gent sejko : albania's participation process in the single euro payments area address by mr gent sejko, governor of the bank of albania, at the hearing of the european affairs committee of the albanian parliament on the preparation of albanian institutions regarding albania's participation process in the single euro payments area ( sepa ), tirana, 17 july 2024. * * * honourable chair, honourable members of the committee, first of all, thank you for the invitation and the opportunity to share with you the work we have dedicated to the first step towards the economic integration in the european union. this step regards to the official submission of albania's application to the european payments council, for participating in the single euro payments area, also known as sepa. the application was sent in june, as scheduled in the action plan. given the multi - dimensional importance of sepa, i extend my gratitude for the attention expressed by this committee in the process of albania's membership into sepa. its successful finalisation will benefit from the support of all the public institutions involved in the integration processes. before delving into more details regarding the application process, allow me to briefly summarise its history and context. the work for albania's participation in sepa has started in 2021, when the bank of albania became part of the regional project " payments modernization in the western balkans ". this project originates from the agreements achieved under berlin process and aims at developing financial and economic relationships among western balkan countries, while simultaneously integrating the region into the european union. in november 2023, the european commission, to encouraging the efforts made by the countries to expand their economic integration with the european market, included the accelerated participation in sepa in their priority agenda of regional enlargement. previous assessments of the world bank experts showed that albania was noticeably prepared to start the application, since it fulfilled almost all the criteria. in particular, it was assessed that albania had made a significant progress regarding the alignment of its payment legislation with that of the european union. the commitment to start the application for membership in sepa was re - highlighted in the ministerial as well : " the western balkans toward the single euro payments area ( sepa ) ", which was held on 28 february of current year, where albania expressed its dedication to submit the application by june. the bank of albania has led and coordinated the work for submitting the application. however, to accomplish this task, the contribution and cooperation of other public institutions,

list last year, removed a barrier that prevented it from fulfilling the application criteria. our legislation regarding money laundering is assessed as generally compliant with the acquis, although some legal amendments are still necessary. we are in close contact with our colleagues at the financial intelligence agency, as we discuss how to address these issues which will successfully support albania's application. however, allow me to highlight that a beneficial contribution originating from participation in sepa, besides the formalisation of the economy, is the possibility to implement in a more rigorous manner money laundering. more concretely, shortening the payment cycle and including fewer actors in this process, gives lawabiding institutions the possibility to monitor more effectively. furthermore, the practices 2 / 5 bis - central bankers'speeches and standards of sepa schemes implement the advanced communication standard ( iso 20022 ) to create the necessary pre - conditions so that the monitoring of transactions is rendered in a more effective manner. other legal aspects comprising the necessary criteria to participate in sepa are related to the protection of competition and personal data, free capital movement, taxation according to international standards, private international rights, etc. the assessment of relevant authorities, supported also by the conclusions of screening meetings, show that our legislation is adequately aligned with the acquis, in the context of sepa. albania's application will be analysed by the european payments council, which manages the sepa schemes, as well as the european commission. the latter should agree to include albania in the geographical scope of the sepa schemes in the context of integrating non - member countries in the european market, based on the same rules and standards. participation in sepa, beyond the political importance of the country's integration in the european union, brings a series of benefits for albanian consumers, businesses and the economy. first, cross - border payments in euro are conducted at the same costs with national payments. this means cheaper and faster payments with the countries which are sepa members. currently, transfers and payments with the european union countries and vice versa are conducted through correspondent banks. this is a costly and inefficient channel in terms of : transaction execution time ; monitoring of its finalization ; transparency of working conditions ; and consumer protection. through sepa, the costs of cross - border euro payments with its member countries are at a minimum 5 times lower. most of cross - border financial transactions are conducted with the eu countries - around 58 % of goods'trading. at the same time,