EUROPEAN
COMMISSION

Brussels, 10.11.2015
SWD(2015) 213 final

COMMISSION STAFF WORKING DOCUMENT
ALBANIA
2015 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

EU Enlargement Strategy
{COM(2015) 611 final}
{SWD(2015) 210 final}
{SWD(2015) 211 final}
{SWD(2015) 212 final}
{SWD(2015) 214 final}
{SWD(2015) 215 final}
{SWD(2015) 216 final}

EN

EN

Table of Contents
1.

INTRODUCTION....................................................................................................... 4
1.1. Context .............................................................................................................. 4
1.2. Summary of the report....................................................................................... 4

2.

POLITICAL CRITERIA............................................................................................. 6
2.1.
2.2.
2.3.
2.4.
2.5.

3.

Democracy ........................................................................................................ 6
Public administration reform............................................................................. 9
Rule of law ...................................................................................................... 12
Human rights and the protection of minorities................................................ 20
Regional issues and international obligations ................................................. 22

ECONOMIC CRITERIA .......................................................................................... 23
3.1. The existence of a functioning market economy............................................. 24
3.2. The capacity to cope with competitive pressure and market forces within
the Union ......................................................................................................... 29

4.

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP...................... 31
4.1. Chapter 1: Free movement of goods ............................................................... 31
4.2. Chapter 2: Freedom of movement for workers ............................................... 32
4.3. Chapter 3: Right of establishment and freedom to provide services............... 32
4.4 Chapter 4: Free movement of capital .............................................................. 33
4.5. Chapter 5: Public procurement........................................................................ 34
4.6. Chapter 6: Company law................................................................................. 36
4.7. Chapter 7: Intellectual property law................................................................ 36
4.8. Chapter 8: Competition policy ........................................................................ 37
4.9. Chapter 9: Financial services .......................................................................... 38
4.10. Chapter 10: Information society and media .................................................... 38
4.11. Chapter 11: Agriculture and rural development.............................................. 39
4.12. Chapter 12: Food safety, veterinary and phytosanitary policy........................ 40
4.13. Chapter 13: Fisheries....................................................................................... 41
4.14. Chapter 14: Transport policy........................................................................... 42
4.15. Chapter 15: Energy.......................................................................................... 43
4.16. Chapter 16: Taxation ....................................................................................... 44
4.17. Chapter 17: Economic and monetary policy ................................................... 45
4.18. Chapter 18: Statistics....................................................................................... 46
4.19. Chapter 19: Social policy and employment .................................................... 47
4.20. Chapter 20: Enterprise and industrial policy................................................... 49
4.21. Chapter 21: Trans-European networks............................................................ 49
4.22. Chapter 22: Regional policy and coordination of structural instruments........ 50
4.23. Chapter 23: Judiciary and fundamental rights................................................. 51
4.24. Chapter 24: Justice, freedom and security ...................................................... 61
4.25. Chapter 25: Science and research.................................................................... 65
2

4.26. Chapter 26: Education and culture .................................................................. 66
4.27. Chapter 27: Environment and climate change ................................................ 67
4.28. Chapter 28: Consumer and health protection .................................................. 68
4.29. Chapter 29: Customs union ............................................................................. 70
4.30. Chapter 30: External relations......................................................................... 70
4.31. Chapter 31: Foreign, security and defence policy........................................... 71
4.32. Chapter 32: Financial control .......................................................................... 72
4.33. Chapter 33: Financial and budgetary provisions............................................. 74
Annex I – Relations between the EU and Albania.................................................... 75
Annex II – Statistical Annex ..................................................................................... 77

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1.

INTRODUCTION1

1.1.

Context

In June 2014, the European Council granted Albania candidate status. In the past year,
Albania has implemented smoothly its obligations under the Stabilisation and Association
Agreement (SAA). Regular political and economic dialogue between the EU and Albania has
continued through the relevant structures under the SAA. The government engaged in EUrelated reforms and in addressing the five key priorities identified for the opening of accession
negotiations.2 Albania continued to actively participate in high level dialogue meetings, as
well as in the related joint working groups on the five key priorities.
1.2.

Summary of the report

As regards the political criteria, the local elections in June 2015 were conducted without
major incidents. Concerns about the impartiality and professionalism of the electoral
authorities and the overall politicisation of the electoral process have yet to be addressed. In
December 2014, the parliament adopted a resolution outlining the basis for the ruling majority
and the main opposition party to engage in a continuous constructive political dialogue. This
ended a six-month parliamentary boycott by the main opposition party. However, more needs
to be done to address the divisive political culture and ensure a more constructive cross-party
dialogue.
As concerns public administration reform, Albania is moderately prepared. Comprehensive
reform strategies and the new Code of Administrative Procedures were adopted. However,
efforts are needed to achieve the objective of a professional and depoliticised public
administration, to increase the financial and administrative capacity of local government units
and to ensure effective implementation of the civil service law at local level.
Albania's judicial system is at an early stage of preparation. Substantial shortcomings in the
judicial system remain regarding independence and accountability of judges and prosecutors,
enforcement of decisions, inter-institutional cooperation, and the administration of justice
which remains slow. An ad hoc parliamentary committee was established to conduct a
comprehensive and inclusive justice reform. The next crucial steps are the adoption of the
judicial reform strategy and action plan followed by the adoption of the necessary
institutional, legislative and procedural measures.
Albania has reached some level of preparation in the fight against corruption. A new anticorruption strategy and action plan were adopted. However, corruption is widespread and
more efforts are needed to make progress with a view to establishing a solid track record of
investigations, prosecutions and convictions at all levels. Proactive investigations, systematic
risk assessments and inter-institutional cooperation need to be improved. The independence of
institutions involved in the fight against corruption needs to be enhanced, as they remain
vulnerable to political pressure and other undue influence.
The country has reached some level of preparation as regards the fight against organised
crime. Albania conducted a number of law enforcement operations leading to the destruction
1

This report covers the period from October 2014 to September 2015. It is based on input from a variety of
sources, including contributions from the government of Albania, the EU Member States, European Parliament
reports and information from various international and non-governmental organisations. As a rule, legislation or
measures which are under preparation or awaiting parliamentary approval have not been taken into account.
2
See Enlargement Strategy and Main Challenges 2013-2014.

4

of vast cultivations of cannabis. However, the number of final convictions effectively leading
to dismantling criminal organisations remains negligible compared to the estimated value of
the regional and domestic criminal market. Financial investigations, anti-money laundering
measures and asset confiscation remain underused. Albania needs to establish a track record
of proactive investigations, prosecutions and final convictions in organised crime cases,
including money laundering, and effectively dismantle criminal networks.
The legal framework for the protection of human rights is broadly in line with European
standards. However, effective implementation of relevant legislation and strategies is limited
and the enforcement of human rights protection mechanisms remains insufficient. As regards
freedom of expression, Albania has reached some level of preparation. The overall
environment is generally conducive to the freedom of expression, but better implementation
of the legislation is needed. The independence of the regulatory authority and public
broadcaster must be further strengthened. Enforcement of property rights remains to be
ensured, and the processes of property registration, restitution and compensation are not
completed. Roma and Egyptians face very difficult living conditions and frequent social
exclusion and discrimination. In the area of anti-discrimination, the case-law needs to be
further developed. Institutional mechanisms to protect the rights of the child remain poor. The
juvenile justice system fails to comply with international standards.
Albania has continued to participate actively in regional cooperation and maintain good
neighbourly relations in line with its commitments under the Stabilisation and Association
Agreement.
As regards the economic criteria, Albania is moderately prepared in developing a functioning
market economy. Some progress was made in improving macroeconomic stability and growth
prospects improved. Inflation remained low. However, significant challenges remain. Further
efforts are needed to sustain fiscal consolidation, improve the business environment and
tackle the informal economy. Albania should also improve the budget management
framework and address the high level of non-performing loans. The levels of unemployment
(17.5%) and informal employment remain high.
Concerning the capacity to cope with competitive pressure and market forces within the
Union, Albania has some level of preparation. Some progress was made as regards education,
transport and energy infrastructure. However, significant investment in human and physical
capital is necessary to improve Albania's competitiveness. Albania should improve the quality
of higher education and continue restructuring the vocational education and training, adopt
and implement the national transport and energy strategies and lower non-tariff barriers to
trade such as shortcomings in food safety.
Albania continued aligning its legislation to the requirements of the EU in a number of areas,
enhancing its ability to take on the obligations of membership. In many areas, the country
is moderately prepared, such as in financial control, or has some level of preparation,
including in the areas of public procurement and statistics. However, Albania will need to
make substantial efforts to upgrade its preparations for implementing the acquis. It should
continue work on the development of the transport and energy network. The administrative
capacity and professional standards of bodies charged with the implementation of the acquis
needs 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.
Albanian authorities are expected to pursue their efforts to tackle the increasing number of
manifestly unfounded asylum applications lodged by its citizens to EU Member States and
5

Schengen-associated countries. All activities to counter this negative phenomenon shall be
intensified via the post-visa liberalisation monitoring mechanism, particularly after the recent
increase over the summer.
2.

POLITICAL CRITERIA

2.1.

Democracy

Elections
The local elections in June 2015 were conducted without major incidents. Concerns about the
impartiality and professionalism of the electoral authorities and the overall politicisation of
the electoral process have yet to be addressed.
While no major incidents occurred in the June local elections, a number of shortcomings
affected the process. Many cases of group voting and procedural irregularities were noted by
international observers. The OSCE’s Office for Democratic Institutions and Human Rights
(OSCE/ODIHR) raised concerns about the impartiality and professionalism of the electoral
authorities and the overall politicisation of the electoral process. Local elections were based
on the new territorial administrative division, which provided for 61 municipalities. In April,
amendments were made to the Electoral Code to reflect the new boundaries. They also
strengthen the gender quota provisions for local elections, requiring 50 % representation of
each sex on lists of candidates, in line with OSCE/ODIHR and Venice Commission
recommendations. Other OSCE/ODIHR recommendations have not been addressed, including
those on enhancing the impartiality of electoral commissions, transparent campaign financing
and effective resolution of electoral disputes.
The Central Election Commission (CEC) has been at full capacity since January, when
parliament appointed three members whose appointment had been pending since April 2013.
The overall impartiality and professionalism of the electoral administration remain a concern.
Parliament
Some progress has been made in the functioning of parliament, in particular by improving the
transparency of law-making. A more constructive cross-party dialogue remains to be ensured.
Initial steps were taken to prepare legislation for the exclusion of criminal offenders from
public offices.
In December, a six-month parliamentary boycott by the main opposition party ended when
parliament adopted a resolution whereby the ruling majority and the main opposition party
pledged to engage in constructive political dialogue. They also agreed to revise the rules of
procedure on parliamentary committees, and to work on drafting legislation for the exclusion
of criminal offenders from public offices. The implementation of this agreement started with
the establishment of two parliamentary committees of inquiry and an ad hoc committee to
work on the exclusion of criminal offenders from public offices. The adoption of the related
legislation would enhance the citizens' trust in political representatives and public institutions.
The work of the committees remains affected by political polarisation. In July, the parliament
approved the new composition of the ad hoc committee on judicial reform based on parity of
members of the ruling majority and the opposition. In November, parliament amended its
rules of procedure, granting the main opposition party the same amount of speaking time as
the Prime Minister. Constructive dialogue in parliament and its technical bodies needs to be
ensured.

6

Parliament lifted the immunity of three MPs from the ruling majority, and rejected seven of
the President’s nominations to the High Court.
In March, parliament enacted a new law on its role in the EU integration process, providing
for more inclusiveness, oversight and exchange of information. This was followed in May by
the establishment of the National Council for European Integration to make the EU-related
reform process more inclusive. Parliament’s capacity to monitor the implementation and
compliance of new legislation with EU law remains limited. Coordination with the executive
branch needs to be enhanced. Other oversight mechanisms, such as question and answer
sessions, remain underused.
Parliament continued to monitor the work of independent institutions and discussed their
reports more promptly and thoroughly. However, appropriate follow-up to their findings
needs to be ensured.
Transparency and inclusiveness in the legislative process have improved. Parliamentary
committees have generally been proactive in holding consultations with civil society and
interest groups. A resolution on the role of civil society in the country’s democratic
development was adopted in December. Parliament’s organisational structure and
administrative and expert capacity need to be further improved, which requires the allocation
of sufficient funds to recruit and train staff, especially in relation to research and analysis.
Governance
The government has maintained its focus on addressing the key priorities for the opening of
accession negotiations, pursuing a set of reforms necessary to advance in the EU integration
path. Some progress has been made at local government level with the start of implementation
of the territorial administrative reform and the adoption of the decentralisation strategy.
However, substantial efforts are needed to clarify the functions and responsibilities of the
newly created local government units and to increase their financial and administrative
capacity.
Some steps have been taken to improve inter-institutional coordination. Working groups in
specific sectors have been reorganised to improve monitoring of policy developments and to
provide strategic advice more effectively.
The Constitutional Court has ruled on 12 cases related to the functioning of state institutions.
Swift implementation of Constitutional Court rulings is essential, and when they require the
adoption of legislation or change of work practices the government and parliament should
ensure implementation.
Further efforts are needed to ensure the professionalism and depoliticisation of independent
institutions. Albania should examine the possibilities for introducing harmonised provisions
on the appointment and dismissal of heads of independent institutions, a merit-based and
transparent selection process of both their heads and members of boards, budgetary autonomy
and autonomy to set up their internal structures.
Regarding local self-government, in January, the government established the National Agency
for Implementation of the Territorial Reform. Instructions on amalgamation of local
government units as a result of the territorial administrative reform were adopted and a EUR
13.2 million transitory fund for the implementation of the reform was distributed to the 61
newly established municipalities. In line with the newly adopted decentralisation strategy for
2015-2020, a new law fully clarifying the functions and responsibilities of the local
government units is needed. Local government associations were more actively involved in
the drafting of the strategy and legal acts. However, recent legal provisions for increased

7

inter-institutional cooperation between central and local governments have yet to be
implemented.
The amendments to the law on territorial planning, clarifying some aspects of the
development of local plans, entered into force in October 2014, and implementing legislation
is in place since July. However, local governments continued to face difficulties in
implementing their urban planning responsibilities.
The National Urban Construction Inspectorate continued to demolish illegal buildings, while
the process of legalising others through the Agency for Legalisation of Illegal Buildings
continued. The inspectorate referred several mayors to the prosecution service for alleged
abuse of office and issuing illegal building permits. This resulted in a number of ongoing
prosecutions and first-instance court decisions. The decision-making process in the National
Territorial Council (NTC), the inspectorate and local government bodies needs to be made
more transparent.
As regards fiscal decentralisation, local government expenditure in 2014 was 2.3 % of GDP,
an increase on the previous year while remaining below the annual target. Albania should
strengthen public finance management at local level under the strategy on public finance
management adopted in December. Efforts to make the distribution of central funds to local
units more transparent should be further supported. Albania needs to ensure the
decentralisation strategy's sustainability as part of the 2016-2018 medium-term budget
programme.
Local government units need substantially greater capacity to deliver services to the public,
including one-stop-shops for all public services. More efforts are needed to develop the
capacity to design and implement local development plans. Substantial efforts are needed
from both central and local government units to develop and implement a comprehensive
training plan for the staff of the new local government units.
The Ombudsman's cooperation with civil society remained very good and a number of joint
trainings were delivered. In March, the Ombudsman’s Office was awarded an ‘A’ status
certificate by the International Coordinating Committee of National Human Rights
Institutions for complying with the Paris Principles, granting it the right to speak at the United
Nations Human Rights Council. In November, the Law on the Ombudsman was amended,
extending its remit on human rights promotion and providing for a more transparent and
inclusive selection of candidate commissioners, and creating two additional commissioner
posts: the Children’s Commissioner and the Commissioner for the national mechanism for
prevention of torture. However, these were not reflected in additional budget allocations,
which remain insufficient. The seven regional Ombudsman offices are dependent on
volunteers and donor support. The authority, autonomy and resources of the Ombudsman’s
Office need to be enhanced, and he should always be properly consulted on draft legislation
and reforms affecting his areas of competence.
Civil society
Good progress has been made towards establishing an institutional framework for cooperation
with and consultation of civil society. Now it is important that existing mechanisms are fully
implemented in practice.
Cooperation between state institutions and civil society organisations (CSOs) has improved.
In October, parliament approved a regulation on public consultations, and in December it
passed a resolution which ratifies the charter on civil society, recognising the importance of
civil society in the country’s democratic development. Following a wide consultation process,
in May the government adopted a roadmap setting out its policy towards a more enabling
8

environment for civil society. Civil society representatives participated in meetings of the
National Council on European Integration, but are yet to take an active role. The law setting
up the National Council for Civil Society, a consultative body to enable regular dialogue
between the government and CSOs on civil society development, was adopted by the
government, but is yet to be enacted by the parliament. At local level, cooperation remains
weak.
While the new law on VAT provides CSOs with the possibility to obtain value added tax
reimbursement on Instrument for Pre-Accession (IPA) funded grants, no such reimbursement
has taken place so far. The new online tax system requires monthly declarations on all CSOs,
even when no activities are ongoing, which creates an additional administrative burden,
particularly for small organisations. Public funding for CSOs is limited and procedures for
fund allocations need to be clarified and unified throughout the public administration. Tax
rules and other regulations are not conducive to private donations to CSOs. Civil society
remains fragmented overall and overly dependent on donor funding.
2.2.

Public administration reform

Albania is moderately prepared with the reform of its public administration. Good progress
has been made in areas falling under the key priority on public administration reform,
especially with the adoption of a comprehensive reform strategy and a new Code of
Administrative Procedures. However, further efforts are needed also in the areas outside the
scope of this key priority, especially on improving policy development and coordination, and
the capacity of administrative courts.
In order to fulfil the key priority on public administration reform, in the coming year, Albania
should in particular:
→ continue to demonstrate transparent and merit-based recruitment and dismissal of civil
servants in all state institutions in order to achieve the objective of a professional and
depoliticised public administration;
→ make accurate information on public service available through the Human Resources
Management Information System, and connect it to the treasury system;
→ prepare for the implementation of the new Code of Administrative Procedures, and carry
out a parallel review and alignment of other relevant legislation.
Public service and human resources management
The 2013 Law on Civil Servants is in line with the principles of public administration. The
law provides for merit-based recruitment, promotion and dismissal in the public service.
Several open ‘pool’ recruitments were carried out in 2014 and 2015 for entry-level positions.
An open competition for the senior civil servants was held and led to the creation of the top
level management corps. An in-depth training programme for all new top-level managers
shall now be carried out.
The amendments to the law, adopted in December, however, open the possibility of
recruitment for lower and middle management posts from outside the civil service, and render
dismissals more flexible. Following the amendments, the secondary legislation should ensure
that fair and rigorous recruitment and dismissal procedures are maintained. The quality of
recruitment procedures needs to be significantly improved, especially in the independent
institutions. The legal framework excludes certain institutions and positions from the scope of
the Law on Civil Servants. Albania should ensure a homogenous employment regime among
public administration institutions.

9

Management of human resources across the public administration has improved. The
Department for Public Administration increased its staff in 2014 to ensure better coordination,
but it still needs to improve capacity. Preparations have started to make the human resources
management information system operational and extend it to all institutions. Implementation
of the Law on Civil Servants at local level remains a challenge. The high number of appeals
in the administrative courts raises concern about the use of termination, downgrading,
restructuring and disciplinary procedures to demote and dismiss public servants.
The Commissioner for oversight of the civil service was appointed by parliament at the end of
2014 as an independent monitor of the management of civil service. In March, she presented
her first report to the parliament. Effective follow-up of the Commissioner’s findings and
recommendations should be ensured.
The remuneration system is based on job classification and is in principle transparent.
However, in June, the government adopted a new system of salary bonuses for civil servants
working on EU integration and legal drafting. The proposed system needs to be reviewed to
ensure it is in line with the Law on Civil Servants. The authorities need to take the necessary
steps to ensure fair and transparent remuneration with equal pay for equal work, and to avoid
weakening the career-based civil service system.
Professional development is provided for in the law. The Albanian School of Public
Administration (ASPA) is responsible for civil servants training. The quality and quantity of
training has increased, but ASPA's budget is insufficient for the increased number of civil
servants in need of training. The new performance appraisal system is not yet used widely.
The perception of corruption is high in Albania. Both the public administration reform
strategy and the anti-corruption strategy include measures to prevent corruption and promote
integrity in public service, but they still need to be implemented effectively.
Policy development and coordination
Albania has the legal framework and institutional structures in place to ensure a good policymaking system, but there are some weaknesses in implementation. The European integration
coordination system has been set up but needs to be made fully functional and equipped with
the necessary staff capacity. Planning as well as monitoring and reporting on the
implementation of the national plan for European integration should be improved. There are
weaknesses with regard to the implementation of the government’s work programme,
coordination of the policy proposals and costing of strategies. The links between policy
planning and medium-term budget planning need to be therefore substantially strengthened.
Policy and legislation development is not yet sufficiently inclusive and evidence-based. In
March 2015, tables of concordance based on European standards were made compulsory for
all legislation aiming at alignment with the acquis. However, ministries do not have in place
clear internal rules which regulate procedures for policy development and legal drafting. The
Law on Public Notification and Consultation came into force in May, setting out procedures
for stakeholder consultation. Impact assessments are not carried out systematically and their
quality varies between institutions. Financial impact assessments generally accompany draft
legislative proposals, but their quality also varies greatly.
The system for monitoring government's performance should be streamlined to ensure
efficient public scrutiny over government work, and the government monitoring reports
should focus on achievements against policy objectives rather than on outputs.
Accountability of the administration

10

The legislative framework for the organisation of the state administration is in place, but the
lines of accountability between agencies and subordinate bodies are still not fully clear. Also,
lines of accountability within institutions need to be improved, as managerial accountability is
not yet a feature of the system. (See Chapter 32 – Financial control)
The institutional set-up and resources to ensure the citizens' right to good administration
are generally well established. The degree to which the recommendations of oversight bodies
such as the Ombudsman and the High State Control are implemented is, however, difficult to
establish as there is no systematic monitoring. The right to access public information is
regulated in the Law on the Right to Information, which was adopted in September 2014. The
law grants supervisory, monitoring and sanctioning powers to the Commissioner for the Right
to Information and Protection of Personal Data. Regular monitoring of the practical
application of exemptions from the law should be carried out.
The right to administrative justice is governed by the Law on Administrative Disputes and
the Law on Administrative Courts. The overall capacity of the administrative court system to
deal with the backlog of cases needs to be significantly improved. There are considerable
delays in enforcement of the final decisions of the courts, including on cases of unlawfully
dismissed civil servants. The Constitution lays down the right to seek compensation and
public authorities’ liability in cases of wrongdoing is regulated by a special law, but in
practice the number of related court cases is low due to limited public awareness.
Public financial management
A public financial management reform strategy for 2014-2020 was adopted in December.
Implementation has focused on strengthening the fiscal framework with multi-year ceilings,
on a new IT system for the tax administration and on compliance audits. Implementation of
the arrears prevention and clearance strategy is on track. The credibility of the medium-term
budget programme needs to be strengthened, and coordination of public investment planning
and management improved. Strong coordination is needed to ensure synergies with public
administration reform. Efforts to prevent, detect and fight against high-risk fraud, corruption
and misuse of public funds need to be further stepped up.
Budget transparency is ensured to some extent. The annual budget proposal does not have
information on baseline expenditure, new policies, final outturn data for previous years or
multiannual commitments on capital spending. A ‘citizen’s budget’ is not available. The High
State Control does not provide an opinion on whether the government's financial reports fairly
present public finances.
Service delivery to citizens and businesses
There is a strong political commitment to a user-oriented administration, and the
government aims to ensure equal access to public services. Progress has been achieved with
further extension of services on the e-Albania portal and the establishment of an
interoperability framework for state institutions. Public satisfaction with government services
is moderate and should be enhanced by policies and mechanisms promoting quality
improvements in public institutions. The fragmented institutional responsibilities are a key
challenge to further implementation. Progress on simplifying administrative procedures has
been achieved in April with the adoption of a new Code of Administrative Procedures, in line
with European standards. For uniform application of the code upon its entry into force mid2016, the authorities need to carry out a parallel review and alignment of other relevant
legislation and provide substantial training to the civil servants. The special administrative
procedures need to be reviewed and either abolished or brought into line with the new law.

11

Strategic framework for public administration reform
The 2015-2020 public administration reform strategy was adopted in April together with
an action plan for 2015-2017. A comprehensive monitoring and reporting system with
performance indicators and targets has been set up. Related strategies on public financial
management, the ‘digital agenda’, anti-corruption and decentralisation have also been
adopted. Political support to the reform process is expected to be ensured by the newly setup Integrated Policy Management Group for PAR, chaired by the Minister of State for
Innovation and Public Administration. The capacity of the lead institutions needs to be further
strengthened, particularly with regard to public administration reform monitoring. Financial
sustainability is a concern, as costs of the overall public administration reform are not fully
reflected in the medium-term budget programme.
2.3.

Rule of law

Functioning of the judiciary
Albania’s judicial system is at an early stage of preparation. Some progress has been made
in the past year, notably through the establishment, in November, of an ad hoc Parliamentary
Committee on Justice Reform to carry out a comprehensive and inclusive reform process.
Administration of justice is slow and judicial decisions are not always enforced. The
professional training of judges is inadequate and their independence is not fully ensured.
There is insufficient accountability of judges and prosecutors and corruption within the justice
system is widespread. Inter-institutional cooperation is poor and resources are insufficient.
In order to fulfil the key priority on the reform of the judicial system, in the coming year
Albania should in particular:
→ adopt a new judicial reform strategy and accompanying action plan, and proceed, through
an inclusive consultation process, with drafting and adopting the institutional, legislative and
procedural measures necessary, taking into account European standards and best practices;
→ fill the vacancies at the High Court and the administrative courts;
→ extend the courts' unified electronic case management system and ensure it is effective,
including an appropriate maintenance budget;
→ publish all court decisions with their respective reasoning within a reasonable deadline.
Strategic documents
The 2011-13 justice sector reform strategy has expired and the adoption of a new strategy is
pending. In April, the 2015-17 medium-term strategy of the Prosecution Office was adopted.
Management bodies
The High Council of Justice (HCJ) is the governing body of the judiciary. Its role is limited
to the appeal and first-instance courts. It is composed of the President of the Republic (chair),
the Minister of Justice, the President of the High Court, nine judges of all levels elected by the
National Judicial Conference and three jurists elected by parliament by a simple majority.
There is no provision ensuring that at least one member designated by parliament is supported
by an opposition party. The deputy head of the HCJ, who is appointed upon a proposal by the
President from among the members designated by parliament, plays a crucial role in the work
of the Council. He is the only fulltime member of this body. The HCJ is in charge of the
evaluation, appointment, promotion, and transfer of judges and handles disciplinary

12

proceedings initiated by the Minister of Justice. In 2014, new rules on suspension from office
and dismissal of HCJ members, and on issues relating to conflicts of interest, were introduced.
However, the rules on ethics remain incomplete. The HCJ publishes its decisions online,
together with the minutes of its meetings.
The Council of Prosecutors is made up of six prosecutors plus a representative of the
Ministry of Justice, and may include a representative of the President of the Republic. It is an
advisory body to the General Prosecutor and not a fully-fledged career management body for
prosecutors.
Independence and impartiality
The independence of the judiciary is enshrined in the Constitution. However, in practice it
is jeopardised by the highly politicised way in which High Court and Constitutional Court
judges are appointed, and the wide margin of discretion enjoyed by the HCJ in appointing,
promoting and transferring judges. In principle, judges and prosecutors decide independently
on individual cases. In practice, their independence is limited and there are regular reports of
selective justice and political interference in court cases.
Not all courts use the unified case management system to allocate cases. Non-transparent
practices such as assigning cases by drawing lots — occasionally even in the office of the
head of court — have not been phased out in some courts. Rules on the exclusion of judges
from cases are set out in the Civil, Criminal and Administrative Procedure Codes. Courts do
not keep a register of cases from which judges have been excluded or have asked to be
excluded. Individual requests to exclude judges from cases are addressed directly to the
courts. The prosecution service’s recently established case-handling system is not yet fully
operational throughout the country, except for case registration purposes.
Accountability
A code of ethics for judges has existed since 2000 but had no real impact on their
accountability. In 2014, a code of conduct was adopted for the prosecution service. There is
not enough monitoring of compliance with ethical standards and integrity when appointing
judges and prosecutors. There is no counselling or mandatory in-service training on ethics.
Lawyers have their own code of ethics and professional ethics is one of the subjects covered
by the initial training programme of the School of Magistrates.
Judges are held accountable through inspection by both the Ministry of Justice and the HCJ.
Although there is a memorandum of understanding between these two bodies, there is a risk
of overlapping inspections. The legal framework for disciplinary proceedings lacks clarity
and such proceedings can be used to improperly influence judges. The Minister of Justice has
sole power — and discretion — to bring disciplinary proceedings against judges, which is
contrary to EU standards. The Minister submits disciplinary cases to the HCJ for review and a
decision on sanctions.
Judges and prosecutors are obliged to declare their assets on an annual basis. However,
despite numerous reported cases of failure to comply with this requirement, no final decisions
on sanctions have been issued to date. The judiciary is generally perceived as being highly
corrupt.
Professionalism and competence
Recruitment, appointment and dismissal are the responsibility of the HCJ, for judges, and
the General Prosecutor, for prosecutors. The requirement of professionalism and integrity is
not sufficiently reflected in the existing criteria for judges. Criteria for evaluating prosecutors
are in place but clear and transparent criteria for evaluating and promoting judges have yet to
13

be adopted. Decisions related to judges' careers are not fully transparent and are not always
based on merits and other objective criteria. An appeal against appointments, evaluations,
transfers, promotion decisions and disciplinary measures is possible. High Court and
Constitutional Court judges are appointed by the President of the Republic, with the backing
of a simple majority of parliament. In recent years, the process of appointing Constitutional
and High Court judges has been marred by controversial hearings in parliament’s Legal
Affairs Committee and frequent rejection by parliament of presidential nominees. In an
attempt to remedy this situation, the Law on the High Court was amended in 2013 and again
in 2015, when more specific criteria and procedures for the selection of judges were
introduced.
Prosecutors are appointed, promoted, transferred and dismissed by the President of the
Republic upon a proposal from the General Prosecutor. The independence and accountability
of the prosecutorial system is further weakened by the fact that the General Prosecutor is
appointed with the consent of a simple majority of parliament. Procedures for the
appointment, promotion and dismissal of key staff in the General Prosecutor’s Office lack
transparency.
Quality of justice
Initial and in-service judicial training is provided by the School of Magistrates, and is being
partly financed by foreign donors due to continuing shortfalls in the budget. A training
programme on the case law of the European Court of Human Rights is in place, but training
on EU acquis is limited. Albania does not yet participate in the European Judicial Training
Network.
The National School of Lawyers began its activity in October 2013. Since then, the school has
prepared 705 lawyers for the bar examination. The school does not yet provide in-service
training for lawyers.
The Ministry of Justice publishes an annual report of courts’ activities and all courts produce
their own annual reports, although not all those reports are published.
The budget for the overall justice sector in 2015 is 3 % lower than in 2014 at
EUR 80.1 million, which represents 0.8 % of GDP and 2.4 % of the state budget. It covers the
Ministry of Justice, the prosecution, the courts, the School of Magistrates, the High Council of
Justice and the Constitutional Court. Nevertheless, the budget for the courts, the prosecution
and the State Commission for Legal Aid, which is EUR 27.6 million and represents EUR 9.55
per inhabitant, has increased.
Albania has 402 professional judges (13.9 per 100 000 inhabitants), 327 prosecutors (11.4 per
100 000 inhabitants) and 916 judicial administrative staff (2.3 employees per judge). There
are 55 practising lawyers for 100 000 inhabitants. The planning and distribution of
administrative and financial resources within the judiciary needs to be improved.
Major investments have been made in court infrastructure but many court premises require
further renovation. Some courts do not have enough courtrooms and hearings still take place
in judges’ offices, which increases the risk of corrupt practices.
Online access to legislation in a consolidated form is not available. A case law database exists
but publication of judicial decisions remains inconsistent and there are no effective research
tools. The High Court has handed down only a few rulings unifying case law. The system for
notifying parties and witnesses is inadequate. The Law on Mediation provides an alternative
dispute resolution mechanism, but recourse to mediation is rare.

14

Efficiency
The overall length of proceedings from initiation to final judgment remains a major concern.
There is no effective monitoring mechanism and there is an overall lack of capacity to
produce reliable statistical data. Compared with selected European states and the ‘reasonable
time’ standard under Article 6 of the European Convention on Human Rights (ECHR),
Albania has some of the lengthiest civil and criminal procedures in Europe. The excessive
length of proceedings is due to long delays before appeal courts. Unclear provisions in the
Codes of Civil and Criminal Procedure also reduce the efficiency of the courts. The clearance
rate, i.e. the ratio of solved cases to new cases filed, has increased in recent years but with
some differences according to the type of court. In 2014, clearance rates were below 100 % at
the High Court, in both first-instance and appeal administrative courts, as well as in district
first-instance and appeal courts as far as criminal cases are concerned. Backlogs remain high,
in particular in administrative courts and at the High Court (rising from 4 094 cases in 2011 to
some 12 000 in 2014). In 2014, there was an overall backlog of 30 600 cases in first-instance
and appeal courts, 7.5 % less than in 2013.
Fight against corruption
The country has reached some level of preparation in the fight against corruption. Some
progress has been made in the past year, notably through the adoption of a strategy and action
plan.
However, corruption is widespread and more efforts are needed to establish a solid track
record of investigations, prosecutions and convictions at all levels, in particular for cases
where high-level state officials are involved. The independence of institutions involved in the
fight against corruption needs to be enhanced, as they remain vulnerable to political pressure
and other undue influence.
In order to fulfil the key priority on the fight against corruption, in the coming year Albania
should in particular:
→ demonstrate further progress with a view to establishing a solid track record of
investigations, prosecutions and convictions in the fight against corruption at all levels; ensure
follow-up of the high number of cases referred to the prosecution by the High Inspectorate for
Declaration and Audit of Assets and Prevention of Conflict of Interest;
→ amend relevant legislation in the area of interceptions and surveillance, time limits for
investigations, and admissibility of evidence before court to enhance the efficiency of
investigations on corruption cases, in line with European standards and best practices;
→ step up efforts to ensure direct access to databases for prosecutors and police; extend the
case management system in prosecution offices and ensure it is effectively used.
Track record
The track record of investigations, prosecutions and convictions in corruption cases remains
limited. So far, there are only very few first instance convictions of corruption cases
involving high-level state officials. One judge has been convicted on corruption related
grounds. The number of final convictions involving junior or middle-ranking officials has
increased steadily since 2010, but remains low overall. A number of high-profile cases,
including some where evidence of alleged wrongdoing by high-level state officials, judges,
mayors and former ministers was leaked to the media, have never been seriously investigated.
Political authorities should ensure law enforcement bodies are fully empowered to act

15

effectively and impartially when investigating corruption allegations. Control and inspection
mechanisms in the public administration need to be strengthened as a matter of urgency.
Financial investigations are not yet systematically launched in cases of corruption. There are
very few final cases of asset confiscation in corruption cases. Infiltration of the public and
private sectors by organised crime — facilitated by corruption — continues to be a major
cause for concern and needs to be urgently addressed. Political influence on law enforcement
authorities and the judiciary is an issue of concern. Political actors frequently criticise
ongoing corruption investigations and court rulings.
The number and frequency of checks on asset declarations increased in 2014. However,
many referrals are not being prosecuted. So far, there have been very few cases relating to
conflicts of interest violations. A proper follow up of the cases needs to be ensured. Also, a
sufficient sample of asset declaration checks of high-state officials has yet to be ensured.
Regarding party financing and electoral campaign financing, there is no track record of
effective control, or deterrent penalties for wrongdoing. Education, healthcare, judiciary,
public procurement, construction and spatial planning, and local government continue to be
particularly vulnerable to corruption.
The law on access to information, which has been adopted in September 2014, is in line with
international standards. It has started being implemented, with inspections being carried out
by the Commissioner for Access to Information and Data Protection Office, as well as
decisions taken. There is no adequate legal framework for protecting whistleblowers.
Institutional framework
There is a National Coordinator against Corruption, but responsibilities for different aspects
of policy are scattered among individual institutions. The High Inspectorate for Declaration
and Audit of Assets and Prevention of Conflicts of Interest (HIDAACI) is at high risk of
political influence, and its independence and accountability need to be strengthened in view of
its significant potential contribution to strengthening the prevention of and fight against
corruption. In addition to the High State Control and HIDAACI, there are two other levels of
audit. State institutions have internal audit units as a standard component of public sector
internal financial control, and the Council of Ministers’ Unit for Internal Administrative
Control and Anti-Corruption (UIACA) may also conduct audits in line ministries, institutions
under the authority of the Prime Minister or ministers, and administrations under the authority
of prefects and companies where the state holds all or a majority of the shares. UIACA’s
mission includes administrative checks in relation to complaints on alleged corruption or
abusive and arbitrary administrative practices and awareness rising of public authorities.
However, UIACA’s role needs to be further clarified, and corruption prevention should be
streamlined; the institutions involved are fragmented. There is no system of risk assessments
based on suspected breaches, or audits of institutions in line with public internal financial
control systems. The HIDAACI’s remit and capacity also need to be strengthened, its
cooperation and data exchange with other institutions improved, and an electronic system to
manage conflict of interest and asset declarations set up. In January, the government launched
an online portal for complaints of corruption, but its scope and referral mechanisms need to be
further clarified.
There are no clear, enforceable, public standards for professional conduct for MPs, and no
system for case-by-case notification of conflicts of interest. MPs’ asset declarations are not
made public automatically and are fully audited only every three years.
As regards law enforcement, important steps have been taken since 2007 to set up specialised
units to investigate corruption-related offences in the police and prosecution. In 2014, further
16

steps were taken to ensure the investigation and prosecution of cases involving high state
officials. However, significant flaws remain in the legal and institutional framework.
Jurisdiction over corruption offences is unclear, human and technical resources are
inadequate, effective cooperation and trust between the police and prosecutors are lacking,
and there is not enough cooperation and exchange of information with other institutions.
Ordinary courts are not specialised enough to deal with complex corruption-related cases and
training is inadequate. Sanctions imposed in corruption cases tend to be overly lenient. Courts
have different approaches to authorising special investigative techniques and admitting
illegally obtained evidence such as private recordings. Court decisions are often poorly
structured and drafted.
There are no legal barriers to the exchange of information between institutions. However, it is
not smooth or effective in practice. HIDAACI needs access to relevant databases and sources,
including the land register and bank information, to check asset declarations. The police and
prosecution also need direct access to a number of public databases to be able to build cases.
However, mutual distrust between institutions remains evident and hampers access.
Legal framework
Public sector corruption, including active and passive corruption, abuse of duty, high-level
corruption, private sector corruption, illegal benefiting from public office and matters related
to asset declaration are all defined in the Criminal Code. The anti-corruption legal framework
is highly complex, and its stability and legal certainty have been undermined by numerous
and frequent amendments, which are often subject to contradictory interpretation.
Government mechanisms for obtaining help, advice or training are limited and the procedures
for responding to breaches of ethics are ineffective. Reforms implemented so far have not
yielded significant results or altered the public’s perception of the level of misconduct by
public officials. Further efforts are needed to improve the law to make investigations more
efficient, and to clarify the definition of ‘high state official’ and ‘large-scale corruption’. The
existing regulations mainly focus on restrictions and prohibitions, to the detriment of public
disclosure and transparency, which limits their effect. Further efforts are needed to improve
implementation and ensure that information of public interest is disclosed in a timely and
efficient manner.
The country is party to the UN Convention against Corruption. Albania has not
criminalised illicit enrichment, but has criminalised the refusal to declare assets, nondeclaration, the concealment of assets, and false declarations by elected persons, public
employees and others who have a legal obligation to declare assets. The country signed and
ratified the relevant Council of Europe Anti-Corruption Conventions and the OECD
Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions. Albania has still to fully align its legal framework with the recommendations
made in the Council of Europe’s Group of States against Corruption (GRECO) evaluation
rounds (see Chapter 23: Judiciary and fundamental rights).
Strategic framework
The government defined the fight against corruption as one of its key priorities. In March,
Albania adopted its national anti-corruption strategy (2015-20) and action plan (2015-17),
with a budget of EUR 12 million. Relevant stakeholders, including civil society and business
community, were widely consulted. Clear timelines and responsibilities are set out, and
actions are budgeted individually. Results and impact indicators should still be improved in
the end-of-year review of the action plan.

17

Fight against organised crime
The country has reached some level of preparation in the fight against organised crime.
Some progress has been made over the past year on enhancing international police
cooperation, in particular in the fight against drug trafficking.
However, cooperation between prosecution and police remains to be further developed.
Effective judicial follow-up of organised crime cases and quality of indictments must be
ensured. The number of final convictions remains negligible compared to the estimated value
of the regional and domestic criminal drug market. Financial investigations remain underused
and the level of assets confiscated is low.
In order to fulfil the key priority on the fight against organised crime, in the coming year
Albania should in particular:
→ demonstrate further progress with a view to establishing a solid track record of proactive
investigations, prosecutions and convictions, including dismantling of criminal networks
involved in all forms of organised crime;
→ amend relevant legislation in the area of interceptions and surveillance, time limits for
investigations, and admissibility of evidence to enhance the efficiency of investigations on
organised crime cases, in line with European standards and best practices;
→ set up an effective human resources policy and a merit-based promotion and transfer
process in the Albanian State Police, and allocate adequate resources to the police and
prosecution services to fight organised crime.
Track record
The number of final convictions for organised crime is still very low and has only slightly
increased in recent years. There are very few cases against trafficking in human beings,
despite Albania being a source, transit and destination country for trafficked people. Over the
past five years fewer than 35 people have been convicted for money laundering and none
during the first semester of 2015, although 123 proceedings were registered and two cases
sent to court. The circumstantial evidence in cases of inexplicable wealth, unjustified
proliferation of assets or extraordinary financial operations is not used. Criminal
investigations often have a narrow scope and legal persons are very rarely investigated.
Financial investigations targeting suspected members of organised criminal groups are not
systematically and efficiently carried out. Precautionary freezing of assets is seldom applied
during the initial phase of an investigation. Proceeds of crime often disappear, resulting in a
poor track record of confiscated assets at the time of the final conviction. Less than 50 % of
organised crime cases led to the confiscation of assets beyond those found upon the arrest of
the suspect. Leaks to the press, violating the secrecy of investigations and jeopardising the
safety of police, are frequent.
Institutional and operational capacity
The Albanian State Police has 9 997 police officers, 228 per 100 000 inhabitants. Its
management of human resources has improved, while its command structures and capacities
need to be consolidated. The high rates of staff turnover, in particular among experienced
police officers often trained with international support, need to be reduced.
Specialised units are in place for economic and financial crimes, cybercrime, counterterrorism, trafficking in drugs and human beings, motor vehicles, works of art, arms,
explosives, protection of witness and collaborators of justice, and international law
18

enforcement cooperation. The joint investigation units need to further develop their human
resource capacity. The efficiency of investigations is often jeopardised by frequent changes of
judicial police officers and a lack of personnel specialised in financial and fiscal matters. The
general level of police equipment and logistics remains an issue of concern.
Cooperation between prosecution and police needs to be further improved. The poor
capacity of judicial police and prosecutors to detect and investigate complex criminal cases
means they are limited to simple investigations ending in arrests in the act, so there is no
comprehensive approach to investigations and prosecutions. The law enforcement authorities
are highly centralised, resulting in poor standards of investigation in remote areas of the
country. Capacity to use special investigative means is limited. Formal and lengthy
procedures to obtain even basic information during investigations cause significant delays and
jeopardise the secrecy of the process. The police and prosecution services lack adequate
resources to fight organised crime.
Following the conclusion of an operational agreement with Europol, exchange of information
has significantly increased. Albania obtained access to the secure information exchange
network application (SIENA). In 2014, 1 026 messages were exchanged through SIENA,
compared with 216 in 2013, which represents an increase of approximately 375 %.
Police collect and process crime statistics manually, which is cumbersome and undermines
data reliability. The budget of the DNA sector of the Forensic Directorate, despite the recent
increase, is insufficient to cover the costs of DNA collection, thus limiting DNA profiling
capacity.
Legal framework
The new Law on the State Police, which came into force in March, is in line with the main
recommendations of the Council of Europe’s European Code of Police Ethics. Criminal
penalties are not sufficiently dissuasive. A number of shortcomings in the investigation phase
need to be addressed, including the timeframe for preliminary investigations and procedures
for using special investigation means. The law on the confiscation of criminal assets is
partially aligned with the acquis. Alignment is still required as regards third party
confiscation, extended confiscation and precautionary freezing of assets. Frequent
amendments and contradictory interpretation have hindered legal certainty. The
recommendations of the Financial Action Task Force are reflected in anti-money laundering
legislation. However, shortcomings need to be addressed, including in implementation and in
police access to public databases. Amendments to the anti-mafia law on assets seizure and
confiscation have yet to be adopted.
Strategic framework
A revised 2013-20 interinstitutional strategy and action plan on fighting organised crime,
countering terrorism and illicit trafficking is in place. In June Albania adopted a national
serious and organised crime threat assessment (SOCTA). Albanian police analysts have been
trained by Europol in June thus establishing the necessary capacity to align the national
serious and organised crime threat assessment with the EU SOCTA methodology. However,
Albania makes little use of Europol’s strategic intelligence products.
Fight against terrorism
Albania has been affected by the phenomenon of foreign terrorist fighters and radicalisation.
Cases of hate speech need to be addressed more forcefully. The phenomenon of foreign
terrorist fighters needs a specific approach by the intelligence and law enforcement
community and a coherent judicial policy on offenders. While international cooperation has

19

greatly improved at both operational and strategic level, prevention mechanisms involving
civil society and religious communities are yet to be designed.
2.4.

Human rights and the protection of minorities

Overall situation
The legal framework for the protection of human rights is broadly in line with European
standards. However, implementation is limited and enforcement of human rights remains
insufficient.
Shortcomings particularly affect the following areas:
• Enforcement of property rights remains to be ensured. The processes of property
registering, restitution and compensation are not completed.
• Roma and Egyptians face very difficult living conditions and frequent social exclusion and
discrimination due to ineffective policy implementation and poor inter-institutional
cooperation; a solid anti-discrimination case law has yet to be built up;
• Institutional mechanisms to protect the rights of the child remain poor; the juvenile justice
system fails to comply with international standards;
In order to fulfil the key priority on the protection of human rights, in the coming year
Albania should in particular make further progress with the implementation of the 2012-2020
strategy on property rights, and the processes of property registration, restitution and
compensation; improve the living conditions of Roma and Egyptians; demonstrate progress
towards developing the anti-discrimination track record; and enhance efforts to bring
legislation on juvenile justice in line with international standards.
A detailed analysis of freedom of expression follows below. For a detailed analysis of
developments on other human rights and the protection of minorities, see Chapter 23 —
Judiciary and fundamental rights. For developments in the areas of trade union rights, nondiscrimination and equal opportunities, see also Chapter 19 — Social policy and employment.
Freedom of expression
The country has some level of preparation concerning the right to freedom of expression.
There has been some progress over the past year.
The Constitution and relevant legislation are in line with international human rights law,
guaranteeing individual liberties. The overall environment is generally conducive to the
exercise of freedom of expression, but better implementation of the legislation is needed. In
addressing the shortcomings outlined below, in the coming year, Albania should in particular:
→ enhance transparency of government advertising in the media;
→ ensure that the existing legislation is implemented in a manner which ensures equality
before the law;
→ further strengthen the independence of the regulatory authority and public broadcaster
notably through the establishment of the RTSH steering committee and the appointment of
senior management.
Intimidation of journalists
Physical assaults on journalists are rare. One case of a failed attempt on a journalist’s life has
been reported, although it has yet to be confirmed whether this attempt was related to the
exercise of his profession. Another journalist has been threatened and placed under police

20

protection. The police and respective authorities have reacted promptly, and investigations are
ongoing. Proper judicial follow-up needs to be ensured. There have been some cases where
politicians made hostile statements against journalists.
Legislative environment
The Constitution and relevant legislation are in line with international human rights law,
guaranteeing individual liberties, including the right to privacy, freedom of expression and
sanctions against incitement of hatred. Defamation is a criminal offence, although prison
sentences are not foreseen as sanctions. Journalists are exposed to potentially large fines and
damages. The rules on hate speech are in line with international law. However, domestic
court rulings in hate speech matters are not monitored. The Commissioner for Protection
against Discrimination has issued a number of decisions and recommendations in cases that
are related to hate speech. The new law on access to information, approved in September
2014, is in line with international standards. Recent proposals to amend the Civil Code and
the Law on Audiovisual Media with the aim of filtering offensive comments and removing
existing audiovisual media ownership limitations could limit freedom of expression.
Implementation of legislation/institutions
The 2013 Audiovisual Media Law transformed the National Council on Radio and Television
into the Audiovisual Media Authority (AMA). The procedure for appointing members of the
AMA board, based on political support by either the majority or the opposition, does not fully
guarantee their independence. New AMA members and a chair were appointed in 2014. The
opposition disputed the election process in court, alleging that the appointments — approved
with the votes of the ruling majority only — were invalid and in breach of the law.
Opposition-nominated AMA members did not attend AMA board meetings, questioning the
legitimacy of its board. This has made it difficult for the regulator to reach the quorum needed
for major decisions. Online content and registration of websites are not regulated by law.
Public service broadcaster
Regulation of the public service broadcaster RTSH is in line with EU standards. Financing is
mostly independent of the government. RTSH fee collection improved when the collection
rate of electricity bills, which include the RTSH fee, improved. The election of the RTSH’s
Steering Council has been delayed by political deadlock and a lawsuit brought by the
opposition. The RTSH should now adopt its statute, and other necessary guidelines, and elect
a new management.
Economic factors
Media ownership transparency has improved. At the National Registration Centre's website
citizens can check the shareholders of any registered company. However, the functioning of
the media market remains opaque with a number of media outlets surviving in a relatively
small market, with limited resources. Transparency of government advertising in the media
needs to improve. The media continued to be used as a tool to promote political and private
interests.
Professional organisations, professional conditions
The capacity of the journalists’ trade union remains weak, although it has intensified its
efforts to set up branches covering many cities in the country. Professional and ethical
standards in journalism need to be strengthened. Protection from arbitrary dismissal needs to
be provided for journalists to prevent self-censorship. Further action is needed to ensure the
proper enforcement of labour rights, especially the rights of media staff to a formal
employment contract and the payment of social contributions.
21

2.5.

Regional issues and international obligations

Albania still maintains a 2003 bilateral immunity agreement with the United States, granting
exemptions for US citizens from the jurisdiction of the International Criminal Court. In
doing so, it does not comply with the EU common positions on the integrity of the Rome
Statute or with the related EU guiding principles on bilateral immunity agreements. Albania
needs to align with the EU position.
As regards regional cooperation and good neighbourly relations Albania is active in
regional initiatives and plays a proactive role, and it held a one-year chairmanship of the
South-East European Cooperation Process (SEECP). In 2014, Albania concluded its one-year
US-Adriatic Charter (A5) presidency. Albania has continued to participate in the
EUFOR/ALTHEA mission in Bosnia and Herzegovina, and in all events related to the
implementation of the Trans-Adriatic Pipeline and Ionian Adriatic Pipeline projects.
A fresh impetus has been given to regional cooperation through the 'Berlin process' and the
Western Balkan 6 initiative, intensifying cooperation among the Western Balkan countries
and with the EU, notably regarding the connectivity agenda. In April, the Western Balkan
Six countries reached an agreement on the core transport network and in June 2015 on
extending three trans-European transport networks core corridors to the Western Balkans.
They also identified the priority projects along sections of these corridors to be implemented
by 2020. To ensure sustainability and also achieve short term results, the countries agreed to
implement before the next summit in Paris a number of 'soft' measures such as aligning and
simplifying border crossing procedures, road safety and maintenance schemes.
Albania is a constructive partner in the region, further developing solid bilateral relations
with other countries preparing to join the EU and neighbouring EU Member States. Albania
started negotiations with Montenegro and Serbia with regard to the bilateral convention on
regional cooperation, under Article 13 of the Stabilisation and Association Agreement.
Relations with Bosnia and Herzegovina are good. There are no open bilateral issues. In July,
Albania and Bosnia Herzegovina signed an agreement allowing their citizens to travel
between the two countries with ID cards only.
Relations with the former Yugoslav Republic of Macedonia are good, with frequent highlevel official visits. The government reacted to the May events in Kumanovo by calling for
calm, transparency and full implementation of the Ohrid Framework Agreement. A
memorandum of understanding on defence was signed in January. An agreement to jointly
recognise respective social insurance schemes and a cooperation protocol on culture for 201520 were signed in March. In August, Albania approved a EUR 50 000 grant for humanitarian
aid to alleviate flood damage in Tetovo.
Relations with Montenegro are good. A bilateral agreement on economic cooperation was
signed in February. Albania has consistently expressed its support for Montenegro’s NATO
membership. There were two high level visits during the year.
Relations with Kosovo∗ are good. A joint customs procedure was established at the Morinë
border crossing point. In March, 12 agreements, memoranda and protocols of cooperation
were signed at the second joint governments’ meeting, on cooperation and security, border
control, education, agriculture, trade and rural development. Albania has strongly supported
Kosovo’s integration process and its membership of regional initiatives and international
∗

This designation is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the ICJ
Opinion on the Kosovo declaration of independence.

22

organisations. Albania supports the ongoing dialogue between Kosovo and Serbia facilitated
by the EU.
Relations with Serbia have intensified and are constructive overall. In October, an incident
during a football match played by both national teams in Belgrade strained bilateral relations.
The Albanian Prime Minister’s subsequent visit to Belgrade — the first in 68 years — marked
an important step forward in the normalisation of relations, and was followed by a visit of
Serbian Prime Minister Vučić in May. Albania and Serbia presented a joint proposal on
concrete connectivity projects at the April Western Balkans Summit in Brussels. The Serbian
and Albanian Ministers of Foreign Affairs took part in a first trilateral meeting with their
Italian counterpart in Rome.
Albania maintains close relations with Turkey. In May, a strategic partnership was signed on
mutual assistance and cooperation in the fight against organised crime and the fight against
terrorism. Frequent high-level visits took place, including Turkish President Erdoğan in May.
Relations with Greece have been positive overall, and have become closer in relation to the
rule of law, with joint meetings between representatives of the ministries of the interior to
build cooperation on migration issues. Talks on several bilateral issues, including the
agreement on the delimitation of Greek-Albanian continental shelf and maritime zones,
continue.
Relations with Italy remain very strong, particularly in the trade sector. Diplomatic relations
are very good. In December, a bilateral cooperation protocol was signed for 2014-2016,
focusing on private sector development, agriculture, and rural and social development.
3.

ECONOMIC CRITERIA

Key economic figures

2013

2014

Gross domestic product per capita (% of EU28 in
PPS)

28

29

GDP growth (%)

1.1

2.1

Unemployment rate (female; male) (%)

15.9 (13.5; 17.8)

17.5 (15.2; 19.2)

Economic activity rate for persons aged 20–64:
proportion of the population aged 20–64 that is
economically active (female; male) (%)

67.6 (57.6; 79.2)

68.6 (57.3; 80.5)

Current account balance (% of GDP)

-10.8

-13.1

Foreign direct investment (FDI) (% of GDP)

9.6

8.1

Source: Eurostat

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 increased
importance of economic governance in the enlargement process. In order to improve their
economic governance, in 2015 the enlargement countries were asked to prepare Economic
Reform Programmes (ERPs), which set out a medium-term macro-fiscal policy framework
23

together with key structural reforms aimed at supporting the framework and boosting
competitiveness. The ERPs were the basis for country-specific recommendations jointly
adopted by the EU and the Western Balkans and Turkey in the Economic and Financial
Dialogue meeting on 12 May 2015.
3.1.

The existence of a functioning market economy

Albania is moderately prepared in developing a functioning market economy. Some
progress was made, in particular in improving macroeconomic stability. However, significant
challenges remain, in particular the need to lower the public debt burden. Growth prospects
have been improving, but they are still vulnerable to constrained bank lending. With a narrow
export and production base, the competitiveness of Albania’s economy is weak. The private
sector is held back by significant shortcomings in the regulatory environment and the rule of
law. The level of unemployment and informal employment remains high.
In line with the ERP recommendations and in order to support long-term growth, in the
coming year Albania should pay particular attention to:
→ sustaining fiscal consolidation and strengthening the budget management framework;
→ tackling the high level of non-performing loans;
→ improving the business environment by implementing regulatory reforms and adopting the
new bankruptcy law.
Economic policy essentials
The government demonstrated strong commitment to reform and implemented stabilityoriented macroeconomic policies in a challenging political environment. Albania
submitted its Economic Reform Programme, covering the period 2015-17, in January 2015.
The objectives of the programme are to achieve macroeconomic stability, remove obstacles to
growth and improve competitiveness. The ERP’s medium-term macroeconomic projections
assume a further acceleration of growth and continued fiscal consolidation on the basis of
stability-oriented policies. Albania needs to follow up on its commitments and take further
steps to implement the ERP recommendations, which are set out below. The three-year
financing arrangement with the International Monetary Fund agreed in February 2014
supports strengthened macroeconomic stability and growth-boosting reforms.
Macroeconomic stability
Economic activity picked up in 2014
because of improved private domestic
demand. The growth rate reached its
lowest level in 15 years in 2013, at only
1.1 %. In 2014, however, growth
rebounded to an estimated 2.1 % as
interest rate cuts by the central bank
improved financing conditions, rising
remittances and low inflation boosted
household spending, and the clearance of
a large part of government arrears
improved firms’ liquidity and confidence.
Annual economic growth reached 2.8 %
in the first quarter of 2015, partly thanks to a strong increase in investment. Per capita GDP in
purchasing power standards stood at only 29 % of the EU-28 average in 2014 (unchanged

24

since 2009), pointing to the need to generate higher growth rates to converge towards EU
living standards.
The current account deficit is
structurally high, but its financing is
healthy, relying mainly on non-debtcreating flows. Overall, the current
account deficit increased to 13.1 % of
GDP in 2014 from 10.8 % in 2013. The
trade deficit increased to 18.8 % of GDP
in 2014 after narrowing in 2012 and
2013. This was the result of higher
imports due to recovering domestic
demand, though exports, especially of
clothing and footwear, also rose. The
growing stock of foreign investment
resulted in higher repatriation of
investment earnings. The long-standing decline in migrant remittances was reversed in 2014,
but in proportion to GDP they remain much below the level reached in the years leading up to
the 2008 global crisis.
In the 2009-2014 period, around two thirds of net financial inflows to the economy consisted
of foreign direct investment (FDI). External debt amounted to around 68 % of GDP at the end
of 2014, with long-term debt making up more than 80 % of the total, mostly in the form of
concessional government borrowing and inter-company lending. This debt profile does not
give rise to concerns about refinancing prospects. Moreover, the official foreign exchange
reserves, covering around 5.3 months of imports and amounting to almost double the stock of
short-term external debt in the first quarter of 2015, provide an adequate safeguard against
adverse shocks. To address the persistent current account deficit, Albania needs to diversify
its economy and improve productivity by attracting foreign capital into tradable sectors
among other things.
Unemployment remained high despite an increase in employment. Employment, in line
with the economic recovery, grew by 1.6 %, but due to a rise in the labour force the
unemployment rate rose from 15.9 % to 17.5 % in 2014 as a whole, before falling to 17.3 %
in the second quarter of 2015. 56.6 % of the working-age population were employed in 2014,
almost unchanged from 2013. However, the high prevalence of long-term and youth
unemployment and large gender differences in labour force participation indicate significant
structural obstacles. Nearly a third of the employed are unpaid family workers (mainly in
agriculture) and informal employment remains widespread; this affects job security and social
security entitlements and hinders company development. Some progress was made on
strengthening labour market policies in line with the national employment and skills strategy
for 2014-2020, adopted in November 2014. However, more needs to be done to improve the
functioning of the national employment service, strengthen employment promotion
programmes, modernise training services and develop a coherent labour market information
system.
Inflation remained weak, allowing the central bank to lower the key interest rate.
Average annual inflation remained below the Bank of Albania’s (BoA) 3 % target in both
2013 (at 1.9 %) and 2014 (at 1.6 %). This resulted from below-potential economic activity,
low inflation in trading partners and a stable exchange rate against the euro. In the first seven
months of 2015, inflation was volatile as a result of floods temporarily disrupting agricultural
production and driving up food prices; however, on average it remained well below the target
25

rate. Persistently low inflation allowed the BoA to bring down the key interest rate in several
steps to a new historic low of 2 % in January 2015 in an effort to stimulate economic activity
and steer inflation towards the target. The BoA was successful in lowering market interest
rates and supporting credit growth, even if banks’ increased risk aversion hampered the passthrough of monetary stimulus to the economy. The degree to which the financial system uses
the euro (‘euroisation’) lessened but remains high. This entails credit risks in case of abrupt
changes in the exchange rate and reduces the room for manoeuvre for monetary policy.
The budget performed well in 2014, but revenues fell short of the target in the first half
of 2015. The 2014 deficit outcome, at 5.2 % of estimated full-year GDP, remained well below
the initial target of 6.6 %. Revenues
increased by 12.1 %, resulting from tax ERP recommendation 1: ‘Pursue fiscal
increases and successful efforts to improve consolidation in line with the objective to put the
tax collection. At the same time, total public debt ratio on a downward path and lower it
spending was 3.9 % lower than budgeted due to less than 66 % of GDP by 2017. At the same
time, preserve fiscal space for growth-enhancing
to underperforming public investment and
public investment by making sure that revenue
operational expenditure. In 2014 the budget performance remains on track, allowing for the
also had to finance the repayment of initially budgeted capital expenditure to be
government arrears to businesses, amounting executed.’
to 2.4 % of GDP. Without this extraordinary
expense, the budget actually posted a small primary surplus for the first time since 2010. In
the first half of 2015 tax revenues fell short of targets mainly due to overoptimistic
assumptions about revenue growth, lower-than-expected inflation, and the fall in oil prices.
The budget was revised in July and revenue targets were lowered, but thanks to savings on
interest payments and substantial underspending on investment, the overall deficit target was
left unchanged at 4 % of GDP (which includes repayment of arrears worth 1.3 % of GDP).
Over-optimistic projections for tax revenue and investment spending are recurring problems
that need to be tackled
The high level of public debt, almost half of
it short-term, remains a key source of
macroeconomic risk. Public debt increased
significantly to 71.8 % of GDP in 2014 from
55.1 % in 2008 in the wake of the economic
slowdown. The large proportion of short-term
debt translates in debt equivalent to about
20 % of GDP needing to be rolled over every
year, relying mainly on domestic banks,
which creates refinancing risks. Accordingly,
the stated objective for 2015 and beyond is to
continue fiscal consolidation and reduce
public debt, in accordance with ERP
recommendation 1. This would not only help rebuild fiscal buffers to fight any future
downturn, but also foster financial stability given large holdings of government debt by banks.
An ambitious pension reform has largely been implemented with the aim of improving the
long-term sustainability of the system. The government made some progress in addressing
fiscal risks stemming from the electricity sector. This public utilities sector is characterised by
very high distribution losses and inadequate bill collection, which leads public finances to
bear the costs, including those of emergency imports of electricity. While the government has
already taken measures to clamp down on electricity theft and illicit connection to the grid,
sustained efforts are needed to make the electricity sector financially sustainable, in line with
26

ERP recommendation 2.
Additional fiscal risks include the obligation
for the state, confirmed by judgments of the
European Court of Human Rights, to pay
compensation to former owners of property
confiscated during the communist regime. In
line with ERP recommendation 2, Albania
prepared a draft law which would improve
the financial sustainability of the current
compensation scheme.

ERP recommendation 2: ‘Progress towards
eliminating high fiscal risks posed by the
electricity sector by reducing distribution losses at
an average rate of 5 percentage points in the
coming years and by improving the bill collection
rate. Evaluate the fiscal impact of the property
compensation scheme and accommodate the costs
in the medium-term budget, if necessary by
adjusting the parameters of the scheme with the
aim of creating a realistic, transparent and
sustainable compensation framework.’

The budget management framework
needs to be significantly strengthened, in ERP recommendation 3: ‘Reinforce the budget
accordance with ERP recommendation 3. management framework by implementing the
Shortcomings in public finance management public finance management strategy agreed with
(PFM) include weak budget planning and the Commission and adopted in December 2014,
monitoring, over-optimistic growth and in particular by moving towards adopting a
revenue projections, as well as lax tax credible fiscal rule which will effectively ensure
collection especially in election years. Over the sustainability of public finances in the long
the years, these shortcomings have run and by strengthening budget forecasting.’
contributed to increased public debt and
large government arrears to the private sector. To address these weaknesses, the government
approved an ambitious PFM strategy for the period 2014-2020, supported by the Instrument
for Pre-Accession Assistance (IPA). It contains plans to strengthen multi-year budgets,
introduce rules to limit politically motivated ad hoc spending increases and eliminate
systematic biases in budget forecasts. Fiscal credibility is to be reinforced by adopting a fiscal
rule the details of which have yet to be worked out.
Interplay of market forces
Market liberalisation and privatisation are advanced. Price and trade liberalisation was
carried out early in the transition process and privatisation is wide-ranging. The state’s
involvement in the economy remains limited and is concentrated in a few sectors such as
energy. The private sector remains dominant, accounting for more than 80 % of the
workforce. Privatisation efforts are now focused on state-owned small and medium-sized
enterprises (SMEs) in non-strategic sectors. Some companies with poor economic
performance went into liquidation in the reporting period, while the unused assets of others
were offered for lease to domestic and foreign investors. In addition, a decision was made to
privatise the state insurance company INSIG through an open tender that attracted four bids.
A working group has been set up to identify the best option for restructuring and privatising
the oil company Albpetrol.
Market entry and exit

ERP recommendation 6: ‘Improve the overall
business environment, including by implementing
the merger of the NRC (National Registration
Centre) and NLC (National Licensing Centre) to
further ease the regulatory and administrative
burden for businesses. Start the implementation
of the simplification regime for authorisations.
Make the newly established investment council
fully operational.’

Further improving market entry and exit
procedures could facilitate the efficient
allocation
of
resources.
Business
registration continues to function reasonably
well through the established network of the
national registration centre (NRC). The
number of start-ups surged by 43 % in 2014
and reached a six-year high, and business
registrations have continued to increase in 2015, partly reflecting efforts to formalise the large
27

informal economy. Plans to further streamline procedures by merging the NRC with the
licensing authority to create a single service window for registration and licensing should be
implemented in line with ERP recommendation 6. Steps have also been taken to create an
inventory of authorisations to remove unnecessary ones. Firms’ access to formal finance,
especially in the start-up phase, remains a challenge. Bankruptcy procedures remain slow and
the recovery rate for debtors in most cases turns out to be low. There was some progress on
revising the bankruptcy law.
Legal system
There are significant shortcomings in the rule of law, property rights enforcement and
the fight against corruption which remain key aspects to improving the business
environment. Steps have been taken to address these complex challenges (see Chapter 23 —
Judiciary and fundamental rights), but much remains to be done. Efforts were also made to
improve the government’s communication with businesses, notably by setting up an
investment council and requiring mandatory consultation of stakeholders on new legal drafts,
and to reduce the regulatory burden on businesses. However, results have yet to materialise.
Financial sector development
There is scope for banks to expand lending and better support the economic recovery.
The banking sector, dominated by foreign-owned banks, holds 90 % of all financial system
assets. With loans to businesses and households amounting to less than 40 % of GDP, there is
much scope for increasing the role of bank lending in the economy. However, credit growth
has only started to gather some momentum towards the end of 2014, despite banks’ ample
liquidity and the gradual fall in credit rates. While the economic slowdown has reduced the
demand for loans, the high proportion of non-performing loans (NPLs), which peaked at
24.9 % in 2014 and was still 21 % in June 2015, has contributed to banks’ increased risk
aversion and cautious lending. Various regulatory and legislative changes have already been
made to address the problem, and an inter-institutional working group was set up to develop a
comprehensive NPL reduction strategy. However, in line with ERP recommendation 4,
further efforts are needed to encourage the clean-up of bank balance sheets and boost lending,
including by addressing impediments to judicial enforcement and collateral execution.
The banking system appears stable but is exposed to credit and sovereign debt risks.
Overall, the capital and liquidity ratios of the banking system well exceed regulatory minima,
and profitability was improving in 2014 and the first half of 2015. The three Greek-owned
banks operate as stand-alone subsidiaries with adequate capital and liquidity buffers and no
significant exposure to their parent banks. The central bank put in place additional prudential
measures following the introduction of capital
controls in Greece: therefore, financial ERP recommendation 4: ‘Take further
contagion risks seem well contained. Banking measures to address the issue of non-performing
activity continued to be fundamentally loans, involving all key stakeholders including
financed by deposits, with the loan-to-deposit the Bank of Albania as necessary, with a view to
achieving a sustainable reduction of their level.
ratio standing at around 55 %. Provisioning
In this context, addressing impediments related
for potential losses on non-performing loans to judicial enforcement and collateral execution
improved, but NPLs net of provisions still would appear helpful.’
amounted to 36 % of bank capital in July.
Banks are also exposed to credit risks originating from foreign currency loans whose
repayment is vulnerable to a potential depreciation of the Albanian currency (lek). Also, since
government securities make up around a quarter of bank assets, severe sovereign debt stress
would be detrimental to banks’ solvency.

28

The size of the non-banking financial sector increased but remains small. It comprises the
insurance and private pension businesses plus investment funds; total assets represent 6.5 %
of GDP. The regulatory and supervisory framework for the sector needs further strengthening.
The capital market remains rudimentary. There is great scope for expanding equity finance.
3.2. The capacity to cope with competitive pressure and market forces within the
Union
Albania has some level of preparation in terms of capacity to cope with competitive pressure
and market forces within the Union. Some progress was made particularly as regards
transport and energy infrastructure. However, significant investment in human and physical
capital is necessary to improve the country’s competitiveness. There is considerable scope for
shifting employment to more productive sectors and for diversifying export products and
markets. In line with the ERP recommendations and in order to support long-term growth, in
the coming year Albania should pay particular attention to:
→ improving the quality of higher education and continuing the restructuring of vocational
education and training to improve its market relevance;
→ adopting and implementing the national transport and energy strategies;
→ lowering non-tariff barriers to trade.
Human and physical capital
Despite significant improvements over the
ERP recommendation 5: ‘Adopt and start to
last decade, Albania still has considerable implement the law on higher education, as well as
gaps to close in terms of years of the new strategy for higher education. Establish
schooling, secondary enrolment rates, an independent accreditation system for all public
education quality and the market and private universities. Continue the
relevance of qualifications. Public spending restructuring of the vocational education and
on education remains low at around 3 % of training system with a view to improving the
GDP and is expected to fall slightly in 2015 relevance of the training for the needs of the
due to lower budgeted investment spending labour market.’
in this area. Albania adopted and started to
implement the national employment and skills strategy for 2014-2020. Institutional changes
are expected to be followed by the introduction of an apprenticeship system and upgrades to
the curricula in line with market needs. In line with ERP recommendation 5, this should
remain a priority, along with drafting a new strategy on higher education and setting up a new
accreditation system for universities. Low scores received by Albanian students in the
OECD’s PISA tests underline the need for improving the quality of basic education (see also
Chapter 26: Education and culture).
Improving physical capital and promoting innovation are important elements for
enhancing productivity and competitiveness. Investment as a share of GDP decreased from
33.9 % in 2008 to 24.9 % in 2014, driven by weak investment in construction and in
machinery and equipment. With some large foreign direct investment projects in the energy
sector under way, including the construction of a large hydropower plant and the Albanian
section of the Trans-Adriatic Pipeline, investment is likely to rebound in the coming years.
Still, a more favourable investment climate is needed to attract capital into a wider range of
sectors. New laws were adopted in May with the aim of promoting investment in strategic
sectors and developing economic zones through lowering administrative burdens and
providing fiscal incentives for such projects. Public investment made up 5.1 %-5.5 % of GDP
in past years, but was often the target of ad hoc spending cuts when budget adjustments were

29

needed. Public spending on research and development continued to represent only 0.01 % of
GDP and much remains to be done to develop an innovation culture and links between
science and industry.
While progress has been made over the
years, Albania’s transport and energy ERP recommendation 7: ‘Adopt and start to
infrastructure is still not sufficiently implement the transport strategy and action plan
for 2016-2020. Focus investments on the core
developed.
The
finalisation
and
network. Adopt and start to implement the
implementation of the transport strategy national energy strategy and the Power Sector
2016-2020 are expected to improve overall Law, including speeding up the unbundling of the
transport infrastructure in the country and energy sector. Prepare single sector pipeline of
are highlighted as a priority in ERP priority investments for both transport and
recommendation 7. Focusing investment on energy.’
the core network, in particular, would
improve connectivity within the Western Balkans as well as with the EU.
Sectoral and enterprise structure
The Albanian economy is dominated by
ERP recommendation 8: ‘Adopt a strategy on
services, and agriculture still plays an the land cadastre and concrete measures to
important role. In 2014, services accounted increase momentum in agricultural land
for around half of gross value added, consolidation.’
unchanged from 2008, followed by
agriculture with a share of 22.6 %. Industry’s role has increased over the last years (making
up 14.2 % of the economy in 2014, up from 11.4 % in 2008) due mostly to increased oil
extraction. At the same time construction’s share of the economy fell to 11 % in 2014 from
18 % in 2008 following the economic crisis and the slowdown in lending. Agriculture
provides a gradually falling, but still very large, proportion of employment (around 42.7 % in
2014), much of which is in the form of unpaid family jobs. In line with ERP recommendation
8, a strategy on the land registry (cadastre) should be adopted.
The sectoral composition of merchandise exports remained highly concentrated, with 82 % of
total exports in 2014 accounted for by mineral products (33.6 %), textiles and footwear
(33.6 %) and construction materials and metals (14.5 %). This lack of diversification
contributes to the large external deficit and exposes the economy to industry-specific shocks.
Small and medium-sized enterprises (SMEs) play a significant role in the economy. They
provide 81 % of employment and 70 % of value added in the non-agricultural private sector.
Micro-businesses in particular make up a high proportion of the number of companies and
account for 46 % of jobs. Various state and donor-funded schemes support SMEs’
competitiveness and access to finance. The business development and investment strategy
2014-2020 has made support services for SMEs and start-ups a priority. Besides putting this
strategy into action, further efforts could be made in implementing an SME test to ensure that
regulations and legislation do not impede SME development and growth.
State influence on competitiveness
Reported state subsidies to the economy remained relatively low, but the electricity
sector is an enduring drain on public resources. Total reported state aid stood at 0.5 % of
GDP in 2014, marking a considerable decrease from 1.5 % in 2013. Around two-thirds of the
subsidies were notionally granted for less distortive general business purposes, such as
research and development and employment. However, much of the general business aid
continued to benefit certain industries, such as the hydrocarbon or the clothing industries.
Data on state aid does not include loan guarantees granted to the state-owned power company

30

KESH to ease its financial difficulties. There is scope for improving the enforcement of
competition rules.
Economic integration with the EU
The EU is Albania’s dominant trading partner, with especially strong links to Italy.
Albania has increased its openness to trade, with total imports and exports rising to 92.3 % of
GDP in 2014 from 86 % in 2008. The EU remains Albania’s largest trading partner by far,
with a share of 77.4 % of its goods exports and 61.1 % of its goods imports in 2014. Italy is
the main destination for Albanian exports, absorbing more than half of Albanian goods sold
abroad in 2014 and providing almost a third of its goods imports. Trade links with Central
European Free Trade Agreement (CEFTA) countries are also relatively important as they
accounted for some 12 % of Albanian goods exports and 8 % of its imports of goods in 2014,
but these shares are largely unchanged since 2008, pointing to a potentially large untapped
potential for future growth.
Substantial progress has been made in lowering technical barriers to trade. However,
additional efforts should be made in the area of sanitary and phytosanitary measures and
administrative barriers, such as introducing electronic clearance of goods and streamlining
customs procedures.
4.

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP

4.1.

Chapter 1: Free movement of goods

The free movement of goods ensures that many products can be traded freely across the EU
based on common rules and procedures. Where products are governed by national rules the
principle of the free movement of goods prevents these creating unjustified barriers to trade.
Albania is moderately prepared in the area of free movement of goods. There has been
some progress, mainly in standardisation and accreditation. In the coming year, the country
should in particular:
→ approximate legislation with the acquis in the areas of metrology, ‘new and global
approach’ product legislation and procedural measures;
→ establish a market surveillance inspectorate.
Some progress has been made on horizontal measures. On standardisation, Albania
continued to adopt European standards, mainly through the ‘cover page’ translation method.
In 2014, 1 269 European standards were adopted, comprising 597 standards of the European
Committee for Standardisation (CEN), 149 standards of the European Committee for
Electrotechnical Standardisation (CENELEC) and 523 from the European
Telecommunications Standards Institute. A further 187 international standards were adopted,
comprising 99 ISO and 88 International Electrotechnical Commission (IEC) standards.
Amendments to the Law on Standardisation were enacted by the Parliament in May, aiming at
alignment with the acquis with regard to notification of standards on technical regulations.
The strategy on consumer protection and market surveillance, covering also accreditation and
metrology, was adopted. In February, the government amended the Regulation on the
Managing Board of the General Directorate of Standardisation.
On conformity assessment, in May Albania became a full member to the European
Accreditation (EA) body. Albania’s signature of the EA multilateral agreement on testing
laboratories is awaiting a decision by the EA.

31

A new advisory board on accreditation was set up in the General Directorate of
Accreditation (GDA) in December, aiming to better balance the representation of public and
private institutions in the decision making process. The GDA signed a memorandum of
understanding with the Tirana Chamber of Commerce in October.
On metrology, a new Law on Metrology was adopted in September 2015. The General
Directorate of Metrology collected about 75 % of the fines for infringement of legislation
issued in 2014. There was no progress on alignment with the Measuring Instruments
Directive.
There was no progress on market surveillance. The legal base for establishment of a market
surveillance inspectorate remains to be adopted. In February, amendments to the law on
processing, transport and trade of petroleum, gas and their by-products were prepared but
have not been adopted yet.
Some progress has been made in the area of ‘Old Approach’ product legislation, through
the adoption in July of a government decision on the technical regulation and the essential
requirements, conformity assessment and CE marking of implantable medical devices.
No progress was made on ‘New and Global Approach’ product legislation and in the area
of procedural measures.
4.2.

Chapter 2: Freedom of movement for workers

Citizens of one Member State have the right to work in another Member State and must be
given the same working and social conditions as other workers.
Albania is at an early stage in freedom of movement for workers. There has been no
progress in this area.
As regards access to the labour market, no further progress has been made on guaranteeing
equal treatment for EU workers in the Albanian labour market.
As regards coordination of social security systems, bilateral agreements on social security
transfer were signed with Kosovo and the former Yugoslav Republic of Macedonia, in
February and March respectively. Comparable agreements with Hungary and Romania have
yet to be ratified, while negotiations with the Czech Republic and Germany are ongoing.
Negotiations with Luxemburg, Belgium and Austria are envisaged.
4.3.

Chapter 3: Right of establishment and freedom to provide services

EU natural and legal persons have the right to establish themselves in any Member State and
to provide cross-border services. For certain regulated professions, there are rules on mutual
recognition of qualifications. Postal services are gradually being opened up to competition.
Albania is moderately prepared in the area of right of establishment and freedom to provide
services. There has been good progress, mainly on aligning legislation with the postal acquis.
In the coming year, the country should in particular:
→ continue to align its legislation with the Services Directive and the Professional
Qualifications Directive;
→ strengthen institutional capacity for the right of establishment and mutual recognition of
professional qualifications.
As regards the freedom to provide cross-border services, preparations for further alignment
with the acquis have continued with the preparation of a general law on services. Preparations
for merging the National Registration Centre (NRC) and the National Licencing Centre

32

(NLC) have started. Sector legislation is being screened for consistency with the Services
Directive: the first screening reports on the mining sector and on the veterinary sector have
been completed, while legislation in the field of tax, social services and legal sectors has
started to be screened. Parliament passed amendments to the legislation on company
registration and licensing, authorisations and permits in February.
A new Law on Postal Services was adopted by parliament in May. This aims to ensure a
universal postal service throughout the country and to further align Albanian law with the
2008 EU Directive.
As regards mutual recognition of professional qualifications, parliament passed laws on the
professional associations for doctors and dentists, and amendments to the relevant laws on the
professional associations for nurses and pharmacists. The professions of social worker and
psychologist were included in the list of recognised professions. The legislation still needs to
be aligned with the Professional Qualifications Directive (2005/36/EC) including on
professions for which minimum training requirements have been harmonised
4.4.

Chapter 4: Free movement of capital

In the EU, capital and investments must be able to move without restriction and there are
common rules for cross-border payments. Banks and other economic operators apply certain
rules to support the fight against money laundering and terrorist financing.
Overall, Albania is moderately prepared in this area. There was some progress on free
movement of capital, mainly due to improved performance in the fight against money
laundering. In the coming year, Albania should in particular:
→ implement effectively legislation against money laundering at all levels and further
strengthen the national anti-money laundering and countering the financing of terrorism
(AML/CFT) system;
→ implement the action plan on acquisition of property by foreigners.
Preparations on capital movements and payments remain weak. An action plan to make it
easier for foreign citizens to buy property was adopted in March.
On payment systems, the Albanian Inter-Banking Payment System processed 86 430
transactions in 2014 (0.09 % more than in 2013 in number and 5.1 % more by value). The
number of transactions processed through the Albanian Electronic Clearing House rose by
22 % compared to 2013, and the value was 14.2 % higher than in 2013. This trend continued
in the first half of 2015. The Ministry of Finance continued to dominate the Clearing House
system, with 54 % of the number of transactions and 49 % of the total value.
On the fight against money laundering, in September Albania was removed from the list of
countries monitored by the Committee of Experts on the Evaluation of the Anti-Money
Laundering Measures and the Financing of Terrorism (Moneyval) in its ongoing compliance
process for combating the financing of terrorism. The number of suspicious transaction
reports increased in 2014 and the first semester of 2015.

33

4.5.

Chapter 5: Public procurement

EU rules ensure public sector procurement of goods and services in any Member State is
open to all EU companies on the basis of non-discrimination.
Albania has some level of preparation in public procurement. Procurement is an area
particularly vulnerable to corruption and more efforts are needed to prevent corruption from
occurring in the procurement cycle. Some progress was made in the past year, especially
through the adoption of amendments to the public procurement law. As regards concessions
there was backsliding, with the introduction of measures incompatible with the acquis. In the
coming year, Albania should in particular:
→ ensure effective, efficient and transparent functioning of the public procurement system by
implementing the public procurement part of the public finance management reform strategy;
→ implement a legal alignment plan to ensure increased harmonisation with EU public
procurement rules, including in the area of concessions, and defence procurement;
→ take steps to strengthen the public procurement review system by ensuring the Public
Procurement Commission’s functional independence from the government.
Institutional set-up and legal alignment
As concerns the legal framework, the Law on Public Procurement is largely in line with the
EU directives on classical and utilities procurement and is harmonised with relevant
administrative and budget provisions. Harmonisation with the revised directives on public
procurement (Directive 2014/24/EU) and on procurement by entities operating in the water,
energy, transport and postal services sectors (Directive 2014/25/EU) has yet to be achieved.
Albania’s legislation is not yet in line with Directive 2009/81/EC on defence and sensitive
security procurement and Regulation No 2195/2002 on the Common Procurement Vocabulary
and there are gaps in conformity with the Remedies Directive.
The Law on Concessions and Public Private Partnerships is partly aligned with Directive
2014/23/EU. Amendments to the law adopted in July introduce the option of granting a bonus
of 10 % for unsolicited proposals, which is a breach of acquis. Road infrastructure of national
importance is exempt from the scope of the law. Urgent measures are needed to address these
discrepancies between the law and the directive.
The public finance management (PFM) strategy includes actions to further align public
procurement and concessions with the acquis and to strengthen inter-institutional cooperation
and coordination. The PPA should adopt a detailed action plan for public procurement under
the PFM strategy and report on its implementation.
The Public Procurement Agency (PPA) is a well-established institution. Mechanisms for
coordination with the key institutional actors and stakeholders should be put in place to
further strengthen PPA's role. Following the establishment of new local government units as a
result of the territorial administrative reform, the capacity of local employees assigned to
public procurement issues needs to be strengthened.
Implementation and enforcement capacity
The country’s public procurement market in relation to gross domestic product (GDP)
stood at 3.2 % in 2014, as compared to 3.6 % in 2013, with a decreasing trend over the last
year due to budget cuts. Planning, preparation, and implementation of public procurement
procedures generally respect transparency and efficiency principles. The use of negotiated
procedure without prior publication in 2014 fell to 31.2 % of all procedures, as compared to

34

33.6 % in 2013, and to 11.4 % in terms of volume, as compared to 19 % in 2013. However, in
the first half of 2015 the number of unpublished negotiated procedures increased
considerably, with a total of 2 224 procedures as compared to 2 121 procedures for all of
2014. A central public procurement portal is in place and is widely used. The e-procurement
system is obligatory and is fully operational, including for low-value procurement. A
centralised procurement body for certain types of procurement is operational in the Ministry
of Interior, but further centralisation is recommended to reduce vulnerability to corruption.
Monitoring of procurement procedures and of the award of contracts needs further
improvement. It focuses on compliance with the law and it does not extend to a full
assessment of practices in the public procurement market. PPA needs to further increase the
capacity to monitor the e-procurement system and to make the concession procedures and
plans more transparent.
Contracting authorities’ capacity to manage public procurement processes has improved.
The PPA adopted new standard tender documents for each type of procedure (works, goods,
services, consultancy and design contest) and in January issued instructions for several
procedures. The government committed itself to addressing corruption and conflict of interest
in public procurement as part of the anti-corruption strategy. However the High State Control
has estimated that the financial loss to the state budget from public procurement ran at EUR
4.8 million in 2014, almost double that of 2013.
Efficient remedies system
The right to legal remedy is stipulated in the Constitution and in the public procurement law.
It is broadly in line with the general EU Treaty principles and the Remedies Directive, but
further improvements are needed by establishing the legislative framework for ineffectiveness
of contracts, for alternative penalties and for ex ante voluntary transparency notices. The
remedies system includes an administrative review by the Public Procurement Commission
(PPC), whose decision can be challenged in the Administrative Court. The consistency of
decisions on public procurement cases should be improved by organising joint training for
judges, PPA and PPC staff. The replacement of the PPC chairman and some of its members
gives cause for concern about the body’s independence. Measures should be taken to ensure
the PPC’s independence and impartiality, which are seriously undermined due to its
subordination to the Council of Ministers.
The PPC received 834 complaints in 2014, or 48 % more than in 2013. Almost 60 % of them
were considered unsubstantiated and most of the complaints accepted were related to
procurement procedures for security services. In about 40 % of cases, the legal maximum
time for processing the complaint was exceeded. About 8 % of its decisions in 2014 were
challenged in the Administrative Court. The provisions do not allow a complaint to be lodged
against unpublished negotiated procedures. This provision excludes 31 % of procurement
procedures from the review mechanism.
While the remedy procedure has broadly been established, the capacity of the PPC and the
Administrative Court to deal with complex and increasing number of procurement-related
appeals needs to be strengthened to ensure timely processing of complaints.

35

4.6.

Chapter 6: Company law

The EU has common rules on the formation, registration, and disclosure requirements of a
company, with complementary rules for accounting and financial reporting, and statutory
audit.
Albania is moderately prepared in the area of company law. Some progress was made in
this field. In the coming year, the country should in particular:
→ strengthen the capacity and independence of the Public Audit Oversight Body.
On company law, amendments to the 2008 Law on Entrepreneurs and Companies were
adopted in October aimed at further alignment with the acquis. Provisions include reporting
and documentation requirements for mergers and divisions, and protection of the interests of
members and third parties. The Law on the National Registration Centre was amended in
February further aligning with the acquis by providing for online submission of annual
balance sheets and audit reports by companies.
On corporate accounting, the national accounting standards adopted in July 2014 apply to
statements filed from January 2015 onwards. The translation and final transposition of
international accounting standards at national level have yet to be completed. Although online
notification of balance sheets is now available, steps should be taken to ensure that companies
file a single set of financial statements (i.e. the duly approved version) in the national business
register. Public access to companies’ financial statements should be further improved.
In relation to auditing, the Public Audit Oversight Body has tabled proposals aimed at
increasing its budget to promote its independence and ensure it is a permanent structure.
Further efforts are needed to secure full independence.
4.7.

Chapter 7: Intellectual property law

The EU has harmonised rules for the legal protection of copyright and related rights. This
covers, for instance, computer programs, broadcasting and trademarks, designs,
biotechnological inventions and pharmaceuticals.
Albania has some level of preparation regarding intellectual property rights. Some progress
was made in the last year. However, Albania has still not met its obligations under Article 73
of the Stabilisation and Association Agreement on the protection of intellectual and industrial
property rights. In the coming year, Albania should in particular:
→ adopt a new copyright law in line with European standards;
→ improve the functioning of the collective management agencies and payment of royalties
to rights holders.
As regards copyright and neighbouring rights, the new copyright law remains to be
adopted.
In the area of industrial property rights, secondary legislation aimed at implementing the
amended Law on Industrial Property was adopted. Two regulations on the approval of fees
concerning industrial property and the issuing of patents for inventions and utility models
entered into force in January and February respectively. Three additional regulations on the
registration of trade and service marks, geographical indications and industrial designs were
adopted in June.
As concerns enforcement, the General Directorate of Patents and Trademarks' new structure
was approved in June. Its cooperation with the National Registration Centre was strengthened.

36

The General Directorate pursued awareness-raising activities, and saw an increase in the
number of companies registering their trademarks.
The Copyright Office conducted inspections and monitored the users of intellectual property,
and issued certifications of author's rights and the transfer of economic rights and registered
contracts. Its cooperation with the local authorities, police and some universities improved. In
2014, the number of fines imposed by the office increased compared with 2013. Its
administrative capacity improved, but remains insufficient. The collective management
agencies continued to face difficulties in carrying out their work, and there were significant
delays in renewing their licences.
The number of counterfeit products in the country is still high and the market surveillance
inspectorate has not yet been set up. The General Directorate of Customs continued to seize
counterfeit products at customs posts. A joint operation to combat intellectual property rights
infringements and the production and trafficking of counterfeit goods was conducted,
resulting in 61 criminal proceedings and fines totalling EUR 15 000. Complaints to the police
by stakeholders about infringements of industrial property rights and illegal production of
goods increased, resulting in 67 perpetrators being prosecuted in 2014. Further efforts are
needed to increase awareness among key stakeholders, including judges.
4.8.

Chapter 8: Competition policy

EU rules protect free competition. They include anti-trust rules against restrictive agreements
between companies and abuse of dominant position. EU rules also prevent governments from
granting state aid which distorts competition.
Albania is moderately prepared in competition policy. Some progress was made
particularly as regards antitrust and mergers. In the coming year, the country should in
particular:
→ increase the operational independence of the State Aid Commission.
→ strengthen the administrative capacity of the State Aid Control Unit.
On antitrust and mergers, the Albanian Competition Authority (ACA) adopted guidelines
on the assessment and abuse of dominant market position and drafted new guidelines on
remedies based on the European Commission notice on remedies. The administrative capacity
of the ACA is sufficient and its staff has a good level of expertise. However, delays in court
proceedings are too long and further efforts are needed to increase the availability and quality
of training for judges on competition policy.
On state aid, an inter-ministerial working group was set up to improve coordination. The
administrative capacity of the State Aid Control Unit in the Ministry of Economic
Development, Trade, Tourism and Entrepreneurship remains inadequate. State Aid
Commission's operational independence remains a concern. The State Aid Control Law is
being revised to strengthen the independence of the enforcement authorities, but the law
remains only partially aligned with the acquis. The amount of state aid granted in 2014 was
EUR 46.4 million, considerably less than the previous year. Access to information on the
State Aid Commission’s decisions improved with the publication of its decisions online.
As regards liberalisation, an ACA ex post evaluation revealed that the contracting authorities
had not met their obligation to request ACA assessment when granting exclusive rights.

37

4.9.

Chapter 9: Financial services

EU rules aim at ensuring fair competition between and the stability of financial institutions,
namely banking, insurance, supplementary pensions, investment services and securities
markets. They include rules on authorisation, operation and supervision of these institutions.
Albania is moderately prepared in financial services. Some progress was made in this field.
For banks and financial conglomerates, legislation on the capital adequacy ratio was
amended. Preparations in financial market infrastructure, the securities market and investment
services remain at an early stage. In the coming year:
→ the Financial Supervisory Authority (FSA) should complete its board structure according
to the FSA law.
On banks and financial conglomerates, the Bank of Albania adopted a regulation on the
capital requirements for second tier banks based on the Basel III capital adequacy ratio.
Regulations on the functioning of the central system of registering and liquidating security
titles and on consumer and mortgage credit were adopted. Amendments were made to
regulations on the inter-bank large payment system; the activities of banks; foreign currency
activities; and risk management of large exposures to counterparty failure among banks. The
institutional and administrative capacity of the Bank of Albania supervisory department was
increased. Since January, it has been assessing banks based on the new risk assessment
methodology, in line with the acquis. The banking system remained solid and liquid.
In the non-banking sector, in March parliament appointed the new chair of the Financial
Supervisory Authority (FSA), following the 2014 amendments to the Law on the Financial
Supervisory Authority. The FSA has taken steps to increase its institutional capacity, but its
new organisational structure remains to be approved and the vacant positions in the board to
be filled. A new micro-credit financial institution was licenced in June.
In insurance and occupational pensions, the FSA issued regulations on principles and
procedures related to insurance companies’ accountancy, including internal risk control
systems and liquidity obligations. It also adopted regulations on notification, correction or ban
of prospectuses.
As regards financial market infrastructure, the Tirana stock exchange was suspended in
December, as it did not list any companies and no securities were traded. It remains on standby in case companies become interested in being listed on the stock market.
On securities markets and investment services, the volume of investment funds continued
to grow in 2014 and was dominated by government securities, which accounted for 85 % of
total assets. Regulations on administering the liquidity of the investment funds and on
notifying measures to prevent money laundering and financing of terrorism were adopted.
4.10. Chapter 10: Information society and media
The EU supports the good functioning of the internal market for electronic communications,
electronic commerce and audio-visual services. The rules protect consumers and support
universal availability of modern services.
Albania is moderately prepared in the field of information society and audiovisual media.
There was some progress in the past year. The capacity of the Agency for Electronic and
Postal Communications (AKEP) and the National Agency for Information Society (NAIS)
was strengthened. A new 2015-2020 digital agenda strategy was adopted. E-services provided
to public institutions and citizens increased. In the coming year, the country should in
particular:

38

→ increase the independence of the media regulator and the public broadcaster;
→ implement, as a matter of urgency, the switchover from analogue to digital broadcasting.
In electronic communications and information and communications technologies,
legislation on public information and consultation was adopted in 2014, aiming at alignment
with the acquis and the principles of the Digital Agenda for Europe. As for market regulation,
mobile termination rates (for calls received) were further reduced, and AKEP decided on a
tariff plan which shall be adopted by all operators until January 2016. The fourth UMTS/3G
license was awarded. Progress was made in implementing the frequency use plan approved by
AKEP in February 2014. AKEP’s administrative capacity was increased; however, no
progress was made in increasing its operational independence. No progress has been made in
making the emergency number 112 operational.
While the overall mobile usage is high and mobile broadband usage reached 35 %, fixed
broadband penetration remained low at 7.3 % in 2014.
In information society services, the cross-sectoral 2015-2020 digital agenda strategy was
adopted in April, including also a review of the national broadband plan of 2013. The number
of e-government services provided through the e-Albania.al portal to the public and
businesses increased. A centralised infrastructure along with an upgraded capacity and
security of online services for all institutions connected to the government network has been
established in the National Agency for Information Society (NAIS). Its staff has doubled, and
it has adopted a new organisational structure.
On audiovisual policy, progress has been slow. The new members of the Audiovisual Media
Authority (AMA) and its new chair were appointed in 2014. The opposition disputed the
election process in court, alleging that it did not follow the correct legal procedures. AMA’s
work was hampered by the absence of its members nominated by the opposition from
meetings. While the implementation of the strategy for switching from analogue to digital
broadcasting resumed in 2015 - after the conclusion of a court case brought against the
regulator by some broadcasters - the internationally agreed deadline for June was not met.
Substantial efforts are needed to implement the digital switchover as soon as possible. This
also applies to the delayed digitisation of the public service broadcaster (RTSH), which needs
to speed up preparations to ensure that networks can host its programmes and those of local
operators. The RTSH fee collection system improved. Since May, the RTSH Steering Council
is fully operational. It is expected to adopt its rules of procedure, elect members of its new
management body and adopt necessary documents and guidelines.
4.11. Chapter 11: Agriculture and rural development
The common agricultural policy supports farmers and rural development. This requires
strong management and control systems. There are also common EU rules for quality policy
and organic farming.
Preparations are at an early stage in agriculture and rural development. There was some
progress in strengthening the capacity of the Agricultural and Rural Development Agency in
preparation for entrusting it with budget implementation tasks. In the coming year, the
country should in particular:
→ increase the capacity of the National Authorising Officer and National Fund to implement
the Instrument for Pre-accession Assistance for Rural Development;
→ set up a farm register, establishing the land parcel information system and consolidating
the animal register, as integral parts of its integrated administration and control system.

39

As regards horizontal issues, the government continued its direct support and national
investment schemes in agriculture and agri-processing, totalling EUR 12,5 million in 2015.
Despite financial support from the EU for conduct of the agricultural census, the final results
of the census have not been published. With a view to improve agricultural statistics, the
government decided to return the task of carrying out statistical activities from the National
Institute of Statistics to the Ministry of Agriculture, Rural Development and Water
Administration.
In the area of common market organisation, the implementing legislation for the new law
on olive oil is awaiting adoption. Activity in this field was limited to the approval of
regulations on marketing standards for seeds. There was no progress on drafting and
approving standards for the marketing of agricultural products.
The 2014-20 strategy for agriculture and rural development was adopted in October. The
operating structures of the Instrument for Pre-accession Assistance for Rural Development
(IPARD) (the paying agency and managing authority in the Ministry of Agriculture, Rural
Development and Water Administration) have gained further experience following the
implementation of an IPARD-like scheme. However, the capacity for decentralised IPARD
management of other relevant operational structures, such as the National Authorising Officer
and the National Fund at the Ministry of Finance, still needs to be strengthened in line with
the requirements for entrusting them with budget implementation tasks. Following
parliament’s ratification of the framework agreement in April, the sectoral agreement between
Albania and the European Commission setting out rules for the management and
implementation of IPARD funds was adopted by the government in July. The 2014-2020
IPARD programme was adopted in July. Implementation of the land consolidation strategy,
which remains to be adopted, requires strengthening of administrative capacity in the Ministry
of Agriculture, Rural Development and Water Administration.
On quality policy, the Ministry of Agriculture, Rural Development and Water Administration
has not yet developed implementing legislation for the amended law on industrial property
rights.
On organic farming, the provision of subsidies through direct schemes and training on
organic production continued. The law on organic farming is not yet in place.
4.12. Chapter 12: Food safety, veterinary and phytosanitary policy
EU hygiene rules for foodstuff production ensure a high level of food safety. Animal health
and welfare and the safety of food of animal origin are safeguarded together with quality of
seed, plant protection material, harmful organisms and animal nutrition.
Albania has some level of preparation in food safety, veterinary and phytosanitary policy.
There was some progress, mostly related to food safety controls. Improvements in this area
would greatly help to increase export potential. In the coming year, the country should in
particular:
→ train staff and improve coordination among relevant institutions with a view to
strengthening capacity to align with EU legislation in this field;
→ adopt the strategy for restructuring the sector;
→ implement food safety rules, including official controls, import conditions and controls,
requirements for traceability of food and feed, and maximum pesticide residue levels.
On general food safety, the internal procedures and operational plans of the National Food
Authority have not yet been endorsed. No steps have been taken to improve the legal and

40

institutional framework for the food safety system by establishing responsibilities and
cooperation between implementing bodies. The rules on the organisation, functioning and
procedures of the Scientific Committee and Panels have not been finalised.
As regards veterinary policy, three mass vaccination campaigns were carried out against
rabies in red foxes, and relevant laboratory capacity for diagnosing and monitoring rabies was
set up. Vaccination of replacement animals against brucellosis in small ruminants was also
carried out. The veterinary service is fragmented, with unclear procedures, and limited human
and financial resources. Animal databases are not updated regularly, due to a lack of reporting
on animal movements and particularly on the slaughtering of animals. Disease reporting needs
to be improved.
With regard to the placing on the market of food, feed and animal by-products, the food
establishments database (AKUnet) has started to be used for the preparation of official
inspection plans. Residue monitoring programmes for undesired substances such as veterinary
medicines, mycotoxins and heavy metals are being implemented in small ruminants, swine,
eggs, milk, honey and fish. The programmes need to establish quantitative testing capacity for
aflatoxins in food products.
As regards food safety rules, no progress has been made on updating regulations on food
labelling, food contact materials and contaminants in line with the relevant acquis. The
frequency of microbiological monitoring of raw milk needs to be increased in line with the
regulations in place, and measures obliging producers to adopt good hygiene practices need to
be stepped up for the production of safer milk.
Legislation on specific rules for feed remains incomplete and unconsolidated.
On phytosanitary policy, administrative and technical capacity remains limited. No progress
has been made in the harmful organisms and seed and plant propagating material sectors.
Regarding genetically modified organisms (GMOs), the Ministry of Agriculture, Rural
Development and Water Administration is still assessing the relevant EU legislation.
4.13. Chapter 13: Fisheries
The common fisheries policy protects living resources of the sea and limits the environmental
impact of fisheries. This includes setting catch quotas, managing fleet capacity, rules for
aquaculture as well as support for fisheries and coastal communities.
Preparations are at an early stage on fisheries. There was no progress in this area. In the
coming year, the country should in particular:
→ endorse the sector strategy;
→ strengthen administrative capacity to ensure appropriate management of fish resources and
enforcement of regulations.
Resource and fleet management continue to suffer from a lack of clearly defined tasks and
responsibilities, institutional coordination and capacity. The vessel register is not updated
continuously. Fish landing statistics remain inaccurate, particularly with regard to data on
small fishing from coastal waters, lagoons and inland waters. The law on aquaculture has not
been adopted yet.
In inspection and control, some progress was made in preventing illegal or unregulated
fishing in the main lakes. The Department for Fisheries Services and Aquaculture continues to
lack the necessary resources and coordination with other bodies to ensure effective deterrence
of illegal fishing practices, particularly in marine waters. The functioning of the Vessel

41

Monitoring System, set up in 2011, has been subject to interruptions due to delays in
procurement procedures for the provision of services. This jeopardises viable and long-term
solutions for its maintenance and operation.
As regards state aid, direct government support for aquaculture continued, with subsidies of
up to 25 % of the price paid for fingerlings and feed. The government also adopted a decision
exempting fishing vessels from the carbon tax and from VAT on fuel.
As regards international agreements, Albania continued to cooperate with the International
Commission for the Conservation of Atlantic Tunas and participated regularly in the meetings
of the General Fisheries Commission for the Mediterranean (GFCM). However, gaps in the
implementation of GFCM decisions and difficulties in data transmission by Albania were
reported.
4.14. Chapter 14: Transport policy
The EU has common rules for technical and safety standards, security, social standards, state
aid and market liberalisation in road transport, railways, inland waterways, combined
transport, aviation and maritime transport.
Albania has some level of preparation in this area, where some progress was made in
transport policy. In the coming year, the country should in particular:
→ step up efforts to implement railway sector reform, in particular by ensuring necessary
independence of train operations from infrastructure management in line with the aquis;
→ strengthen administrative capacity for all modes of transport, in particular to ensure the
implementation of legislation on dangerous goods;
→ adopt and implement the transport strategy.
On road transport, the road code was amended with a view to aligning it with the EU
directive on driving licences. The road safety remains a serious concern; legislation on
dangerous goods transport is fully aligned with the acquis, but is not fully implemented
because the General Directorate of Road Transport lacks capacity. Legislation on road
infrastructure and vehicle inspections needs to be further aligned with the acquis. No progress
was made on aligning admission to the occupation of road haulier and access to the road
haulage market with the acquis. In March, the process of setting up gas emissions limits
started.
On rail transport, the new railway law has not yet been finalised. Upon adoption, it should
pave the way for splitting up the incumbent Albanian Railway, separating train operations
from infrastructure management in line with the aquis, and for setting up an independent
safety authority and regulatory authority. The level of investment in railway infrastructure
remains negligible, resulting in deterioration in transport services.
As regards air transport, Albania fulfilled its single European sky commitments for the first
transitional period under the European Common Aviation Area Agreement, but more work is
needed to complete the remaining requirements. The Albanian Civil Aviation Authority
(ACAA) needs to address the non-compliance findings of the European Aviation Safety
Agency inspection concerning air traffic management and air navigation services. . In
December, the law on the ACAA was amended to increase its institutional, organisational and
management autonomy however the ACAA still lacks capacity to ensure oversight of all the
organisations operating under its supervision. Albania actively participates in the joint service
provisional area (JSPA) initiative.

42

In maritime transport, as a result of the removal from service of a number of vessels, the
detention rate of vessels flying the Albanian flag fell and the national fleet remained on the
grey list of the Paris Memorandum of Understanding (MoU) on Port State Control. Albania
should follow up on its membership application to the Paris MoU and continue efforts to
further reduce the detention rate of its vessels. Further progress is needed on aligning
legislation on reporting formalities for ships with the acquis.
4.15. Chapter 15: Energy
EU energy policy covers competition and state aids, equal access to resources, the internal
energy market, energy efficiency, nuclear energy and nuclear safety and radiation protection.
Albania is moderately prepared in this area. There was some progress on energy,
specifically on aligning power sector legislation with the relevant acquis and improving the
bill collection rate. In the coming year, the country should in particular:
→ improve the financial recovery of the state power generation company and ensure the
economic sustainability of the electricity sector by reducing distribution losses and improving
the bill collection rate;
→ adopt and implement the national energy strategy and implement the April 2015 power
sector law;
→ adopt the national energy efficiency and renewable energy action plans.
On security of supply, preparations to construct the 400 kV interconnection line between
Albania and Kosovo are ongoing but were delayed due to the discovery of an ancient
historical site. Work continued on construction of a 100 kV transmission line in the south of
Albania. The feasibility study and environmental impact assessment for the construction of a
400 kV interconnection line with the former Yugoslav Republic of Macedonia were
completed. In January, an agreement was signed on the permanent synchronous functioning
of the Albanian electricity transmission system with the continental European system, as a
step towards Albania’s full membership of the European Network of Transmission System
Operators (ENTSO-E). Albania managed to cover 100% of its demand from hydropower,
even though it produced 32 % less power in 2014 compared to 2013 as a result of poor
hydrological conditions. Construction work on the Trans-Adriatic Pipeline (TAP) project
started in July. The construction of the Ionian Adriatic Pipeline (IAP) was launched in March
and a joint statement on IAP was signed between Albania, Bosnia and Herzegovina,
Montenegro and Croatia. Albania continued preparations for the development of a gas master
plan. The Vlora thermal power plant is still not operational.
The legislation on hydrocarbons was amended in March to provide for new, transparent
reporting requirements. As a result of a first control and verification operation in May,
Albania revoked 23 licenses of hydrocarbons trading companies. Albania already broadly
meets the obligation of keeping oil stock reserves corresponding to 90 days of imports.
In the internal energy market, the new power sector law aligned with the EU’s third energy
package was adopted in April and the law on the gas sector was adopted in September 2015.
The Energy Regulatory Entity approved a new electricity tariff structure for 2015. In 2014,
non-technical losses in power distribution were reduced to 44% of distribution losses, as
compared to 61% the previous year. The bill collection rate increased to 92.6% in 2014,
compared to 83% in 2013. In February, the government adopted a financial recovery plan for
the energy sector and an action plan for the next five years. Despite efforts to clear arrears
accumulated before 2014, unpaid arrears by the public power operator continue to create
financial difficulties for private operators in the sector.

43

In renewable energy, the Energy Community took infringement proceedings to the second
stage, sending its reasoned opinion in February and a reasoned request in May on Albania’s
failure to submit a renewable energy action plan. In October, legislation on the hydrocarbon
sector was amended to cover production, transport and trade in bio-fuels and other
renewables. Any further development of hydropower should take place in conformity with EU
environmental legislation. The law on energy efficiency in buildings has not yet been adopted
by the parliament. Albania missed its Energy Community deadline to align its law with the
2006 Directive on Energy End-Use Efficiency and Energy Services. The second national plan
for energy efficiency has yet to be adopted.
In nuclear energy, nuclear safety and radiation protection, a regulation on the protection
of workers from risks related to non-ionising radiation in the workplace was adopted in
December, aiming at alignment with the relevant acquis.
4.16. Chapter 16: Taxation
EU rules on taxation cover value-added tax and excise duties as well as aspects of taxing
income from savings of individuals and of corporate taxes. They also deal with cooperation
between tax administrations, including information exchange to prevent tax evasion.
Albania is moderately prepared in the area of taxation. Some progress was made, in
particular as regards legislative approximation with the acquis on value added tax (VAT) and
excise. Revenue performance in 2014 increased, as a result of tax increases and improvements
in the tax administration, but did not increase as budgeted in 2015. In the coming year, the
country should in particular:
→ implement new VAT legislation effectively, which entails raising awareness among
businesses and training tax officials;
→ strictly implement measures to prevent new VAT arrears and address businesses’
complaints about VAT refund delays;
→ ensure the new IT system is effective in reducing arbitrary practices, fraud and corruption
and improving information exchange.
On indirect taxation, the new value added tax law and implementing legislation came into
force in January. The law seeks alignment with the VAT Directive but still contains
exemptions (zero rates) which are not in line with the acquis. It sets clear deadlines for
payment of VAT refund claims. Measures were taken to refund almost all VAT arrears.
Legislation on VAT and on tax procedures was amended in July to provide for the
establishment of a central unit within the General Directorate of Taxation which will process
VAT reimbursement requests based on a risk model, with the aim of shortening the duration
of the procedure. Implementing instructions on some VAT exception procedures were also
adopted in June. The excise law was amended in December, increasing excise duties on
tobacco products, making changes to excise duty on energy drinks and removing excise duty
on natural bitumen. Further work is needed to align excise rates with the acquis.
On direct taxation, the rate of personal income tax levied on income from shares, rental of
immovable property and copyright was raised to 15 %, while income deriving from voluntary
pension schemes became exempt. Further steps remain necessary to improve transparency and
public consultations on drafting fiscal legislation.
As regards administrative cooperation and mutual assistance, Albania has been
participating in the EU’s Fiscalis 2020 programme since January. The tax administration is
cooperating with the Italian revenue agency on transfer pricing issues under the OECD

44

programme ‘Tax inspectors without borders’. Agreements on avoidance of double taxation
and prevention of tax evasion were concluded with Iceland and the Swiss Federation.
As regards operational capacity and computerisation, a new IT system was deployed in the
tax administration as of January. Personal income tax declarations must now be made via
electronic means. Initial technical problems encountered by taxpayers have been resolved.
Coordination between the tax and customs administrations has been strengthened by ensuring
their IT systems are interoperable. Measures were taken to fight fiscal evasion in the fuel
market. The General Directorate of Taxation strengthened its cooperation with the High
Inspectorate for Declaration and Audit of Assets and Prevention of Conflicts of Interest. The
management and revenue collection capacities of the tax administration need to be enhanced
to ensure tax compliance and prevent further revenue slippages.
4.17. Chapter 17: Economic and monetary policy
EU rules require the independence of central banks and prohibit them 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 through improved multi-annual budgeting and transparency
in budget preparation, but further consultations with the business community are needed on
drafting fiscal measures. In the coming year, the country should in particular:
→ further strengthen the medium-term budgetary framework and increase commitment
control, partly by adopting a well-designed fiscal rule in line with the Directive on
requirements for budgetary frameworks;
→ ensure better internal coordination and consultations with external stakeholders when
formulating structural reform priorities, to strengthen ownership and implementation.
On monetary policy, the Law on the Bank of Albania should be aligned with the acquis as
regards the personal independence of the Supervisory Council's members and the bank’s
accountability. The Bank of Albania's Supervisory Council is fully operational after a new
governor and chief inspector were appointed in February and April respectively. The security,
transparency and internal auditing of the bank were strengthened. The central bank law
establishes the primary objective of price stability, in line with the primary objective of the
European System of Central Banks. The Bank of Albania has cut the key interest rate in
several steps over the past six years to a new historic low of 2 % in January 2015 in an effort
to steer inflation towards the target rate of 3%. However, inflation remains below target.
On economic policy, Albania adopted its Economic Reform Programme (ERP) in January.
The programme's macroeconomic and fiscal frameworks have improved; links between the
macroeconomic and fiscal assumptions and the structural reform measures have also been
made more explicit. However, the capacity for economic policy formulation and
implementation needs to be further improved. Internal coordination of the programme and
consultations with external stakeholders remain weak. For the first time, as part of the budget
law, parliament adopted prospects for budget expenditure and revenues for the period 20152017. The budget for 2015 and the 2016–2018 Macroeconomic and Fiscal Framework were
revised in July 2015 due to a shortfall in revenues. Budget forecasting needs to be improved.
The European System of Accounts, 2010 standards (ESA 2010) have been implemented
partially in annual GDP data and further efforts are needed in this area (see also Chapter 18:
Statistics). Efforts were made to improve public financial management through the adoption
of a public financial management strategy and action plan.

45

4.18. Chapter 18: Statistics
EU rules require that Member States are able to produce statistics based on professional
independence, impartiality, reliability, transparency, and confidentiality. Common rules are
provided for the methodology, production and dissemination of statistical information.
Albania has some level of preparation in statistics. Some progress was made, notably in
harmonising methodology with EU standards in some statistical areas.
However, significant efforts are needed to strengthen the human and financial resources of the
Institute of Statistics (INSTAT) to comply with European standards, to improve the quality of
statistics and to ensure the alignment of agriculture, business and social statistics. INSTAT's
role as coordinator of national statistics system should be enhanced. In addressing the
shortcomings outlined below, in the coming year, Albania should in particular:
→ strengthen the position of INSTAT in the public administration through adjustments in the
salary structures and civil servants job positions;
→ improve the professional independence of INSTAT through changes in the statistical law,
among others, guaranteeing the professional independence of INSTAT in recruitment and
staffing;
→ further align statistics with the European system of accounts (ESA 2010).
On statistical infrastructure, the legal framework is in line with the European statistics Code
of Practice and classifications are in line with EU standards and applied in statistical surveys.
INSTAT is the main producer and coordinator of statistics and its professional independence
is enshrined in the law, but needs further enhancement in practice through independence in
deciding on staffing and budget. In March, INSTAT signed a memorandum of understanding
with the General Directorate for Taxation. Its coordinating role in the national statistical
system needs to be further strengthened through the conclusion of Memoranda of
Understanding and an increase of its status and standing in the public administration.
On macroeconomic statistics, INSTAT improved national accounts' estimates based on
European System of Accounts 2010 (ESA 2010) concepts and methodology. Annual and
quarterly gross domestic product (GDP) data are produced in constant and current prices..
Albania started compiling government finance statistics and excessive deficit procedure
(EDP) notification tables and INSTAT submitted them to Eurostat in October 2014.. A new
estimation method has been introduced for calculating annual GDP based on the expenditure
approach, independent from the production approach. In February, INSTAT published, for the
first time, supply / use tables and input and output tables for the years 2009-2011 according to
ESA 2010. Data sources for macro-economic statistics need to be improved, in particular by
data holders outside INSTAT.
Structural business statistics and short-term statistics for industry and construction are mainly
in line with the acquis, but further quality improvements are needed as well as efforts to
improve statistics for the service sector. The revised statistical classification of economic
activities (NACE Rev.2) started to be implemented in January 2015 by statistical units,
ministries, central and local institutions, juridical and physical persons who carry out
economic activities in the country. Statistics on research and development, information and
communication technologies and on innovation still need to be aligned. In June, INSTAT
carried out a sector review of the business sector.
Within social statistics demographic statistics are to a large extent produced. A pilot survey
of income and living conditions (SILC) was carried out in November. Labour market statistics

46

are broadly aligned with the acquis. The labour force survey is conducted and published
regularly and results from the labour cost survey for the year 2012 have been published. The
labour cost index and the structure of earnings data still need to be produced. In June, the
country adopted the latest version of the International Standard Classification of Education
(ISCED 2011). External migration statistics still need to be developed.
Agricultural statistics are partially aligned with the acquis. In June, INSTAT presented the
agriculture and livestock statistics for 2014. The results of the census of agricultural holdings
have not been published yet, so the statistical farm register has not been finalised. The transfer
of responsibility for carrying out agriculture surveys from INSTAT to the Ministry of
Agriculture, Rural Development and Water Administration will require improved technical
capacity and a proper coordination mechanism with INSTAT.
Environment and energy statistics are partially in line with the acquis. Energy balances for
electricity were produced for the 2000-2014 period; energy balances for other energy sources
are still missing. As part of the European Environment Information and Observation Network
(EIONET), the Ministry of Environment reports timely and accurately to the European
Environment Agency on air and water quality. However, environmental statistics are not
complete and not updated regularly. Statistics on waste, on water and on waste water need to
be further developed. Material flow balances and environmental protection expenditure
statistics are not yet produced.
4.19. Chapter 19: Social policy and employment
EU rules in the social field include minimum standards for labour law, equality, health and
safety at work and anti-discrimination. They also promote social dialogue at European level.
Albania has some level of preparation in social policy and employment. Some progress was
made, notably efforts to align the law with the EU acquis on health and safety at work. Key
reforms were launched in social protection. Amendments to the labour code and the national
jobs and skills strategy were adopted. The employment rate and labour market participation
remain low, and the informal economy is still a significant job provider. In the coming year,
the country should in particular:
→ finalise and adopt the 2015-2020 social protection strategy and ensure it is implemented
effectively; make further progress in the social care reform;
→ improve labour market statistics and develop social statistics in line with EU surveys.
On labour law, amendments to the labour code were approved by the government, but remain
to be enacted by parliament. They aim to bring the code in line with the acquis on health and
safety at work, non-discrimination, relations between employers and employees, and
provision of social security to a series of unprotected professions. They also reflect
recommendations by the Council of Europe Experts Committee for Social Rights and
commitments on implementing the relevant International Labour Organisation conventions
and recommendations.
As regards health and safety at work, four new regulations were adopted, covering risks
arising from electromagnetic fields, artificial optical radiation, noise and vibration, aiming at
aligning legislation with the acquis. The government adopted secondary legislation related to
safety measurements for pregnant women, protection of minors in the workplace and to the
fishing industry. Efforts were made to improve labour inspection by training inspectors on
applying the new occupational safety and health legislation and extending electronic reporting
to the regional labour inspectorates. Accident reporting and labour inspections to reveal

47

undeclared workers improved. The number of reported accidents at work increased from 86 in
2013, to 111 cases in 2014.
On social dialogue, the National Labour Council (NLC) is functioning properly; however,
further efforts are needed on collective bargaining at all levels and to increase social partners’
capacity to negotiate collective agreements. Some social partners expressed concern over
being excluded from the six NLC tripartite committees that were set up. Bipartite social
dialogue needs to be improved and social partners’ autonomy needs to be increased. Much
remains to be done to develop social dialogue at local and enterprise level.
On employment policy, the 2014-20 national jobs and skills strategy and action plan were
adopted, but no mechanism for monitoring their implementation is in place yet. In June, the
government adopted the 2015-2020 national action plan on youth. The unemployment rate
estimated by the labour force survey decreased from 18.2 % in the first quarter of 2014 to
16.9 % in first quarter of 2015, but remains high, especially among women, young people and
persons with disabilities. Employment rates for men rose from 50.7 % in 2013 to 51.4 % in
2014, while women’s employment rate fell slightly from an already low 38.0 % in 2013 to
37.6 % in 2014. In 2014, long-term unemployment represented about 54.2 % of total
unemployment. Administrative capacity for job placement was increased, with the creation of
five new model employment offices. Labour market statistics are broadly aligned with the
acquis. However, further efforts are needed to improve the coverage of data. Agriculture
remains the main job provider, followed by market services and non-market services. The
informal economy remained a significant source of jobs, accounting for around 40 % of
employment in the non-agriculture sector. A comprehensive approach to inspection of
informal employment activity has yet to be developed.
There were no developments on the European Social Fund. The agreement for Albania’s
participation in the Programme for Employment and Social Innovation (EaSI) was signed.
As regards social inclusion, a social care reform was initiated. Minimum basic services are
provided to residents, but need to be stepped up. Many social services are dependent on donor
funding and civil society, and lack a clear legal framework and adequate budget.
As regards inclusion of persons with disabilities, training was provided to social workers, the
staff of Child Protection Units, and to school and kindergarten teachers to promote the
inclusion of children with disabilities. However, persons with disabilities still face difficulties
in accessing education, housing, legal aid, employment, healthcare and social services, and
legal provisions on the inclusion of children with disabilities are not effectively implemented.
Disability payments have been linked to the consumer price index published by INSTAT.
In the area of social protection, the pension reform process is ongoing. Given the important
role that municipalities play in providing social services, all strategies and policies on social
inclusion and protection need to be closely coordinated with the territorial and administrative
reform that significantly reduced the number of municipalities.
As regards anti-discrimination, the number of cases handled by the Commissioner for
Protection against Discrimination (CPD) increased; however, more outreach and a more
proactive approach are required. The CPD significantly increased its participation in judicial
processes, participating in 18 judicial processes in 2014, compared to six in 2013.
In the area of equal opportunities, further action is needed to increase the representation of
women in the labour market and ensure equal opportunities and treatment. Women account
for only 24 % of the labour force but 60 % of registered long-term unemployed. (See also
Chapter 23 — Judiciary and fundamental rights)

48

4.20. Chapter 20: Enterprise and industrial policy
EU industrial policy enhances competitiveness, facilitates structural change and encourages
an enterprise friendly environment that stimulates small and medium sized enterprises.
Albania is moderately prepared in the area of enterprise and industrial policy. Some
progress was made in this field in particular with alignment with the EU Small Business Act.
In the coming year, the country should in particular:
→ strengthen the capacity of the Albanian Investment Development Agency, including
capacity for services to both local and foreign investors;
→ improve further policy consultations.
On the principles of enterprise and industrial policy, the business and investment
development strategy and action plan were adopted in October 2014. They are in line with the
principles of the EU’s ‘Small Business Act’, the national plans for the South East Europe
2020 strategy and the World Bank’s ‘Doing Business’ indicators. Legislation on the National
Registration Centre and on licensing, authorisations and permits was amended in January to
reduce the administrative and regulatory burden on businesses. Further efforts are needed on
the formalisation of the Regulatory Impact Assessment. In April, the Investment Council was
set up, with the participation of six members from state institutions and six business
representatives, to further improve the business climate and facilitate the dialogue between
government, business and donors. The national employment and skills strategy was adopted
in 2014. A law on strategic investments and amendments to the law on the establishment and
functioning of the economic zones were enacted by the Parliament in May with a view to
improve the investment climate.
As regards enterprise and industrial policy instruments, Albania ratified in June an
agreement to participate in the EU’s COSME competitiveness programme. Albania continued
to support financing of small and medium-sized enterprises (SMEs) through a credit line of
EUR 15 million concluded with the Italian government, the Western Balkans Enterprise
Development and Innovation Facility, and the European Fund for Southeast Europe.
However, SME access to credit and the lack of skilled staff remain business concerns. The
government introduced a package of legislation to support the inward processing industry by
reducing administrative formalities.
On sector policies, a new law on tourism was adopted in June, to promote and attract
strategic domestic and foreign investment in tourism, in line with the Law on Strategic
Investment adopted in May. Tourism businesses face difficulties related to informality, the
need for improved infrastructure (including waste management and access to energy) and
property issues. On mining, amendments to the law on the mining sector were adopted in
October 2014, to improve the legislation as regards approval of mining operations.
4.21. Chapter 21: Trans-European networks
The EU promotes trans-European networks in the areas of transport, telecommunications and
energy to strengthen the internal market and contribute to growth and employment.
Albania has achieved some level of preparation in the area of trans-European networks.
Some progress was made, notably in developing road infrastructure and interconnecting
energy networks. In the coming year, Albania should in particular:
→ continue work on the development of the transport and energy networks in line with the
infrastructure investment priorities for the core network, agreed under the regional
connectivity agenda;

49

→ step up efforts on transport infrastructure maintenance and land expropriation.
On transport networks, Albania continued to participate in the South East Europe Transport
Observatory (SEETO). Albania played an active role within the Western Balkans 6 process
and has endorsed the extension to the Western Balkans of the TEN-T core network and core
corridors focused on the improving connectivity within the Western Balkans as well as with
the EU.
Improvements to the road network continued. Construction of the Fier and Rrogozhine
bypasses is progressing. On the north-south corridor, works on the Damës-Tepelenë segment,
Shkozet overpass and the extension of the section Durres-Rrogozhine were completed. As
regards road corridor VIII, completion of the Tirana-Elbasan road has been delayed.
A five-year programme of road maintenance started, with a focus on the maintenance and
safety of the road core network. There was no progress on the railway network and the section
from Librazhd to Pogradec remained non-operational due to a lack of maintenance. As
regards port infrastructure, dredging works to improve access to the port of Shengjin were
completed; the port is now operational and its capacity has increased.
As regards energy networks, Albania is making progress with the preparation of the TransAdriatic Pipeline project. Progress was made in regional energy connectivity. Preparatory
work on constructing a 400 kV interconnection line between Albania and the former
Yugoslav Republic of Macedonia has started.
4.22. Chapter 22: Regional policy and coordination of structural instruments
The EU funds regional development in the Member States. Implementation is the
responsibility of the Member States that must have adequate administrative capacity to ensure
the good handling and sound financial management of the projects.
Albania is moderately prepared in the area of regional policy. Some progress was made,
notably on the start of projects to be run in indirect management under the IPA 2013 national
programme. In the coming year, the country should in particular:
→ strengthen project management under the IPA 2013 programme to minimise the risk of
delays in the use of EU funds;
→ increase programming capacity for sector policies and improve design of mature sector
project pipelines, both at national and local level.
On the legislative framework, further efforts are needed to ensure multiannual sector
programming in line with the new sector approach under the IPA framework for 2014-2020,
together with flexibility in the government’s medium-term budget plan and appropriate cofinancing capacity for EU projects at national and local level.
On the institutional framework, following the conferral of management powers by the
European Commission under component I of the 2007-2013 IPA, the competent national
structures are implementing projects under the IPA 2013 programme. Preparatory work for
the management of IPA funds in agriculture and rural development needs to be stepped up
with a view to start to managing funds as of 2016. (See also Chapter 11 — Agriculture).
On administrative capacity, further action is needed to ensure competent staff for all IPA
structures in view of the workload stemming from management responsibilities.
On programming, coordination between the Ministry of Finance and line ministries needs to
be improved to develop and implement realistic and budgeted sector policies in line with the
government medium-term budget plan. The national strategy for development and integration

50

for 2015-2020 has not yet been adopted. A mature project pipeline of investments in regional
development has yet to be developed. As a result of the recent administrative territorial
reform, local governments are expected to increase their capacity to generate mature projects
in order to benefit from national and IPA support.
On monitoring and evaluation, the existing set-up of sector working groups was reorganised
with the aim of improving the monitoring of policy developments and providing strategic
advice. Four pilot integrated policy management groups (water management; public
administration reform; competitiveness and innovation; and employment skills and social
policy) were set up to support the government’s Strategic Planning Committee and other highlevel inter-ministerial committees in charge of key policy decisions.
In financial management, control and audit, the administrative capacity of the Central
Finance and Contracting Unit (CFCU) in the Ministry of Finance needs to be strengthened
while the audit authority requires increased human resources with senior expertise on audit.
4.23. Chapter 23: Judiciary and fundamental rights
The EU's founding values include the rule of law and respect for human rights. A proper
functioning judicial system and effective fight against corruption are of paramount
importance, as is the respect for fundamental rights in law and in practice.
Albania has some level of preparation for implementing the acquis and the European
standards in this area. Some progress has been achieved. As regards the judiciary, the ad hoc
Parliamentary Committee on Judicial Reform was set up to carry out comprehensive reform.
Full independence and accountability of judges and prosecutors is not ensured.
Administration of justice is slow and judicial decisions are not always enforced. A new anticorruption strategy and action plan were adopted. Corruption remains widespread in many
areas and continues to be a very serious cause of concern. In the area of fundamental rights,
further efforts are needed across the board as effective implementation of relevant legislation
and strategies remains limited. In the coming year, Albania should in particular:
→ strengthen the accountability of judges and prosecutors and fight corruption within the
justice system;
→ demonstrate further progress with a view to establishing a solid track record of
investigations, prosecutions and convictions in the fight against corruption and organised
crime at all levels;
→ improve institutional mechanisms to ensure child protection, the protection of victims of
domestic violence, and gender equality, enhance efforts to bring existing legislation on
juvenile justice in line with international standards, step up efforts to establish a solid antidiscrimination case law, and boost efforts to find a sustainable long-term housing solution for
vulnerable groups;
→ make further progress with the implementation of the 2012-2020 strategy on property
rights, and the processes of property registration, restitution and compensation.
(See also the specific recommendations on the judicial system, the fight against corruption
and freedom of expression in sections 2.3 and 2.4.)
Functioning of the judiciary
Strategic documents
In November 2014, an ad hoc Parliamentary Committee on Judicial Reform - which is made
up of members from both the ruling majority and the opposition - was set up. The Committee

51

is assisted by a high level group of experts which completed an analytical overview of the
current justice system in June and has drafted a judicial reform strategy and accompanying
action plan.
Management bodies
Two members of the High Council of Justice (HCJ), including its deputy head, were
dismissed by parliament following the adoption, in 2014, of contested amendments to the HCJ
law and a controversial parliamentary process. An appeal against the dismissals was rejected
by the Administrative Court and a new HCJ deputy head has not yet been appointed. The
reasoning behind HCJ's decisions is not published and there is still scope for improving the
transparency of the Council's decision-making process. The budget of the HCJ has increased
by 5.85 % compared to last year. The regulation on the functioning of the Council of
Prosecutors was amended in November, to include detailed criteria on evaluation of
prosecutors for promotion purposes. In February, a manual was approved with a view to
holding competitions for prosecutors.
Independence and impartiality
The functioning of the judicial system continues to be affected by a high degree of
politicisation and poor inter-institutional cooperation. The independence and impartiality of
the High Court is still not fully guaranteed. Since September 2014, parliament has rejected all
seven President’s nominations to the High Court and the vacancies concerned have yet to be
filled. Key legislation on reforming the Constitutional Court, the High Court, the HCJ, and the
Prosecutor’s Office is currently under discussion. Judges and prosecutors still do not have
appropriate working and security conditions, and protection against undue pressure remains
inadequate. Hearings continue to be held quite frequently in judges’ offices, which raises
concerns about potential undue influence and corrupt practices.
Accountability
The memorandum of understanding between the Ministry of Justice and the HCJ on
inspections continued to be implemented smoothly. Both institutions conducted various
inspections respectively in prosecution offices and courts. Requests to open disciplinary
proceedings against eight judges have resulted in one dismissal and three judges receiving
reprimands. The cases against the other four judges were abandoned. The disciplinary system
for judges needs to be substantially improved, including through a more transparent and
efficient inspection system. The Minister of Justice's role in the process also needs to be
reviewed and a track record of sanctions established.
Upon a proposal from the Council of Prosecutors, the General Prosecutor’s Office (GPO)
took measures against three prosecutors, including a reprimand, a warning of dismissal and a
proposal for dismissal.
The HCJ launched a website which enables the filing and monitoring of complaints against
judges. This was accompanied by an awareness-raising campaign on disciplinary complaints
against judges.
The transparency and impartiality of the appointment and dismissal procedures for key staff in
the GPO need to be enhanced, and the role of the Council of the Prosecution reinforced. The
lack of accountability of the GPO remains a matter of concern, as is the potential for political
influence in the process of appointing the General Prosecutor.
Judges’ asset declarations were audited in 2014 and those of prosecutors are planned to be
audited in 2015. Since October 2014, the HCJ suspended two judges for a lack of compliance
with declaration of assets requirements. Corruption in the judiciary remains an issue of
52

serious concern. Substantial efforts are needed to increase transparency and accountability,
and to implement the relevant recommendations made by the Group of States against
Corruption (GRECO) in its fourth-round evaluation report on corruption prevention in respect
of judges and prosecutors.
Professionalism and competence
Criteria for evaluating judges’ performance need to be improved. The process of assessing
judges’ performance for 2007-2009 is still not complete; this has prevented the HCJ from
appointing heads of court in full compliance with the relevant legal provisions. A new
regulation of the HCJ on the evaluation of HCJ inspectors started to be implemented in June.
Prosecutors and judicial police officers’ performance has been assessed for the year 2013.
Procedures for the recruitment of administrative court judges need to be reviewed to address
the limited number of applications in former competitions. There are still seven vacancies in
the administrative courts. Legal advisors have been appointed in all administrative courts. The
process of appointing judges who have recently graduated from the School of Magistrates is
yet to be completed.
Quality of justice
Budget planning capacity needs to be improved and adequate budgetary resources for the
justice system ensured. Despite some efforts, training of judicial administrative staff remains
insufficient. The School of Magistrates is still dependent on foreign aid. Eleven per cent of
first- and second-instance court judges are receiving in-service training on EU law.
The audio recording system was further extended and started to be implemented in most
administrative courts. The unified case management system has been rolled out to nearly all
courts, including one section of the civil chamber of Tirana District Court. However, the
system is underused, is not fully operational and, in some courts, has not even been installed.
The system needs to be substantially improved to meet the needs of the courts and provide the
statistical data required by the Ministry of Justice. Budget allocations to courts for IT matters
are still insufficient. The case management system for the prosecution service has yet to
become fully operational.
Online access to jurisprudence is not fully guaranteed and there is no searchable database. If
published, court rulings often lack the relevant reasoning and publication deadlines are not
always respected. Efforts are also needed to improve judges' drafting skills. Publication of
court decisions in an anonymous manner is still not possible.
Since October, 70 new mediator licences were delivered and there are now 367 licensed
mediators, as opposed to 285 in 2014. In practice, only 61 mediators are operational and the
number of mediation services provided remains very modest.
The functioning of the private bailiff's service has improved since June 2014 when changes
were introduced in their regulatory framework providing for the abolition of fees tying
payments to the successful completion of the enforcement process. The ‘ALBIS’ public and
private bailiff case management system has been discontinued for lack of a maintenance
budget, although private bailiffs have since developed their own electronic system.
As regards access to justice, the performance of the State Commission for Legal Aid needs to
be enhanced so as to cope with the pressing needs of a considerable number of vulnerable
citizens. Six regional legal aid offices are yet to be set up.

53

Efficiency
The efficiency of the court system is undermined by insufficient financial and human
resources and the lack of a rational organisation of the administrative staff. The length of
proceedings remains a cause of concern. The process of adjusting the number of judges
assigned to each court remains to be completed. Notification of court proceedings to parties is
deficient and there is still no reliable address registry. Backlogs remain high, in particular in
administrative courts, appeal courts and the High Court.
A working group has been set up under the Ministry of Justice to tackle serious shortcomings
identified in the process of producing and collecting statistical court data.
Fight against corruption
Track record
Albania’s track record of investigation, prosecution and conviction in corruption cases
remains limited. The number of corruption-related cases referred to the prosecution service
has increased. However, the number of cases being brought before the courts remains low,
even though it increased by 82% in 2014 compared to the cases sent to court in 2013. The
number of final convictions involving junior or middle-ranking officials has nearly doubled in
the first half of 2015, compared to the same period of the previous year. In 2015, there has
been one first instance conviction of a corruption case involving a mayor and one conviction
at appeal court level of a judge on corruption related grounds. The General Prosecutor’s
Office dismissed a prosecutor for a corruption-related offence.
The performance of the High Inspectorate for the Declaration and Audit of Assets and
Prevention of Conflicts of Interest (HIDAACI) improved considerably. In 2014, the
inspectorate referred 74 cases to the prosecution service, out of which 25 were sent to court.
In 2015, HIDAACI sent 82 referrals to the prosecution service, out of which five were sent to
court. These referrals resulted in three prison sentences and 17 penalties. Among the
HIDAACI referrals are twelve judges, two prosecutors and six members of parliament. Sound
follow-up to referrals by the inspectorate, including a track-record of successful prosecution
and final convictions, has yet to be demonstrated. In 2014, the inspectorate imposed 400
administrative sanctions, and 420 in 2015. There is no electronic system for submitting,
checking and publishing asset declarations. The process for selecting which public officials’
asset declarations to check has yet to ensure a sufficient sample of high-state officials,
including members of parliament, ministers and judges. Prevention of conflict of interest
requires greater awareness-raising, in particular in high-risk areas for corruption.
Some progress has been made with the upgrade of the integrated case management
information system ICMIS and the introduction of a case management system in some
prosecution offices. However, the collection of inter-institutional and integrated statistics and
track record remains a challenge. Efforts need to be streamlined and Albania should work
towards setting up an integrated case management system, into which all law enforcement
bodies involved in the fight against corruption feed information, so that corruption cases can
be followed from start to finish. The budget for the maintenance and implementation of the
case management system in courts and prosecution offices needs to be secured.
The use of proactive investigations and risk assessment in the tax and customs services has
increased. Corruption in the tax and customs administration remains an issue of concern.
Regarding internal control mechanisms, inspections carried out by the Internal Control and
Anti-Corruption Unit of the Ministry of Interior need to substantially increase. The Council of
Ministers’ Internal Administrative Control and Anti-Corruption Unit (UIACA) carried out 20

54

administrative checks in 2014, which have led to 39 disciplinary measures and 3 criminal
referrals. In 2015, UIACA carried out 117 administrative checks, which have led to 46
recommendations for disciplinary and administrative measures, and four criminal referrals.
UIACA's recommendations have been implemented overall.
Regarding access to information, 214 complaints were registered at the Commissioner for
Access to Information and Data Protection Office. In this period, 73 inspections were carried
out, 45 decisions taken, and 21 complaints still are being processed. A system that captures
the overall number of requests made to public institutions remains to be established.
The law on the protection of whistle-blowers remains to be adopted.
Institutional framework
Prevention measures
The capacity of the anti-corruption network in line ministries and at local level needs to be
strengthened. Sufficient human resources need to be ensured for the anti-corruption portal,
and its scope and cooperation mechanisms with law enforcement bodies need to be defined so
that complaints can be properly handled. The reporting mechanism has yet to demonstrate its
effectiveness and impartiality.
HIDAACI’s budget for 2015 was around 30 % higher than in 2014. However, its
administrative, technical and financial capacity need to be further strengthened, particularly in
view of the greater number and frequency of checks provided for in the May 2014
amendments that widened the scope of the asset declarations law.
Further efforts are needed to strengthen the role of the High State Control (HSC) in the
overall anti-corruption framework by setting up an effective mechanism for parliament and
the government to follow up its findings. Cases involving abuse of office or public tenders
referred to prosecutors by the HSC have led to very few investigations and no convictions.
Regarding political party financing, vacancies on the Central Election Commission (CEC)
board have been filled. The CEC needs to establish clear internal responsibilities for
overseeing party finances and go beyond purely formal checks of statements by the political
parties. Gaps in the legal and institutional framework need to be urgently addressed, including
the need to provide for regular monitoring and reporting on expenditure during election
campaigns and the public disclosure of preliminary election campaign finances prior to
election day.
Recommendations made by the Group of States against Corruption (GRECO) in its fourthround evaluation report on preventing corruption among MPs, judges and prosecutors have
yet to be fully implemented.
Law enforcement
Proactive investigations — based on thorough risk analysis — need to be increased
substantially to develop a solid track record of investigation, prosecution and final conviction
in corruption cases. The next steps should include strengthening the investigative capacity of
law enforcement agencies and conducting proactive and effective investigations by amending
the Criminal Procedure Code in relation to interceptions and surveillance, time limits for
investigations, and admissibility of evidence before a court. The investigation, prosecution
and judgment of corruption-related offences needs to be improved by ensuring sufficient
autonomy and stability of police and prosecution staff, and clear jurisdiction over corruptionrelated crimes, especially for the highest state officials. The Joint Investigative Units, the
Serious Crimes Court and Prosecutor’s Office, and the HIDAACI have yet to be

55

guaranteed sufficient human and financial resources and training.
Inter-agency cooperation needs to be further developed. Cooperation between prosecution
and police needs to be improved so that pre-trial investigations are brought as a result of
proactive intelligence gathering and access to information from both public and private
databases. The balance between effective prosecution instructions and an appropriate level of
police autonomy and initiative has yet to be found. Concerns remain over weak cooperation
between anti-corruption institutions and insufficient exchange of information, which hamper
the effective conduct of investigations and prosecutions, especially for high state officials.
Bodies involved in the fight against corruption continue to suffer from inadequate allocations
from the state budget.
Legal framework
Implementing legislation for the law on the right to information was adopted in January.
Provisions for setting up of a National Bureau of Investigation to tackle high-level corruption
and associated crimes, under the new Law on State Police, were repealed by a Constitutional
Court decision in April.
Strategic framework
In March, the cross-sectoral strategy (2015-20) and action plan (2015-17) against corruption
were adopted. Both documents were widely consulted, including the preparation of the budget
for the action plan measures. The budget for the action plan is EUR 12 million. It contains
specific indicators and budgets for most of the activities. A mechanism to monitor
implementation of the action plan is provided for, but the monitoring framework and the body
responsible have yet to be set up. Representation of civil society organisations in the
monitoring mechanism is planned.
Fundamental rights
Regarding international human rights instruments, Albania ratified Protocol 16 of the
European Convention on Human Rights enabling the European Court of Human Rights to
deliver advisory opinions in May. Albania has ratified most international human rights and
humanitarian conventions, but further action is needed to ensure their full implementation.
Since September 2014, the European Court of Human Rights (ECtHR) has found that the
country violated the European Convention on Human Rights (ECHR) in three cases relating
to the right to a fair trial, protection of property, right to liberty and security and right to an
effective remedy. A total of 130 new applications were allocated to a decision-making body,
bringing the number of pending applications to 402. Delays in applying the court’s judgments
continued, notably on property rights, judicial proceedings, the right to a fair trial and
inadequate medical care in custody.
Regarding the promotion and enforcement of human rights, the Ombudsman has continued
to actively promote human rights and the rights of vulnerable groups, including by submitting
special reports and recommendations. Training and awareness-raising campaigns were held;
however, human rights are insufficiently enforced. Amendments to the Law on the
Ombudsman grant him the right to publish his reports even if parliament fails to discuss them.
They provide for more transparent and inclusive selection of candidate commissioners, but
fail to increase the budget of the Ombudsman’s Office or its organisational autonomy. The
amendments provide for the creation of the Children’s Commissioner and the Commissioner
for the national mechanism for prevention of torture. The capacity of institutions in charge of
the protection and enforcement of human rights remains weak, and there is a particular need
for better-trained, specialised staff in the judiciary and police.

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As regards the right to life, blood feuds remain a problem, albeit on a limited scale. In March,
parliament adopted a resolution and recommendations on blood feuds, based on the findings
of the Ombudsman’s special report. The resolution calls for the coordination council on blood
feuds set up in 2005 to be revived, for educational and social programmes to be run in rural
areas, and for the prosecution and the police to step up investigation efforts and to invest more
in preventing conflicts.
On prevention of torture and ill-treatment, in 2014 the national preventive mechanism
(NPM) conducted 115 inspections, checks and monitoring visits. The 81 resulting
recommendations were acknowledged, but most have not been addressed. In 2014, the NPM
and the Ombudsman’s Office handled 35 complaints about disproportionate use of force and
violence by police officers and prisons guards, of which eight were found to have valid
grounds. Very view investigations are launched against police officers. In some prisons,
special care units providing psychological support have been set up. No progress has been
made on setting up a specialised medical institute to treat mentally ill detainees, who continue
to be kept in inadequate conditions in detention in Kruja prison hospital. Further action is
needed to ensure specialist treatment for this vulnerable category of prisoners in all facilities.
Overcrowding of the prison system remains a concern. The total number of offenders on
probation rose from 700 in 2009, when the probation service was set up, to about 13 359 in
December 2014. Local probation offices have been extended to all 22 judicial districts.
Despite this, the number of probation service staff has not risen which hampers the effective
functioning of the service and the provision of alternatives to detention. The electronic
monitoring system available in all judicial districts since February has yet to be used by the
courts. Further action is needed to improve detention conditions and address overcrowding in
prison and pre-trial detention which increased to 26 % above capacity in 2014. Problems with
dilapidated infrastructure and poor maintenance of recently built facilities persist.
Privacy issues and the lack of confidentiality of inmates’ conversations with visitors have yet
to be addressed, and access to appropriate healthcare services needs to be secured, as do
hygiene and health standards. Inmates continue to rely on food, equipment and medicines
provided by relatives. Support networks, before and after prisoners’ release, are needed to
allow successful reintegration into society. Vocational courses in prisons as part of pre-release
programmes, foreseen since November, have yet to be put into practice. The few inmates who
work have their sentences remitted instead of receiving remuneration; the legal framework for
employment scheme payments needs to be improved. Existing penitentiary legislation needs
to be effectively implemented and aligned with EU standards.
In the area of protection of personal data, the complaints submitted to the Commissioner for
Right to Information and Data Protection increased. The free phone number for citizens'
complaints is operational and a complaint form is available on the commissioner's website.
Trainings and awareness-raising activities increased. The commissioner has been consulted on
an increasing number of legislative proposals. The capacity of the commissioner's office
needs to be strengthened in order to ensure effective implementation of the law on access to
information. The publication of court decisions is not always in line with data protection
requirements. The right to personal data protection is frequently violated by the media. The
independence of the commissioner should be strengthened, in particular as regards
appointment and dismissal procedures as foreseen by its statute.
Freedom of thought, conscience and religion was generally upheld and religious tolerance
prevailed. In August, an Orthodox Church in Dhërmi was demolished by the Albanian
authorities on the alleged grounds that it was illegally built, provoking protests by the
Church's community.

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As regards freedom of expression, one case of a failed attempt on a journalist’s life was
reported in December 2014. Another journalist received death threats after reporting on a
police drug operation. Proper prosecution and judicial follow-up needs to be ensured.
Although rare, such cases remain a cause for concern.
The implementation of the Law on Audiovisual Media has been slow, mainly because the
mandate of the chair of the Audiovisual Media Authority (AMA) was suspended and there
were delays in filling AMA vacancies. The authority drafted an action plan for the digital
switchover process and approved a regulation that allowed the launch of the process for
licensing digital networks.
The AMA has not been able to make decisions to carry out much of its remit in 2014, as the
chair was suspended while prosecutors conducted an investigation. The confrontational
climate in parliament has also affected the regulator’s work. The election of two new AMA
board members and a chair, relying on ruling majority votes only, was contested by the
opposition in court. Opposition-nominated AMA members did not attend AMA meetings, as
they disputed the legitimacy of the board, and this made it difficult for the regulator to reach
the quorum needed for major decisions.
There have been some defamation lawsuits brought by directors of public administration
offices against journalists, but no reported defamation cases brought by politicians against
journalists. Further action is needed to ensure proper implementation of amendments on
defamation and guidelines on setting damages at a reasonable level, in particular through
training for judges and prosecutors. A new amendment to the Civil Code was proposed to
hold administrators of news portals liable for filtering comments that offend human dignity.
This may impose undue limits on freedom of expression.
Media ownership has become more transparent, but concerns remain over hidden ownership.
The transparency of media financing remains problematic. Concerns remain over the
distribution of state advertising and public funds to media and business owners close to the
government, as this affects fair competition among media businesses. The proposed
amendment to remove limits on ownership of audiovisual media has led to concerns that this
will facilitate the establishment of monopolies in the audiovisual media sector.
Many journalists are not organised or represented in any form. Poor implementation of the
labour code for both full-time journalists and freelancers is an issue of major concern. Most
journalists work without employment contracts or have contracts which can be terminated
arbitrarily. Many journalists face delayed payment of their salaries and/or losing years of
social security payments.
Freedom of assembly and association has generally been upheld. A number of peaceful
protests and political demonstrations were held without major incidents.
More efforts are needed to update and implement the 2012-2020 strategy on property rights
and to complete the process of registering properties, to ensure judicial decisions are enforced
and to continue the process of restitution and compensation.
Regarding the execution of ECtHR judgments in property cases, financial compensation
awarded by the court is being provided to relevant individual applicants. To implement the
2014 action plan agreed with the Committee of Ministers of the Council of Europe, the
government is finalising a new law setting up a mechanism to enforce decisions providing for
restitution of, or compensation for, property nationalised under the communist regime.
As regards non-discrimination policies, the number of cases handled by the Commissioner
for Protection against Discrimination (CPD) increased and its ex-officio powers were used in

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18 cases in 2014. The CPD significantly increased its participation in judicial processes. The
Commissioner conducted awareness-raising activities and training, contributing to an increase
in complaints. However, more outreach and a more proactive approach are required. Antidiscrimination case law needs to be further developed and implementation improved. Data on
hate crime is not collected.
Equality between women and men is undermined by the poor functioning of mechanisms to
address gender equality and gender-based violence. The online system for reporting and
monitoring cases of gender-based violence is still operational in only 29 out of 61
municipalities. The number of reports of serious offences and cases of domestic violence
increased, signalling more trust in the system, but the vast majority of cases still go
unreported. The number of criminal proceedings for domestic violence increased. Courts have
begun to prosecute domestic violence cases more effectively – especially in Tirana. The
number of shelters and reintegration services needs to be increased, and existing volunteer-run
shelters have yet to be supported by the authorities. Due to poor administrative and financial
resources, the national referral mechanism for domestic violence is operational in very few
municipalities, and it applies unnecessarily restrictive admission criteria for victims. Services
for victims of domestic violence should improve in quality, quantity, accessibility and
geographical coverage, and there should be more work on reintegration and economic
empowerment.
Legislative provisions that discriminate between men and women in a wide range of sectors
need to be repealed, and gender bias in court decisions and treatment by law enforcement
agencies has to be tackled. Amendments to the Electoral Code were adopted in April and
provide for a 50 % gender quota requirement in candidate lists for municipal councils, and the
rejection of lists which fail to meet this quota. Ten percent of mayoral candidates in the June
local elections were women and nine women were elected mayors, marking a considerable
increase. In 2015, out of a total of 140 members of parliament, 29 were women (21%).
Regarding the rights of the child, the child protection system lacks sufficient budgetary
means, staff continuity and standards of operation. Further action is needed to make it more
accessible to children. A joint directive from four ministers was adopted, identifying
procedures to protect children at risk, including sexually abused children. The number of child
protection units (CPU) rose to 196 at local level; however, many children in rural areas still
lack access to them. Only five child rights units are working at regional level; seven stopped
functioning due to lack of funding. CPUs need to be integrated with social services, and
backed up by clear reporting and monitoring guidelines, and cooperation with institutions at
regional and national levels increased.
Further work is needed on returning children to family settings, expanding foster care and
ensuring special protection for children in residential institutions. A revision of the family
code is needed to facilitate placement of children in foster families and ensure adoption
procedures in line with international standards. The emigration of unaccompanied minors
from Albania to the EU remains a matter of concern.
A specific juvenile justice system has yet to be established, that brings the existing legislation
in line with international standards. Most of the 96 juveniles in detention are held in the
juvenile correction centre in Kavaja and the pre-trial detention facility in Vlora, which offer
better conditions than other facilities. However, juveniles are still being detained longer than
provided by law in detention and pre-detention for minor offences. Excessive length of pretrial detention is a concern. The level of reoffending among juveniles is high and no
possibility is offered for secondary education in detention. A lack of coordination persists

59

between the justice and protection systems for juveniles coming out of the justice system who
need support to reintegrate into society.
As regards child labour, a nation-wide survey on street children completed in April found that
up to 2 500 children, mostly Roma and Egyptian, live and/or work on the streets. The number
of children working in cannabis plantations is an issue of serious concern. Albania remains a
source country for trafficked children, forced child labour and for the worst forms of child
labour as defined by ILO Convention 182.
As regards integration of persons with disabilities, sign language was approved as an
official language for deaf people. Most children with disabilities remain excluded from
schools and vocational education. Persons with disabilities continue to face difficulties in
accessing education, employment, healthcare, social services and decision-making.
The first shelter for lesbian, gay, bisexual, transgender and intersex (LGBTI) persons
opened in Tirana in December. In May, parliament approved a resolution on the protection of
rights and freedoms of persons belonging to the LGBTI community, which calls for an action
plan, legislative amendments and other measures in support of LGBTI persons, and made the
Ombudsman responsible for monitoring its implementation. The international day against
homophobia, transphobia and biphobia was celebrated in May with a number of awarenessraising events but public awareness remains low. Albania was one of the signatories of the
joint statement of Ministers of the region at the 2015 IDAHO forum. The second Tirana pride
event was held in June without major incidents. Discrimination against transgender and
intersex persons need to be removed from the legislation.
Labour and trade union rights are generally respected. The new National Labour Council
improved its functioning and is meeting regularly.
Regarding procedural rights, basic components are in place, but more efforts are needed to
enhance the level of protection provided by the existing legislation and to ensure its effective
implementation. As regards legal aid, the performance of the State Commission for Legal Aid
needs to be enhanced so as to cope with the needs of vulnerable citizens. Six regional legal
aid offices are yet to be set up.
As regards respect for and the protection of minorities, overall, inter-ethnic relations
remained good, but the legal and policy framework still needs improving. In April the interinstitutional working group on minorities led by the Ministry of Foreign Affairs submitted
conclusions aimed at addressing shortcomings in the protection of minorities, taking into
account the recommendations of the Advisory Committee of the Framework Convention for
the Protection of National Minorities. The group suggested drafting a specific law on
minorities aimed at equal treatment of national and ethno-linguistic minorities, and enhancing
the representativeness and consultative role of the State Committee on Minorities. Albania has
not yet adopted the European Charter for regional and minority languages. National minority
representatives have challenged the recent local government boundary changes, maintaining
that the new system violates their rights and international norms. Equal access to rights for
persons from all minorities has yet to be ensured.
The implementation of policies on Roma inclusion remains inadequate overall, as does the
implementation of the conclusions of the 2011 and 2014 Roma seminars. The 2015-2020
national action plan for the integration of Roma and Egyptians still remains to be adopted.
The inclusion of Roma children in the education system has improved slightly; however,
enrolment and drop-out rates remain a serious concern: 42 % of Roma children attend preschool education (3-6), but only 16.1 % finish middle school, 2.1 % have high school
education, and 0.3 % have university education. 40.3 % of the Roma population is illiterate.

60

The number of Roma and Egyptian street children remains a concern. The existing legal and
institutional framework for registering births is not delivering the intended results. Roma and
Egyptians continue to face very difficult living conditions and frequent social exclusion and
discrimination, particularly regarding access to healthcare, social protection, education,
employment and housing.
Budgetary allocations for housing Roma and Egyptians have tripled, but remain insufficient to
address needs. Most of the Roma families evicted from their settlements in August 2013 and
transferred to the National Emergency Transition Centre are still living there. While some of
the families left the centre and benefitted from municipal social housing, no long term
solution has been found to relocate the others. Further evictions took place in Selita for the
construction of the Tirana ring road. Apart from being offered two years’ worth of rent, most
evicted families were not provided assistance to find new accommodation suited to their
specific needs.
4.24. Chapter 24: Justice, freedom and security
The EU has common rules for border control, visas, external migration and asylum. Schengen
cooperation entails the lifting of border controls inside the EU. There is also cooperation in
the fight against organised crime and terrorism, and judicial, police and customs
cooperation.
Albania is at an early stage of preparation in this area and made some progress. Steps have
been taken to improve the capacity of institutions in the areas of border management, asylum
and the fight against terrorism. Albania has started issuing identity and travel documents to
refugees and is ready to issue such documents to people granted subsidiary protection too.
The alarming increase of unfounded asylum applications lodged by Albanian citizens in the
EU is a matter of serious concern. In the coming year, Albania should in particular:
→ step up intelligence-led investigations on money laundering and financial crimes, and
increase confiscation of criminal assets;
→ further pursue efforts to sustainably prevent and fight terrorism by strengthening the
counterterrorism directorate, increasing inter-institutional coordination and implementing
targeted policies to prevent radicalisation;
→ step up efforts to effectively address the negative phenomenon of unfounded asylum
applications, and prioritise investigations of facilitators of irregular migration.
(See also the specific recommendations on the fight against organised crime in section 2.3.)
Legal and irregular migration
The extended 2013 migration profile, containing key data on Albanian migration, was
adopted in December; the 2014 profile has been finalised and is expected to be adopted in
October 2015. Efforts were made to address migration issues in several national sector
strategies for the period 2014-20, including social protection and inclusion, employment,
business and development, integrated border management, and the fight against trafficking in
human beings. However, the lack of the new cross-sector national migration strategy remains
an issue of concern. The pre-screening process at the borders and reception capacity for
irregular migrants need to be improved, in particular at the southern border, to cope with the
increasing migration flows. Registration and referral mechanisms also need to be further
strengthened. In the first semester of 2015, 1 963 irregular migrants were apprehended,
compared to 601 during the same period in 2014. Albania needs to effectively prosecute
people's smugglers since the number of arrests and prosecutions remains low.

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Asylum
Albania is hosting Iranian exiles and former residents of the temporary transit location Camp
Hurriya, Iraq. In November, Albania received 235 people from this community, bringing their
total number to 479. In 2014, 427 people, mainly from Iran and Syria, sought asylum in
Albania. Asylum was granted to 10 people. In the first half of 2015, 112 new asylum requests
were submitted, and 50 people were granted asylum. The issuance of identity and travel
documents to refugees started in May. Accommodation capacity and asylum procedure
require improvements. While interpretation services are provided, lack of qualified
interpreters is a concern. A proper asylum case management system needs to be ensured. No
specialist unit collects country of origin information. Procedures for determining international
protection status need to be further improved. Albania has established initial contacts with the
European Asylum Support Office (EASO).
Visa policy
Albania has yet to align its legislation with the EU ‘positive’ and ‘negative’ lists. The visafree travel regime between Albania and the EU continued unhindered. However, irregular
migration flows from Albania have increased considerably since 2013 and reached new peaks
in 2014 and 2015. The number of asylum applications lodged by Albanian citizens grew by
51 % between 2013 and 2014, reaching 16 795 in total. From January to end of August 2015,
EU Member States and Schengen associated countries reported some 45 000 asylum
applications lodged by Albanian citizens. Albania has intensified border control procedures
and engaged in outreach activities. However, the country is expected to further step up its
efforts to address the increasing number of manifestly unfounded asylum applications lodged
by its citizens to EU Member States and Schengen-associated countries, and take immediate
and determined action via the post-visa liberalisation monitoring mechanism. This is even
more urgent following the recent peak of applications during the summer. Albania needs to
engage in closer operational cooperation and information exchange with EU Member States,
step up investigations of facilitators of irregular migration, conduct regular information
campaigns for travellers and, most importantly, reduce socioeconomic push factors. All
efforts in these areas need to continue systematically and with the appropriate allocation of
resources. Increased attention needs to be paid to the effectiveness of border controls,
including preventing that unaccompanied minors leave the country. The number of
unaccompanied minors from Albania, either staying irregularly or seeking asylum in the EU
and Schengen-associated countries, has increased.
Some progress was made on cooperation with civil society on awareness-raising, assisted
voluntary returns, monitoring returns, and reintegrating vulnerable groups. Further action is
still needed to ensure effective implementation of the 2010-15 strategy and action plan for
returned migrants, and to develop a new reintegration strategy, based on a thorough impact
assessment of the previous one. Implementation of the readmission agreements continued
smoothly. An implementation protocol was signed with Portugal. Negotiations on
readmission agreements and implementation protocols with Ukraine and the Russian
Federation, and on an implementation protocol with Greece, are ongoing. Agreements on
exchanging of information on migration should be signed with more EU Member States to
strengthen cooperation on readmission and return. In 2014, 12 867 refusals of entry of
Albanian citizens to the EU and 11 923 refusals of exit from Albania were recorded.
Schengen and external borders
Two police cooperation centres at the border crossing points with Montenegro and Kosovo
are being set up and should be operational by the end of the year. A trilateral police
cooperation centre with Greece and Italy and a bilateral centre at the Greek border are
62

expected to be set up shortly. Work is about to start at two border crossing points with
Montenegro and one with Kosovo, and an implementation protocol for a new border crossing
point with Montenegro is expected to be signed. In the period January-August, Albania
detected 157 cases of forged and counterfeit documents, compared to 134 cases during the
same period in 2014. The integrated border management strategy and its action plan are fully
in line with European standards. Further investments in border management are required to
keep pace with the evolving challenges stemming from cross-border crime and irregular
migration. Cooperation with Frontex in joint risk analysis has been consolidated. The capacity
of border and migration police needs to be strengthened to further upgrade border crossing
points and reinforce ‘green’ and ‘blue’ (land and water) border surveillance. The nonimplementation of exit checks at the border crossing points with Albania and Kosovo is an
issue of concern. Cooperation and coordination among authorities managing the blue border
has improved. The Interinstitutional Maritime Operations Centre (IMOC) and the maritime
surveillance and communication systems are fully operational. Appropriate planning of IMOC
budgetary resources needs to be guaranteed to ensure adequate operational capacity and
sustainable surveillance systems.
Judicial cooperation in civil and criminal matters
Albania has maintained good judicial cooperation in civil and criminal matters, including with
EU Member States. However, international cooperation needs to be further strengthened
based on timely implementation of multilateral instruments and greater institutional capacity.
Further efforts are needed to strengthen cooperation with Eurojust. The assessment of data
protection standards by Eurojust is ongoing.
Fight against organised crime
Track record
In 2014, 134 people were convicted for serious and organised crimes (compared to 129 in
2013), mostly for drug trafficking. There were very few cases brought for trafficking in
human beings. Eleven new cases were tried before the Serious Crimes Court of First Instance
compared to none in 2013, with only eight convictions (no convictions in 2013).
As regards money laundering, the number of suspicious transaction reports rose to 1 230 in
2014, more than double that of 2013. However, the number of final convictions on money
laundering remained low. The total value of criminal assets confiscated increased: the Court
of Appeal for Serious Crimes issued five confiscation decisions for over EUR 1 million and
five land properties, compared with only EUR 747 000 in 2013.
On drug trafficking, Albania intensified the fight against drug trade and distribution
networks. The amount of drugs seized increased. In 2014, 73.5 kg of heroin, 10.3 kg of
cocaine and more than 97 tonnes of marijuana were seized (in comparison with 47.3 kg of
heroin, 16.1 kg of cocaine and almost 21 tonnes of marijuana in 2013). Secure storage of
seized drugs and effective destruction procedures are not yet ensured and remain an issue of
concern. In 2014, 180 cybercrime cases involving 86 people were detected, compared with
108 cases in 2013.
Institutional and operational capacity
The police remains vulnerable to political pressure and corruption, thus hindering effective
investigation of organised crime cases. Substantial efforts are still needed to strengthen the
capacity and improve the performance of all law enforcement authorities. Prosecutors dealing
with sensitive cases related to organised crime should be granted special protection and
ensured independence from any external and internal interference.

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The establishment of three mobile units in Tirana, Vlora and Elbasan contributed to the
identification of an increased number of victims and potential victims of trafficking in human
beings. Since their creation in September 2014, 102 potential victims of trafficking were
identified. Most of the victims are trafficked for sexual exploitation, forced labour and
begging.
The IT system for crime statistics is currently being reviewed to provide a clearer and more
reliable overview of the status of criminal offences. An electronic case management system at
the prosecution offices started with a pilot phase in January. Preparations for building the
capacity of the forensic laboratory to collect, compare and store DNA profiles have started.
The Combined DNA Index System (CODIS) was installed in April and users were trained.
An exchange programme with the European Police College (CEPOL) is ongoing. A working
agreement is in place; however, it has yet to be fully exploited to benefit from all CEPOL’s
learning products.
Legal framework
The new Law on the State Police entered into force in March. It established a merit-based
recruitment and career evaluation system, and brought the code of ethics and internal control
standards closer to European levels. In February, parliament’s National Security Committee
adopted the draft law on military police in the armed forces, aiming at preventing, detecting
and investigating criminal activities in the armed forces. The scope of the new law has yet to
be clarified as regards the division of responsibilities between the military criminal police and
judicial police. In February, the government adopted a decision on the organisation and
functioning of the security academy.
Strategic framework
In November, the 2014-17 strategy for combating trafficking in human beings and its action
plan were adopted. Albania has updated and continued to implement the strategy and action
plan on the fight against organised crime and trafficking. A cyber security policy document
has been prepared and is pending governmental approval. In April, the General Prosecutor’s
Office approved the 2015-17 mid-term strategy and action plan to raise the standard of
investigation and increase the professionalism and integrity of prosecutors.
Fighting organised crime and corruption remains fundamental to countering criminal
infiltration of the political, legal and economic systems.
Fight against terrorism
Albania has continued to implement the strategy and action plan on the fight against
terrorism. A security strategy was adopted, but the action plan and a clear timetable have yet
to be adopted. The strategy to prevent extremism and terrorism was finalised and remains to
be adopted. In September, the Committee of Experts on the Evaluation of the Anti-Money
Laundering Measures and the Financing of Terrorism (Moneyval) removed Albania from the
list of countries under monitoring for money laundering and terrorism financing. In
December, a new counterterrorism directorate and four regional branches were set up in the
Albanian State Police. However, they are not yet fully staffed and operational. A fully
functional counterterrorism directorate, working in close cooperation with the secret service
and the border police, remains crucial to tackling terrorism threats effectively. A task force on
terrorism and religious extremism was set up, involving the General Prosecutor’s Office, the
Ministry of Interior, the Albanian State Police and the Intelligence Service (SHISH). Nine
self-proclaimed imams are standing trial over allegations of promoting acts of terrorism.
Albania needs to develop an effective policy to prevent radicalisation, including through law

64

enforcement measures and socioeconomic actions aimed at strengthening social inclusion,
particularly among young people, and to enhance efforts to identify, prevent and disrupt the
flow of foreign terrorist fighters traveling to conflict areas such as Iraq and Syria.
Cooperation in the field of drugs
Cooperation with the European Monitoring Centre for Drugs and Drug Addiction continued.
The deployment of aerial surveillance contributed to a significant increase in the identification
of drug plantations and subsequent destruction. In 2014, a total of 551 414 cannabis plants
were destroyed, which represents an increase of 460 % compared to 2013. In the first ten
months of 2015, the number of destroyed marijuana plants further increased by almost 40 %
compared to the total number for 2014, accounting for more than 99 % of the plantations
identified. In January, a major international police operation succeeded in dismantling a large
drug lab in Elbasan, where cocaine was processed for the European market. Another operation
carried out in cooperation with Germany resulted in the seizure of 19.4 kg of pure cocaine and
97.6 kg of mixed cocaine, and the confiscation of EUR 321 950 and a number of firearms.
While the successful major police operation in Lazarat in 2014 marked an important
operational achievement in the fight against drug cultivation, the investigation and
prosecution follow up has not been decisive. Of the 187 referrals handled from the police, the
Serious Crimes Prosecutor’s Office submitted to court the request for trial against sixteen
people for several criminal offences. No accusations of participation in a criminal
organisation were made.
Customs cooperation
The 24-hour digital camera monitoring system is fully operational. The number of
investigations against customs officials for crime and corruption increased compared with
previous years.
For measures against counterfeiting the euro, see Chapter 32- Financial control.
4.25. Chapter 25: Science and research
The EU provides significant support to research and innovation. All Member States can
benefit from the EU’s research programmes, the more so where there is scientific excellence
and solid investment in research.
Preparations are at an early stage in the area of science and research. There was no progress
in the past year. In the coming year, the country should in particular:
→ build capacity and increase investment in research to ensure integration into the European
Research Area and contribute to the Innovation Union;
→ increase efforts for successful participation in the research and innovation framework
programme Horizon 2020.
Overall, actions in line with EU policy on research and innovation have not been implemented
due to lack of national funding.
As regards framework programmes, Albania is associated to the EU research and
innovation programme 'Horizon 2020' (2014-2020) and all administrative actions for
participation are in place (national contact points and representatives in Horizon 2020
programme committees have been appointed). Based on first Horizon 2020 statistics, the
number of Albanian participants in proposals selected for funding has been very small. The
Agency for Research, Technology and Innovation still lacks the resources to promote
cooperation on research and innovation. Albania should take actions to improve the scientific
excellence and participation of the private sector in research and innovation should be
65

stimulated. Albania has been active in cooperating at regional level following its co-signing of
the Western Balkan regional R&D strategy for innovation and it cooperates with the Central
European Initiative.
On integration into the European Research Area, Albania has appointed a member in the
European Research Area Committee, however, is not participating in it on a regular basis. The
level of investment in research stagnated at about 0.4 % of Albania’s GDP. This is insufficient
to make a meaningful contribution to competitiveness and growth. Due to a lack of reliable
statistics it is also difficult to measure the precise level, in particular for expenditure on
research by the private sector.
On the Innovation Union, no specific actions to stimulate innovation have been taken.
4.26. Chapter 26: Education and culture
The EU supports cooperation in education and culture through funding programmes and
through the open method of coordination. Member States must also prevent discrimination
and facilitate education of children of EU migrant workers.
Albania is moderately prepared in education and culture. Apart from the adoption of the
new law on higher education, no progress was made in the past year. Further efforts are
needed to ensure the inclusiveness, credibility, transparency and quality of the education
system. In the coming year, the country should in particular:
→ implement the new law on higher education with the aim of improving quality;
→ continue to implement competence-based curricula with learning outcomes, and complete
teacher training for it;
→ continue the restructuring of vocational education and training to improve its market
relevance and enhance links with private sector.
On education, training and youth, following the recommendations of the independent
commission for higher education and scientific research reform, a new law on higher
education was adopted. The accreditation process begun for all public and private universities.
The comprehensive national qualifications framework is under revision. It will be important
to ensure that diplomas comply with the law on higher education.
The education sector remains a high-risk area for corruption. The recruitment procedure for
teachers and school directors needs to become more transparent and merit-based. Despite
significant improvements over the last decade, Albania still has considerable gaps to close in
terms of years of schooling, secondary school enrolment rates, education quality and the
market relevance of qualifications. Albania joined the European Alliance for Apprenticeship.
Public spending on education is low, at around 3 % of GDP, with primary education
commanding most of the expenditure (61 %). The 2012 PISA results for Albania, in testing 15
year olds, were the lowest in the region and ranked Albania as 57th out of the 65 participating
countries. The participation rate in pre-school education is about 30%. The 2014-2020
national strategy for jobs and skills and the relevant action plan were adopted in November.
They need to be accompanied by a financial and monitoring plan. Further efforts should be
made to strengthen linkages between education and the labour market.
Roma and Egyptian children are still not fully integrated in the education system, which often
leads to unemployment and exclusion. Quotas for the enrolment of Roma, Egyptians and
disadvantaged students in public universities continued to be applied. Enrolment rates for
Roma and Egyptian children increased slightly, but overall they remain very low. The 20152020 action plan for the integration of Roma and Egyptians and the social inclusion policy
66

document are yet to be adopted by the government (see also chapter 19 – Social policies and
employment).
As regards youth, Albania participates in the Erasmus+ Youth in Action strand and the
Western Balkans Youth Window.
In the area of culture, Albania continued to fully participate in the EU Creative Europe
programme.
4.27. Chapter 27: Environment and climate change
The EU promotes strong climate action, sustainable development and protection of the
environment. EU law contains provisions addressing climate change, water and air quality,
waste management, nature protection, industrial pollution, chemicals, noise and civil
protection.
Albania is at an early stage of preparation in this area. There was some progress on
environment and climate change, however, industrial control and monitoring of emissions and
waste management remain poor. Overall, resources remain limited and substantial investment
is needed. In the coming year, the country should in particular:
→ establish systematic strategic planning, start implementing the Intended Nationally
Determined Contribution (INDC) to the expected 2015 Paris Climate Agreement;
→ monitor the quality of the environment and increase administrative capacity;
The cross-cutting strategy for the environment has not been adopted yet. Further work is
needed to align horizontal environmental legislation, in particular with the Directive on
Environmental Crime. Public consultation, access to information and cooperation with civil
society organisations have improved. Initial steps taken to strengthen law enforcement need to
be stepped up. The environmental impact assessment process has improved, but needs to be
strengthened considerably, in the hydropower and mining sectors especially.
As regards air quality, the national strategy for air quality and the law on ambient air quality
were adopted and need to be enforced. The division of responsibilities between the National
Environment Agency (NEA) and implementing bodies was clarified. The indoor smoking ban
has proved effective. Albania has missed its Energy Community deadline to implement the
1999 Directive on Sulphur Content in Fuels. Known breaches of the standard values for air
quality persist. Air quality in cities remains very problematic.
Planning, coordination and implementation of policies on waste management are progressing
very slowly and administrative capacity remains very limited. Implementing legislation in line
with the acquis has been adopted in the areas of exporting and transiting non-hazardous and
construction waste, and use of sewage sludge. Waste separation is very limited and recycling
remains rare. Most waste continues to be disposed of unsafely in legal and illegal dumpsites,
or burned. Hazardous medical waste is a major concern.
In the area of water, water management was transferred to the Ministry of Agriculture, Rural
Development and Water and a National Secretariat of the Water Council was created.
Important regulations on water use, under the law on integrated water management, were
adopted. Bathing water quality has improved overall however remains unsatisfactory in rivers.
Untreated sewage is the main source of pollution. Further efforts are needed to extend the
water test range of the NEA. In March, the Velipoja wastewater treatment plant was
completed, but is not yet operational. The number of operational plants thus remains five.
In the field of nature protection, in February, parliament passed an amendment on
international trade in endangered species of flora and fauna. The Research Centre for Flora
67

and Fauna must now be consulted before a trade permit is issued. A National Agency for
Protected Areas and Agency for the Albanian Coast were set up. Effective protection for
designated protected areas still needs to be guaranteed. The investments in hydropower need
to comply with nature protection obligations especially for protected areas and areas of high
natural value and to be carried out in conformity with the acquis in particular with the
environmental impact assessment, Water Framework Directive and Birds and Habitats
Directives.
In the area of industrial pollution control and risk management, the law transposing the
EU Directive on the control of major accident hazards has still not been adopted. Preventive
measures are not enforced and risk preparedness is not applied. Self-monitoring of emissions
is not reliable. In October, a task force was set up to inspect and evaluate the environmental
compliance of oil exploration companies. Best available techniques to guide compliance have
not been adopted yet.
A framework law on chemicals management has not been adopted yet. A decision regulating
import of ozone depleting gases (HFCF) over the coming years until 2040 was amended in
line with Albania's commitments under the Montreal Protocol.
On environmental noise, a joint order of the Ministers of Transport and of Environment was
adopted, laying down the rules for protection from aircraft noise. It only partially transposes
EU directives.
As regards civil protection, the 2014-2018 national strategy for disaster risk reduction and
civil protection has not been adopted yet. The floods in the south of the country in February
showed the need for Albania to further strengthen its capacity in this sector.
On climate change, Albania needs to develop a comprehensive policy and strategy consistent
with the EU 2030 framework. Significant efforts are needed to fully integrate climate
considerations into all relevant sectoral policies. The preparation of the national plan for
adaptation to climate change has started. INDC to the 2015 Paris Climate Agreement has been
adopted in September. Alignment with the EU monitoring mechanism regulation should be a
priority. A decision on the reduction and stabilisation of fluorinated greenhouse gas emissions
was adopted but it is only partially aligned with the relevant EU regulation. The
establishment of a monitoring, verification and reporting system for greenhouse gas emissions
has not started yet.
The NEA has strengthened its administrative capacity considerably. The environmental
monitoring system has improved, but needs more financing. The State Inspectorate of the
Environment took initial steps to strengthen law enforcement. The incomplete implementing
legislation, in particular in the water sector, and limited logistical resources hamper the
normal functioning of the inspectorate.
4.28. Chapter 28: Consumer and health protection
EU rules protect consumers in relation to product safety, dangerous imitations and liability
for defective products. The EU also ensures high common standards for tobacco control,
blood, tissues, cells and organs, patients’ rights and communicable diseases.
Preparations are at an early stage in the area of consumer and health protection. There was
some progress over the last year. In the coming year, the country should in particular:
→ align legislation with the acquis on tobacco control, substances of human origin and
serious cross-border health threats, including communicable diseases;
→ adopt the national strategy on consumer protection and market surveillance;

68

→ set up a market surveillance inspectorate.
Legislation on consumer protection with regard to certain aspects of timesharing, long-term
holidays and exchange contracts was adopted in October, aiming at bringing them in line with
the acquis. An awareness-raising campaign on consumer protection was launched in 2014, but
further action is needed to empower consumers. The Consumer Protection Unit remains
understaffed and the capacity of the Consumer Protection Commission needs to be
strengthened. The 2020 national strategy for consumer protection and market surveillance has
been adopted in September 2015.
In safety related issues, the Market Surveillance Inspectorate has not been established yet.
In non-safety-related issues, the Consumer Protection Commission issued decisions on
standard energy and water contracts for consumers, asking for provisions with unfair terms to
be removed. Based on consumer complaints against a currency exchange office, the
Commission issued a decision requiring the operator to fully respect the legislation. It
recommended the adoption of a code of conduct for telephone operators.
As regards public health, a package for primary healthcare services was approved in
February, addressing prenatal and postnatal care and new-born and child care. Significant
efforts have been made to fight corruption in the sector (see Chapter 23). The national
electronic health record started to be implemented, following the completion of a feasibility
study in October. The hospital information system was launched in several institutions.
Albania signed a loan agreement with the World Bank to set up health information systems
and strengthen governance of public hospitals and health financing to improve efficacy and
quality of healthcare. The coverage of insurance-based care remained very low.
On tobacco control, the law on health protection against tobacco products has been unevenly
implemented in the hospitality services sector.
On communicable diseases, people with HIV/AIDS have difficulty accessing healthcare. A
mosquito control strategy and action plan remain to be adopted. Little has been done to
increase the capacity of hospital microbiology laboratories and provide additional human
resources. Reporting systems on communicable diseases and microbiology laboratories are
not integrated with the national electronic health record system.
On blood, tissues, cells and organs, blood safety and transfusion practices improved, but
further efforts are needed to bring the legislation into line with the acquis.
On pharmaceuticals, the law on drugs and pharmaceutical services came into force in
September 2014. The law is only partially in line with the aquis.
On mental health, some progress has been made in the implementation of secondary
legislation regulating mental health services, which sets out the responsibilities of mental
health professionals and physical restraint standards for mentally ill patients. On health
inequalities, some steps were taken to improve access for Roma to healthcare through
vaccination campaigns, community nurses and home visits; however, Roma still face
difficulties in access to health services. Further work is needed to ensure access to good
quality healthcare for the most vulnerable groups. As regards nutrition, 700 family doctors
and nurses have so far been trained using integrated training modules on nutrition for
pregnant women, infants and children. Child malnutrition remains a serious concern. On
cancer screening, a structure for cancer screening services and a cancer registry system
remain to be set up.

69

4.29. Chapter 29: Customs union
All Member States are part of the EU customs union and follow the same customs rules and
procedures. This requires legislative alignment as well as 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 as regards further approximation of the legislation with the acquis and the
country’s increased participation in EU programmes and regional cooperation. In the coming
year, the country should in particular:
→ strengthen the fight against smuggling and imports of counterfeit products;
→ ensure the interoperability of customs IT systems with those of the EU;
→ continue fighting corruption and malpractice in the customs administration.
On customs legislation, the new customs code came into force in January, together with
implementing instructions, in line with the acquis on a broad range of issues. The code was
again amended in March to allow the operation of duty-free shops. The customs tariff was
updated in line with the 2015 version of the EU’s combined nomenclature. As of May, the
rules of origin for the Stabilisation and Association Agreement refer to the Regional
Convention on pan-Euro-Mediterranean preferential rules of origin. Legislation which entered
into force on 26 August, requires payment of a "scanning fee" per customs declaration.
Article 33.1 of the SAA prohibits the introduction of customs duties on imports or exports or
charges having equivalent effect in trade between the Community and Albania.
As regards administrative and operational capacity, the General Directorate of Customs
started to implement a ‘Green channel’ at customs houses. This initiative allows companies
with a good customs record to benefit from a preferential customs procedure, speeding up
trade formalities. The civil servant status of customs officials was confirmed in the customs
code in line with the Law on Civil Servants, and legislation on the procedures and
requirements for employment and promotion within the customs administration was adopted
in December. Customs revenue decreased during the first quarter of 2015 and collection
capacities need to be strengthened. Cooperation with the prosecution and the High
Inspectorate for the Declaration Audit of Assets and Conflicts of Interest in identifying
corruption cases improved, leading to the dismissal of a number of customs officials. In May
2015 integrity tests were carried out on 123 customs officials and disciplinary measures were
taken against 26 officials. Albania participates in the EU Customs 2020 programme since
December.
A joint Albania-Kosovo transit corridor was inaugurated in February to facilitate transit
customs procedures and increase trade in the region.
4.30. Chapter 30: External relations
The EU has a common trade and commercial policy towards third countries, based on
multilateral and bilateral agreements and autonomous measures. There are also EU rules in
the field of humanitarian aid and development policy.
Albania is moderately prepared in the area of external relations. There was some progress
in the past year. Albania continued to cooperate well with the EU in the World Trade
Organisation (WTO). In the coming year, Albania should in particular:
→ strengthen trade coordination/consultation policy mechanisms.

70

Albania has continued to coordinate its trade policy with the EU common commercial policy
in the WTO. Albania’s 2014 self-assessment on trade facilitation capacity showed 85 %
compliance with WTO requirements. Albania notified the provisions under the WTO Trade
Facilitation Agreement which it will implement by the time the agreement enters into force
and started preparation for ratification of the agreement.
There were no developments on export credits. Preparations have started for transposing
Annex 1 of the EU Regulation on export controls on dual-use goods but further efforts are
needed to align export control legislation with the acquis.
As regards bilateral agreements with third countries, Albania continued negotiations with
Turkey under the Free Trade Agreement (FTA), focusing on the liberalisation of trade in
services and the inclusion of investment provisions in the FTA. Albania finalised memoranda
on economic cooperation with Kuwait, Montenegro and Czech Republic, and a bilateral
investment treaty with Kosovo. Economic and technical cooperation agreements with Bosnia
and Herzegovina, Brazil, China, Kazakhstan and South Korea were finalised. Negotiations are
ongoing on bilateral investment treaties with Canada, Iceland, Morocco, Lebanon and the
United Arab Emirates. Albania continued its constructive participation in Central European
Free Trade Agreement (CEFTA) structures. Negotiations on a new chapter on sustainable
development to Albania's agreement with EFTA countries were concluded.
There were no legislative changes in development policy or humanitarian aid, which
remain at an early stage of alignment.
4.31. Chapter 31: Foreign, security and defence policy
Member States must be able to conduct political dialogue in the framework of the foreign,
security and defence policy, to align with EU statements, to take part in EU actions and to
apply agreed sanctions and restrictive measures.
Albania has a good level of preparation in foreign, security and defence policy. There has
been some progress in the destruction of surplus of conventional ammunition and small arms
and light weapons. On the common foreign and security policy, Albania aligned itself with all
relevant EU declarations and European Council conclusions (100% alignment). This trend has
been consistent for the last few years, thus demonstrating a very clear commitment in
supporting the positions promoted by the European Union on issues related to international
peace and security. Albania has also continued to participate in civil and military crisis
management missions. In the coming year, the country should in particular:
→ make full use and ensure maintenance of the online register of weapons and ammunition
under the management of the State Police.
Regular political dialogue between the EU and Albania on foreign security policy issues
continued. (For more information on relations with other enlargement countries and EU
Member States, see Political criteria — Regional issues and international obligations.)
On the common foreign and security policy, Albania aligned itself, when invited, with all
relevant EU declarations and European Council conclusions (100 % alignment). This trend
has been consistent for a number of years, thus demonstrating a very clear commitment in
supporting the positions promoted by the European Union on issues related to international
peace and security. (As regards the International Criminal Court, see Political criteria —
Regional issues and international obligations.)
Albania itself aligned with and implemented all restrictive measures introduced by European
Council decisions.

71

On non-proliferation, Albania has made further progress in implementing the action plan for
the destruction of surplus weaponry. The destruction of surplus conventional ammunition is
well on track. Clearance of hot spots, removal of hazardous chemicals, and final closure of
unneeded depots and renovation of permanent depots remains to be done. The destruction of
small arms and light weapons is almost complete. Some action has been taken to upgrade
armament and storage security, which remains a concern. The online register of weapons and
ammunition under the management of the State Police has been installed and is operational. A
national security strategy was adopted. The strategy on counter violent extremism was
finalized and remains to be adopted. (As regards the International Criminal Court, see
Political criteria 2.3 — Regional issues and international obligations.)
Albania has continued to engage actively in cooperation with international organisations.
Albania maintained four observers to the two OSCE missions in Ukraine, and also sent two
OSCE observers for parliamentary elections in Ukraine held in October 2014.
On security measures, a security agreement with the EU on the exchange and mutual
protection of classified information is under negotiation.
Albania has continued to participate in civil and military crisis management missions under
the common security and defence policy (CSDP), in particular EUFOR Althea Bosnia
Herzegovina (with one military officer). Via NATO, Albania has provided significant
supplies of surplus weapons and ammunition to Kurdish forces fighting Da'esh.
4.32. Chapter 32: Financial control
Based on international standards, EU financial control rules promote sound financial
management of national income and expenditure. They also 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 chapter. Some progress was made in the past year,
especially in adopting a comprehensive public financial management reform strategy and an
amended State Audit Institution (SAI) law. However, the managerial accountability principle
is not yet fully embedded in the management culture and public internal financial control
(PIFC) legislation is not systematically implemented by all institutions. In the coming year
Albania should in particular:
→ adopt amendments to the PIFC legislation;
→ strengthen follow-up to the annual PIFC assessment addressing systemic weaknesses;
→ ensure quality of external audit by further aligning SAI operations to the standards of the
International Organisation of Supreme Audit Institutions (INTOSAI).
Public internal financial control
In December 2014 the government adopted the 2014-2020 public financial management
reform strategy. The PIFC Council, an advisory body for the Ministry of Finance, has yet to
take a more active role in promoting reforms while the government has yet to ensure
systematic follow-up to the findings of the annual PIFC report.
The two Central Harmonisation Units for Financial Management and Control and for
Internal Audit continue to focus on organising training and preparing legislation and
guidelines. This focus should be changed to undertaking more strategic policy-driven
activities. The recommendations from annual reporting have yet to be effectively followed up.
Draft amendments to the financial management and control (FMC) law clarifying the role
of authorising officers are awaiting adoption. Primary and secondary legislation is largely in

72

line with the internal control framework of the Committee of Sponsoring Organisations
(COSO) and INTOSAI guidelines but implementation remains weak at all levels of the
administration. Particular examples are the low proportion of budget institutions (30%), which
have drawn up internal procedures for FMC; the uneven introduction of delegation; and the
insufficient application of risk management. Effective implementation and supervision of the
FMC systems, and appropriate training for staff and senior programme officers, have yet to be
ensured. The draft law, which is to make the centralised budget inspection function in line
with PIFC requirements, is awaiting adoption. The operational capacity of the Financial
Inspection Directorate is not sufficient to fight high-risk fraud and corruption.
The internal audit law is in line with international standards. Manuals and codes of ethics are
largely in place. The share of certified auditors is 82% but a new national certification scheme
is being developed. Of 116 institutions, 28 are not sufficiently staffed. The internal audit
function is yet to reach its potential with managers still asking auditors to perform inspection
type work rather than identifying systemic weaknesses and modalities to address them.
External audit
Since a revised SAI law, in line with INTOSAI guidelines, was adopted in February 2015,
there is an adequate constitutional and legal framework in place to guarantee the SAI’s
functional and operational independence. Work now needs to focus on ensuring that the
revised legal provisions are fully implemented.
The SAI has a total of 149 allocated posts, which are not sufficient to cover its audit mandate
involving all public sector institutions. To help boost its institutional capacity, the SAI
updated its strategic development plan for the period 2015-17, which foresees improvement of
the quality of audit work in line with INTOSAI standards. While the SAI may carry out any
type of audits, it mostly undertakes compliance audits determining economic damage and
violations of rules rather than focusing on how to prevent such damages. Financial audits do
not yet result in professional audit opinions. Performance audits have to increase in numbers
and fully comply with international standards. Audit manuals are in place but they need to be
revised to comply with INTOSAI standards.
The impact of audit work is limited by the low number of audited institutions. In 2014, the
SAI completed 160 audits, uncovering irregularities totalling 11.19 billion Albanian LEK.
The SAI presented 41 cases concerning 149 officials to the General Prosecutor Office as part
of the fight against economic crime, fraud and corruption. Audit reports are summarised
quarterly and published on the SAI website. The Ministry of Finance developed an action
plan to follow-up on SAI findings but systematic follow-up needs to be further reinforced.
The SAI annual audit report to the Parliament is discussed in the Economic and Financial
Committee, but there is again no systematic parliamentary follow-up.
Protection of the EU’s financial interests
As regards acquis alignment, the national legislation incorporates the main elements of the
Convention on the Protection of the EU’s Financial Interests and regulates the obligation to
safeguard evidence. The revised law covering the requirements for the national anti-fraud
coordination service (AFCOS), assigned to the public financial inspection directorate
under the Minister of Finance, remains to be adopted. AFCOS has limited operational
capacity. With regard to cooperation with the European Commission, procedures for
reporting irregularities and suspected fraud cases remain to be strengthened. The
irregularity management system has been set up but so far no suspected cases have been
reported. A solid track record on investigation activities still needs to be established.

73

Protection of the euro against counterfeiting
Albania has signed, but not yet ratified, the 1929 International Convention for the Suppression
of Counterfeiting Currency. Acquis alignment is partial. Medals and tokens similar to euro
coins are not yet regulated. Technical analysis of counterfeit money is performed by the
National Analysis Centre (NAC) of the National Bank, which has assessed a considerable
number of domestic and foreign currency banknotes in the period 2014-15. It cooperates with
competent authorities at national and international level. The National Bank concluded a
formal cooperation agreement with the European Commission on coins in 2013. A similar
agreement on banknotes with the European Central Bank is pending. National competent
authorities participate regularly in activities organised under the Pericles 2020 programme.
4.33. Chapter 33: Financial and budgetary provisions
Rules for funding the EU budget provide for contributions based mainly on the gross national
income of each Member State as well as from value-added tax and customs duties.
Albania has some level of preparation in financial and budgetary provisions. There was
some progress in this area. Albania will need to set up a coordinating body in due course to
steer pre-accession preparations in the own resources field.
There were limited developments in the area of traditional own resources, the value added
tax-based resource and the gross national income-based resource. On the VAT-based
resource, tax evasion remains a priority to be tackled. As regards the gross national incomebased resource, work on introducing ESA 2010 standards will need to continue. (For
developments in the underlying policy areas, see Chapters 16 — Taxation; 18 — Statistics; 29
— Customs union; and 32 — Financial control.).
Albania has put in place the main administrative infrastructure for the underlying policy
areas that indirectly affect the own resources system. Further efforts are needed to ensure
effective measures for fighting tax evasion and the informal economy. In due course, work
will need to be done to set up the institutions and the coordinating body in charge of preparing
the administrative conditions for applying the own resources rules.

74

Annex I – Relations between the EU and Albania
The Stabilisation and Association Agreement between Albania and the EU came into force
in April 2009. Albania presented its application for membership of the European Union on 28
April 2009. Following a request by the Council, the Commission submitted its Opinion on
Albania’s application in November 2010. In December 2010, the Council noted that the
opening of accession negotiations would be considered once the Commission has assessed
that the country has achieved the necessary degree of compliance with the membership
criteria and, in particular, has met the key priorities set out in the Commission’s Opinion. In
view of the progress made by Albania, the Commission recommended in October 2013 that
Albania be granted candidate status, on the understanding that it continues to take action in
the fight against organised crime and corruption, and the Commission identified five key
priorities for opening accession negotiations. In December, the Council stated that it would
decide on whether to grant candidate status in June 2014, in the light of a report by the
Commission focusing on Albania’s implementation of its judicial reform strategy and on the
fight against organised crime and corruption. The Council stressed that sustained
implementation of reforms and fulfilment of all key priorities would be necessary for the
opening of negotiations. In a report published in June 2014, the Commission confirmed its
recommendation that the Council should grant Albania candidate status. The European
Council of June 2014 endorsed the decision of the General Affairs Council granting Albania
candidate status.
In the past year, Albania has implemented smoothly its obligations under the Stabilisation and
Association Agreement (SAA). Regular political and economic dialogue between the EU and
Albania has continued through the relevant structures under the SAA. The Stabilisation and
Association Committee and Council met in April and May 2015, respectively. Meetings of
subcommittees and of the special group on public administration reform were held. Albania
continued to actively participate in high level dialogue meetings, which were held in
September 2014, March 2015 and September 2015, as well as in the related meetings of the
joint working groups on the five key priorities in September and February.
Albania has made steady progress in addressing the key priorities for the opening of
accession negotiations, pursuing a set of reforms necessary to advance in the EU integration
path. The most relevant achievements are related to public administration reform and the
preparation of a comprehensive reform of the judicial system. It is essential to build on the
progress made and keep the reform momentum. In the area of rule of law, further tangible
results are necessary. The finalisation of the comprehensive reform of the judiciary is amongst
the most significant challenges. Albania needs to demonstrate progress with a view to
establishing a solid track record of investigations, prosecutions and final convictions in
corruption and organised crime at all levels. The implementation of effective measures to
reinforce the protection of human rights, including of Roma citizens and other vulnerable
groups within the society, and anti-discrimination policies, as well as the implementation of
property rights are of utmost importance. Albania should pursue economic reforms aimed at
increasing competitiveness and tackling high unemployment, as well as improve the business
environment. The commitment to inclusive dialogue and cooperation under the agreement
reached between the ruling majority and the main opposition party in December 2014 needs
to be maintained for the overall sustainability of all the ongoing and upcoming EU-related
reform processes.
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,

75

the Commission has been regularly assessing the progress made by the country in
implementing reforms introduced under the visa roadmap. The monitoring mechanism also
includes an alert mechanism to prevent abuses, coordinated by Frontex. The Commission has
organised a post-visa liberalisation peer review mission in June and submitted regularly its
monitoring reports to the European Parliament and the Council. The next post-visa
liberalisation report will be presented in the last quarter of 2015. A readmission agreement
between the European Union and Albania has been in force since 2006.
The EU provided financial assistance to Albania under the Instrument for Pre-accession
Assistance (IPA) for the period 2007-2013 with a total allocation of € 594 million. The
assistance has been predominantly implemented under direct management by the EU
Delegation in Tirana. The indirect management modality has been introduced with a pilot
approach for the IPA 2013 national programme.
Under IPA II, Albania will continue to benefit from pre-accession assistance for 2014-2020 in
line with the priorities set out in the indicative strategy paper, with a total indicative allocation
of € 649.4 million. The Framework Agreement for IPA II entered into force in April.
The 2014 action programme for Albania provides approximately € 67 million to promote
reforms in key sectors such as democracy and governance and rule of law and fundamental
rights. It includes a budget support operation for public finance management and a set of
actions for support to public administration reform, participation in union programmes and
economic and social empowerment of minority groups, as well as an EU integration facility.
Albania continues to benefit from support under the IPA multi-country and regional
programmes. It continues to participate in five cross-border cooperation programmes with
neighbouring Western Balkan countries and Member States, as well as in transnational
cooperation programmes under the European Regional Development Fund and the IPA
Adriatic cross-border programme.
Albania participates in the following EU programmes, with IPA support: Erasmus+, Creative
Europe (Culture and Media strands), Employment and Social Innovation, Horizon 2020,
Customs 2020, Fiscalis 2020, Competitiveness of Enterprises and Small and Medium-Sized
Enterprises Programme (COSME).

76

Annex II – Statistical Annex

STATISTICAL DATA (as of 7.09.2015)
Albania
Basic data
Population (thousand)
Total area of the country (km²)

2002
3 057e
28 750

2010
2 919e
28 750

2011
2 907e
28 750

2012
2 902e
28 750

2013
2 899e
28 750

2014
2 896e
28 750

2010
1 239 645
b
8 997b
3 088b
7 089e

2011
1 300 624

2012
1 332 811

2)
2)
2) 3)

2002
622 71
1
4 705
1 537
:

9 268
3 191
7 409e

9 586
3 305
7 300

2013
1 350 555
p
9 629p
3 323p
7 400

2014
1 393 54
0p
9 956p
3 440p
7 800

2) 4)

:

28

28

28

28

29

5)

4.2

3.7b

2.5

1.4

1.1p

2.1p

2)
2)
2)
2)
2) 6)

:
:
:
:
86.0

20.7
13.8
14.9
50.7
88.9b

21.0
13.5
14.6
50.9
88.9s

21.7
13.3
13.1
51.9
88.5

22.5p
14.4p
11.9p
51.1p
88.9p

22.6p
14.2p
11.0p
52.2p
90.7p

2) 6)

37.9

28.4b

29.4s

26.5

25.9p

24.9p

2) 6)
7)
2) 6)

0.8

1.9b

2.0s

1.8

2.4p

:

19.6

32.4b

34.0s

33.4

35.4p

29.9p

2) 6)

44.3

53.0b

56.7s

52.0

53.5p

49.0p

Business
Industrial production volume index (2010 = 100)
Number of active enterprises (number)
Birth rate: number of enterprise births in the
reference period (t) divided by the number of
enterprises active in t (%)
Death rate: number of enterprise deaths in the
reference period (t) divided by the number of
enterprises active in t (%)
People employed in SMEs as a share of all
persons employed (within the non-financial
business economy) (%)
Value added by SMEs (in the non-financial
business economy) (EUR million)
Total value added (in the non-financial business
economy) (EUR million)

Note

2002
:
56 490
18.0

2010
100.0
103 038
16.0

2011
111.9
109 039
11.8

2012
118.7
106 837
12.0

2013
135.1
111 083
10.9

2014
138.9
112 537
15.4

:

:

:

:

:

:

73.6

83.8

81.4

81.7

81.0

:

496e

1 574

1 521

2 126

1 961

:

740

2 476

2 239

3 077

2 948

:

Inflation rate
Consumer price index (CPI), change relative to
the previous year (%)

Note
8)

2002
1.7

2010
3.6

2011
1.7

2012
2.4

2013
1.9

2014
0.7

National accounts
Gross domestic product (GDP) (million national
currency)
Gross domestic product (GDP) (million euro)
GDP (euro per capita)
GDP (in Purchasing Power Standards (PPS) per
capita)
GDP (in Purchasing Power Standards (PPS) per
capita), relative to the EU average (EU-28 =
100)
Real GDP growth rate: change on previous year
of GDP volume (%)
Gross value added by main sectors
Agriculture, forestry and fisheries (%)
Industry (%)
Construction (%)
Services (%)
Final consumption expenditure, as a share of
GDP (%)
Gross fixed capital formation, as a share of GDP
(%)
Changes in inventories, as a share of GDP (%)
Exports of goods and services, relative to GDP
(%)
Imports of goods and services, relative to GDP
(%)

Note
1)

2)

77

Balance of payments
Balance of payments: current account total
(million euro)
Balance of payments current account: trade
balance (million euro)
Balance of payments current account: net
services (million euro)
Balance of payments current account: net
income (million euro)
Balance of payments current account: net
current transfers (million euro)
of which government transfers (million euro)
**3 year backward moving average of the current
account balance relative to GDP (%)
Net inward foreign direct investment (FDI)
(million euro)
Foreign direct investment (FDI) abroad (million
euro)
of which FDI of the reporting economy in the EU28 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 (%)

Note
9)

2002
-444

2010
-1 019

2011
-1 225

2012
-978

2013
-1 037

2014
-1 303p

9)

-1 218

-2 083

-2 242

-1 999

-1 893

-2 137p

9)

-8

232

135

213

155

268p

9)

116

-90

-25

-72

21

-160p

9)

667

922

906

880

680

725p

9)

41
-7.2

45
-14.1

29
-13.3

33
-11.6

17
-11.4p

9p
:

141.4

788.5

608.9

647.8

923.2

801.3p

0.0

4.8

21.4

17.9

21.6

76.3p

:

:

:

:

:

:

141.4

793.3

630.4

665.8

944.8

877.6p

:

:

:

:

:

:

:

:

:

:

:

:

:

-11.0

-3.9

1.6

-19.6

8.8p

2002
-6.1

2010
-3.1

2011
-3.5

2012
-3.4e

2013
-4.9

2014
-5.1

62.8

57.7

59.4

62.0

70.1

71.8

24.8

26.2

25.4

24.7

24.0

25.9

30.9

29.3

28.9

28.2

28.9

31.0

2002
62.8

2010
54.0

2011
55.7

2012
58.0

2013
61.1

2014
65.2

320.6

166.6

163.7

174.2

174.1

174.0

1 102

1 999

1 973

2 023

2 109

2 524

2 430

4 387

4 611

4 816

4 942

5 161

3 083

7 114

7 626

8 080

8 192

8 538

302

3 506

3 862

3 990

3 906

4 001

11)

:

4.92

5.07

3.96

3.53

2.55

12)
13)

14.96
8.50
132.36

11.29
6.40
137.79

11.17
5.87
140.33

10.28
5.38
139.04

9.52
4.17
140.26

7.66
1.92
139.97

:

:

:

:

:

:

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 (%)

Note

Financial indicators
Gross foreign debt of the whole economy,
relative to GDP (%)
Gross foreign debt of the whole economy,
relative to total exports (%)
Money supply: M1 (banknotes, coins, overnight
deposits, million euro)
Money supply: M2 (M1 plus deposits with
maturity up to two years, million euro)
Money supply: M3 (M2 plus marketable
instruments, million euro)
Total credit by monetary financial institutions to
residents (consolidated) (million euro)
Interest rates: day-to-day money rate, per
annum (%)
Lending interest rate (one year), per annum (%)
Deposit interest rate (one year), per annum (%)
Euro exchange rates: average of period (1 euro
= … national currency)
Trade-weighted effective exchange rate index
(2005 = 100)

Note
10)

78

Value of reserve assets (including gold) (million
euro)
External trade in goods
Value of imports: all goods, all partners (million
euro)
Value of exports: all goods, all partners (million
euro)
Trade balance: all goods, all partners (million
euro)
Terms of trade (export price index / import price
index * 100) (number)
Share of exports to EU-28 countries in value of
total exports (%)
Share of imports from EU-28 countries in value
of total imports (%)

:

1 905

1 912

1 972

2 015

2 192

2002
1 587

2010
3 328

2011
3 867

2012
3 797

2013
3 699

2014
3 941

90

1 169

1 400

1 531

1 761

1 827

-1 497

-2 160

-2 467

-2 267

-1 938

-2 114

101

72

78

83

86

86

75.9

70.4

72.8

75.6

76.7

77.4

79.1

66.9

65.3

63.2

64.3

61.1

2002
7.6e

2010
4.8e

2011
4.9e

2012
5.0

2013
5.3

2014
5.2

17.2

9.6

8.7

8.8

7.9

7.9

:
:

74.7e
79.4e

75.3e
79.8e

75.5e
79.7e

76.0
80.3

76.4
80.3

2002
:

2010
69.7e

2011
75.6e

2012
71.9e

2013
67.6e

2014
68.6e

:

60.3e

64.9e

62.4e

56.7e

56.6e

:

71.5e

72.8e

70.1e

64.8e

65.2e

:

49.8e

57.2e

54.9e

49.3e

48.5e

:

48.3e

54.7e

56.3e

51.1e

51.2e

:
:
:
:
:

:
:
:
:
:

45.4e
10.6e
8.2e
35.7e
:

46.1e
9.1e
8.2e
36.6e
15.7e

44.0e
9.7e
7.1e
38.8e
17.8e

42.7e
11.0e
6.4e
39.4e
17.5e

:

:

:

84.3e

82.2e

82.5e

15)

15.8

14.0e

14.0e

13.4e

15.9e

17.5e

15)
15)
15)

13.6
19.1
26.8

12.6e
15.9e
30.5e

13.6e
14.4e
23.6e

14.6e
11.7e
29.8e

17.8e
13.5e
31.4e

19.2e
15.2e
39.0e

:

10.6e

10.2e

10.3e

11.5e

11.2e

:

10.9e

12.1e

10.5e

13.6e

13.4e

:

7.9e

10.1e

11.8e

11.7e

13.7e

Note

Demography
Crude rate of natural change of population
(natural growth rate): number of births minus
deaths (per thousand inhabitants)
Infant mortality rate deaths of children under one
year of age (per thousand live births)
Life expectancy at birth: male (years)
Life expectancy at birth: female (years)

Note

Labour market
Economic activity rate for persons aged 20–64:
proportion of the population aged 20–64 that is
economically active (%)
*Employment rate for persons aged 20–64:
proportion of the population aged 20–64 that are
in employment (%)
Male employment rate for persons aged 20–64
(%)
Female employment rate for persons aged 20–
64 (%)
Employment rate for persons aged 55–64:
proportion of the population aged 55–64 that are
in employment (%)
Employment by main sectors
Agriculture, forestry and fisheries (%)
Industry (%)
Construction (%)
Services (%)
People employed in the public sector as a share
of total employment, persons aged 20–64 (%)
People employed in the private sector as a
share of total employment, persons aged 20–64
(%)
Unemployment rate: proportion of the labour
force that is unemployed (%)
Male unemployment rate (%)
Female unemployment rate (%)
Youth unemployment rate: proportion of the
labour force aged 15–24 that is unemployed (%)
Long-term unemployment rate: proportion of the
labour force that has been unemployed for 12
months or more (%)
Unemployment rate for persons (aged 25–64)
having completed at most lower secondary
education (ISCED 0–2) (%)
Unemployment rate for persons (aged 25–64)

Note

14)
14)
14)
14)

79

having completed tertiary education (ISCED 5 &
6) (%)
Social cohesion
Average nominal monthly wages and salaries
(national currency)
Index of real wages and salaries (index of
nominal wages and salaries divided by the
inflation index) (2000 = 100)
GINI coefficient — see definitions
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 (%)

Note

2002
19 659

2010
44 375

2011
46 665

2012
50 093

2013
52 150

2014
53 025

121.1

216.1

223.5

238.2

:

234.4

28.2
5.7
:

:
:
31.9e

:
:
35.2e

:
3.0
31.6e

:
:
30.6e

:
:
26.0e

2002
49e

2010
104

2011
106p

2012
107

2013
122

2014
131

261.4e

1 584.4

1 841.8

2 015.0

1 822.5s

1 686.5

Standard of living
Number of passenger cars relative to population
size (number per thousand population)
Number of mobile phone subscriptions relative
to population size (number per thousand
population)

Note

Infrastructure
Density of railway network (lines in operation per
thousand km²)
Length of motorways (kilometres)

Note

2002
15.0

2010
13.9

2011
13.9

2012
13.9

2013
12.0

2014
12.0

Innovation and research
Public expenditure on education relative to GDP
(%)
*Gross domestic expenditure on R&D relative to
GDP (%)
Percentage of households who have internet
access at home (%)

Note

2002
3.0

2010
3.4

2011
3.2

2012
3.3

2013
3.2

2014
3.3

:

:

:

:

:

:

:

:

:

14.3

:

:

Environment
Energy intensity of the economy (kg of oil
equivalent per 1 000 euro GDP at 2005 constant
prices)
Electricity generated from renewable sources
relative to gross electricity consumption (%)
Road share of inland freight transport (based on
tonne-km) (%)

Note

2002
:

2010
:

2011
:

2012
:

2013
:

2014
:

:

:

:

:

:

:

:

:

:

:

:

:

Energy
Primary production of all energy products
(thousand TOE)
Primary production of crude oil (thousand TOE)
Primary production of hard coal and lignite
(thousand TOE)
Primary production of natural gas (thousand
TOE)
Net imports of all energy products (thousand
TOE)
Gross inland energy consumption (thousand
TOE)
Electricity generation (thousand GWh)

Note

2002
896

2010
1 643

2011
1 494

2012
1 676

2013
2 041

2014
2 014

308
5

744
3

895
2

1 031
2

1 207
2

1 368
0

8

13

15

15

16

28

965

552

668

320

567

662

1 862

2 106

2 162

2 014

2 346

2 342

3.7

7.7

4.2

4.7

7.0

4.7

80

Agriculture
Agricultural production volume index of goods
and services (at producer prices) (previous year
= 100)
Utilised agricultural area (thousand hectares)
Livestock numbers: live bovine animals
(thousand heads, end of period)
Livestock numbers: live swine (thousand heads,
end of period)
Livestock numbers: live sheep and live goats
(thousand heads, end of period)
Production and utilisation of milk on the farm
(total whole milk) (thousand tonnes)
Harvested crop production: cereals (including
rice) (thousand tonnes)
Harvested crop production: sugar beet
(thousand tonnes)
Harvested crop production: vegetables
(thousand tonnes)

Note

2002
:

2010
107.3

2011
103.9

2012
104.5

2013
:

2014
:

1 140
690

1 201
493

1 201
492

1 201
498

1 190
498

1 178
500

114

164

163

159

152

172

2 773

2 581

2 517

2 619

2 723

2 804

1 010

1 070

1 101

1 105

1 131

1 133

519

662

701

697

703

700

39

0

0

0

0

0

668

860

890

914

924

950

: = not available
b = break in series
e = estimated value
p = provisional
s = Eurostat calculation
* = 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)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)

2002 and 2010–12: based on retro projection made by INSTAT.
2010–14: based on ESA 2010.
2012–14: Source, Eurostat.
Source, Eurostat.
2014: flash estimate based on quarterly data.
2010–14: the shares of the GDP expenditure components do not sum to 100 % due to statistical discrepancy.
2002: change in inventories and statistical discrepancy.
2002: variation between December of one year compared with December of the previous year.
2013 and 2014: based on balance of payments manual edition 6 (BPM6).
Data disseminated by the Bank of Albania.
Annual average of the overnight rate exchanged in money market.
Average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity.
Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 12month maturity.
2013 and 2014: the sum of the shares in the analysis of employment by activity does not sum to 100% due to cases where
persons have not or cannot be classified to a particular activity.
2002: administrative data.

81