Tuesday, December 1, 2020

Bank of Albania to monitor money laundering

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The Bank of Albania is expected to strengthen the supervisory rules for banks and non-bank financial institutions to monitor shareholders and partners of banks and other financial institutions, while new control measures will be enforced for shareholders applying for new licenses.

In its latest meeting, the Bank of Albania announced that it adopted a regulatory package for implementing the Moneyval Expert Report recommendations on money laundering prevention and terrorist financing.

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Through these changes, a greater emphasis is placed by the Bank of Albania on the ongoing monitoring process of shareholders or partners of banks and non-bank financial institutions as well as of the governing bodies of non-bank financial institutions and savings/loan associations.

The package includes changes to regulations on licensing and performing activities by banks and branches of foreign banks in Albania, non-bank financial institutions, savings and loan associations and their unions, foreign exchange offices, as well as in the regulation “On risk management in the activity of non-bank financial institutions” in terms of preventing money laundering and the financing of terrorism.

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Through this package, it is intended to meet the recommendations of the Moneyval Expert Committee within the framework of round V assessment for Albania.

The approved amendments consist mainly in strengthening the requirements of the Bank of Albania for financial entities applying to it for the license or for shareholders and for the entities licensed by the Bank of Albania during the process of changing influential participation and legal reorganization of them. At its recent meeting, the Bank adopted several regulatory acts under the inter-institutional plan for measures to reduce non-performing loans.

One of the main acts adopted was the regulation “On extrajudicial treatment of banks, borrowers in financial difficulties,” otherwise called “Tirana Approach” which was drafted in the framework of meeting the Bank of Albania commitments in the Inter-Institutional Plan of measures for the reduction of non-performing loans.

This regulation was prepared in cooperation with World Bank experts (FinSAC project) and is the completion of a package of measures taken by the Bank of Albania to address non-performing loans in the country.

The regulation focuses on facilitating the financial recovery of long-term borrowers who have exposure to more than one bank and foresees setting up a common platform between banks to find a suitable solution for the borrower.

The other change adopted in the regulation on credit risk management is the reduction of the depreciation period of loans lost by banks, and the strengthening of credit restructuring criteria by banks, taking into account the practices followed in European Union countries.

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