfully  removed 
from the territory of a Member State is not aligned with the acquis.  

5.2.   Chapter 2: Free movement of 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: 

→   continue to align its legislation with the EU acquis in the area of freedom of movement 
for workers; 

→   continue  negotiating  and  implementing  new  bilateral  agreements  on  social  security, 
notably with EU Member States. 

As regards access to the labour market, EU citizens are eligible to work in Albania without 
a  work  permit.  This  is  pursuant  to  provisions  of  the  Law  on  Foreigners  and  subsequent 
amendments,  which  provide  that  foreigners  will  not  need  a  work  permit  or  business 
registration  certificate  if  they  are  nationals  of  an  EU  Member  State  or  Schengen  country 
legally  residing  in  Albania.  The  appropriateness  of  social  security  schemes  and  forfeit  of 
occupational  pensions  are  regulated  through  bilateral  agreements.  Immigration  admission 
policies do not place obstacles to the permanent settlement of EU workers’ family members. 
On concluding and signing bilateral agreements for citizens of Albania, no progress was made 
over the reporting period. 

55 

 
 
 
Regarding  preparation  for  joining  EURES  (European  network  of  employment  services), 
Albania has established an integrated database for the Employment Services System. This will 
facilitate exchanges of information between IT departments of the civil status, the tax system, 
the compulsory healthcare system and the economic assistance system. It marks an additional 
step in the preparation of a national employment database. 

On the coordination of social security systems, bilateral agreements on social security are in 
place  with  Belgium,  the  Czech  Republic,  Germany,  Luxembourg,  Hungary,  Austria, 
Romania, the former Yugoslav Republic of Macedonia and Turkey. Negotiations are ongoing 
with  Switzerland,  Kosovo  and  Canada.  There  have  been  initial  exchanges  on  coordinating 
social security schemes with countries such as Bulgaria, Spain, France and Croatia. 

5.3.   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  during  the  reporting  period  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; 

→   further strengthen institutional capacity on right of establishment and mutual recognition 
of professional qualifications. 

Regarding barriers to the freedom of establishment or the free movement of services, the 
legislation  on  mining,  taxation  and  social  policy  is  broadly  aligned  with  the  Services 
Directive.  However,  the  legislation  on  the  veterinary  sector  requires  amendments  for  the 
licensing  of  private  veterinary  clinics  and  hospitals.  In  the  legal  sector,  the  legislation  is 
partially aligned with the EU acquis but restrictions exist for the public notaries and private 
bailiffs. The screening process is ongoing for other sectors. 

On  the  freedom  to  provide  cross-border  services,  the  law  on  services  of  September  2016 
provides a single contact point for establishing a business in Albania. The National Business 
Centre  functions  as  a  one-stop-shop  for  registering  businesses  and  issuing  licences, 
authorisations  and  permits.  It  operates  through  service  windows  throughout  the  country,  as 
well as the electronic service window on the e-Albania portal. 

Following the adoption of implementing legislation for the law on postal services, the postal 
market  has  been  opened  to  competition  since  January  2017.  There  is  one  universal  service 
provider and 11 other postal service providers in the market. 

Regarding mutual recognition of professional qualifications, following the approval of the 
law on handicrafts in June 2016 the National Chamber of Crafts and an apprenticeship system 
for crafts trades have been set up. For the first time, the law provides for a model of the dual 
system of vocational education and training. 

56 

 
 
 
 
 
 Chapter 4: Free movement of capital 

5.4. 
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. 

Albania is moderately prepared in the area of free movement of capital. Some progress was 
made in the reporting period, particularly in the area of payment systems. This was achieved 
through the amendment of regulations by the Bank of Albania and the implementation of the 
mid-term  strategy  of  the  National  Payment  Systems  Committee.  There  was  also  some 
progress  in  the  national  legislation  on  fighting  money  laundering.  The  action  plan  on 
acquisition of property by foreigners has yet to be implemented.  

In the coming year, Albania should in particular: 

→  continue  legislative  alignment  with  the  EU  acquis  on  fighting  money  laundering  and 
financing of terrorism; 

→  take  short-  and  medium-term  measures  to  implement  the  action  plan  on  acquisition  of 
land by foreigners. 

The Law on Foreign Investments of 1993 was amended in April 2017 to extend the special 
protection  enjoyed  by  foreign  investors/investments  under  Albanian  legislation  until  31 
December 2018. This special protection is also granted to strategic investments under the Law 
on Strategic Investments. 

Acquisition of real estate by foreigners remains subject to restrictions: they are not allowed to 
acquire agricultural  land, forests, meadows and pastures. Albania is late in  delivering on its 
commitment  under  the  2006  Stabilisation  and  Association  Agreement  (SAA)  to  amend  the 
regime for the acquisition of property by EU citizens/entities by 2016. Provisions regulating 
the acquisition of real estate by foreigners remain unchanged and uncertainties over real estate 
ownership rights continue to discourage investment. 

As regards payment systems, foreign banks have the right to open branches and agencies in 
Albania and to offer cross-border payments. Albania has the administrative capacity to move 
ahead  with  aligning  its  legislation  with  the  EU  directives  in  this  area.  The  regulations  on 
licensing  the  activities  of  non-bank  financial  institutions  and  on  electronic  payment 
instruments were amended in December 2016, aiming at alignment with European Directive 
"On  Payment  Services  in  the  Internal  Market"  and  the  Directive  "On  Electronic  Money 
Institutions".  The  amendments  provided  for  exception  procedures  regarding  licensing 
requirements for entities or persons that provide payment services via mobile phone or other 
electronic tickets. They also provided for an increase in the minimum initial capital required 
for  electronic  money  institutions.  The  National  Payment  System  Committee  continued  to 
meet in 2017, and agreed to work on a mid-term strategy on small value payments in Albania.  

As  regards  the  fight  against  money  laundering,  some  progress  was  made  through 
amendments in May 2017 to the Law on the Prevention of Money Laundering and Financing 
of Terrorism and an amendment to the Bank of Albania regulation on the same subject. The 
Albanian Financial Intelligence Unit (FIU) increased its staff by 11 employees in 2017. The 
number of suspicious transaction reports the Unit collected in 2017 increased to 1 384 from 1 
292 in  2016.  In  2017,  the  Unit  shared  401  of  these  reports  with  the  General  Directorate  of 
Polices and the Prosecutor’s Office, almost at the similar level of 411 in 2016. In 2016, law 
enforcement  structures  seized  approximately  EUR  47.6  million  in  bank  accounts  and 

57 

 
 
 
properties related to money-laundering offences and additional EUR 38.8 million were seized 
in  2017.  The  number  of  appeal  court  convictions  on  charges  of  money-laundering  offences 
increased to 4 in 2017 from only 2 in 2016. 

5.5.   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. Some progress 
was  made  in  the  past  year  to  further  align  with  the  acquis  on  strengthening  the  public 
procurement review system.  

In the coming year, Albania should in particular: 

→  fully  transpose  the  2014  directives  on  EU  public  procurement,  including  in  the  area  of 
utilities, concessions and defence procurement; 

→ further strengthen the administrative capacity of the Public Procurement Agency and the 
contracting authorities; 

→  systematically  follow  up  conflicts  of  interest  and  strengthen  the  state’s  audit  capacity  in 
this respect. 

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.  The 
law  specifies  the  principles  of  transparency,  equal  treatment  and  non-discrimination. 
However,  there  has  been  no  progress  on  harmonisation  with  the  directives  on  utilities  or  in 
defence and security. 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 are still not aligned with the acquis.  

Under  the  public  finance  management  strategy,  recommendations  of  studies  on  public 
investment  management  and  public  procurement  have  still  to  be  addressed.  These  include 
revision of the public investment management guidelines to ensure good project selection and 
management principles. 

The Public Procurement Agency (PPA) is the central public procurement entity mandated to 
monitor the application of public procurement rules, including providing information, support 
and guidance to contracting authorities. The PPA has 29 posts of which 4 are vacant. 

Implementation and enforcement capacity 

The planning and preparation of public procurement procedures generally comply with 
transparency  and  efficiency  principles  and  public  procurement  forecasts  are  published.  The 
number  of  negotiated  procedures  without  prior  publication  increased  during  2017  to  2  234, 
67 % of which were contract extensions. In terms of volume these procedures represented 8 % 
of the total budget of awarded procedures. The use of framework agreements is expanding but 
is still very limited, with 61 framework agreement notices published and 36 contracts signed 
in 2017. For categories of common use goods and services a centralised procurement body is 

58 

 
 
 
operational in the Ministry of Interior, which can be seen as providing intermediary functions 
partly in line with new EU directives. 

Albania  has  an  electronic  central  public  procurement  portal  for  the  publication  of  tender 
and  contract  notices  as  well  as  other  important  information  and  guidance.  The  system  is 
mandatory,  including  for  low-value  procurement.  Since  January  2018  standard  tendering 
documents for each type of procedure and contract are published on the PPA website. 

By the end of 2017 around 200 public-private partnerships (PPPs), mostly concessions, have 
been  signed.  Although  required  by  law,  value-for-money  analysis  is  still  not  systematically 
carried out before approval of all PPPs. Furthermore, there is no regular report on PPPs. The 
technical  skills  and  capacity  to  design  and  assess  concessions  and  PPP  projects  need  to  be 
further improved. 

The  PPA  has  strengthened  its  monitoring  role  and  applies  a  procurement  performance  and 
compliance  monitoring  system  based  on  performance  indicators.  Further  support  to 
contracting  authorities  is  still  needed,  as  well  as  the  strengthening  of  the  e-procurement 
system,  monitoring  of  contract  implementation  and  analysis  of  public  procurement  market 
trends. 

The contracting authorities’ capacity to manage public procurement procedures still needs to 
be  improved  substantially.  Compliance  is  still  generally  weak,  especially  in  more  complex 
procedures.  In  October  2016,  PPA  issued  an  instruction  on  the  declaration  of  conflicts  of 
interest  by  procurement  officials,  which  was  drafted  jointly  with  the  High  Inspectorate  of 
Declaration and Audit of Assets and Conflict of Interest. The State Audit Institution reports a 
substantial number of irregularities in public procurement with an estimated financial loss to 
the state budget of around EUR 12 million in 2017 compared to around EUR 25.6 million in 
2016 and approximately EUR 18.8 million in 2015.   

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 notices are still not yet 
covered.  The  remedy  system 
to  economic  operators  without 
is  easily  accessible 
discrimination.  However,  the  complainant  needs  to  pay  a  0.5  %  fee  of  the  budget  of  the 
procurement  procedure  which  is  refunded  once  the  complaint  is  accepted  and  granted.  For 
refused complaints the fee is transferred to the state budget. 

In April 2017, amendments to the Public Procurement Law strengthened the independence of 
the Public Procurement Commission (PPC) in line with the acquis and increased the length 
of time for reviews from 10 to 15 days, and to 30 days for complex cases. However, the PPC 
chair and 4 other members have not been appointed as envisaged on 1 January 2018. The PPC 
carries  out  administrative  reviews  of  public  tenders  and  the  majority  of  PPC  decisions  are 
corrective and can be challenged in the Administrative Court. 

The  majority  of  initial  complaints  lodged  with  the  Contracting  Authority  that  awarded  the 
contract are dismissed, thus pushing the complainants to appeal to the PPC. In 2016, the PPC 
handled  1  393  complaints,  up  from  1  124  (2015)  and  corresponding  to  14  %  of  the  public 
procurements  published.  708  complaints  were  considered  unsubstantiated  and  683  were 
accepted. Almost 60 % of complaints relate to procedures below EUR 38 000. In 2016, 100 or 
7 % of total PPC decisions were challenged in the Administrative Court, with 60 % upheld. 

59 

 
 
 
Processing  of  complaints  within  the  legal  time  limit  remains  a  challenge,  partly  due  to  the 
absence  of  standard  criteria  to  categorise  new  appeals  either  as  a  normal  or  complex  case. 
Setting up an electronic database for PPC judgments 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 complexity and increasing number of appeals still needs 
to  be  substantially  strengthened.  Jointly  organised  specialised  training  courses  on  topics 
related to public procurement are recommended. 

5.6.   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 
towards improving the online registration service.  

In the coming year, Albania should in particular: 

→  step  up  efforts  to  align  its  legislation  with  the  acquis  on  accounting,  and  strengthen  its 
implementation capacity; 

→ ensure full transparency of company financial statements in the business register. 

Some  acquis  alignment  has  been  achieved  in  a  range  of  company  law  areas,  including 
takeovers and cross-border mergers. The National Business Centre is responsible for company 
registration and disclosure of financial statements. Free online registration is available and the 
application time was reduced; data can be accessed electronically.  

In the area of  corporate accounting, further efforts are needed to align legislation with the 
acquis  on  annual  and  consolidated  financial  statements.  Public-interest  entities  (PIE)  apply 
international financial reporting standards. The capacity of the National Accounting Council, 
which  drafts  the  accounting  standards  and  monitors  their  implementation,  still  needs  to  be 
reinforced.  On  statutory  audit,  the  Public  Oversight  Board,  established  as  an  independent 
regulatory authority with its own financing resources, is the competent authority that ensures 
quality  assurance  and  a  system  of  investigations  and  sanctions.  Statutory  auditors  and  audit 
firms apply international auditing standards — translated into and published in the Albanian 
language — and are subject to continuous professional training. The Law on Statutory Audit 
lays  down  provisions  on  professional  ethics.  The  Public  Oversight  Board  can  delegate  the 
quality  assurance  of  non-PIE  audits  to  the  professional  organisation  of  statutory  auditors. 
Further efforts are required to align with the most recent acquis on statutory audit. 

5.7.   Chapter 7: Intellectual property law 
The  EU  has  harmonised  rules  for  the  legal  protection  of  intellectual  property  rights  (IPRs) 
and 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 
programs and broadcasting. 

60 

 
 
 
 
Albania  has  some  level  of  preparation  regarding  IPRs.  Following  the  recommendations 
made  by  the  European  Commission  in  its  previous  report,  some  progress  was  made  in 
particular in implementing and enforcing the 2016 Copyright Law.  

In the coming year, Albania should in particular: 

→ continue aligning its legislation on copyright and neighbouring rights with the EU acquis; 

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

In the area of copyright and neighbouring rights, the implementation of the 2016 Copyright 
Law aimed at aligning Albania with relevant EU directives. In March 2017 the Criminal Code 
was  amended  to  refine  the  legal  mechanisms  and  better  address  copyright  infringements, 
which has already brought positive results and is expected to further intensify actions against 
copyright infringement. 

The  two  main  entities  responsible  for  intellectual  property  are  the  General  Directorate  of 
Industrial  Property  (GDIP)  and  the  Copyright  Directorate  (CD).  GDIP  is  a  public  agency 
under the supervision of the Minister of Economy and Finance. It registers, administers and 
promotes  IP  objects.  Under  the  Ministry  of  Culture,  the  CD  provides  advice  to  the 
inspectorate and to the public in cases of infringement of rights. 

On  IPRs,  in  2017  the  Law  on  Industrial  Property  was  amended,  creating  a  legal  basis  for 
protecting IP objects. 

On  enforcement,  in  2017  applications  to  register  trademarks  rose  by  12.3  %  compared  to 
2016 and applications for patents and utility models increased by 16 %. During the reporting 
period the GDIP participated in 54 court proceedings.  

The State Inspectorate for Market Surveillance is responsible for inspecting, controlling and 
enforcing copyright and related rights. The Inspectorate is in the process of strengthening its 
capacity. Since it was established in 2016 it has conducted 261 inspections concerning IPRs. 

Furthermore,  during  the  reporting  period  the  customs  administration  suspended  the  customs 
clearance of a number of goods infringing IPRs, based on an application by the right holder 
and/or  ex  officio  procedures.  However,  there  are  still  concerns  about  the  high  number  of 
counterfeit products in the country. 

5.8.   Chapter 8: Competition policy 
EU rules protect free competition. They include antitrust rules against restrictive agreements 
between companies and abuse of dominant position, and also include rules on concentrations 
between  companies  which  would  significantly  impede  competition.  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  during  the  reporting  period.  However, 
significant efforts are needed to further improve legislative alignment and enforcement in the 
area of State aid.  

In the coming year, the country should in particular: 

→ ensure the operational independence of the State Aid Commission (SAC) and strengthen 
the capacity of the State Aid Unit; 

61 

 
 
 
→ step up efforts to improve its enforcement record in the area of State aid control. 

Antitrust and mergers 

The  alignment  of  the  legislative  framework  is  broadly  in  line  with  the  acquis  and  the 
provisions of the SAA. 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  prior  control  of  mergers,  in  line  with  the  Merger  Regulation.  Secondary 
legislation is broadly in line with the relevant EU regulations and Commission guidelines. In 
2016,  the  Albanian  Competition  Authority  (ACA)  simplified  its  procedures  for  handling 
certain concentrations and its regulation on commitment procedures. 

As regards the institutional framework, the ACA is responsible for implementing the Law 
on Protection of Competition. Formally, it is an operationally independent authority reporting 
to  Parliament,  which  appoints  its  chair  and  four  board  members.  The  ACA  can  adopt 
secondary legislation, impose fines and remedies if competition rules are breached, authorise 
mergers, with or without conditions, or prohibit them. It can conduct sector enquiries and, at 
its  own  initiative,  issue  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  39  staff  members,  which  is  considered 
adequate. The level of expertise has been strengthened through ACA staff participating in a 
number  of  seminars  and  workshops.  On  implementation,  during  the  reporting  period  the 
ACA adopted 46 decisions, including 2 decisions on prohibited agreements and 13 decisions 
approving concentration notifications. Few decisions in the area of antitrust or mergers seem 
to  result  in  effective  remedies:  no  leniency  applications  have  been  reported  since  2016  and 
only  one  suspected  cartel  case,  on  cinema  distribution,  was  under  investigation.  The  ACA 
should continue to step up its enforcement of competition rules. 

State aid 

The legislative framework is broadly in line with the acquis and with the provisions of the 
SAA.  Amended  in  2016,  the  Law  on  State  aid  largely  reflects  Articles  107  and  108  of  the 
TFEU  on  the  definition  of  compatible  and  incompatible  State  aid  as  well  as  on  procedures. 
During the reporting period, Albanian legislation was amended to align it with the Regulation 
on de minimis aid granted to undertakings providing services of general economic interest and 
with  the  latest  modifications  to  the  General  Block  Exemption  Regulation.  However,  further 
alignment with secondary EU legislation on State aid control is still needed. 

As regards the  institutional framework, the SAC is  responsible for implementing  the Law 
on State aid. Given that its secretariat is part of the Ministry of Economy and Finance, which 
is  an  aid-granting  institution,  the  SAC  cannot  be  considered  an  operationally  independent 
authority as the SAA requires. 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 limited resources, the enforcement capacity of the SAC is insufficient and needs to be 
strengthened.  It  has  yet  to  be  shown  that  the  Law  on  State  aid  is  being  implemented 
effectively. Since the beginning of 2016, the SAC has assessed 13 State aid schemes and 2 ex 
officio cases. No negative or recovery decisions were taken. It is important that State aid rules 

62 

 
 
 
are reflected in the public finance management strategy and that the SAC’s advisory role is 
presented to line ministries and regional and local authorities. Advocacy must be stepped up 
to achieve prior notification of aid measures to the SAC. 

Liberalisation 

The laws on protection of competition and on State aid are applicable to public undertakings 
and undertakings with special or exclusive rights, except when their application obstructs the 
performance of the particular tasks of services of general economic interest that are assigned 
to them. 

There  has  been  no  investigation  of  State  aid  for  public  undertakings  or  undertakings  with 
special  or  exclusive  rights.  As  regards  the  rules  on  financing  services  of  general  economic 
interest, their enforcement needs to be further demonstrated. 

 Chapter 9: Financial services 

5.9. 
EU  rules  aim  to  ensure  fair  competition  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.  Some progress has been 
made  in  banking  supervision  and  in  further  aligning  the  legislation  with  the  Solvency  II 
Directive.  

In the coming year, Albania should: 

→  align  its  legislation  with  Basel  III  and  prepare  for  the  implementation  of  the  Basel  IV 
provisions; 

→  accelerate  the  adoption  of  the  amendments  to  the  Law  on  Compulsory  Insurance  in  the 
transport sector. 

As regards banks and financial conglomerates, the Bank of Albania (BoA) has reinforced 
and restructured its supervision department with special emphasis on risk-based supervision. 
Memoranda  of  understanding  have  been  signed  with  other  institutions  on  the  domestic 
financial  market  and  with  foreign  supervisory  authorities  of  banking  entities  operating  in 
Albania.  The  BoA  is  part  of  the  College  of  the  European  Banking  Authority  and  maintains 
contacts  with  the  European  Supervisory  Authorities.  The  BoA’s  capacity  is  adequate  for 
implementing Albania’s legislative alignment with the acquis. A BoA mid-term development 
strategy 2018-2020 was adopted in November 2017. The BoA has continued to further align 
the  banking  regulation  and  supervisory  manual  with  Basel  II  and  Basel  III.  The  Basel  III 
definition of capital has been adopted. Work has to continue in the areas of macroprudential 
policy (counter-cyclical capital buffers and identification of domestic systemically important 
banks)  and  the  resolution  framework.  New  guidelines  and  regulations  aiming  at  further 
alignment  with  the  relevant  EU  acquis  were  adopted  on  capital  adequacy,  licensing  and 
activity,  risk  management,  reporting  by  savings  and  loan  associations,  and  transparency  for 
banking  and  financial  product  services.  Albania  has  in  place  a  system  of  identification  of 
systemically  important  banks,  similar  to  the  EU  practice.  The  non-performing  loan  ratio 
decreased  from  18%  in  December  2016  to  13.2  %  in  October  2017,  mainly  due  to  the 
write-offs  procedure  and  some  loan  restructuring.  Efforts  to  implement  the  non-performing 
loan action plan and to further facilitate the collateral execution process need to continue.  

63 

 
 
 
 
In the area of insurance and occupational pensions, amendments still need to be adopted to 
the Law on Compulsory Insurance in the transport sector. The Albanian Financial Supervisory 
Authority  (AFSA)  adopted  a  secondary  legislation  to  further  align  with  the  Solvency  I  and 
Solvency  II  Directives  and  started  the  implementation  of  the  Strategy  on  consumers  and 
investors'  confidence  in  the  supervised  markets.  AFSA  re-organised  its  organisational 
structure and recruited additional staff. 

Some progress was made on financial market infrastructure with the licensing of Albania’s 
first  private  stock  exchange,  which  became  operational  in  February  2018.  The  public  stock 
exchange remains suspended. 

As  regards  the  securities  markets  and  investment  services,  the  issuance  of  bonds  by 
companies  has  been  authorised  for  private  offerings  to  institutional  investors,  their 
shareholders or individuals. 

 Chapter 10: Information society and media 

5.10. 
for  electronic 
The  EU  supports 
communications, electronic commerce and audiovisual services. The rules protect consumers 
and support universal availability of modern services. 

internal  market 

functioning  of 

the  smooth 

the 

Albania is  moderately prepared in  the field  of information  society and audiovisual media. 
Some progress was made on the digital agenda action plan and e-government services. The 
Audiovisual Media Authority (AMA) approved its strategic action plan for 2017-2019 and the 
public broadcaster its new statute.  

In the coming year, Albania should in particular: 

→  finalise  the  delayed  digital  switchover  process,  free  the  digital  dividend  and  revise  the 
national broadband plan with clear objectives and targets; 

→ take further steps to draft and approve the necessary amendments to the Law on Electronic 
Communication, in alignment with the acquis;   

→ implement the European emergency number 112 over a wider geographical area. 

On  electronic  communications  and  information  and  communications  technologies, 
progress was made in implementing the single European emergency number 112 as envisaged 
in  the  2015-2020  public  order  strategy  and  the  2015-2017  action  plan.  Further  funding  is 
needed to extend the 112 number to the whole country. Judicial bodies received training on 
how to enforce the Law on Electronic Communications. Further training was provided on the 
modules  and  importance  of  competition  advocacy  as  a  tool  for  addressing  anti-competitive 
regulation and enforcing decisions by the Authority of Postal and Electronic Research. Fixed 
internet penetration is low: approximately 30 % of households are connected. There is a huge 
gap between urban and rural areas. Rural areas represent 40% of the population but only 1% 
out of this is connected to the internet. Mobile internet penetration is around 80%. 

In  the  area  of  information  society  services,  the  cross-sectoral  strategy  on  Albania’s  digital 
agenda for 2015-2020 and the plan for broadband development are being implemented. The 
Law on Cyber Security was adopted in February 2017 and is partly aligned with the Directive 
on  security  of  network  and  information  systems.  In  the  framework  of  the  European 
Commission’s mapping of ‘digital innovation hubs’, three eligible hubs have been registered. 
There is a need to develop a national cybersecurity strategy. 

64 

 
 
 
Some good progress was made in electronic communications with the approval of the law on 
the development  of  high-speed  electronic communication networks and the  provision  of the 
right of way. The law fully complies with the acquis.  

In the field of audiovisual policy, in March 2017, following public consultation with various 
stakeholders, the AMA adopted its strategic action plan for 2017-2019. During the reporting 
period  the  public  broadcaster,  RTSH,  approved  a  new  Statute  with  a  new  internal  structure 
reflecting  the  digital  switchover  process.  The  digital  switchover  still  has  to  be  finalised  and 
the  digital  dividend  to  be  freed.  Due  to  obsolete  technology,  AMA  is  still  not  able  to 
adequately  exercise  monitoring  duties,  a  challenge  which  becomes  more  difficult  with  the 
digital  switchover  process.  Debt  collection  from  old  fees  of  broadcasting  operators  has 
significantly increased reaching an 87 % rate.   

5.11.   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 2017 on strengthening the capacity of the IPARD II management and operating 
structures and in the overall process for entrusting them with budget implementation tasks.  

In the coming year, the Albanian authorities should in particular: 

→ plan and allocate resources for improving farm and animal registers and use of available 
agricultural statistics in policy-making; 

→ complete the reform of the advisory system in agriculture in order to strengthen the growth 
of investment in agriculture and agro-processing; 

→  complete  the  legal,  institutional  and  administrative  framework  for  organic  products, 
Protected Designation of Origin and Protected Geographical Indication. 

As regards horizontal issues, the Agricultural and Rural Development Agency (ARDA) is the 
structure  implementing  the  national  support  schemes  in  agriculture  and  rural  development. 
ARDA  is  part  of  the  management  and  operating  structures  to  be  entrusted  with  budget 
implementation tasks under the IPARD II programme (2014-2020). After ARDA’s structure 
was modified in November 2017 it now has 123 staff members.  

There  is  no  land  parcel  identification  system  in  place.  Given  the  complexity  of  the  issue, 
including land property titles and restitution of land, the Albanian authorities should consider 
to  start  planning  the  process  as  soon  as  possible.  The  integrated  administration  and  control 
system has yet to be fully implemented, but certain elements of it - such as a farmer register 
and an animal register - have been developed. There is no Farm Accountancy Data Network 
in place and preparatory work on setting it up has not started. 

Direct  payments  in  2017  represented  a  high  percentage  of  the  agricultural  support  for  the 
sector (close to 80 %) and their importance will increase further in the 2018. Overall, public 
expenditure  for  support  to  farmers  is  very  low  and  there  is  no  consistency  in  the  yearly 
amounts  of  national  aid  granted  to  the  sector.  Direct  payments  are  linked  to  production: 
planting of vineyards, fruit trees, nuts, hazelnuts, almonds and medicinal and aromatic plants; 
cows  with  a  semi-pasture  regime;  support  for  registered  sheep/goats;  support  for  extensive 

65 

 
 
 
farming  of  cows;  and  support  for  beehives  (the  last  three  measures  account  for  animal 
payments in the sector). Direct payments are not linked to cross-compliance rules.   

The  farm  advisory  service  is  currently  under  the  competence  of  the  Regional  Agricultural 
Directorates  of  the  Ministry  for  Agriculture  and  Rural  Development.  Both  directorates  are 
under  reorganisation  in  order  to  be  geographically  closer  to  the  farmers.  Five  agricultural 
technology  transfer  centres,  specialised  in  different  agricultural  products,  operate  in  the 
country. 

Regarding common market organisation, two legal acts have been adopted in the olive oil 
sector which partially aligns the relevant national legislation with the acquis. No other sector-
specific  common  market  organisation  schemes,  market  measures  such  as  public/private 
storage, production quotas or export refunds were implemented in the country in 2017. 

Two programming documents for rural development are in place - the IPARD II programme 
(2014-2020)  and  the  inter-sectoral  strategy  for  agriculture  and  rural  development  (2014-
2020).  Good  progress  has  been  recorded  on  IPARD  II  entrustment.  The  three  most 
capital-intensive  IPARD  II  measures  (investments  in  agricultural  holdings,  processing,  and 
diversification of agricultural activities) were entrusted at the beginning of 2018. 

Currently there are no special support schemes aiming at protecting landscapes, valuable 
natural  habitats,  biodiversity  and/or  preventing  the  negative  effects  that  inappropriate 
agricultural practices can have on natural resources. 

On organic farming, there was an increase in subsidies under direct schemes, from EUR 600 
per certified farm in 2016 to EUR 1 500 in 2017. Two organic operators applied in 2016, of 
which  one  became  a  beneficiary,  while  six  (out  of  eight)  became  beneficiaries  in  2017. 
Organic  olive  growers  have  also  benefited  indirectly  from  the  support  scheme  to  protect 
olives from olive fly.  

The Commission for Organic Production (COP) is responsible for approving and supervising 
the control bodies for the certification of organic products. Supervision on behalf of COP is 
performed  by  the  Sector  for  Policies  of  Agricultural  and  Livestock  Production  which  is 
responsible for developing legislation for organic farming, registering organic operators and 
operating the database containing information on organic production. 

As regards quality policy, the Law on Industrial Property was amended in August 2017 and 
is partially aligned with the EU acquis. However, a number of bylaws need to be adopted for 
the system of protection of geographical indications to be effective.   

5.12.   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 quality of 
seeds, plant protection material, protection against harmful organisms and animal nutrition. 

Albania has some level of preparation in food safety, veterinary and phytosanitary policy. It 
made  some  progress  in  implementing  relevant  policies  in  the  food  safety  and  veterinary 
sectors.  

In the coming year, Albania should in particular:  

→ update the relevant legislation to approximate it with the latest EU legislation on official 
controls,  animal  health  and  plant  health;  and  enforce  food  safety  rules,  including  official 
controls, import conditions and controls, and maximum pesticide residue levels; 

66 

 
 
 
→ complete the restructuring of the veterinary sector in line with the tasks and functions set 
out in the amended legislation; 

→  update  animal  registers  to  ensure  solid  traceability  systems  are  established  for  food  of 
animal origin. 

On general food safety, for the second consecutive year the National Food Authority carried 
out  official  controls  under  a  risk-based  plan  approved  at  the  beginning  of  2017.  The 
operational  procedures  needed  to  ensure  compliance  with  the  legislation  have  not  been 
endorsed  yet,  including  those  on  internal  audits.  No  progress  has  been  made  on  risk 
assessment. The Scientific Committee and panels have not convened due to budgetary issues. 

During  2017,  the  National  Food  Authority  started  to  use  the  TRACES  system  to  issue 
veterinary export certificates for animal products (fish and eggs). 

As  regards  veterinary  policy,  mass  vaccinations  against  rabies  in  red  foxes,  brucellosis  of 
small  ruminants,  lumpy  skin  disease  of  cattle  and  anthrax  in  infected  areas  have  continued. 
Strategies for monitoring and eradicating main zoonotic diseases are to be finalised by end of 
2017.  Although  positive  efforts  were  made  during  the  second  half  of  2017  to  update  the 
information  in  the  animal  identification  and  registration  system,  it  still  suffers  from 
insufficient or inaccurate field data due to the lack of reporting in previous periods. 

The  reform  of  the  veterinary  service  announced  since  2015  was  meant  to  consolidate  the 
veterinary  service  by  establishing  a  clear  chain  of  command  and  communication  to  be 
sanctioned  in  the  relevant  amendments  to  the law.  Nevertheless,  the  pace  of  reform  is  slow 
and  the  service  remains  fragmented  and  understaffed  with  various  functions  being  left 
uncovered such as animal waste management, farm biosecurity or aquaculture. 

At present, veterinary field operations are carried out by veterinary clinics rather than single, 
private  veterinarians.  However,  the  necessary  operational  and  contracting  procedures  that 
regulate the activity of these clinics with regard the veterinary work on animal identification 
and registration, animal movement, vaccination and reporting are not yet in place. 

With regard to the placing on the market of food, feed and animal by-products, the annual 
programmes for monitoring residues of undesired substances have covered pesticide residues 
in  10  plant  products  in  addition  to  veterinary  medicines,  bio-toxins  and  heavy  metals. 
Albania’s capacity to improve the safety of food on the market is expected to be increased by 
2018 with IPA assistance. 

Concerning  food  safety  rules,  the  preparation  of  secondary  legislation  has  continued  in 
several  areas:  microbiological  criteria  in  foodstuffs,  trichinella  in  meat,  plastic  material 
coming into contact with food, maximum levels of pesticide residues in several products and 
maximum  residue  limits  for  pharmacologically  active  substances  in  foodstuffs  of  animal 
origin. 

Improvements have been registered in the methodology of microbiological monitoring of raw 
milk based on samples from every milk-processing or dairy plant with capacity of more than 1 
tonne/day.  The  samples  are  analysed  for  plate  counts  and  somatic  cells  and  a  geometrical 
average is generated every 3 months. This approach provides a clearer picture of the situation 
regarding raw milk. 

Besides general rules included in the Food Law, no progress has been made on preparing the 
required legislation on specific rules on feed. 

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On  phytosanitary  policy,  following  the  new  Law  on  Plant  Protection  adopted  in  October 
2016,  the  secondary  legislation  on  registration,  procedures  and  criteria  for  assessing  plant 
protection  products  and  rules  on  trading,  transport,  keeping  and  storage  of  plant  protection 
products is not yet in place but expected to be ready for approval during 2018. 

There was no progress on preparing legislation on  genetically modified organisms, and no 
structure has been appointed for this role. 

5.13.   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  are  at  an  early  stage.  Albania  has  made  some  progress  towards  updating  the 
vessel register and adopting preparatory measures for improving landing statistics.  

In the coming year, Albania should in particular: 

→  establish  appropriate  institutional  and  administrative  capacity  in  line  with  its  sector 
strategy; 

→  take  steps  to  ensure  the  appropriate  management  of  fisheries  resources,  including  by 
allocating  the  necessary  resources  to  this  area,  taking  appropriate  enforcement  action, 
developing an adequate data collection system, ensuring the adjustment of the fishing fleet's 
capacity  to  the  fishing  opportunities  with  the  objective  of  achieving  a  stable  and  enduring 
balance between them, and collecting accurate landing statistics;  

→ strengthen inspection, control, monitoring and surveillance capacity. 

In October 2016, a regulation on the management of fishery resources and the functioning of 
the fishing fleet register was approved. The vessel register was updated twice. 

Inspection  and  control  capacity  needs  to  be  strengthened.  The  Department  for  Fisheries 
Services  and  Aquaculture  lacks  qualified  staff  to  control  and  eliminate  illegal  fishing 
practices. The limited number of inspectors (18) does not allow for 24/7 service, especially in 
Albania’s marine waters. Fisheries statistics have been so far collected by fisheries inspectors. 
Albania has not yet recruited monitors and observers to cooperate with the inspection service 
as foreseen in the relevant amendment to the fishery law approved in May 2017. 

The  fisheries  service  has  not  been  reorganised  in  line  with  the  recommendations  of  the 
Albanian  government’s  sector  strategy.  At  present,  the  service  consists  of  a  directorate 
responsible for inspections and controls outside the structure of the ministry and two sectors 
placed under two different directorates.  

The vessel monitoring system has worked discontinuously and has not covered all vessels. 
Since March 2017 the system has not operated, partly due to issues related to the procurement 
of maintenance and airtime services. As a consequence, inspections and controls have mostly 
been regularly applied to small vessels in coastal or inland waters only. 

68 

 
 
 
Following  approval  of  the  Law  on  Aquaculture  in  2016,  the  licensing  of  new  aquaculture 
farms  will  be  allowed  only  when  the  plan  of  allocated  zones  has  been  established  and 
approved. 

Data collection and scientific advice on managing fish stocks needs to be strengthened in 
line with the EU acquis, as the country currently continues to be dependent on these issues to 
the FAO FAO-AdriaMed Project (Scientific Cooperation to Support Responsible Fisheries in 
the Adriatic Sea) project financed by the Commission and EU Member States. 

As  regards  international  agreements,  Albania  has  consistently  participated  in  activities  of 
the General Fisheries Commission for the Mediterranean and is committed to complying with 
its  recommendations.  In  addition,  Albania  has  fulfilled  all  the  requirements  in  the 
recommendations of the International Commission for the Conservation of Atlantic Tunas. 

On  fisheries  governance  Albania  signed  the  Malta  MedFish4Ever  Declaration  towards  the 
sustainability  of  fishing  resources  in  the  Mediterranean  (an  initiative  of  the  EU  to  return 
fisheries in the Mediterranean to sustainability and in this way preserve growth and jobs). 

5.14.   Chapter 14: Transport  
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.  Some  progress was 
achieved  in  the  past  year  by  adopting  the  national  transport  strategy  for  2016-2020  and  the 
new railway code.  

In the coming year Albania should: 

→ review the national transport plan in line with the national transport strategy; 

→ adopt legislation to implement the railway sector reform; 

→ pursue  efforts  to  comply  with  the  requirements  under  the  first  transitional  phase  of  the 
European Common Aviation Area Agreement. 

As regards the general transport acquis, the national transport strategy and action plan for 
2016-2020  for  all  transport  modes  was  adopted  in  November  2016.  The  strategy  includes  a 
sustainable transport plan, which aims to ensure a sustainable transport network and improve 
energy  efficiency.  The  third  review  of  the  national  transport  plan  will  be  initiated  in  2018. 
Albania  needs  to  make  further  efforts  to  align  with  the  public  services  obligations  and  the 
acquis  on  public  service  contracts.  Albania  signed  the  Transport  Community  Treaty  in  July 
2017 at the Western Balkan 6 Summit in Trieste and ratified it in February 2018. 

Albania  has  not  transposed  the  legislation  on  summer-time  arrangements.  Administrative 
capacity  throughout  the  transport  sector  needs  to  be  strengthened,  particularly  on  rail 
transport.  The  new  railway  code  was  adopted  in  December  2016  and  entered  into  force  in 
January  2018.  Independent  railway  and  waterborne  accident  investigation  bodies  are  not 
established  yet.  Funding  for  maintaining  road  and  railway  infrastructure  is  insufficient, 
resulting in their continued  deterioration.  Further efforts  are needed to support  the road and 
rail maintenance plans for 2018-2022. 

Albania has made steady progress in approximating its national legislation on road transport 
with  the  acquis.  There  has  been  good  progress  on  adopting  the  road  safety  inspection 

69 

 
 
 
guidelines  and  curriculum  and  delivering  training.  The  country’s  legislation  is  aligned  with 
the acquis 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, has yet to adopt and apply rules on sanctions and strengthen its 
inspection  capacity.  Greater  approximation  efforts  are  needed  on  commercial  vehicle 
inspections, 
including  education  and 
enforcement.  Albania  has  to  pursue  its  efforts  to  align  with  the  safety  acquis  and  develop 
enforcement capacity. In 2017 Albania partially aligned its legislation on the qualification of 
road transport operators. Implementation of the legislation on roadside checks of commercial 
vehicles  is  at  an  initial  phase.  The  legislation  on  intelligent  transport  systems  is  partially 
aligned.  

traffic  management  systems  and  road  safety, 

The new railway code aims to regulate railway transport by separating train operations from 
infrastructure management, in line with the EU acquis. It transposes only partially the recast 
Directive  on  a  single  European  railway  area  and  EU  safety  and  interoperability  rules.  As  a 
result,  the  unbundling  of  train  operations  from  infrastructure  management  has  not  yet  been 
achieved.  Implementing  legislation  is  under  preparation  for  the  establishment  of  relevant 
structures and agencies, in particular the Railway Regulatory Authority. One private railway 
operator  is  licensed  for  freight  transport.  Positive  development  was  noted  on  cross-border 
facilitation, with the operation of the joint railway station of Tuzi (Montenegro), which started 
in July 2017. Further efforts are needed to define the strategic framework for implementing 
the intelligent transport systems on the core rail network. 

On maritime transport, further efforts are needed to follow up on the country’s membership 
application  to  the  Paris  Memorandum  of  Understanding  on  port  state  control.  Efforts  to 
improve flag state control of Albanian flagged vessels and port state control need to continue 
in  order  to  further  reduce  the  detention  rate  of  Albanian  vessels.  Further  efforts  are  also 
needed to define a strategic framework for the implementing intelligent transport systems on 
the  core  maritime  network.  Legislation  on  an  EU  vessel  traffic  monitoring  and  information 
system has not been transposed yet.  

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

On aviation, Albania should be adequately prepared for the assessment visit requested in the 
framework  of 
the  European  Common  Aviation  Area  Agreement,  ensuring  proper 
transposition and implementation of the relevant EU acquis, notably in the areas of aviation 
safety, security and economic regulation. On air traffic management in particular, Albania has 
not  yet  complied  with  the  Single  European  Sky  requirements  for  the  first  transitional  phase 
under the European Common Aviation Area Agreement as the functional use of airspace has 
not  been  implemented  yet.  Albania  should  also  focus  its  efforts  on  the  second  transitional 
phase. 

Even  though  the  national  transport  strategy  includes  some  priority  actions  for  the 
development of combined transport, there is still no legislation on this. Albania has to step 
up efforts to implement the EU passenger rights legislation in all modes of transport. 

70 

 
 
 
 
 
5.15.   Chapter 15: Energy 
EU  energy  policy  covers  energy  supply,  infrastructure,  the  internal  energy  market, 
consumers,  renewable  energy,  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 
on  interconnection  lines.  However,  the  country  has  to  accelerate  implementation  of  the 
connectivity  reform  measures,  especially  by  removing  legal  and  contractual  obstacles  to 
integrating energy markets.  

In the coming year Albania should in particular: 

→  finalise and adopt its national energy strategy;   

→   fully align its Energy  Efficiency Law with  the  acquis, set up an energy efficiency fund 
and draft and adopt secondary legislation implementing the Energy Performance of Buildings 
Directive; 

→  finalise the unbundling of energy companies. 

On  security  of  supply,  Albania  is  at  a  moderate  stage  of  preparation.  The  new  national 
energy  strategy,  which  runs  until  2030,  is  now  undergoing  consultation  with  different 
stakeholders. 

Albania’s  oil  stocks  legislation  is  not  in  line  with  the  acquis.  There  was  no  progress  on 
establishing  a  central  stockholding  body.  The  interinstitutional  working  group  for  analysing 
and  developing  a  plan  for  re-designing  the  emergency  stockholding  system  is  working  on a 
plan for a model of an emergency oil stock reserve. Albania has to continue its efforts to align 
with the acquis on minimum oil stocks of crude oil and/or petroleum products and to amend 
the emergency oil stock model. 

Albania’s  electricity  system  is  interconnected  with  the neighbouring  systems  of  Greece  and 
Montenegro  since  2014,  when  the  European  Network  of  Transmission  System  Operators 
(ENTSO-E) approved synchronous operation of the Albanian electricity transmission system 
with the continental European system.  

On the internal energy market, Albania has adopted legislation on gas and electricity in line 
with the EU’s third energy package.  

In March 2017 the Albanian Energy Regulator ERE approved the certification of OST SA as 
the transmission system operator, following a positive opinion from the Energy Community 
Secretariat. Consequently, later the same month the ENTSO-E Assembly admitted OST SA as 
a full member of the network. 

The  legal  and  functional  unbundling  of  distribution  system  operator  OSHEE  SA  from  its 
supply  activity  has  not  yet  been  finalised.  The  unbundling  model  was  approved  by  the 
supervisory  council  of  OSHEE  and  the  Minister  of  Energy  and  Industry,  representing  the 
General  Assembly.  The  Energy  Community  Secretariat  initiated  an  infringement  procedure 
for  non-compliance  with  Albania’s  obligations  concerning  OSHEE’s  unbundling  in  January 
2018. 

Electricity prices are still regulated but should be gradually liberalised once the legislation is 
implemented. The freedom for all customers to switch suppliers is stipulated by law but is still 

71 

 
 
 
not possible in practice. The electricity market remains closed by a regulated contract between 
the state-owned generation and supply companies which needs to be phased out urgently. 

ERE  must  develop  into  a  well-equipped  and  skilled  independent  institution  and  the 
shortcomings in their competences as regulator need to be addressed. 

On  hydrocarbons,  Albania  has  not  aligned  its  legislation  with  the  Hydrocarbons  Licensing 
Directive, but there has been some progress with its secondary legislation. The Directive on 
safety  of  offshore  oil  and  gas  installations  has  not  been  transposed.  In  February  2018  the 
Council  of  Ministers  adopted  the  ‘Gas  master  plan’  which  assesses  investment  needs  until 
2040.  

The main interconnection line, the Trans Adriatic Pipeline, is progressing on schedule.  (see 
chapter 21) 
The regulatory framework for renewable energy3 is at an early stage. The national renewable 
energy  action  plan  for  2015-2020  plan  envisages  that  38  %4  of  gross  final  energy 
consumption will come from renewable energy sources. The plan should be revised in the first 
quarter of 2018. With the adoption of the law promoting renewable energy in 2017 Albania 
increased its compliance with the acquis. It introduced schemes to support renewable energy 
producers above 2 MW (solar) and 3 MW (wind) through a competitive procedure based on 
the  support  scheme  "contracts  for  difference"  on  top  of  the  market  price  of  electricity.  The 
law incorporates a net metering scheme for photovoltaic (PV) or wind energy with a capacity 
of up to 500 kW.  

Albania  depends  almost  exclusively  on  hydropower  for  its  electricity  generation  (98  %), 
making  it  vulnerable  to  unfavourable  hydrological  conditions  as  in  2017.  In  addition, 
electricity  from  hydropower  is  not  sufficient  to  meet  its  needs.  Albania is  a  net  importer  of 
electricity and the security of its power supply is a challenge. The government should foster 
the  development  of  renewable  energy  generation.  Several  investments  (local  and  foreign) 
have  been  made  through  concession  contracts  to  construct  and  operate  hydroelectric  power 
plants.  However,  plans  for  future  plants  (on  the  Vjosa  and  Valbona  rivers,  etc.)  have 
generated  debate  about  the  need  to  address  ecological  considerations.  Doubts  have  been 
expressed  about  the  quality  of  strategic  environmental  assessments  and  environmental 
impact assessments carried out on energy projects. Investments in renewable energy projects 
other than hydropower need to be further explored.  

The second and third national energy efficiency action plans for 2017-2020 were approved by 
the Council of Ministers in December 2017. The main target is a cumulative saving of 6.8 % 
of  the  energy  used  in  Albania  by  2020.  The  Energy  Efficiency  Agency  was  set  up  in  2016 
with  the  task  of  implementing  energy  efficiency  policies  and  measures,  but  it  is  still  not 
staffed and operational. The agency reports to the minister responsible for energy. A working 
group  has  been  set  up  within  the  Ministry  of  Energy  and  Infrastructure  to  prepare  the 
establishment  of  the  energy  efficiency  fund.  However,  full  compliance  with  the  Energy 
Community  acquis  has  still  not  been  achieved  so  the  Secretariat  has  continued  the  dispute 
settlement  procedure  and  submitted  a  Reasoned  Request  to  the  Ministerial  Council  for 

3  The  Ministry  of  Infrastructure  and  Energy  includes  the  Directorate  of  Renewable  Energy  and  Energy 
Efficiency,  which  is  charged  with  drafting  and  implementing  legislation  on  renewable  energy  sources.  The 
Directorate has currently six employees including its director. 

4 In 2015, the total RES share was 35 %. 

72 

 
 
 
                                                            
decision.  Albania  still  needs  to  start  amending  the  Energy  Efficiency  Law  in  order  to  align 
with  the  Energy  Efficiency  Directive  (EED).  Albania  is  also  the  only  Energy  Community 
Contracting  Party  that  failed  to  submit  its  first  annual  report  under  the  EED  (by  30  June 
2017). 

A law on energy performance in buildings entered into force in 2016. Albania still needs to 
adopt the necessary legislation to achieve full compliance with the acquis. 

There  has  been  moderate  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.  Albania  stated  in  its  reports  for  the  Sixth  Review  Meeting  of  the 
Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive 
Waste Management that on 7 September 2016 the government approved regulation No 638 on 
the  safe  management  of  radioactive  waste,  which  reflects  the  latest  International  Atomic 
Energy  Agency  developments  in  this  field.  The  country  has  established  a  waste  storage 
facility  with  capacity  of  300  m3.  The  facility  was  licensed  by  the  Radiation  Protection 
Commission  on  18  November  2016  for  5  years.  Albania  is  not  a  member  of  the  European 
Community Urgent Radiological Information Exchange. It has partly aligned with the acquis 
on  controlling  radon  and  is  preparing  a  national  plan  on  this.  The  Radiation  Protection 
Commission operates as Albania’s nuclear regulatory authority, with the Radiation Protection 
Office (with 10 employees) as executive body. 

5.16.   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  tax  procedures,  further 
organisational development of the General Directorate of Taxation (GDT), implementation of 
the action plan against informal economy and tax compliance. Revenue performance in 2017 
was  above  2016  levels  (+7.8  %)  but  slightly  below  target  (-1.7  %),  largely  due  to 
underperformance of personal income tax and local taxes.  

In the coming year, the country should in particular: 

→  establish  the  fiscal  cadastre  in  pilot  municipalities  (Tirana,  Korça,  Fieri,  Durrës)  and 
implement the revised property tax law; 

→  step  up  its  efforts  to  negotiate  double  taxation  agreements,  notably  with  EU  Member 
States; 

→ address the recurrence of delays in VAT refunds and avoid large backlogs. 

Regarding  indirect  taxation,  the  standard  value  added  tax  (VAT)  rate  is  20  %.  Since  June 
2017, a reduced rate of 6 % is applied to tourism accommodation services. Exemptions from 
VAT for supplies without right to input deduction are largely aligned with the acquis. 

Excise taxation  is partially  aligned with  the EU  acquis. Marking of mineral oils  is done  for 
some categories. Tobacco excise duties are set to increase incrementally over the next 3 years, 

73 

 
 
 
from EUR 44 per 1 000 cigarettes as of 1 January 2018 to EUR 48.9 from 1 January 2021. 
Since  2016,  the  level  of  taxation  on  cigars  and  cigarillos  manufactured  domestically  with 
tobacco  leaves  grown  in  Albania  is  set  at  EUR  18.8/kg  as  compared  to  EUR  33.1/kg  for 
imported  in  an  attempt  to  combat  the  informal  economy.  Small  producers  of  alcoholic 
beverages enjoy reduced tax rates and distillation. For personal consumption, amounts up to 
100  litres  for  spirits  and  up  to  200  litres  for  wine  are  tax  exempted.  The  national  VAT  law 
includes all energy products listed in Directive 2003/96/EC.  

Regarding  direct  taxation,  financial  institutions  are  legally  required  to  calculate,  withhold, 
declare  and  pay  income  tax  on  income  from  savings.  Albania  does  not  provide  deferral  of 
taxation for status changes such  as  those  provided for in  the Merger  Directive. Albania  has 
committed to join the Organisation for Economic Co-operation and Development's (OECD) 
Inclusive Framework on anti-Base Erosion and Profit Shifting by 2019. 

On  administrative  cooperation  and  mutual  assistance,  Albania  is  yet  to  sign  double 
taxation agreements with Denmark, Cyprus, Lithuania, Portugal, Slovakia and Finland. It has 
not  yet  established  a  central  liaison  office  to  automatically  exchange  financial  account 
information based on the OECD single Global Standard. 

Concerning  operational  capacity  and  computerisation,  the  tax  administration  has  1 569 
posts.  In  2017,  22  employees  were  dismissed  due  to  disciplinary  measures.    The  annual 
training programme is needs-based and was approved by the Director-General of Taxation in 
January  2017.  Training  is  provided  through  the  tax  and  customs  administration  Training 
Centre and the Albanian School of Public Administration.  

Albania  does  not  yet  have  the  technical  capacity  to  facilitate  the  efficient  exchange  of 
information or the appropriate infrastructure to apply the EU IT standards. The electronic tax 
administration system has been operational since January 2015 as a network application with 
a  central  platform  operating  in  the  entire  tax  administration.  The  current  IT  department 
strategy does not provide steps and timelines to achieve interconnection and interoperability 
with the EU systems. 

GDT  adopted  the  2017  annual  action  plan  on  combating  the  informal  economy  and 
implemented it accordingly.  

5.17.   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  in  the  area  of  fiscal  policy  where  new  rules  on  debt 
reduction and budget execution in election years were implemented.  

In the coming year, Albania should take further measures to: 

→  further  align  the  legislation  with  the  acquis  as  regards  the  Bank  of  Albania's  (BoA) 
independence and accountability; 

→  strengthen  the  government's  policy  coordination  and  consultation  mechanism  with 
non-governmental stakeholders when formulating sector priority reforms. 

In the area of monetary policy, preparations have started to further align the 1997 Law on the 
Bank of Albania with the statute of the European System of Central Banks (ESCB) as regards 

74 

 
 
 
the  personal  independence  of  the  supervisory  council  members,  especially  of  the  governor, 
and  the  BoA's  accountability.  The  BoA  is  financially  independent  and  has  sufficient 
administrative capacity to function effectively. The primary objective of the central bank, as 
defined  by  the  Law  on  the  Bank  of  Albania  is  to  achieve  and  maintain  price  stability.  The 
BoA has defined price stability as an annual increase of consumer prices of 3 % and it aims to 
keep  consumer  price  inflation  at  that  level  on  average  terms  and  for  long  time  periods. 
Monetary  policy  is  conducted  with  a  standard  set  of  instruments  and  within  a  free-floating 
exchange rate regime. Foreign exchange reserves are maintained at an adequate level. 

In  the  area  of  economic  policy,  the  2016  amendments  to  the  Organic  Budget  Law  on  debt 
reduction and budget execution in an election year (fiscal rules)  were implemented in 2017. 
Further alignment with the Directive on Requirements for Budgetary Frameworks is needed. 
EDP notification tables are sent regularly to Eurostat on a best-effort basis, but they are not 
complete.  An  MoU  was  signed  in  2016  between  the  Institute  of  Statistics,  Bank  of  Albania 
and Ministry of Finance towards further improving the fiscal statistics reporting according to 
the European System of National and Regional Accounts (ESA 2010) requirements. Albania 
should  fill  in  the  gaps  for  cross-annual  statistics,  as  well  as  for  regular  transmissions  of 
government  deficit  and  debt  statistics  and  government  finance  statistics.  Further  significant 
efforts are needed to align fiscal statistics with ESA 2010. Preparations for participation in the 
macroeconomic  imbalance  procedures  (MIP)  have  started  at  the  Bank  of  Albania  and  the 
Institute of Statistics. Albania submitted its coherent ERP 2018-2020 in time. 

5.18.   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 is moderately prepared on statistics. Some progress was made in many statistical 
areas and by adopting the official statistics programme for 2017-2021, but a detailed budget 
and  action  plan  for  its  implementation  is  still  to  be  prepared.  The  Institute  of  Statistics 
(INSTAT) has signed several memoranda of understanding with different statistical agencies. 
However, there is a need for a greater use of administrative data.  

In the coming year, Albania should in particular: 

→  continue  strengthening  INSTAT’s  resources  by  adjusting  its  salary  structures  and  civil 
servant posts; 

→  adopt  the  new  statistical  law  and  put  more  efforts  into  implementing  existing  legislation 
(such as the new official statistics programme); 

→  further  align  macroeconomic  statistics  to  ESA  2010  and  submit  a  complete  excessive 
deficit procedure notification. 

Regarding statistical infrastructure, the legal framework is partly in line with the European 
Statistics  Code  of  Practice  and  classifications  are  in  line  with  EU  standards.  The  new 
five-year programme on official statistics for 2017-2021 was adopted in February 2017 but is 
yet  to  be  accompanied  by  a  detailed  action  plan.  INSTAT’s  budget  and  staffing  are 
insufficient  for  fully  implementing  the  EU  acquis  in  statistics.  INSTAT  has  concluded 
agreements with data custodians on access to administrative data to facilitate the statistical use 
of  such  data.  A  Memorandum  of  Understanding  was  signed  in  October  2016  between 
producers  of  official  statistics  (INSTAT,  BoA  and  Ministry  of  Finance)  on  improving  the 

75 

 
 
 
national accounts statistics and communication and data transmission between parties. During 
2017 memoranda of understanding were signed with 12 different statistical agencies and other 
public  institutions  for  accessing  administrative  data.  INSTAT  has  improved  the  range  and 
quality  of  the  statistics  it  publishes.  Since  January  2017  INSTAT  transmits  data  to  Eurostat 
through the Electronic Datafiles Administration and Management Information System.   

On macroeconomic statistics, annual and quarterly GDP data continue to be produced based 
on the production and  expenditure approach, in current  and constant  prices. Supply and use 
tables  and  derived  input-output  tables  are  produced  and  harmonised  with  the  concepts  and 
definitions  of  the  European  System  of  Accounts  (ESA  2010).  Excessive  deficit  procedure 
notification  tables  are  sent  regularly  to  Eurostat  on  a  best-effort  basis,  but  they  are  not 
complete.  During September 2017,  INSTAT  released  for  the  first  time  the  full  list  of  public 
institutions  in  the  government  sector.  However,  further  improvements  are  needed  in 
Government Finance Statistics. 

As  regards  structural  business  statistics,  data  collection  and  production  have  further 
improved.  INSTAT  produces  and  publishes  the  Harmonised  Index  of  Consumer  Prices 
(HICP).  Expenditures  are  classified  using  the  European  Classification  of  Individual 
Consumption  by  Purpose  ECOICOP-5  digit  classification.  Since  first  quarter  2017  the  time 
series  of  Short-Term  Statistics  are  published  regularly  every  quarter.  Development  of  a 
Service  Producer  Price  Index  started  in  February  2017.  Efforts  are  under  way  to  improve 
tourism statistics. INSTAT carried out a pilot survey, harmonised with EU regulation, during 
April 2017 and a full-scale survey during May 2017. During March 2017, INSTAT conducted 
the ICT survey on businesses.  

More detailed social statistics need to be produced. The Labour Force Survey is conducted 
regularly  and  micro-data  are  provided  to  Eurostat.  In  2016,  INSTAT  launched  for  the  first 
time a full-scale EU statistics on income and living conditions (EU-SILC) survey among the 
representative gross sample of 9 216 households. Labour cost statistics (LCS) are calculated 
on the basis of a Labour Cost Survey, which is conducted every 4 years. The second Survey 
has been launched for the period April 2017-April 2018. Statistics on external migration and 
asylum  are  partially  aligned  with  EU  legislation.  Quarterly  publications  on  crime  statistics 
were  published  throughout  2017.  The  annual  publication  of  ‘Women  and  Men  in  Albania’ 
was enriched with 15 additional indicators, including child-specific indicators in the areas of 
demographics, health, justice, education and labour. 

Agricultural  statistics  are  partially  aligned  with  the  EU  acquis.  INSTAT  conducted  the 
Annual  Agricultural  Survey  2016  in  collaboration  with  the  Ministry  of  Agriculture,  Rural 
Development and Water and the data were published in 2017. The final data of the Census of 
Agriculture  Holdings  2012  was  published  in  October  2017.  The  Farm  Structure  Survey  has 
yet to be implemented. 

Environment and energy statistics are in line with the EU acquis to a very limited extent. 
INSTAT  produces  the  Balance  of  Electricity  twice  per  year  and  publishes  the  Balance  of 
Energy produced by the National Agency of Natural Resources. Short-term energy statistics 
are still produced as volume data for electricity only. Detailed data on urban waste statistics 
are in line with the EU acquis. Air emission accounts are partially in compliance with the EU 
requirements. In 2017, for the first time, INSTAT produced data on economy-wide material 
flow  and  environmental  taxes  as  part  of  environmental  accounts.  Data  on  environmental 
expenditure is not yet being produced due to continued lack of information. 

76 

 
 
 
5.19.   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. They also promote social dialogue at European level. 

Albania has some level of preparation on social policy and employment. Some progress has 
been  made  on  increasing  labour  market  participation  and  the  quality  and  effectiveness  of 
labour  market  institutions  and  services,  and  on  implementing  the  national  employment  and 
skills strategy (NESS) for 2014-2020. Albania has initiated the restructuring of employment 
governance  stipulated  in  the  revised  law  on  vocational  education  and  training  (VET). 
Employment and human capital development statistics have improved from the previous year. 
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: 

→  ensure  sufficient  human  and  financial  capacities  and  resources 
the 
implementation  of  employment  and  social  policies  and  to  carry  our  meaningful  social 
dialogue;  

to  secure 

→ develop a strategic approach to tackle the informal economy and undeclared work; 

→ intensify efforts to implement the 2015-2020 social protection strategy, including through 
further  progress  in  social  care  reform  and  linkages  with  active  labour  measures  and 
strengthening the role of local government in implementation. 

On  labour  law,  the  amended  Labour  Code  is  being  implemented.  The  monitoring  of  the 
implementation of the Labour Code amendments requires strengthening of data collection and 
instruments for disaggregated data. Labour inspectorate capacity and performance should be 
further  increased  and  investigations  of  suspected  cases  of  fraud  and  misconduct  by  social 
inspectors  strengthened.  Child  labour  remains  a  concern,  with  more  effective  measures 
needed to prevent it. There is also a need to improve the system of monitoring child labour. 

Regarding health and safety at work, the 2016-2020 occupational, safety and health policy 
document  and  its  action  plan  are  under  implementation.  The  Labour  Inspection  Law  was 
amended  in  March  2017,  but  labour  inspection  is  struggling  with  low  financial  and  human 
capacities.  Reported  accidents  at  work  fell  from  125  in  2015,  to  107  in  2016-2017,  and 
fatalities  at  work  decreased  from  28  to  13.  Ninety-nine  workers  suffered  accidents  in  2016, 
and  101  in  the  first  9  months  of  2017.  Most  of  the  accidents  (60  %)  occurred  in  mines, 
manufacturing and construction. Statistical data on health and safety still need to be improved. 

Social dialogue remains weak in both the private and state sector. Regarding tripartite social 
dialogue, the mandate of the members of the National Labour Council has expired and should 
urgently be re-established. The appointment of the new members is still expected.  Significant 
efforts are needed to transform it into an effective social dialogue forum, aiming at improving 
collective  bargaining.  Intensification  of  bipartite  social  dialogue,  in  particular  at  local  and 
company  level  is  also  needed.  At  regional  level,  the  decision  on  a  tripartite  Regional 
Consultative Council, consisting of representatives of employers' organizations, trade unions 
and representatives of state structures, is still expected to be adopted. 

On employment policy, the administrative restructuring led to the dismantling of the Ministry 
of  Labour  and  reduction  in  human  capacities,  which  can  have  negative  effects  on  the 

77 

 
 
 
 
implementation  and  the design of employment policies and  measures. While there has  been 
improvement  in  the  labour  market,  the  employment  rate  and  labour  market  participation 
remain  low  and  the  informal  economy  significant.  A  mid-term  review  of  the  NESS  and  its 
action plan should be conducted in the first half of 2018. In February 2017 the revised VET 
Law  was  adopted  but  its  bylaws  have  yet  to  be  adopted.  No  progress  has  been  made  in 
extending employment and VET services to rural areas. Significant efforts should be made to 
adopt 
law  on  employment  promotion 
programmes has still not been adopted. Less progress has been made in linking the reform of 
social assistance to the employment and skills development programmes available. 

the  Albanian  Qualification  Framework.  The 

Public employment services were strengthened and the image and outreach of Labour Offices 
have improved. Further efforts should be made to finalise the reorganisation of the remaining 
employment offices. 

The unemployment rate decreased to 15.6 % in 2016 from 17.5 % in 2015, but remains high, 
particularly among women, young people and people with disabilities. The data available on 
the second quarter of 2017 show that the unemployment rate further decreased to 14 %, 1.6 
percentage  points  below  the  same  period  in  2016  and  with  a  downward  trend  from  the 
beginning  of  the  year  (-0.3  pp.).  Long-term  unemployment  remains  a  challenge  to  be 
addressed  through  more  flexible  and  tailored  policy  interventions.  During  the  first  half  of 
2017, over 460 undeclared workers were identified and over 1 650 urgent measures imposed. 
Inspections carried out in June 2017 show that 37 % of employees are declared as paid at the 
minimum wage.  

Institute of Statistics has sufficient resources to contribute to policies with comprehensive and 
reliable data. The wage gap methodology still needs to be aligned with Eurostat requirements. 
Special attention is needed to urban/rural ratios in all labour-related statistics. There were no 
developments regarding use of the European Social Fund. 

As regards social inclusion and protection, the national strategy on social protection for 2015-
2020  is  under  implementation.  The  Law  on  Social  Care  Services  entered  into  force  in 
November 2016 and the Law on the Rights and the Protection of the Child in February 2017. 
The  2017-2020  national  agenda  for  children’s  rights  was  adopted  in  April  2017,  promoting 
stronger  governance  in  the  protection  of  such  rights.  In  December  2016  the  Council  of 
Ministers approved the criteria, procedures, documentation and the amount of economic aid 
for  offering  more  autonomy  to  local  government  units.  The  use  of  the  Management 
Information System for disabled beneficiaries is already approved and is being implemented 
in a pilot phase. The process of transitioning from institutional to community-based care for 
vulnerable groups is being piloted in Durrës, Shkoder and Saranda. Foster care was promoted 
by the state social services but needs to be further developed and regulated. 

Regarding the Social Inclusion Policy Document for 2016-2020, little progress has been made 
in setting up the necessary structures or clarifying arrangements for implementing the policy. 
The government should step up its efforts to ensure there is a comprehensive plan for building 
up  the  capacity  of  all line  ministries  and  local governments  to  implement  the  actions  in  the 
document.  In  2016,  the  government  developed  a  social  housing  strategy  but  the  budget 
allocated  for  (social)  housing  programmes  is  limited  and  does  not  provide  for  all  proposed 
actions  to  be  carried  out.  To  address  many  of  Albania’s  shortcomings  identified  by 
international  bodies  in  the  field  of  housing  and  forced  eviction,  the  Council  of  Ministers 
approved  a  full-fledged  draft  social  housing  law  in  April  2017.  However,  this  draft  was 

78 

 
 
 
withdrawn following the restructuring of the government after the elections in June 2017, and 
is not yet adopted. 

On  non-discrimination  in  employment  and  social  policy,  there  have  been  legislative 
amendments  in  the  employment  and  workplace  environment  for  women.  These  concern  the 
amendment of the Labour Code defining and reversing the burden of proof in cases of sexual 
harassment. 

As regards equality between women and men in employment and social policy, the gender 
gap  in  employment  decreased  in  2016  to  12  %,  2.5  p.p.  less  than  2014.  The  2017  World 
Economic  Forum  Gender  Gap  Index  report  showed  Albania  improved  compared  to  2016 
(rising  from  rank  62  to  38  out  of  144  countries).  The  2017  index  ranked  Albania  third  on 
wage  equality  for  similar  work  and  10th  for  women  in  ministerial  positions.  There  are  not 
enough kindergarten and early childhood education and care facilities in the country to enable 
parents, especially women, to work. In rural areas, in 2016 women were overrepresented as 
contributing family earners. In the third quarter 2017, agriculture employs 35 % of employed 
males and 42 % of employed females. 

Concerns remain over the proportion of women in the informal labour market, especially the 
textile  and  shoe  industries,  without  adequate  labour  and  social  protection.  There  are  also 
concerns over the lack of disaggregated data on the number of women in the informal labour 
economy. 

5.20.   Chapter 20: Enterprise and industrial policy 
facilitates  structural  change  and 
industrial  policy  strengthens  competitiveness, 
EU 
encourages  a  business-friendly  environment  that  stimulates  small  and  medium-sized 
enterprises (SMEs). 

Albania  is  moderately  prepared  in  the  area  of  enterprise  and  industrial  policy.  Some 
progress  was  made  by  introducing  incentives  to  stimulate  investment  in  the  tourism  sector 
and maintaining a focus on the principles of the Small Business Act.  

In the coming year, Albania should in particular: 

→ take steps to enhance SMEs' ability to handle new technologies and business processes; 

→ raise the effectiveness of the implementation of the triple-helix action plan; 

→ speed up the full alignment of its legislation with the late payment directive; 

→ pursue the reduction of the regulatory burden more ambitiously and vigorously address the 
main business environment challenges in the policy areas concerned. 

The  2014-2020  business  and  investment  development  strategy  sets  the  strategic  framework 
for  Albania’s  enterprise  and  industrial  policy  and  addresses  its  strategic  approach  to 
industry  and  competitiveness.  Albania  is  following  the  South-East  Europe  2020  regional 
initiative which mirrors the Europe 2020 strategy and has already adopted an action plan for 
its  implementation.  The  business  and  investment  development  strategy  is  cross-cutting  and 
sets  out  the  roadmap  for:  business  development,  including  SMEs  and  increased  competitive 
skills; developing innovation; promoting sustainable growth; and creating the conditions for 
attracting foreign investment. In January 2017 the government adopted an action plan based 
on a ‘triple helix’ model that incorporates measures requiring the involvement of the public 
and private sectors together with universities. However, its implementation needs to be further 
improved.  An  innovation  map  Albania  portal  was  launched.  The  national  strategy  on 

79 

 
 
 
employment  and  skills  for  2014-2020  and  its  action  plan  address  the  measures  needed  to 
develop and consolidate the labour market.  

Albania has partly aligned its definition of SMEs and the relevant legislation which regulates 
this issue with the EU definition. Albania follows the implementation of the Small Business 
Act. The methodology and templates for full regulatory impact assessment were finalised by 
the end of 2016. Albania has intensified its coordinated actions against the informal economy 
and  an  ‘anti-informality’  action  plan  for  2017  has  been  implemented.  In  October  2017  a 
Council  of  Ministers  Decision  was  adopted  on  monitoring  the  performance  indicators  on 
fighting informality. Despite some improvement in the business environment, SMEs continue 
to identify the informal economy and unfair competition as well as the unclear ownership of 
property titles as the main challenges, as well as the enforcement of the rule of law and better 
implementation of public consultation law. 

In  the  area  of  enterprise  and  industry  policy  instruments,  the  Albanian  Investment 
Development  Agency  has  implemented  and  manages  dedicated  funding  instruments  that 
stimulate  entrepreneurship  in  tourism,  handicrafts  and  innovation  and  to  support  inward 
processing  industry  and  competitiveness.  Albania  participates  in  the  EU’s  COSME 
programme  for  SMEs  and  the  Enterprise  Europe  Network  through  a  consortium  led  by  the 
Investment Development Agency. The second European Enterprise Network project is being 
implemented  until  the  end  of  2018.  Business  incubators  are  not  yet  properly  developed  in 
Albania and few pilot experiences can be identified. Albanian legislation is partially aligned 
with the 2011 Late Payment Directive. 

Regarding sector policies, specific studies were completed in 2017 in the copper industry and 
leather-footwear sectors as part of structural reforms under the economic reform programme 
aimed at encouraging private investment in these areas. A national strategy on innovation and 
technology was adopted in December 2017. In the first half of 2017 regulatory measures and 
fiscal  incentives  in  the  tourism  area  were  adopted  which  were  followed  in  2018  by  a  fiscal 
incentive package for 4-5 star hotels. Albania’s Law on the Establishment and Operation of 
Economic Zones, amended in 2015, provides for the creation of a technological and economic 
development area. Businesses have only benefitted to a small extent from the industrial zone 
facilities. 

5.21.   Chapter 21: Trans-European networks 
The  EU  promotes 
transport, 
telecommunications  and  energy  to  strengthen  the  internal  market  and  contribute  to  growth 
and employment. 

trans-European  networks 

the  areas  of 

(TEN) 

in 

Albania  has  some  level  of  preparation  in  the  area  of  trans-European  networks.  Some 
progress was made in preparing the strategic framework for developing transport and energy 
networks. Some progress was also made on its gas interconnection due to the implementation 
of the Trans Adriatic Pipeline project.  

In the coming year, Albania should in particular: 

→  accelerate  the  development  of  the  transport  and  energy  core  networks  in  line  with  the 
national  strategies  for  transport  and  energy  and  with  infrastructure  investment  prioritisation 
under the Single Project Pipeline and the connectivity agenda; 

80 

 
 
 
→ proceed with harmonising the legal framework with the EU acquis and the regulations on 
TEN-T  (trans-European  transport  networks)  and  TEN-E  (trans-European  energy  networks), 
and with implementing connectivity reform measures; 

→ strengthen the institutional framework and administrative capacity to develop and monitor 
trans-European networks. 

On  the  transport  networks,  Albania  is  progressing  in  setting  up  the  country’s  strategic 
framework. Albania intends to harmonise the legal and institutional framework with the EU 
TEN-T  Regulation  and  the  Transport  Community  Treaty,  signed  in  June  2017.  Albania 
participates  actively  in  the  South-east  Europe  Transport  Observatory  and  Western  Balkan  6 
(WB6)  processes,  focusing  on  improving  connectivity  within  WB6  and  with  the  EU.  The 
national  transport  strategy  and  action  plan  for  2016-2020,  adopted  in  November  2016, 
envisages the development of the indicative extension of the TEN-T Comprehensive and Core 
Networks to the WB6, aligned with TEN-T guidelines and EU standards and regulations. 

Albania has made progress on repairing roads, rail and maritime infrastructure, especially that 
linked with the Adriatic-Ionian Corridor and Corridor VIII. 

Albania is partially aligned with the acquis on a single European railway area, railway system 
interoperability and rail freight corridors for competitive freight. Further efforts are needed to 
align with the Directive on intelligent transport systems and the steps needed to implement it 
are still awaited. 

The national energy strategy is in the consultation phase with stakeholders. It aims to cover 
the  development  of  the  energy  sector  up  to  2030.  The  gas  master  plan  (GMP)  has  been 
adopted  by  the  Council  of  Ministers  in  February  2018.  Further  efforts  need  to  be  made  to 
adopt  the  strategic  framework  (namely  the  national  energy  strategy  as  well  as  the  strategic 
environmental assessment and project identification plan related to the GMP) for developing 
TEN-E projects. Progress was made on the infrastructure for power transmission. The Trans 
Adriatic  Pipeline  is  progressing  well  and  is  expected  to  be  operational  in  2020.  Major  gas 
interconnector projects are provided for under the GMP. 

Albania has functional power interconnection lines with Greece, Montenegro and Kosovo. A 
400 kV interconnection line between Albania and Kosovo was finalised in June 2017 but is 
not  yet  used.  The  inability  to  use  this  interconnection  has  a  financial  cost  for  Albania  and 
Kosovo. OST S.A. and KOST SA, respectively the Albanian and Kosovo power transmission 
system operators, have therefore officially requested the assistance of the Energy Community 
Secretariat and the European Commission to start the operation of the line. 

The  construction  of  the  400  kV  line  between  Elbasani  in  Albania  and  Bitola  in  the  former 
Yugoslav Republic of Macedonia was approved in June 2016 by the Council of Ministers and 
the tendering procedure for project preparation is still ongoing. The  line is projected to cost 
EUR  70  million.  For  this  reason,  the  Council  of  Ministers  approved  an  agreement  between 
Albania and Germany on financial cooperation for the project. The agreement was ratified by 
the Albanian Parliament in January 2017.  

Albania  has  shown  some  progress  towards  building  up  the  institutional  framework  and 
administrative capacity for developing trans-European networks for transport and energy. 

Albania also participates in the EU macro-regional strategy for the Adriatic and Ionian Region 
(EUSAIR)  where improving connectivity (transport and energy networks) is a main priority 
for the regional issues. 

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5.22.   Chapter 22: Regional policy and coordination of structural instruments 
Regional  policy  is  the  EU’s  main  tool  for  investing  in  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 moderately prepared in the area of regional policy and coordination of structural 
instruments. Some progress was made with the signature of the Financing Agreement for the 
2016 IPA national programme, completing the entrustment process.  

In the coming year, the country should in particular: 

→  strengthen its administrative capacity, especially the Central Finance and Contracting Unit 
(CFCU) of the Ministry of Finance, 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 
and  difficulties  in  meeting  contracting  deadlines,  as  observed  in  the  2013,  2014  and  2015 
programmes; 

→ 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,  the  national  strategy  for  development  and  integration  and 
several sectoral reform strategies have been  adopted and are being implemented. A national 
medium-term  budget  plan  still  needs  to  be  drafted  and  adopted.  Adequate  co-financing 
capacity for EU programmes at national and local level has yet to be established. 

Regarding the institutional framework, the reorganisation of Albania’s institutions after the 
general  elections  in  2017  affected  the  progress  of  setting  up  the  institutional  bodies  to 
implement the regional development policy and  manage EU pre-accession  assistance  (IPA). 
The  functions  of  national  IPA  coordinator  were  transferred  to  the  Minister  for  Europe  and 
Foreign  Affairs.  The  coordinator’s  support  office  is  being  reorganised  as  well.  The  pilot 
integrated  policy  management  groups  set  up  by  the  Prime  Minister’s  Office  to  support  the 
government’s  Strategic  Planning  Committee  have  not  been  reactivated.  Further  efforts  are 
needed  to  fully  establish  adequate  structures  and  make  them  operational.  The  integrated 
policy management group on competitiveness still has to be made operational. Coordination 
on  EU  integration  and  EU  assistance  needs  to  be  ensured  between  national  administrations 
such as the Ministry for Europe and Foreign Affairs, the Ministry of Finance and Economy, 
the Prime Minister’s Office and line ministries. 

On  administrative  capacity,  the  problems  faced  by  the  Audit  Authority  were  partially 
addressed in 2017 by increasing its staff. However, further capacity-building measures should 
be  taken  for  the  Audit  Authority  and  the  CFCU,  in  particular  for  the  public  procurement 
process. The CFCU’s procurement department should be increased to ensure it can handle the 
volume  of  tendering  procedures  effectively  and  promptly.  The  supervisory  capacity  of  the 
National  Authorising  Officer’s  Support  Office  has  yet  to  be  strengthened  and  a  proper 
retention  strategy  needs  to  be  developed  for  all  indirect  management  structures.  The 
administrative  capacity  and  monitoring  of  the  integrated  policy  management  group 
secretariats still need to be improved and business continuity ensured. 

Further  efforts  are  still  needed  to  ensure  multiannual  sector  programming  in  line  with  the 
sectoral approach under the IPA framework for 2014-2020. The number of integrated policy 
management  groups  should  be  expanded  and  new  sectors  identified.  The  involvement  of 

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development partners, local governments and civil society organisations in sectoral dialogue 
should  be  improved.  The  authorities  provide  input  into  the  mid-term  review  of  the  IPA 
country  strategy  paper.  The  national  project  pipeline  of  investments,  including  those  for 
regional development, is not yet fully aligned with the medium-term budget programme and 
the planning and management of nationwide public investment. 

On monitoring and evaluation, there  is  slow progress on setting up the Sector  Monitoring 
Committee  (for  IPA  II).  The  committee  ensures  the  proper  monitoring  of  EU  pre-accession 
assistance and the process for establishing it has to be finalised soon. The committee needs to 
meet regularly. 

Regarding financial management, control and audit, procurement procedures under IPA II 
indirect management were suspended. This is causing delays in handling tendering procedures 
for the 2014 and 2015 programmes. 

5.25.   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,  especially  with  the  adoption  of  the  national  strategy  for 
scientific research, technology and innovation for 2017-2022.  

In the coming year, the country should in particular: 

→ increase investment in research, in line with its own commitments and European Research 
Area priorities; 

→  strengthen  participation  in  Horizon  2020,  for  example  by  making  efforts  to  increase  the 
participation rate. 

On research and innovation policy, the national strategy for scientific research, technology 
and  innovation  for  2017-2022  was  adopted  following  broad  public  consultation.  The 
strategy’s  action  plan  is  designed  to  promote  the  EU  research  and  innovation  programme 
Horizon  2020.  In  January  2017  the  government  approved  the  2017-2021  action  plan  to 
support  the  development  of  innovative  policies,  stimulating  better  links  between  academia, 
industry and government.  

Investment  in  research  and  measures  to  strengthen  research  and  innovation  capacity  at 
national level need to be stepped up. The percentage of research & development expenditure 
in relation to GDP remains low at around 0.35 % of GDP. Albania has no national roadmap 
for research infrastructure. In September 2017 the process of drafting a ‘smart specialisation’ 
strategy  started  under  the  lead  of  the  Ministry  of  Education,  Sports  and  Youth  and  in 
cooperation with the European Commission. 

As  regards  EU  framework  programmes,  Albania  participates  in  Horizon  2020  as  an 
associated country. At the end of 2017, the number of Albanian applicants had increased to 
249  from  146  in  2016,  but  the  success  rate  remains  comparatively  low  (7.9 %  compared  to 
14.7 % overall for Horizon 2020). Private sector participation in the programme remains very 
low. The Albanian early-stage or experienced researchers participating in Marie Skłodowska-
Curie Actions have been increasing steadily over the last years, counting a total of 21 funded 
talented researchers since 2014.  

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On integration into the  European  Research  Area, Albania has  so far endorsed  29 bilateral 
scientific  cooperation  agreements  with  EU  countries,  Western  Balkan  states  and/or  other 
countries worldwide. 

Concerning  Innovation,  the  government  adopted  decisions  establishing  three  programmes 
managed by the Albanian Investment Development Agency for 2016: Competitiveness Fund: 
6 companies benefited from a total of EUR 58 712; Innovation Fund: 1 project received EUR 
3 077; Start-up Fund: 2 projects were approved and received EUR 4 466. 

 Chapter 26: Education and culture 

5.26. 
The EU supports cooperation in education and culture through funding programmes and the 
coordination of Member State policy through the open method of cooperation. 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  on  education  especially  by  improving  the  curricular  framework  for  pre-school 
education  and  standards  of  development  and  learning  for  children  aged  3-6  years.  Some 
progress was registered in vocational education and training (VET), with the adoption of the 
revised VET Law.  

In the coming year, Albania should in particular: 

→  ensure  the  pre-university  education  strategy  and  the  higher  education  reform  are 
implemented and further improve teacher training; 

→  ensure  the  VET  Law  is  fully  implemented,  including  finalisation  of  the  secondary 
legislation, and review/expand the current funding system and arrangements for VET; 

→ adopt and implement the national strategy on culture for 2018-2022 to preserve Albania’s 
cultural heritage. 

On  education  and  training,  progress  was  made  with  the  approval  of  the  curricular  and 
legislative  frameworks.  The  level  of  pre-school  participation  was  81.5  %  in  2016  (slightly 
down from 83 % in 2015) and participation in lifelong learning participation was very low at 
1  %  in  2016.  The  enrolment  of  Roma  and  Egyptians  in  pre-school  education  increased  by 
5 %,  in  elementary  schools  by  25  %,  in  middle  school  and  high  school  by  27  %  and  in 
pre-university education by 22 %. However, their enrolment rates remain very low overall. 

The  new  VET  Law  was  adopted  in  February  2017  but  related  implementing  legislation  has 
yet  to  be  adopted.  Qualification  standards  and  framework  curricula  for  most  VET 
programmes  are  being  modernised,  even  though  some  Albanian  schools  lack  the  teaching 
skills  and  equipment  to  put  them  into  practice.  Participation  in  VET  is  increasing,  mainly 
through  promotion  of  the  VET  services.  It  is  planned  to  expand  the  responsibilities  of  the 
National Agency for VET and Qualifications to include VET teacher training and non-formal 
training.  Albania  should  also  make  progress  in  ensuring  VET  is  inclusive  through  targeted 
measures for rural women, people with disabilities, Roma and Egyptian minorities and other 
populations at risk of exclusion, especially in rural and remote areas.   

Moderate  progress  was  made  in  implementing  the  Law  on  Higher  Education  and  Scientific 
Research. Remaining bylaws still need to be approved. Progress was made on recognition of 
diplomas which is now offered online. Some steps have been taken to implement the 2014-
2020  pre-university  education  strategy;  however  it  is  still  at  a  very  early  stage,  especially 

84 

 
 
 
regarding  teacher  training  and  delivery  of  the  new  curricular  framework.  On  education, 
infrastructure works are ongoing but further efforts are needed to improve the infrastructure in 
small cities and rural areas as well. 

The  results  in  all  areas  of  the  Programme  for  International  Student  Assessment  (PISA) 
surveys improved over the last three testing rounds (2009, 2012 and 2015) and preparation for 
Albania’s participation in PISA 2018 has started. 

Special  measures  have  been  taken  regarding  the  inclusion  of  vulnerable  groups  into  formal 
education; their enrolment rates had increased during the academic year 2016/2017.  

Participation in the Erasmus+ programme has been further improved, especially in Capacity 
Building in Higher Education, where two Albanian higher education institutions participated 
as project coordinators for the first time and in the International Credit Mobility action, where 
1 193 mobilities were granted last year, which represent an increase of +11.5 % in relation to 
the previous year and more than 3 400 since the first call was launched in 2015. Participation 
in the Jean Monnet programme significantly increased with four selected projects. 

On  youth,  the  Regional  Cooperation  Office's  headquarters  has  been  established  in  Tirana 
during  the  second  half  of  2017.  Government  priorities  for  youth  continue  to  promote  youth 
participation  employability.  Six  Youth  Centres  have  been  established  in  the  last  two  years: 
three  in  Tirana  and  three  more  outside  the  capital.  Young  Albanians  and  Albanian  youth 
workers  and  youth  organisations  continued  benefitting  from  the  funds  allocated  through  the 
Erasmus+ National Agencies. More than 1 700 young participants benefited from one of the 
three Youth mobility actions since 2014 (mobility of youth workers, youth exchanges and the 
European Voluntary Service). 

As regards the culture sector, the national strategy on culture for 2018-2022 is in its drafting 
stage.  The draft law on cultural heritage was approved by Council of Ministers in 2017.  

The  Law  on  Copyright  and  Other  Related  Rights  came  into  force  in  October  2016.  In  line 
with  the  2005  UNESCO  Convention  on  the  Protection  and  Promotion  of  the  Diversity  of 
Cultural Expressions, a new Law on the Protection of National Minorities has been adopted. 

Albania continued to participate in the EU Creative Europe programme with good results in 
literary translations over the years. 

5.27.   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 shows some level of preparation in this area. Some progress has been achieved in 
further aligning policies and legislation with the acquis, especially through the review of the 
national  strategy  on  waste  management.  However,  significant  efforts  are  needed  on 
implementation and enforcement.  

In the coming year, Albania should in particular: 

 →  ensure  an  adequate  budget,  finalise  the  cross-cutting  environmental  strategy  and 
strengthen the environment agency’s monitoring and reporting capacity; 

85 

 
 
 
→   develop  the  legal,  institutional  and  policy  framework  for  water,  and  improve  the 
environmental  impact  assessment  process,  especially  in  the  hydropower,  construction  and 
mining sectors; 

→   start  implementing  the  Paris  Agreement  and  Albania’s  contribution  to  it  by  adopting  a 
national  strategy  and  legislation  on  climate  change  as  well  as  related  energy  and  transport 
policies. 

As  regards  horizontal  issues,  further  progress  is  needed  to  achieve  full  alignment  and 
implementation.  The  environmental  impact  assessment  process  needs  to  be  considerably 
strengthened,  especially  in  the  hydropower  and  mining  sectors.  Some  permits  for  the 
construction of new hydropower plants and tourist resorts in protected areas have been issued. 
Substantial  efforts  are  needed  to  align  the  process  with  the  EU  standards.  The  Directive  on 
infrastructure  for  spatial  information  has  not  yet  been  transposed.  Albania  has  taken  some 
steps  to  improve  cooperation  with  civil  society  organisations,  but  more  work  is  needed  to 
achieve  effective  public  participation  and  consultation  in  the  decision-making  process, 
particularly at the local level. Further progress is needed to achieve full compliance with the 
remaining  cross-cutting  aspects  of  the  directives  on  environmental  liability,  environmental 
crime  and  environmental  inspection.  The  lack  of  a  secondary  legal  framework  for 
environmental  liability  and  the  inappropriate  permits  and  requirements  that  result  are 
hampering the establishment of an adequate process and assessment of environmental liability 
for damage to the environment. 

More  efforts  are  needed  to  further  align  the  legislation  on  air  quality  with  the  acquis.  The 
national  strategy  for  air  quality  and  the  law  on  ambient  air  quality  need  to  be  properly 
enforced.  The  directive  on  ambient  air  quality  and  cleaner  air  for  Europe  has  been  fully 
transposed  but  current  air  quality  monitoring  practice  is  not  in  line  with  EU  requirements. 
Albania prepared a first draft annual assessment report for January-September 2017 based on 
available  air  quality  data.  Online  data  access,  disclosure  to  the  public  and  accreditation  of 
public authorities to undertake the monitoring need to be ensured. 

The  legal  framework  for  waste  management  is  partially  aligned.  The  national  strategy  on 
waste management (covering 2010-2025) is being revised but implementation remains at an 
early stage. Work done on waste landfills has brought waste treatment facilities closer to the 
EU  standards.  Further  efforts  are  needed  to  close  the  over  300  non-compliant  landfills, 
increase  the  separate  collection  of  different  waste  streams  and  reduce  bio-waste.  Economic 
instruments  to  promote  recycling  and  prevent  waste  generation  remain  limited.  The 
construction  of  an  incinerator  in  Elbasan  which  started  to  operate  last  year  and  plans  for 
further  investment  in  incinerators  pose  concerns  in  terms  of  compliance  with  EU  principles 
since disposal and incineration are the least preferred waste management options. 

On  water  quality  the  level  of  alignment  remains  partial.  A  National  Agency  for  Water 
Supply  and  Sewerage  was  established,  and  performance-based  contracts  between 
municipalities and  water utilities were put  in  place. Further efforts are needed  to  strengthen 
the  capacity  of  utilities  and  the  central  level  and  to  improve  the  subsidy  scheme.  Further 
progress has been achieved in the licensing process for waste water collection and treatment. 
However, the performance and connections to waste water systems need to improve. Efforts 
have  been  made  to  combat  illegal  connections.  The  responsibility  for  water  resource 
management was transferred from the Ministry of Agriculture, Rural Development and Water 
Administration  to  the  Prime  Minister’s  Office.  Only  one  of  the  six  defined  river  basin 
management plans exists and it has not yet been implemented. Nine marine/coastal protected 

86 

 
 
 
areas  are  registered.  The  integrated  water  resource  management  strategy  has  been  prepared 
but not adopted yet. Water quality and its monitoring system have improved. The number of 
operational  waste  water  treatment  plants  increased  but  their  impact  is  limited  by 
underdeveloped networks and household connections. There is a strong need to extend sewer 
networks and treatment plants, notably in urban, coastal and tourism areas.  

Alignment  with  the  acquis  in  the  field  of  nature  protection,  in  particular  the  Habitats  and 
Birds  Directives,  is  well  advanced.  The  level  of  transposition  of  the  Habitats  and  Birds 
Directives  has  increased.  However,  effective  protection  for  designated  protected  areas  still 
needs to be guaranteed. Furthermore, investments in hydropower need to comply with nature 
protection obligations. 

Alignment with the EU legislation on industrial pollution and risk management is still at 
an early stage. Capacity constraints are hampering progress in implementing the legislation on 
prevention  of  chemicals  accidents.  Permitting  is  not  fully  compliant  with  all  legal 
requirements. 

On chemicals, Albania’s national plan to reduce and eliminate persistent organic pollutants is 
currently being reviewed. Some positive steps have been taken towards aligning with the EU 
Regulation  on  registration,  evaluation,  authorisation  and  restriction  of  chemicals  (REACH). 
However,  the  adoption  of  the  implementing  legislation  and  the  establishment  of  adequate 
capacity are still needed. 

Administrative  capacity  for  preparing  strategic  noise  maps  and  action  plans  needs  to  be 
strengthened. 

No civil protection strategy is in place and there is limited administrative capacity. Albania is 
gradually implementing  its emergency communication system in  accordance with the single 
European  emergency  number  112,  but  is  not  linked  to  the  EU  Common  Emergency  and 
Information System yet. 

Climate change 

Albania  has  achieved  some  level  of  preparation,  but  alignment  is  still  limited.  A  national 
strategy  on  climate  change  consistent  with  the  EU  2030  framework  on  climate  and  energy 
policies  still  needs  to  be  adopted.  It  should  aim  at  implementing  Albania’s  Nationally 
Determined  Contribution  (NDC)  to  the  Paris  Agreement  and  also  contain  a  plan  on 
adaptation.  The  latest  reorganisation  that  established  the  Ministry  of  Tourism  and 
Environment  provided  no  specific  structure  for  climate  change,  which  might  jeopardise  the 
Paris  Agreement  implementation.  Laws  and  plans  in  the  fields  of  transport  and  energy 
efficiency help to mainstream climate change and reach the objectives of Albania’s NDC.   

Regarding  its  reporting  obligation  under  the  United  Nations  Framework  Convention  on 
Climate  Change,  Albania  submitted  its  third  national  communication  but  did  not  attend  the 
UN Climate Change Conference in 2017. 

The  law  on  climate  change  and  accompanying  decisions,  partly  transposing  provisions  on 
monitoring,  reporting  and  verification  of  greenhouse  gas  emissions  and  on  accreditation  of 
verifiers  in  the  EU  Emissions  Trading  Directive,  still  need  to  be  adopted.  Further  efforts 
should  be  made  on  emission  standards  for  new  cars  and  vans  and  related  consumer 
information. The same goes for effort sharing, geological storage of CO2, and greenhouse gas 
emissions  from  land  use,  land  use  change  and  forestry.  Considerable  strengthening  of 

87 

 
 
 
administrative  capacity,  sustainable  financing  of  the  sector  and  awareness-raising  activities 
are needed. 

5.28.   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, and medicines for  human and veterinary  use.  The EU also 
ensures high common standards for upholding patients’ rights in cross-border healthcare and 
tackling serious cross-border health threats including communicable diseases. 

Preparations are at early stage in the area of consumer and health protection. There was some 
progress  over  the  last  year,  notably  on  strengthening  the  effectiveness  of  the  Consumer 
Protection Commission (CPC), analysing business practices and raising consumer awareness, 
and through the adoption of the national health strategy for 2016-2020. However, significant 
progress needs to be made to ensure everyone in Albania has healthcare coverage.  

In the coming year, the country should in particular: 

→   further align its  legislation with  the acquis  on tobacco control,  on substances  of human 
origin and on medicines for human and veterinary use; 

→  improve  access  to  services  for  vulnerable  populations,  including  women,  Roma  and 
Egyptian minorities, people with disabilities and populations in rural or remote areas; 

→  implement the national health strategy by allocating adequate funding and staffing at both 
central and local level. 

Consumer protection 

Regarding  horizontal  aspects,  the  capacity  of  the  CPC  and  of  other  consumer  protection 
bodies  was  strengthened  through  training  and  by  sharing  knowledge  of  EU  legislation  and 
enforcement practices. 

In  product  safety-related  issues,  the  Market  Surveillance  Inspectorate,  which  was 
established  in  2016,  still  needs  to  be  better  staffed  and  made  fully  operational.  National 
legislation is partly aligned with the EU acquis. 

In non-safety-related issues, awareness-raising materials were made available on the CPC’s 
website. 

Public health 

On horizontal aspects, the 2016-2020 national health strategy, adopted in May 2017, seeks to 
achieve universal healthcare coverage. However, further efforts are needed to strengthen the 
governance  of  public  hospitals  and  healthcare  quality.  Albania  should  ensure  that  adequate 
funding and staffing are allocated to fully implement the new policy at both central and local 
level.  Although  reporting  of  health  data  by  public  and  private  health  service  providers  has 
been established, further efforts are needed to improve the quality and coverage of the data. 

National  legislation  on  patients’  rights  in  cross-border  healthcare  has  yet  to  be  aligned 
with the EU acquis. The Ministry of Health and the National Agency of Information Society 
are the authorities responsible for e-health issues.  

As  regards  rare  diseases,  the  national  e-health  strategy  is  being  developed  in  cooperation 
with the World Bank. 

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In  the  field of  serious  cross-border  health threats  including  communicable  diseases,  the 
legal basis on communicable disease prevention and control is in place and is designed to be 
in  line  with  the  acquis.  However,  its  implementation  through  secondary  legislation  is  still 
lacking.  There  is  a  national  alert,  response  and  surveillance  system  for  communicable 
diseases.  However,  no  national  plan  for  implementing  international  health  regulations  has 
been put in place yet. The national immunisation coverage rate is 97 %. There have been no 
new communicable diseases related to vaccination.  

Albania does not yet have an antimicrobial resistance action plan. 

On blood, tissues, cells and organs, the relevant legislation is still not fully aligned with the 
acquis on blood safety. On tobacco control, the law to protect public health against tobacco 
products, which is designed to be aligned to the acquis, is being implemented. 

Legislation on medicines for human and veterinary use is not aligned with the acquis. 

With regard to health promotion regarding non-communicable diseases, there is a national 
cancer  control  plan  but  appropriate  structures  for  cancer  screening  services  and  a  cancer 
registry have yet to be set up. 

No developments can be reported in the area of mental health. With regard to nutrition and 
physical activity, malnutrition is a critical issue, especially for children and pregnant women. 
Albania  is  encouraged  to  develop  a  nutrition  plan  and  increase  awareness  in  school  and 
community centres of the risks related to malnutrition. 

On  drug  abuse  prevention  and  harm  reduction,  prevention  activities  have  taken  place 
sporadically,  mainly  initiated  by  the  Department  of  Health  Promotion  and  the  Institute  of 
Public Health. The social and economic reintegration of drug addicts has limited success. 

On  health  inequalities,  access  to  services  needs  to  be  strengthened  for  vulnerable 
populations,  including  women,  Roma  and  Egyptian  minorities,  people  with  disabilities  and 
populations in rural or remote areas. 

5.29.   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. 

Albania is moderately prepared in the area of the customs union. Some progress was made: 
in particular the Customs Code entered into force, the organisation was restructured and risk 
management improved.  

In the coming year, the country should in particular: 

→ approve legal provisions and develop the New Computerised Transit System; 

→ advance the registration of authorised economic operators; 

→ pursue the fight against smuggling, imports of counterfeit products and corruption. 

As  regards customs  legislation,  the  Customs  Code  which  entered  into  force in  June  2017 is 
broadly aligned with the acquis. In January 2017, the Albanian customs administration (ACA) 
updated  the  Nomenclature  of  the  Goods  in  line  with  the  EU  Combined  Nomenclature.  The 
country’s system for customs debt and guarantees is harmonised with EU rules. However, the 
customs  declaration  ‘scanning  fees’  contravene  the  SAA  which  prohibits  customs  duties  or 

89 

 
 
 
charges  having  equivalent  effect  on  trade  between  the  EU  and  Albania.  The  guide  for 
implementing  the  common  Albania-Kosovo  transit  procedures  was  approved  in  December 
2016. In 2016 and 2017 national legislation and procedures were prepared to align with the 
acquis in the area of the Common Transit Convention. 

Tariff  suspensions  and  tariff  ceilings  are  not  envisaged  at  the  moment.  Binding  tariff 
information  and  explanatory  notes  are  published  by  ACA,  and  anonymised  decisions  on 
administrative appeals by the respective court. Rules of non-preferential origin are included in 
the  2014  Customs  Code  and  accompanying  implementing  provisions.  The  Regional 
Convention  on  Pan-Euro-Mediterranean  (PEM)  preferential  rules  of  origin  is  applied  in 
Albania. 

The  Customs  Code's  rules  on  valuation  are  aligned  with  EU  rules.  The  risk  management 
system is automated and compares import, export and transit data against active risk profiles. 
However,  further  harmonisation  with  EU  rules  is  required.  The  legislation  on  customs 
enforcement of intellectual property rights is harmonised with the acquis. The customs control 
system  for  drug  precursors,  dangerous  chemical  products  and  ‘controlled  substances’  is 
harmonised  with  the  1988  UN  Convention  against  Illicit  Traffic  in  Narcotic  Drugs  and 
Psychotropic  Substances.  Differences  between  the  acquis  and  national  rules  on  cash  and 
goods transported in travellers’ baggage remain in relation to the amount to be declared (ALL 
1  million  or  ca.  EUR  7  500)  and  the  declaration  form.  ACA  does  not  impose  sanctions  for 
non-declarations or mis-declarations, but confiscates the cash and passes it on to the police or 
Attorney General’s office for criminal prosecution. 

On administrative and operational capacity, Albania adopted the Business Strategy of the 
Customs Administration which comprises the mission and strategic objectives for the period 
2017-2021,  including  an  objective  on  enhancing  IT  systems  and  platforms.  A  new 
organisational  structure  of  ACA  entered  into  force  in  January  2017,  further  amended  in 
January 2018, with the aim of strengthening professional training and implementation of the 
Code of Ethics  as well as  increasing transparency. In  2017, 148 disciplinary measures were 
taken  against  customs  officials,  including  95  cases  considered  by  the  Disciplinary 
Commission and 7 terminations of service. 

Electronic local customs clearance is functioning, but IT systems are only fully interconnected 
with  the  Directorate  General  of  Taxation  and  the  Directorate  General  of  Road  Transport, 
while conditions for direct access are created to police and prosecution. 

5.30.   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 is moderately prepared in the area of external relations. Some progress was made 
in coordinating and facilitating trade policy.  

In the coming year, Albania should in particular: 

→ implement the national action plan on trade policy coordination and facilitation; 

→ adopt the relevant legislation in the field of export control of dual-use goods, and prepare 
participation in the Wassenaar multilateral export control arrangement; 

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→ strengthen the administrative capacity of the team in the Ministry of Finance and Economy 
dealing  with  trade  with  the  EU  and  the  Central  European  Free  Trade  Agreement  (CEFTA); 
work  within  the  World  Trade  Organisation  (WTO)  framework,  in  particular  with  a  view  to 
implementing  smoothly  the  WB6  multiannual  action  plan  for  developing  a  Regional 
Economic Area (REA) in the Western Balkans. 

On the common commercial policy, Albania continued to coordinate its positions and align 
its policies closely with those of the EU, including within the WTO.  It has ratified the WTO 
Trade  Facilitation  Agreement  and  notified  its  list  of  commitments,  which  now  need  to  be 
carefully reviewed in order to speed up implementation. In addition, Albania needs to submit 
the notifications required under Articles 1.4, 10.6.2 and 12.2.2 of the WTO Trade Facilitation 
Agreement. 

The  NCTF  held  two  meetings  in  2017  and  adopted  a  national  action  plan  for  2017-2020 
which needs to be duly implemented. 

In  October 2016  Albania  adopted  its  national  control  list  of  dual-use  goods  in  line  with  the 
2015  Commission  Delegated  Regulation  on  the  control  of  exports,  transfer,  brokering  and 
transit  of  dual-use  items.  Further  alignment  with  the  acquis  on  export  controls  of  dual-use 
goods remains to be completed. There has been no progress towards Albania’s participation in 
the  Wassenaar  multilateral  export  control  arrangement.  Albania  has  not  transposed  the 
legislation  related  to  the  EU  Regulation  concerning  trade  in  certain  goods  which  could  be 
used  for  capital  punishment,  torture  or  other  cruel,  inhuman  or  degrading  treatment  or 
punishment.  

the 

During 
reporting  period,  Albania  signed  12  new  bilateral  agreements  on 
economic/trade/technical cooperation. In total, it has now in place bilateral agreements with 
36 countries, including 13 EU Member States. Albania has finalised an exercise in mapping 
and  analysing  bilateral  investment  treaties  (BITs)  with  regard  to  the  need  for  harmonising 
them with EU law. Albania has in place BITs with 45 countries and 6 more BITs are under 
negotiation with Slovakia, Iran, Canada, Morocco, Lebanon and Iceland.  

Albania  continued  its  active  participation  in  CEFTA.  In  addition,  it  made  important 
commitments  at  the  WB6  summit  in  Trieste  to  implement  a  multiannual  action  plan  for 
developing  a  REA  in  the  Western  Balkans.  Implementing  the  action  plan  will  deepen  and 
widen  economic  integration  within  the  region,  based  on  EU  rules  and  standards.  The 
government  of  Albania  has  established  a  mechanism  for  implementing  and  monitoring  the 
REA.  In  February  2018  the  Albanian  Government  adopted  the  draft  law  on  adoption  of 
additional  protocol  5  of  the  agreement  with  CEFTA  countries,  which  remains  pending 
adoption by Parliament. 

Administrative  and  operational  capacity  needs  to  be  strengthened:  following  the 
restructuring of the Ministry of Finance and Economy, organisational units in charge of trade 
with the EU, CEFTA and WTO are covered by an Ad Hoc Working Group composed of four 
experts.  This Working Group also cover functions of the Technical Secretariat supporting the 
National Committee for Trade Policy and Facilitation (NCTF). 

Albania  has  no  policy  framework  for  development  cooperation/aid  or  agency  for 
development  cooperation  with  third  countries.  The  2001  Law  on  Non-Profit  Organisations 
recognises the potential activities of such organisations in the field of humanitarian aid and 
entitles them to carry out development and humanitarian aid activities in and outside Albania. 

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5.31.   Chapter 31: Foreign, security and defence policy 
Member  States  must  be  able  to  conduct  political  dialogue  under  EU  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.  Some  progress  was  made  through  the  ongoing 
security  upgrade  of  armament  and  ammunition  storage  facilities.  The  newly  established 
national  Small  Arms  and  Light  Weapons  (SALW)  Commission  is  operational.  Albania 
continued  to  participate  in  military  crisis  management  missions  and  to  align  with  EU 
positions.  

In the coming year the country should in particular: 

→  finalise  the  work  on  an  evidence-based  strategy  on  SALWs,  continue  improving  the 
security of armament and ammunition storage facilities and establish a Firearms Focal Point 
in the Albanian State Police. 

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

Albania’s Ministry of Foreign Affairs and Ministry of Defence have sufficient structures to be 
able to  participate in the common  foreign and security policy and the common security and 
defence  policy.  On  the  common  foreign  and  security  policy,  Albania  supports  the  Global 
Strategy  for  the  European  Union’s  Foreign  and  Security  Policy.  Albania  aligned,  when 
invited, with all relevant EU declarations and Council decisions (100 % alignment) during the 
reporting  period.  (For  more  information  on  developments  concerning  the  International 
Criminal Court, see Political criteria — Regional issues and international obligations).  

Albania  continued  to  participate  in  some,  but  not  all,  international  export  control 
arrangements  and  instruments  on  non-proliferation.  The  next  step  would  be  starting  the 
process of adhering to the Wassenaar Arrangement. 

Albania  has  made  further  progress  in  implementing  the  action  plan  for  destroying  surplus 
weaponry. Clearance of hotspots  contaminated with  unexploded ammunition continues. The 
destruction  of  the  last  batch  of  1 987  SALWs  was  finalised  in  October  2016.  The  security 
upgrade of the armament and ammunition storage facilities in Qafe Molla was completed in 
December  2016.  Staff  from  the  Ministry  of  Defence  and  the  Albanian  State  Police  have 
undergone  specialised  training  in  the  physical  security  of  armaments  and  ammunition  and 
stockpile  management.  The  security  upgrade  of  the  Albanian  State  Police  central  armament 
storage and two evidence rooms in main police stations is expected to be completed in 2018. 
Albania is encouraged to establish a Firearms Focal Point in the Albanian State Police. 

An awareness campaign on the dangers of the misuse and illicit possession of weapons was 
implemented  in  November-December  2016  targeting  both  police  personnel  and  the  civilian 
population.  Following  the  campaign,  the  government  approved  a  three-month  amnesty  for 
voluntary  surrender  of  weapons  which  led  to  a  significant  collection  of  SALWs,  pieces  of 
explosives and ammunition. Albania is encouraged to examine and destroy weapons collected 
through this campaign. 

The  online  register  of  weapons  and  ammunition  is  currently  installed  in  police  stations 
throughout the country and the relevant personnel have been trained in the use of its software. 
In  June  2017  the  government  signed  the  decision  formally  establishing  the  inter-ministerial 

92 

 
 
 
SALW Commission with the task of coordinating and monitoring all SALW control-related 
activities  in  the  country.  The  National  SALW  Commission  is  now  operational.  In  February 
2018, Albania contributed to the unanimous adoption of a regional Joint Statement of deputy 
ministers of interior and foreign affairs of South-East Europe, strengthening its commitment 
towards SALW control in the region. 

Albania  continued  to  engage  actively  with  international  organisations.  It  maintained  a 
robust presence in a number of NATO missions, including some of strategic importance for 
the EU (e.g. NATO’s Maritime Group in the Aegean Sea deployed to contribute to European 
efforts to address the migration/refugee crisis).   

On security measures, negotiations are continuing on the arrangements for implementing the 
agreement  on  security  procedures  for  exchanging  and  protecting  classified  information, 
signed between the EU and Albania in March 2016. Concluding the negotiations will allow 
the agreement to enter into force. 

Albania  continued  to  actively  participate  in  military  crisis  management  missions  under  the 
common  security  and  defence  policy,  notably  EUFOR  Althea  in  Bosnia  and  Herzegovina 
and EUTM Mali. 

5.32.   Chapter 32: Financial control 
The  EU  promotes  the  reform  of  national  governance  systems  to  enhance  managerial 
accountability, sound financial management of income and expenditure, and external audit of 
public funds. 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 during the reporting 
period, especially with raising awareness on managerial accountability, piloting external audit 
manuals  in  line  with  international  standards  and  establishing  quality  control  measures.  The 
Commission’s  2016  recommendations  were  partially  implemented.  However,  several 
institutions do not fully implement the public internal financial control (PIFC) legislation, and 
the rate of implementing internal and external audit recommendations remains low.  

In the coming year, Albania should in particular: 

→  prepare  a  comprehensive  PIFC  policy  paper  with  a  specific  focus  on  managerial 
accountability; 

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

→  adopt  a  risk-based  external  audit  approach  that  will  outline  how  to  gradually  reduce  the 
number of compliance audits and increase financial and performance audits. 

Public internal financial control  

The  strategic  framework  is  broadly  in  place.  While  the  PIFC  reform  is  addressed  in  the 
2014-2020 public financial management reform strategy and its action plan, there is not yet a 
clear policy on managerial  accountability and how it applies to institutional responsibilities, 
resource  allocation,  reporting  on  the  achievement  of  objectives,  and  financial  management. 
The  2016  annual  PIFC  review  was  presented  to  the  Council  of  Ministers  and  published  in 
May 2017, while the main findings were discussed in the Parliament in June 2017. The PIFC 
Council  has  become  operational  in  2017  holding  two  meetings.  A  mechanism  for  effective 

93 

 
 
 
coordination,  monitoring  and  reporting  of  the  public  administration,  public  financial 
management and PIFC reforms still need to be put in place. 

Managerial  accountability  is  not  yet  well  embedded  in  the  administrative  culture,  despite 
several awareness-raising events in 2017. Following the restructuring in 2017, all ministries 
have  managerial  structures  broadly  aligned  with 
the  budget  structure.  Institutional 
accountability  is  hampered  by  unclear  accountability  and  reporting  lines  between  agencies 
and their parent institutions. Supervision over state-owned enterprises is limited. Performance 
management  is  not  yet  developed,  although  some  ministries  use  performance  indicators  to 
monitor  implementation.  Decision-making  in  the  institutions  is  centralised  with  very  little 
delegation  to  middle  management.  The  financial  management  and  control  law  defines 
accountability only in relation to financial management. Specific guidance, beyond the current 
legal framework on delegating duties of employees to governance units is needed (see Public 
administration reform). 

Legislation  on  internal  control  implementation  is  largely  in  line  with  the  internal  control 
framework of the Committee of Sponsoring Organisations (COSO) and the guidelines of the 
International  Organisation  of  Supreme  Audit  Institutions  (INTOSAI).  The  revised  financial 
management  and  control  manual  was  approved  in  November  2016.  Implementation  is  not 
systematic  by  all  institutions.  As  reported  in  May  2017,  93  %  of  budget  institutions  have 
internal control procedures in place. Risk management is still at an early stage, although 70 % 
of  institutions  have  prepared  risk  registers  and  corresponding  action  plans.  Declarations  of 
assurance are systematically signed by senior management, but in the absence of a delegation 
framework, they are more of a formal exercise. Centralised budget inspection is regulated in 
line with PIFC requirements. The Financial Inspection Directorate in the Ministry of Finance 
and Economy has four inspectors who are supported by a further 85 inspectors on a case-by-
case basis. In 2016 20 inspections were carried out compared to 5 in 2015. The work focuses 
on financial mismanagement, fraud, theft, property destruction, abuse of duty and corruption.  

The  legislation  on  internal  audit  practice  is  in  line  with  international  standards.  Manuals, 
codes of ethics and internal audit charters are in place. In 2017, the share of certified auditors 
in  the  public  sector  increased  compared  to  76  %  in  2016,  when  the  revised  national 
certification  scheme  was  first  implemented.  In  2017,  the  Central  Harmonisation  Unit 
(CHU) carried out a quality review in two ministries under a new methodology. Until the end 
of  2016,  49  municipalities  out  of  61  (80  %)  have  created  internal  audit  units  and  33  public 
units  have  not  performed 
internal  audit 
recommendations is high, 7 718 in 2016, with a shift from mainly financial aspects towards 
improving decision-making processes, policies, procedures and drafting of strategies. There is 
a high acceptance rate of recommendations by management, although the level of follow-up 
decreased from 62 % in 2015 to 47 % in 2016. 

internal  audit  service.  The  number  of 

The CHU provides methodological guidance and monitors implementation of internal control 
and  internal  audit,  by  analysing  self-assessment  reports  and  conducting  on-site  visits.  The 
2016  PIFC  report  provides  recommendations  on  improving  PIFC  implementation;  however 
the government needs to ensure a more systematic follow-up. 

External audit 

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

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Concerning institutional capacity, professional development of auditors has been a priority 
in  recent  years  with  on  average  25  training  days  per  auditor  per  year.  The  SAI  adopted  its 
2018  audit  plan  according  to  a  risk-based  assessment  methodology.  The  new  strategic 
development  plan  for  2018-2022  was  adopted  in  December  2017.  The  strategy  on 
communication for the period 2017-2019 was approved in July 2017. 

As  regards  the  quality  of  audit  work,  the  audit  activities  do  not  yet  comply  with  the 
International  Standards  of  Supreme  Audit  Institutions  (ISSAI).  The  focus  is  on  compliance 
audits determining economic damage and violations of rules, rather than on audits that could 
help prevent such damage in the first place. The focus on producing a large number of audit 
reports annually negatively impacts the quality of audit work and recommendations. Financial 
audits  do  not  yet  result  in  professional  audit  opinions.  New  compliance  and  financial  audit 
manuals were first piloted in 2016. The first IT audits were conducted in 2016 and 2017. A 
Code  of  Ethics  from  December  2016  guides  audit  work.  In  2017,  SAI  took  steps  towards 
improving  quality  assurance  and  control  in  line  with  ISSAI.  In  May  2017  the  SAI  and  the 
CHU  signed  a  new  Memorandum  of  Understanding  to  better  coordinate  and  monitor  the 
follow-up to audit recommendations. 

The impact of audit work is limited. In 2017, 52 % of SAI’ recommendations for legal and 
organisational  improvements  were  accepted  by  auditees  and  of  these  68  %  are  under 
implementation. Audit reports are summarised quarterly and published on a regular basis on 
the SAI website. The SAI 2016 annual audit report was submitted to Parliament and presented 
to the Economy and Finance Committee in October 2017. 

Protection of the EU’s financial interests  

As  regards  acquis  alignment,  the  main  elements  are  in  place.  The  national  Anti-Fraud 
Coordination  Service  (AFCOS)  is  a  unit  within  the  Directorate  of  Financial  Inspection,  in 
the  Ministry  of  Finance  and  Economy.  An  AFCOS  network,  involving  other  relevant 
authorities,  is  in  place.  The  irregularity  management  manual  was  approved  and  the 
cooperation  agreements  with  relevant  national  institutions  were  signed  in  2016.  Albania’s 
cooperation  with  the  European  Commission  includes  cooperation  during  on-the-spot 
missions and irregularity reporting through the Irregularities Management System. So far, 1 
case has been reported through the system since 2015. There is no anti-fraud strategy yet in 
place  to  address  the  protection  of  the  EU’s  financial  interests.  Effective  capacity  to  carry 
out investigation activities has yet to be ensured and a solid track record in investigations and 
reporting on irregularities 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.  Technical  analysis  is  performed  by  the  National 
Analysis Centre of the National Bank. 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 takes part in 
the  actions  of  the  Pericles  2020  programme.  Albania  has  an  agreement  with  Europol  on 
cooperation in combating the counterfeiting of currency and means of payment since 2014. 

95 

 
 
 
 
5.33.   Chapter 33: Financial and budgetary provisions 
This  chapter  covers  the  rules  governing  the  funding  of  the  EU  budget  ("own  resources"). 
These resources mainly consist of i) contributions based on the gross national income of each 
Member  State;  ii)  customs  duties;   and  iii)  a  resource  based  on  value-added  tax.  Member 
States  must  have  the  appropriate  administrative  capacity  to  adequately  co-ordinate  and 
ensure the correct calculation, collection, payment and control of own resources.  

Albania  has  some  level  of  preparation  in  this  area.  Some  progress  was  made  in  the 
underlying  policy  areas  that  affect the  functioning  of  the  EU  funding  system.  This  progress 
consists  in  implementation  of  the  2016  Organic  Budget  Law,  the  fiscal  rule  and  the 
continuation of the public finance management reform.  

Albania should make efforts to: 

→  further  align  its  relevant  legislation  with  the  European  System  of  National  and  Regional 
Accounts (ESA 2010) requirements; 

→ further align its legislation with the EU provisions on VAT and customs duties; 

→  set  up  solid  coordination  structures  and  implementing  rules  and  working  procedures  to 
ensure that it will be able to collect, control, manage and report on its own resources in line 
with the EU acquis. 

There  was  some  progress  on  the  underlying  policy  areas  affecting  indirectly  the  own 
resources  system  (see  chapters  16-Taxation,  18-Statistics,  29-Customs  union  and  32–
Financial control). 

Albania has structures in place for levying customs duties at the point of import, it operates a 
national  VAT  system  and  the  national  accounts  and  GDP  and  GNI  estimates  are  partially 
based  on  ESA  2010  standards.  Although  the  Institute  of  Statistics  has  taken  measures  to 
systematically  evaluate  all  potential  sources  of  non-exhaustiveness,  considerable  efforts 
remain necessary to ensure the exhaustiveness of the national accounts and GNI calculations. 
Additional  efforts  are  needed  to  ensure  effective  measures  are  taken  to  formalise  the  grey 
economy and combat fiscal evasion and customs duty fraud. 

Some amendments to property tax, income tax and the VAT tax base that were introduced in 
the 2018 fiscal package are expected to improve tax collection and management and increase 
general tax revenues.  

On  administrative  infrastructure,  the  Ministry  of  Finance  and  Economy  has  overall 
responsibility for financial and budgetary issues. Albania will need to work on setting up the 
relevant  institutions  involved  in  the  own  resources  system,  a  coordination  body  and 
implementing rules. These are needed to ensure that from accession it will be able to correctly 
calculate, forecast, account for, collect, pay, control and report to the EU on own resources in 
line with the acquis. 

96 

 
 
 
 
 
 
 
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. The European Council of June 2014 endorsed the decision of the General Affairs 
Council  granting  Albania  candidate  status.  In  November  2016  in  view  of  the  progress  in 
meeting the key priorities the Commission recommended opening accession negotiations with 
Albania subject to credible and tangible progress in the implementation of the justice reform, 
in particular the re-evaluation of judges and prosecutors (vetting).  

In  the  reporting  period,  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  October  and  November  2017,  respectively. 
Meetings  of  subcommittees  and  of  the  special  group  on  public  administration  reform  were 
held.  The  Stabilisation  and  Association  Parliamentary  Committee  gathered  in  Tirana  in 
February 2018.  

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  the  European  Border  and 
Coast Guard Agency (EBCGA).  

A readmission agreement between the EU and Albania has been in force since 2006. Albania 
signed the draft status agreement for operational cooperation with EBCGA, which will enable 
the deployment of EBCGA teams with executive powers on Albanian territory, and ensure a 
better management of irregular migration. Albania signed in February 2018 the Memorandum 
of Understanding on the drugs component of the EU Justice Programme. 

The  EU  provided  financial  assistance  to  Albania  under  the  Instrument  for  Pre-accession 
Assistance (IPA I) in 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 2012 and 2013 national programmes. Under IPA II (2014-2020), Albania benefits, in line 
with the priorities set out in the indicative strategy paper, from pre-accession assistance with a 
total  indicative  allocation  of  EUR  649.4  million.  The  Framework  Agreement  for  IPA  II 
entered into force in April 2015. The 2014-2017 action programmes for Albania provide EUR 
170 million to promote reforms in key sectors such as democracy and governance and rule of 
law  and  fundamental  rights  and  provide  EUR  113  million  to  invest  in  competitiveness  and 
growth.  They  include  budget  support  operations  for  public  finance  management,  public 
administration  reform,  employment  and  vocational  education  and  training,  home  affairs  and 
transport as well as an EU integration facility. Albania benefits from support under the IPA 
multi-country  programme  and  it  participates  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  with  IPA  support  in  the  EU 
programmes  Erasmus+,  Creative  Europe  (Culture  and  Media  strands),  Employment  and 

97 

 
 
 
 
Social  Innovation,  Horizon  2020,  Customs  2020,  Fiscalis  2020,  Competitiveness  of 
Enterprises and Small and Medium-Sized Enterprises Programme (COSME) and Europe for 
Citizens. 

98 

 
 
 
ANNEX II – STATISTICAL ANNEX 

STATISTICAL DATA (as of 19.02.2018) 

Albania 

Basic data 

Population (thousand) 

Note 

2005 

2012 

2013 

2014 

2015 

2016 

3 135 

: 

2 899 

2 896e 

2 892e 

2 886 

Total area of the country (km²) 

28 750 

28 750 

28 750 

28 750 

28 750 

28 750 

National accounts 

Note 

2005 

2012 

2013 

2014 

2015 

2016 

Gross domestic product (GDP) (million 
national currency) 

Gross domestic product (GDP) (million 
euro) 

GDP (euro per capita) 

GDP per capita (in purchasing power 
standards (PPS)) 

GDP per capita (in PPS), 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 
(in volume) 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 (2010 = 100) 

Labour productivity per person employed: 
GDP (in PPS) per person employed relative 
to EU average (EU-28 = 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 (%) 

804 16
3 

1 332 81
1 

1 350 05
3 

1 395 30
5 

1 427 79
9p 

1 472 79
1p 

6 475 

9 586 

9 625 

9 969 

10 218p 

10 722p 

2 150 

5 000 

3 305 

8 000 

3 325 

7 800 

3 450 

8 300 

3 547 

8 500 

3 728 

8 500 

21 

30 

5.5 

1.4 

29 

1.0 

30 

1.8 

29 

29 

2.2p 

3.4p 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

21.5 

11.1 

17.5 

49.9 

88.0 

21.7 

13.3 

13.1 

51.9 

88.8 

22.4 

14.6 

11.8 

51.2 

91.1 

22.9 

14.8 

9.9 

52.4 

92.2 

22.9p 

13.9p 

10.2p 

53.0p 

92.4p 

37.9 

26.5 

26.1 

24.2 

24.6p 

99 

: 

: 

: 

: 

: 

22.9p 

13.2p 

10.5p 

53.4p 

: 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 
(%) 

: 

1.8 

2.0 

1.5 

1.7p 

23.0 

28.9b 

28.7 

28.2 

27.4p 

47.9 

47.6b 

47.0 

47.2 

44.7p 

: 

: 

: 

: 

: 

: 

: 

: 

: 

Business 

Industrial production volume index (2010 = 
100) 

Note 

2005 

47.1 

2012 

143.5 

2013 

172.7 

2014 

178.0 

2015 

161.7 

2016 

130.5 

Number of active enterprises (number) 

1) 

46 261 

77 508 

78 950 

78 920 

95 184 

: 

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) 

14.5 

12.0 

10.9 

15.4 

: 

: 

: 

: 

: 

: 

2) 

80.4 

81.4 

81.0 

80.1 

81.7 

2) 

2) 

843 

2 020 

1 867 

1 949 

2 083 

1 345 

2 918 

2 803 

2 871 

3 124 

19.5 

: 

: 

: 

: 

Inflation rate and house prices 

Note 

2005 

2012 

Consumer price index (CPI), change relative 
to the previous year (%) 

3) 

2.0 

2.4 

2013 

1.9 

2014 

0.7 

2015 

2.0 

2016 

2.2 

**Annual change in the deflated house price 
index (2010 = 100) 

: 

: 

: 

: 

: 

: 

Balance of payments 

Note 

2005 

2012 

-978 

2013 

-891 

2014 

-1 076 

2015 

-884 

2016 

-812 

-589 

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 
balance for primary income (million euro) 

4) 

4) 

4) 

4) 

-1 477 

-2 226 

-1 963 

-2 216 

-2 299 

-2 603 

-140 

440 

226 

323 

525 

797 

131 

-72 

166 

91 

122 

174 

100 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance of payments current account: net 
balance for secondary income (million euro) 

Net balance for primary and secondary 
income: 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 balance (inward - outward) of 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 (%) 

4) 

897 

880 

680 

725 

768 

821 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

-11.5p 

-10.8p 

-10.1 

-9.6p 

-9.0p 

: 

: 

: 

: 

: 

647.9 

923.2 

811.5 

818.4 

936.5 

65.1 

21.6 

57.7 

71.9 

6.1 

: 

: 

: 

: 

: 

712.9 

944.8 

869.2 

890.4 

942.5 

: 

: 

259.5 

272.7 

319.5 

242.3 

: 

-42.9 

-43.2 

: 

0.7 

-18.9 

8.0 

1.2 

0.9 

Note 

2005 

-3.5 

2012 

-3.4 

2013 

-5.0 

2014 

-5.2 

2015 

-4.1 

2016 

-1.8 

58.2 

58.2 

61.7 

66.1 

69.1 

68.7 

25.4 

24.8 

24.2 

26.3 

26.6 

27.6 

28.9 

28.2 

29.2 

31.5 

30.6 

29.4 

Financial indicators 

Note 

2005 

2012 

57.5 

2013 

66.2 

2014 

69.5 

2015 

74.7p 

2016 

73.5p 

25.6 

Gross external debt of the whole economy, 
relative to GDP (%) 

Gross external debt of the whole economy, 
relative to total exports (%) 

4) 

4) 

Money supply: M1 (banknotes, coins, 
overnight deposits, million euro) 

Money supply: M2 (M1 plus deposits with 
maturity up to two years, million euro) 

110.6 

198.6 

228.8 

246.3 

272.7 

253.5 

1 801 

2 023 

2 109 

2 524 

2 749 

3 170 

3 434 

4 816 

4 942 

5 161 

5 174 

5 365 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (%) 

**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, 42 countries (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) 

4 614 

8 080 

8 192 

8 538 

8 703 

9 198 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

5) 

6) 

7) 

4.10 

4.47 

3.80 

2.92 

2.26 

1.49 

12.38 

10.28 

9.52 

7.66 

7.77 

5.89 

5.08 

5.38 

4.17 

1.92 

1.35 

0.80 

124.19
0 

: 

: 

139.040 

140.262 

139.97 

139.74 

137.364 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

1 208 

1 972 

2 015 

2 192 

2 880 

2 945 

External trade in goods 

Note 

2005 

2012 

2 096 

3 797 

2013 

3 699 

2014 

3 941 

2015 

3 882 

2016 

4 169 

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 (%) 

159 

1 531 

1 761 

1 827 

1 728 

1 771 

-1 566 

-2 267 

-1 938 

-2 114 

-2 154 

-2 399 

89 

115 

119 

119 

120 

116 

75.5 

75.6 

76.7 

77.4 

75.4 

77.9 

71.3 

63.2 

64.3 

61.1 

61.8 

63.1 

Demography 

Note 

2005 

2012 

Crude rate of natural change of population 
(natural growth rate): number of births 

7.2 

: 

2013 

5.3e 

2014 

5.2e 

2015 

3.6e 

2016 

: 

102 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 

7.6 

: 

: 

: 

: 

: 

Labour market 

Note 

2005 

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 (%) 

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 

8) 

9) 

9) 

9) 

7.9 

7.9 

7.1 

: 

: 

76.3e 

80.2e 

2014 

68.6e 

76.2e 

79.7e 

2015 

71.3e 

: 

: 

: 

2016 

73.3e 

2012 

71.9e 

2013 

67.6e 

62.4e 

56.7e 

56.6e 

59.3e 

62.1e 

70.1e 

64.8e 

65.2e 

68.1e 

69.4e 

54.9e 

49.3e 

48.5e 

50.7e 

55.0e 

56.3e 

51.1e 

51.2e 

53.6e 

54.8e 

46.1e 

44.0e 

9.1e 

8.2e 

36.6e 

15.7e 

9.7e 

7.1e 

39.2e 

17.8e 

42.7e 

11.0e 

6.4e 

39.9e 

17.5e 

41.3e 

11.6e 

6.9e 

40.2e 

16.7e 

40.2e 

12.8e 

6.5e 

40.5e 

15.6e 

84.3e 

82.2e 

82.5e 

83.3e 

84.4e 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

14.1 

13.4e 

15.9e 

17.5e 

17.1e 

15.2e 

14.6e 

11.7e 

29.8e 

17.8e 

13.5e 

31.4e 

19.2e 

15.2e 

39.0e 

17.1e 

17.1e 

39.8e 

15.9e 

14.4e 

36.5e 

10.3e 

11.5e 

11.2e 

11.3e 

10.1e 

10.5e 

13.6e 

13.4e 

12.0e 

11.8e 

12.1 

17.2 

: 

: 

: 

103 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
secondary education (ISCED levels 0-2) (%) 

Unemployment rate for persons (aged 25–
64) having completed tertiary education 
(ISCED levels 5-8) (%) 

: 

: 

: 

: 

: 

: 

Social cohesion 

Note 

2005 

2012 

2013 

2014 

2015 

2016 

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) (2010 = 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 (%) 

10) 

26 808 

50 093 

52 150 

53 025 

54 000 

54 488 

10) 

83.8 

108.8 

111.1 

111.2 

111.1 

110.7 

11) 

30 

3.9 

: 

27 

3.0 

: 

: 

: 

: 

: 

: 

: 

: 

31.6e 

30.6e 

26.0e 

21.3e 

19.6e 

Standard of living 

Note 

2005 

2012 

2013 

62.2 

: 

: 

2014 

130.5 

2015 

139.6 

2016 

151.1 

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) 

509.3e 

2 015.0 

1 822.5 

1 742.5 

1 697.9 

1 836.5 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

Note 

2005 

15.8 

2012 

14.6 

2013 

12.6 

2014 

12.6 

2015 

13.8 

2016 

12.2 

Length of motorways (kilometres) 

3 

: 

: 

: 

: 

: 

Innovation and research 

Note 

2005 

2012 

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 (%) 

3.3 

3.3 

: 

: 

: 

: 

104 

2013 

3.3 

2014 

3.3 

2015 

3.1p 

2016 

3.1p 

: 

: 

: 

: 

: 

: 

: 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of households who have internet 
access at home (%) 

1.7 

14.3 

: 

23.8b 

25.0 

: 

Environment 

Note 

2005 

2012 

2013 

2014 

2015 

2016 

*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 solid fuels (thousand 
TOE) 

Primary production of gas (thousand TOE) 

Net imports of all energy products (thousand 
TOE) 

Gross inland energy consumption (thousand 
TOE) 

91e 

: 

: 

: 

: 

: 

318.5 

224.6 

250.1 

243.8 

223.6p 

223.1p 

93.6 

65.1 

75.0 

60.6 

80.8 

100.5 

: 

: 

: 

: 

: 

: 

Note 

2005 

2012 

1 097 

1 605 

2013 

1 966 

2014 

1 876 

2015 

2 071 

2016 

1 936 

383 

966 

1 138 

1 231 

1 276 

1 031 

11 

9 

1 119 

1 

1 

0 

34 

2 

13 

461 

15 

670 

25 

809 

27 

282 

35 

486 

2 216 

2 101 

2 363 

2 345 

2 199 

2 267 

Gross electricity generation (GWh) 

5 443 

4 725 

6 959 

4 724 

5 895 

7 782 

Agriculture 

Note 

2005 

2012 

2013 

2014 

2015 

2016 

Agricultural production volume index of 
goods and services (at producer prices) 
(2010 = 100) 

: 

: 

: 

: 

: 

: 

Utilised agricultural area (thousand hectares) 

1 077 

1 201 

1 190 

1 178 

1 175 

1 182 

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) 

Raw milk available on farms (thousand 
tonnes) 

655 

498 

498 

500 

504 

492 

147 

159 

152 

172 

171 

181 

2 701 

2 619 

2 723 

2 800 

2 751 

2 913 

1 076 

1 105 

1 131 

1 133 

1 131 

1 145 

Harvested crop production: cereals 

12) 

511 

697 

703 

700 

696 

698 

105 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 

0 

0 

0 

0 

0 

685 

914 

924 

950 

1 030 

1 129 

(including rice) (thousand tonnes) 

Harvested crop production: sugar beet 
(thousand tonnes) 

Harvested crop production: vegetables 
(thousand tonnes) 

: = 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)  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. 

2)  2005: based on NACE Rev. 1.1; coverage is Divisions 10 to 74. 2012-2015: based on NACE Rev. 2; coverage 

is Divisions 05 to 82 and 95. 

3)  Variation between December of one year and December of the previous year. 

4)  2005: based on balance of payments manual edition 5 (BPM5). 

5)  Annual average of the Tribor rate – interbank rate for overnight loans. 

6)  Average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity. 

7)  Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective 

month, on 12-month maturity. 

8)  2013 and 2014: including persons who have not or could not be classified to a particular activity. 

9)  2005: administrative data. 

10)  Public sector. 

11)  Measured by consumption.  

12)  Excluding rice. 

106