EUROPEAN COMPLIANCE BENCHMARK - European Law Students ... · European Compliance Benchmark | ELSA...

The Final Report

EUROPEANCOMPLIANCEBENCHMARK

LEGAL RESEARCH GROUP

2

INTERNATIONAL LEGAL RESEARCH GROUP

EUROPEAN COMPLIANCE BENCHMARK

Conducted by:

The European Law Students’ Association

International Coordinator

Jakub Čája

International Research Assistant

Mariagiulia Cecchini

International Human Resources Coordinator

Kristýna Tranová

Technical Editor

Mads Lorentzen

Contact: [email protected] and legalresearch.elsa.org

Brussels, June 2017

mailto:[email protected]://legalresearch.elsa.org/

European Compliance Benchmark

| FOREWORD

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FOREWORD

1. WHAT IS ELSA?

ELSA is a non-political, non-governmental, non-profit making, independent organisation which

is run by and for students. ELSA has 43 Member and Observer countries with more than 250

Local Groups and 40,000 students. It was founded in 1981 by 5 law students from Poland, Austria,

West Germany and Hungary. Since then, ELSA has aimed to unite students from all around

Europe, provide a channel for the exchange of ideas and opportunities for law students and young

lawyers to become internationally minded and professionally skilled. Our focus is to encourage

individuals to act for the good of society in order to realise our vision: “A just world in which there

is respect for human dignity and cultural diversity”. You can find more information on

www.elsa.org.

2. LEGAL RESEARCH GROUPS IN ELSA

A Legal Research Group (LRG) is a group of law students and young lawyers carrying out

researchon a specified topic of law with the aim to make their conclusions publicly accessible.

Legal research was one of the main aims of ELSA during our early years. When ELSA was created

as a platform for European cooperation between law students in the 1980s, sharing experience

and knowledge was the main purpose of our organisation. In the 1990s, our predecessors made

huge strides and built a strong association with a special focus on international exchange. In the

2000s, young students from Western to Eastern Europe were facing immense changes in their

legal systems. Our members were part of such giant legal developments such as the EU expansion


| FOREWORD

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and the implementation of EU Law. To illustrate, the outcome of the ELSA PINIL (Project on

International Criminal Court National Implementation Legislation) has been the largest

international criminal law research in Europe. In fact, the final country reports have been used as

a basis for establishing new legislation in many European countries.

The results of our more recent LRGs are available electronically. ELSA for Children (2012) was

published on Council of Europe's web pages and resulted in a follow up LRG (2014) together

with, among others, Missing Children Europe. In 2013, ELSA was involved in Council of Europe's

‘No Hate Speech Movement’. The final report resulted in a concluding conference in Oslo that

same year and has received a lot of interest from academics and activists in the field of

discrimination and freedom of speech. The results of the LRG conference, a guideline, have even

been translated into Japanese and were presented in the Council of Europe and UNESCO!

3. LEGAL RESEARCH GROUP - EUROPEAN COMPLIANCE BENCHMARK

The International Legal Research Group - European Compliance Benchmark is a cooperation

between The European Law Students' Association (ELSA) and K&L Gates. K&L Gates has

provided ELSA with research questions that 24 member and observer groups in our network

successfully investigated in the framework of their respective national legislation.

The topic of this LRG centered around the world of Corporate Compliance, as it is one of the

hottest legal topics currently. What is meant by this is the degree to which companies abide by the

regulations set for corporate governance and prevention of criminal measures in a commercial

context. The questions of the LRG focused on outlining the relevant rules as well as assessing

what the ramifications are for breaking them.


| ACKNOWLEDGEMENTS

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ACKNOWLEDGEMENTS The achievements of the International Legal Research Group - European Compliance Benchmark

would not have been possible without the kind support and help from many individuals.

The International Coordination Team would first and foremost like to thank and congratulate the

National Research Groups for their extraordinary effort. More than 200 students and academics

from 24 countries have participated as Researchers, Coordinators, Linguistic Editors and

Supervisors. Thanks to your great work, this project has put corporate compliance on the agenda

of many law students and you have provided a valuable source of information for readers who

seek to learn more about the corporate's criminal liability regulatory framework around Europe.

Academic background and support has been crucial for this student initiative. We are very grateful

for the assistance we received from Mr. Jeroen Smets from the K&L Gates office in Brussels and

Ms. Christine Braamskamp, from the London's K&L Gates office, who actively contributed to the

accompanied European Compliance Webinar. Without you, we would not have been able to

achieve a successful project.

Thankfully yours,

Jakub, Mariagiulia, Kristýna and Kerli

International Coordination Team of the International Legal Research Group - European

Compliance Benchmark


| TABLE OF CONTENTS

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TABLE OF CONTENTS FOREWORD ...................................................................................................................... 3

ACKNOWLEDGEMENTS ................................................................................................ 5

TABLE OF CONTENTS ................................................................................................... 6

ACADEMIC FRAMEWORK .............................................................................................. 8

NATIONAL REPORTS .................................................................................................... 10

ELSA ALBANIA ................................................................................................................ 11

ELSA BELGIUM .............................................................................................................. 53

ELSA BOSNIA AND HERZEGOVINA ......................................................................... 86

ELSA BULGARIA ............................................................................................................ 150

ELSA CYPRUS ................................................................................................................. 190

ELSA FINLAND ............................................................................................................. 243

ELSA GEORGIA .............................................................................................................. 305

ELSA GREECE ................................................................................................................ 353

ELSA IRELAND .............................................................................................................. 411

ELSA ITALY .................................................................................................................... 459

ELSA LATVIA .................................................................................................................. 541

ELSA LUXEMBOURG.................................................................................................... 599

ELSA MALTA .................................................................................................................. 644

ELSA the NETHERLANDS ........................................................................................... 688

ELSA POLAND ............................................................................................................... 732

ELSA REPUBLIC OF MACEDONIA ............................................................................ 786

ELSA ROMANIA ............................................................................................................. 830


| TABLE OF CONTENTS

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ELSA RUSSIA .................................................................................................................. 878

ELSA SLOVENIA ............................................................................................................ 918

ELSA SPAIN .................................................................................................................... 959

ELSA SWEDEN ............................................................................................................... 999

ELSA TURKEY .............................................................................................................. 1051

ELSA UKRAINE ............................................................................................................ 1104

ELSA UNITED KINGDOM ......................................................................................... 1146


| ACADEMIC FRAMEWORK

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ACADEMIC FRAMEWORK 1. Please identify the relevant anti-bribery and corruption, fraud, anti-money laundering,

and sanctions legislation within your jurisdiction.

2. Please explain the nature of the main offences for companies under this legislation and

any potential penalties.

3. Please explain whether, and in what circumstances, criminal conduct by directors and

officers may lead to corporate liability (i.e. the identification principle in the UK).

4. What are the potential bars to extradition of an individual (i.e. in the UK you cannot

extradite individuals where the request is politically motivated or would expose someone

to human rights violations)?

5. Please state and explain any:

5.1 internal reporting processes (i.e. whistleblowing);

5.2 external reporting requirements (i.e. to markets and regulators), that may arise on

the discovery of a possible offence.

6. Who are the enforcement authorities for these offences?

7. What powers do those enforcement agencies have to compel the production of

information (i.e. documents, answers to questions)?

8. In what circumstances may information be withheld from enforcement authorities (e.g.

legal privilege, privilege against self incrimination)?


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9. What are the restrictions on providing employee data to domestic or foreign enforcement

authorities?

10. If relevant, please set out information on the following:

10.1 Defences to the offences listed in question 2;

10.2 Any methods of obtaining immunity from or prevention of prosecution (i.e.

deferred prosecution agreement); and

10.3 Means and availability of and penalty reductions (i.e. co-operation, early guilty

pleas).

11. If relevant, please set out information on means of cost mitigation (i.e. taxation, directors

and officers insurance).

12. Looking forwards, how do you think that the legislation, enforcement and penalties are

likely to change over the next five years?


| NATIONAL REPORTS

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NATIONAL REPORTS ELSA Albania

ELSA Belgium

ELSA Bosnia and Herzegovina

ELSA Bulgaria

ELSA Cyprus

ELSA Finland

ELSA Georgia

ELSA Greece

ELSA Ireland

ELSA Italy

ELSA Latvia

ELSA Luxembourg

ELSA Malta

ELSA the Netherlands

ELSA Poland

ELSA Republic of Macedonia

ELSA Romania

ELSA Russia

ELSA Slovenia

ELSA Spain

ELSA Sweden

ELSA Turkey

ELSA Ukraine

ELSA United Kingdom


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ELSA ALBANIA

National Coordinator

Artemida Hoxhaj

National Academic Coordinator

Paola Ibraj

National Researchers

Bjorka Duka, Edina Llazani, Ervina Kaptina, Klotilda Gjorga, Zenajda Zaimi

National Linguistic Editor

Paola Ibraj

National Academic Supervisor

Prof. Asoc. Dr. Argita Malltezi


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ACKNOWLEDGEMENTS

We would like to express our sincere gratitude to our academic advisor Prof. Asoc. Dr. Argita

Malltezi for the continuous support in drafting this report and related research, for her patience,

motivation and immense knowledge.


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1. Please identify the relevant anti-bribery and corruption, fraud, anti-money

laundering, and sanctions legislation within your jurisdiction.

Albania has made progress in improving its legal framework of fight against money laundering and

financing of terrorism. Legal framework is improved with international standards. Bazel AML

index 2016 report provided by Bazel Institute of Governance, has ranked Albania the 102nd among

149 countries observed by the index. Scored is improved in 5.04 points, compared with year 2015

scored 5.56 points, showing lower risk of money laundering and terrorism. Albania is underlined

by the index, as one of top 10 improvers 2016.1 Albanian Financial Inteligence Unit, established

in Albania during year 2009, as member of EGMONT Group (international forum), is responsible

for receiving, analysing & disseminating to the competent authorities, disclosures of financial

information. The attempt of FIU for searching and fighting the potential financing of terrorist

activities in the national and international levels has been supported in Albania by the law of

terrorism in 20042.

Main bodies involved in the identification and prevention of bribery and corruption are

The General Directorate for the Prevention of Money Laundering,

The High Inspectorate of Declaration and Audit of Assets, General Directorate of

Prevention of money laundering (part of ministry of Finance), and all structures created for

such purpose within the public bodies.

Other regulators are Bank of Albania, Ministry of Finance, Ministry of Justice, Financial

Supervisory Authority etc.

The Prosecution Office is the competent authority for investigating and prosecuting corruption.

The Prosecution Office is organised and operates under the supervision of the general prosecutor

as a centralised structure, and includes the office of the General Prosecutor, the Prosecution

Council and the District Prosecution Offices. The General Prosecutor is the highest authority

1 https://index.baselgovernance.org/sites/index/documents/Basel_AML_Index_Report_2016.pdf 2 http://www1.fint.gov.al/en/historiku-3/albanian-financial-intelligence-unit


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exercising the criminal prosecution and representing the accusation in court on behalf of the state.

He is also responsible of the carrying out a series of other duties assigned by law to the

prosecution.3

Physical persons & juridical bodies shall undertake customer due diligence measures, before they

establish a business relationship, and after that, when the customer carries out or intends to carry

out i. a transfer within the country or abroad or a transaction at an equal amount or exceeding 100,

000 (one hundred thousand) Albanian Lek.

If the amount of transactions is not known at the time of operation, the identification shall be

made once the amount is known and the above threshold is reached.4 For Legal entities, that do

not carry out for-profit activity are required personal data’s like; name, number and date of court

decision related to registration as a legal person, statute and the act of foundation, number and

date of the issuance of the license by tax authorities, permanent location, and the type of activity;5

The subjects, the activities of which include money or value transfers, must obtain and identify,

first name, last name, address, document identification number or account number of the

originator, including the name of the financial institution from which the transfers is made.

The information must be included in the message or payment form attached to the transfer. If

there is no account number, the transfer shall be accompanied by a unique reference number. The

entities transmit the information together with the payment. Activities shall keep a list of their

agents and make such list available to the responsible authority, supervisory authorities, and

auditors as may be required.6

3 http://www.pp.gov.al/web/About_As_2_2.php#.WKvNqjuLTIU 4 Article 4 LAW: Nr.9917, dated on 19.5.2008 On the Prevention of Money Laundering & Financing of Terrorism, amended. 5 Article 5 LAW: Nr.9917, dated on 19.5.2008 On the Prevention of Money Laundering & Financing of Terrorism, amended. 6 Article 10 LAW: Nr.9917, dated on 19.5.2008 On the Prevention of Money Laundering & Financing of Terrorism, amended.


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Entities shall have the obligations:

a. Draft and apply internal regulations and guidelines that take into account the money

laundering and terrorism financing risk,

b. Nominate a responsible person for the prevention of money laundering and terrorism

financing, at the administrative/management level,

c. Establish a centralized system, in charge of data collection and analysis;

d. Apply fit and proper procedures when hiring new employees, to ensure their integrity,

e. Train their employees on the prevention of money laundering and terrorism financing

through regular organization of training programs,

f. Instruct the internal audit to check the compliance with the obligations of this law and of

the relevant sublegal acts,

g. Ensure that subsidiaries, branches, sub-branches, as well as their agencies, outside the

territory of the Republic of Albania,

h. The company should submit information, data and additional documents to the responsible

authority, in accordance with the provisions and time limits set forth in this law.

The responsible authority may extend this time limit in writing for a period of no more than 15

days. If the number of the employees of the entities referred to in this law is less than 3 persons,

the obligations of this law shall be fulfilled by the administrator or by an authorized employee of

the entity.7 Entities shall not use professional secrecy or benefits deriving from it as a rationale for

failing to comply with the legal provisions of this law, when information is requested or when, in

accordance with this law, the release of a document, which is relevant to the information, is

ordered.8

7 Article 11 LAW: Nr.9917, dated on 19.5.2008 On the Prevention of Money Laundering & Financing of Terrorism, amended. 8 Article 25 LAW: Nr.9917, dated on 19.5.2008 On the Prevention of Money Laundering & Financing of Terrorism, amended


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The criminal code of the Republic of Albania is in charge of protecting (against the penal acts) the

state’s dependence and its territorial integrity, human’s dignity, human’s rights and freedoms,

constitutional order, property, environment, Albanians’ co-habitation and well-understanding with

national minorities, and religious cohabitation; also, the criminal code should prevent the penal

acts.9

Organizing and putting in function fraudulent and pyramid schemes by borrowing money, in order

to have material benefits, is condemned by imprisonment from three to ten years. This act, when

it brings about serious consequences, is sentenced by imprisonment from ten to twenty years.10

Fraud on documents presented, thus fraudulently obtaining subsidies from the state, is punishable

by a fine or up to four years of imprisonment.11 Presenting false circumstances related to the object

to be insured, or fabricating false circumstances and presenting them into documents thus

fraudulently obtaining insurance is punishable by a fine or up to five years of imprisonment.12

Fraud on presented documents, thus fraudulently obtaining credit through fictitious registration

in property registration offices25 of objects which do not exist, or over estimated, or which belong

to somebody else’s property, committed with the intent of not paying back the credit, is punishable

by a fine or up to seven years of imprisonment.13 Publication or use partially or totally with his

own name of a work of literature, music, art or science which belongs to another, constitutes

criminal contravention and is punishable by a fine or up to two year of imprisonment.

9 Article 1/b Criminal Code of the Republic of Albania approved upon Law no. 7895, dated 27 January 1995 amended 10 Article 143/a Criminal Code of the Republic of Albania approved upon Law no. 7895, dated 27 January 1995 amended 11 Article 145 Criminal Code of the Republic of Albania approved upon Law no. 7895, dated 27 January 1995 amended 12 Article 144 Criminal Code of the Republic of Albania approved upon Law no. 7895, dated 27 January 1995 amended 13 Article 148 Criminal Code of the Republic of Albania approved upon Law no. 7895, dated 27 January 1995 amended


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2. Please explain the nature of the main offences for companies under this

legislation and any potential penalties.

Definition of corruption offence is provided under the provisions of the Albanian Criminal Code,

which indicated two forms of corruption.14 Active Corruption includes the promising, offering,

giving, directly or indirectly any type of irregular advantage or promise. Passive Corruption

includes the requesting, receiving, directly or indirectly any type of irregular advantage or promise.15

False statements, about the increase of capital of a company, related to the distribution of shares

of initial capital to the shareholders or the deposit of funds constitutes criminal contravention and

is punishable by a fine.16 Falsifying signatures and deposits, or false statement of deposits of the

company’s funds, or publication of signatures and deposits of fictitious people, or assessing the

contribution in kind to a bigger value than the factual one, is punishable by a fine or up to five

years of imprisonment.17

Irregularly issuing shares before registration of the company, or when registration is made illegally,

or when the documents of the company have not yet been completed, or when the statute of the

company after its increase of capital has not been changed or has not been registered or has been

drafted unlawfully, constitutes criminal contravention and is punishable by a fine or up to three


Simultaneously holding the capacities of shareholder and certified accountant constitutes criminal

contravention and is punishable by a fine or up to six months of imprisonment.19

14 Article 146 Criminal Code of the Republic of Albania approved upon Law no. 7895, dated 27 January 1995 amended 15 Article 163 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 16 Article 164/a of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 17 Article 165 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 18 Article 166 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 19 Article 167 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended


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Giving false information on the situation of a society by the certified accountant of a corporation,

to the competent agency on an offence committed, when cases of exclusion from criminal

responsibility provided in Article 300 of this Code do not exist, is punishable by a fine or up to

five years of imprisonment.20

Revealing the secrets of a company by its certified accountant, except in the case when he is

compelled to do so by law, constitute’s criminal contravention and is punishable by a fine or up

to two years of imprisonment. 21 Refusing to write mandatory notes by the manager or the

liquidator of the company constitutes criminal contravention and is punishable by a fine.22

Unlawful importing, exporting or transiting unauthorized goods entering or leaving the 58

Republic of Albania, committed through any means or ways, is sentenced up to ten years of

imprisonment.23 Importing, exporting or transiting goods to which excise duty is applied, by

passing them through places out of the custom stations, their partial or total concealment,

inaccurate declaration to customs, false declaration of the kind, sort, quality, price, destination of

goods or other forms aimed at avoiding custom duties, are punishable by a fine or up to seven


Importing, exporting or transiting goods which require a license from the competent authority by

passing them through places out of the custom stations, their partial or total concealment,

inaccurate declaration to the customs, false declaration of the kind, sort, quality, price, destination

of goods or other forms aimed at avoiding custom duties, are punishable by a fine or up to five


20 Article 168 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 21 Article 169 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 22 Article 171 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 23 Article 170 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 24 Article 172 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 25 Article 173 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended


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Importing, exporting or transiting goods by passing them through places out of the custom

stations, their partial or total concealment, inaccurate declaration to the customs, false declaration

of the kind, sort, quality, price, destination of goods or other forms aimed at avoiding custom

duties, are punishable by a fine or up to five years of imprisonment.26 Smuggling by employees

that are related with customs activities, even by collaborating with other persons, is condemned

by imprisonment from three to ten years.27

Trading, alienation or transport of smuggled goods, as well as any other support given to persons

dealing with these activities, is sentenced with fine or imprisonment up to three years.28 Storing,

accumulating, keeping or processing goods that are known to be smuggled, is punishable by a fine

or up to three years of imprisonment.29

Concealment or false statement of income or other objects that are subject to taxation, in cases

when other administrative sanctions have been previously taken, constitutes criminal

contravention and is punishable by a fine or up to two years of imprisonment.30

Non-payment of taxes within the time required by law by the person, against whom administrative

sanctions were previously taken for the same reason, although their payment was possible by the

person, is punishable by a fine or up to three years of imprisonment.31

Non completion of the duties related with collecting of the taxes and tariffs within the defined

legal term from the employees of the tax organs and other official persons assigned with these

duties, when it is done because of their fault and has brought a damage to the state with a value of

less than 1 million Albanian Lek (ALL), is punished by fine of up to 2 million Albanian Lek; When

26 Article 174 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 27 Article 175 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 28 Article 179 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 29 Article 178 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 30 Article 180 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 31 Article 181 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended


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the value is higher than 1 million Albanian Lek it is punishable by 3 to up to 10 years

imprisonment.32

Modification or any other intervention in measurement devices and counters, or utilizing altered

measurement devices and counters, or allowing the use by others of irregular measurement devices

and counters, with the intent of avoiding the full payment of taxes, constitutes criminal

contravention and is punishable by a fine or up to two years of imprisonment.33 Forging and

putting in use checks, bills of exchange, credit cards, or other valued papers, is condemned by

imprisonment up to five years. This very act, when committed by accomplices, more than once,

or when it brought about serious consequences, is condemned by imprisonment from three to ten

years.34

Producing or keeping equipment for falsifying currency, checks, bills of exchange, credit cards,

traveler’s checks or other financial documents, is punishable by a fine or from one to three years

of imprisonment. This very act, when committed by accomplices, more than once, or when it

brought about serious consequences, is punished by imprisonment from three to ten years.35 The

falsification or use of falsified documents is punished with imprisonment of up to three years and

with a fine of from two hundred thousand to six hundred thousand Albanian Lek. When this

offence is committed in collaboration or more than once or when it has brought serious

consequences, it is punished with imprisonment of from six months to four years and with a fine

of from three hundred thousand to One Million Albanian Lek.

When the falsification is done by a person who has the duty of issuing the document, it is punished

with imprisonment of from one year to seven years and with a fine of from five hundred thousand

to Two Million Albanian Lek.36 The falsification or use of falsified seals, stamps or forms, or the

32 Article 182 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 33 Article 183 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 34 Article 184 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 35 Article 185 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 36 Article 186 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended


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presentation of false circumstances in the latter that are directed to state organs, is punished with

imprisonment of from six months to four years and with a fine of from four hundred thousand to

one million Albanian Lek.37

Intentionally provoking bankruptcy by a juridical person is punishable by a fine or up to three


Entering into an economic commercial relationship with a third party by a juridical person with

the intent of concealing bankruptcy status is punishable by a fine or up to five years of

imprisonment.39 Concealment of assets by a juridical person upon the act of bankruptcy with the

intent of avoiding its consequences is punishable by a fine or up to seven years of imprisonment.40

Failure by a juridical person to comply with its obligations arising under bankruptcy constitutes

criminal contravention and is punishable by a fine or up to two years of imprisonment.41

Provisions of the “Law on the Criminal Liability of Legal Entities” are applicable to Albanian legal

entities and to foreign legal entities that have acquired legal personality according to the provisions

of the Albanian Company Law. The law applies to both national and foreign legal persons (ie joint

stock and limited liability companies, and non-profit organisations) and, with a few exceptions, to

local governmental bodies, public legal entities, political parties and labour unions.42

There are two types of penalties imposed on legal entities: principal penalties, consisting in

pecuniary fines or compulsory dissolution of the legal entity; and supplementary penalties, which

are applicable to the offender in addition to the principal penalties.43

37 Article 190 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 38 Article 193 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 39 Article 194 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 40 Article 195 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 41 Article 196 of Law No. 7895, dated 27 January 1995 “Criminal Code of the Republic of Albania” amended 42 Article 2 of Law no. 9745, dated 14 June 2007 “On the criminal liability of the legal entities” 43 Article 3 of no. 9745, dated 14 June 2007 “On the criminal liability of the legal entities”


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The responsible unit fulfils tasks from The High Inspectorate of Declaration and Control of

Property and Conflict of Interest (ILDKPKI) for development of the process of signalization, &

reports every year, not later than January 15 of the next year, a written report with registered

signalizations, steps followed for investigation. The responsible office reports every year the

fulfilment of the law.44

3. Please, explain whether, and in what circumstances, criminal conduct by

directors and officers may lead to corporate liability.

The Criminal Code of the Republic of Albania has a special chapter on the criminal offenses

happening in the domain of corporate or companies. Most of them refer to breaches committed

by directors or administrators of the company since they are the persons responsible for the

ongoing activity of the company. From drafting of false statements, misuse of powers, active and

passive corruption, these are some of the most common offenses happening. As it will further be

explained, The Law on Criminal Liability of Legal Persons (LCLLP) establishes the conditions

upon which the act committed by a company’s representative generate liability for the company

itself on Chapter II as it says:

The Legal person is responsible for offenses committed:

a. on behalf or for the benefit of his organs and his representatives;

b. the name or on his behalf, by a person who is under the authority of the person who It

represents, leads and manages the legal person;

c. the name or on his behalf, due to lack of control or supervision the person who manages,

represents and manages legal entities.

Furthermore the Legal Person will be handled with Criminal liability when bodies and

representatives acting on their behalf or on behalf of the legal person.

44 Article 22 of Law no 60/2016 “For signaling and Protection of Whistleblowers”


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In terms of Article 3 letter "a" of this law, and representative organ of the person legal, acting on

behalf or for the benefit of a legal person is any person who, by Law or legal person is charged for

representation, management, administration or control the scope of activity of the legal entity and

its structures.

The Criminal Code of Albania also provides a set of offences that the individual may commit but

taking in consideration which position he uses such as his position to represent the company it

might raise criminal liability for the company. These offences committed while on duty or serving

to a purpose of his duty as director or administrator of the company will bring consequences also

for the company. These offences are to be found from Section II (Frauds) Art 143-149 and on

Section III (Destruction of Property) Art 150-162.

Such Crimes are considered to be punishable by prison and imply criminal liability of the

responsible individual who committed the offence on behalf of his status as director or

administrator of the company. The Criminal Code also condemns fraudulent schemes by three to

ten years and in case of serious consequences by ten to twenty years. Market manipulation in case

there is inaccurate presentation of the product of service is subject to imprisonment up to four

years.

Price manipulation and dissemination of false information is condemned with imprisonment to

three years and in case of cooperation and brought serious consequences from two to five years.

Registration of securities in an unauthorized manner by the subject whose responsible of the stock

management shall be condemned with imprisonment from six months up to three years, and in

case of serious consequences from two to five years.

Wilful hiding of property or ownership of securities from the Authority for Financial Supervisory

would imply the subject with a punishment up to one year and in case of serious consequences up

to two to five years. Also illegal trade of securities can imply the subject with criminal liability and

the obligation to suffer imprisonment from one to five years in case of serious consequences. In

reference to computer fraud one, in case of Entering, changing, or deleting computer data removal


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or interference in the functioning of a computer system in order to provide themselves or third

parties, with fraud, a benefit economic situation or to inflict a third reduction of property, will be

punished by six months to six years.

Tax fraud is also settled in the Criminal Code and it implies that the organization and operation of

fraudulent schemes, in order to acquire material for him or others, through default, or obtaining

credit or refund of added tax value is punishable by three to ten years.

Other types of fraud are also included in the Albanian legislation differencing Fraud on insurance,

on Credit, for Art and culture which can be punished by a fine or imprisonment by up to five,

seven or four years respectively. In case someone holding a position on a company willingfuly

publishes another person’s work within its own name or chooses to reproduce the work of another

without the authors consent it will be considered as criminal offense and will be subject to

punishment by fine or up to two years of imprisonment.

On Section IV, for crimes committed on Companies or Corporate, there is a very strict provision45

about drafting false statements and the increase of capital of the company since this is narrowly

connected with the financial outcomes of the company. By doing so the legislator is trying to

condemn these offences under the 3Criminal Code also regarding the distribution of shares of

capital to the shareholders, its repayment or the deposit of funds, as they are considered criminal

offense and are punishable by a fine.

Falsifying signatures and deposits or false statement of deposits of funds to the company or

publication of the signatures and deposits of fictitious people, or assessing the contribution in kind

with a value greater than the value of fact, punishable by a fine or imprisonment up to five years.46

The misuse of powers by members of the supervisory board or managers of the company in order

45 Article 163, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 46 Article 165, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated)


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to obtain or favouring another company where they have interests is punishable by a fine or

imprisonment up to five year.47

Another offense related to the competencies and duties of directors who tend to give false

information about the state of, or the failure to report to the competent authorities for committing

a crime, shall be punished by a fine or imprisonment up to five years.48

The Criminal Code also provides criminal liability towards offences covered in Article 150,

Destruction of Property, and Destruction of property with fire, Wilful destruction of property

with explosion, flood and other means. Destruction of streets and connectivity infrastructure,

destruction of Electric systems, Destruction of irrigation and watering systems. Wilful destruction

of works of Art, Destruction of property from negligence and Destruction brought by Mavis

transport means crush. All of the aforementioned equip the victims with protection for offences

and crimes made not only by individuals, but also from companies or individuals that act as such.

Active/Passive Corruption in the Private sector

Corruption is seen with a double prism on the Criminal Code as it condemns both active and

passive corruption. Considering this a very important problem, active corruption49 in the private

sector 50 is punished by a fine as the main sentence, in addition to imprisonment.51

Promise, offer or giving, directly or indirectly, of any irregular benefit for himself or for others, a

person who exercises a management function in the company or in any position in the private

sector, to perform or failing to act in contrary to his duty or function, is sentenced to imprisonment

from three months up to three years.

47 Article 164, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 48 Article 168, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 49 Article 164/a Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 50 Law no. 9275, dated 16.09.2004, Article 13, amended by Law no. 23/2012, dated 01/03/2012, Article 22, 51 Law no. 144 dated 02.05.2013, Article 48


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Passive corruption52 in the private sector53 again is subject of a fine but the imprisonment from

three months to three years. Soliciting or receiving, directly or indirectly, of any irregular benefit

that such promise for himself or a third person, or accepting an offer or promise, coming from an

irregular benefit, the person who exercises a management function or in any position in the private

sector, to act or not to act contrary to his duty or function shall be punished by imprisonment

from six months to five years.

Issuing shares on behalf of the shareholders is it not allowed before the registration of the

company or when the recording was made illegally. When the formalities of society are still not

met, or when the statute in the case of capital increase has not yet been made or not registered or

it was made unlawfully this constitutes a criminal offense and is punishable by fine or

imprisonment up to three months.54

The Criminal Code of Albania also constitutes as offence unfairly holding two capacities on an

enterprise.55 When simultaneously holding the capacities of shareholder and certified accountant

constitutes a violation shall be punishable by a fine or by imprisonment up to six months.

The administration of an enterprise or company delivers a number of responsibilities on the

directors regarding also the management of human resources. For such responsibility on the

administration of the employment services the need for more regulated provisions raised and there

have amendments on the Illegal Employment.56

Employment without registration authorities or without ensuring the employees according to the

rules, when given before an administrative measure, constitutes a criminal offense and fined up to

10 thousand for each case or with imprisonment up to 1 year. Intentional failure or infringements

52 Article 164/b, Approved by Law no. 7895, dated 27.1.1995,(Updated) 53 Law no. 9275, dated 16.09.2004, Article 13, amended by Law no. 23/2012, dated 01/03/2012, Article 22, 54 Article 166, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 55 Article 167, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 56 Added by Law no. 8279, dated 15.01.1998, Article 2, amended by Law no. 8733, dated 01.24.2001, Article 47


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connected with employment and social security of persons entrusted with the implementation and

control of the relevant provisions, constitutes a criminal offense and punishable by a fine up to

100 thousand or imprisonment up to 2 years.57

More than providing criminal liability for these subjects the law for “Financial Securities”

establishes financial and administrative penalties that the subjects will have to pay in cases of

breaching the legal conditions for acting on financial securities.

Other than the Criminal Code offences regarding the administration of enterprises or companies

related with the responsibilities of the administrators are found also in the Law No. 9879, dated

February 21st 2008 “For financial Titles”. The publication of the Prospectus, which is a very

important document when trading or entering a trade relationship among companies/corporate

because it contains a summary of the most important legal and financial information of the

company, is an obligation by law.

Publishing distorted information in this document would make the issuing party obliged to

compensate third parties for damage arising from confidence in the truthfulness of the

information, if they have entered a relationship with this company. There is a lot of responsibility

for the content of the prospectus as the issuer is responsible for the accuracy of data contained in

the prospectus. Authority decision, confirming only that the prospectus is filed under requirements

of the law, that contains all the information provided herein and it can be published.

The issuer and persons found to have used the prospectus to cover or distorting important facts

bear full responsibility for the entirety and authenticity of the data contained in the prospectus

them, because of the position their connection with the issuer, knew or should have known about

the information undeclared.58

57 Article 170/a Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated) 58 Article 31, Law No. 9879, dated 21.02.2008 “For financial Titles”


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The consequences for the damages caused by the publication of false information raise liability for

the issuer of this information. If the issuer is allowed to trade on the stock exchange and publishes

false information, he is obliged to compensate third parties for damage arising from confidence in

the truthfulness of the information, if the third party:

Has purchased securities after the publication of false information and still owns them at

the moment when it becomes publicly known that the information was incorrect.

Has purchased securities before the publication of false information and has sold them

before it became clear that the information was inaccurate.

In the event that the issuer proves that the publication of false information is not made knowingly

or in terms of negligence, he is liable for damages, according to the first paragraph of this article.

Is not considered as damage, in accordance with the first paragraph of this article, if in the case of

paragraph 1 of this article, the third party in the moment of purchase, was aware that the

information was false and if in the case of paragraph 2 of this Article third party at the time of sale,

was aware that the information published was incorrect.

4. What are the potential bars to extradition of an individual (i.e in the UK you

cannot extradite individuals where the request is politically motivated or

would expose someone to human rights violations)?

The Criminal Code of Republic of Albania has a distinct article for the Extradition. As Albania is

a contracting party of the European Convention of Human Rights the conditions of which this

procedure might happen are very strict. Extradition may be granted, only when it is expressly

provided in international Conventions or mutual signed agreements to which Albania is party.

Extradition is permitted when the offense which is subject of the extradition request is as such

provided by law at the same time as Albanian and foreign.59

59 Article 300, Criminal Code of Albania, Approved by Law no. 7895, dated 27.1.1995,(Updated


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Extradition is not allowed, if the person to be extradited is an Albanian citizen, unless the

agreement provides otherwise, if the criminal act constituting the object of the request for

extradition has a political character or the military, if there is reason to suspect that the person

sought to be extradited will be prosecuted, punished or wanted because of his political, religious,

national, racial or ethnic origin, if the person sought to be extradited has been tried by a competent

court Albanian criminal offense for which extradition is requested.

5. Please state and explain any:

5.1 Internal reporting processes (i.e. whistleblowing).

a. Criminal Procedure Code of the Republic of Albania has a special chapter on the way how

internal reporting processes are made on article 280, 281, 282, 283 and 294.

The prosecutor and the judicial police become aware of the criminal offence ex-officio and by

others information related the public officials, who during the exercise of the duty or due to their

position or service, become aware of a criminal offence prosecutable ex-officio, are obliged to

make a written indictment even when the person to whom is attributed the criminal offence has

been not identified to the prosecutor or an officer of the judicial police.

When, during the civil or administrative proceedings, it is discovered a fact which constitute a

criminal offence which is prosecutable ex-officio, the relevant authority presents the indictment

to the prosecutor.

The medical personnel is legally bound to indict to the prosecutor or any officer of the judicial

police.

Any person that has become aware of a criminal offence prosecutable ex-officio must indict of it.

In cases specified by law the indictment is compulsory and is presented to the prosecutor or to an

officer of the judicial police orally or in writing, personally or through an attorney.


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Even after reporting the criminal offence, the judicial police continue gathering every valid element

for the reproduction of the fact and for the individualization of the guilty.

b. The purpose of the Law no 60/2016 “For signalling and Protection of Whistleblowers”, is

prevention and fight against corruption in the public and private sector as well as protection of

individuals that signal actions or alleged corruption practices in their work place.

Whistleblowers need support in order to overcome the consequences of retaliatory actions arising

from the discovery and reporting of corruption actions and practices within the organization.

5.2 External reporting requirements (i.e. to markets and regulators) that may arise on

the discovery of a possible offense.

a. Law no 60/2016 “For signaling and Protection of Whistleblowers”

External reporting process according to Article 8 of the same law is when High Inspectorate of

Declaration and Audit on Assets and Conflict of Interests (HIDAACI) discovers unequivocally

about hidden forms of wrongdoing or to an alleged corruptive act or practice to organizations

without any specialized unit that would uphold responsibility, as a certain and special body within

the public authority or private entity.

HIDAACI exercises its authority in compliance to Albanian Constitution, Law no 60/2016 “For

signalling and Protection of Whistleblowers, Administrative Procedure Code of the Republic of

Albania and other relevant laws.

In cases of a possible wrongdoing or corruption practices the HIDAACI or the specialized unit

presents the indictment to the prosecutor or to an officer of the judicial police.

b. LAW No. 9572, dated July 3rd 2006 “On The Financial Supervisory Authority”


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Its main function is the regulation and the observance of financial securities, the insurance market,

voluntary pensions market and other nonbanking financial activities. Violations of the provisions

of this law give due to criminal responsibility according to the penal code.

According to article 31 as an administrative sanctions fines, are predicted.

c. Law no. 18/2014 “On state police”

State institutions and entities that produce database for the identity of the citizens should give

access to their recognition and processing by the police officer with the authorization of the

director of the policy. Under Article 130 of this law when the police officer provides secret

information related to prevention and detection of offenses is obliged to keep the secret of this

cooperation and classified information until the legal obligation of confidentiality under Article

130 of this law is.

d. Law No.9917, dated on May 19th 2008 “On the Prevention of Money Laundering & Financing

of Terrorism”

Reporting to the responsible authority, means that each subject presents to the responsible

authority a report on the doubts that were conducted or is conducting a terrorism financing,

laundering of a criminal act, or if they observe the funds that may derive from criminal activities.

According to this law they are obliged to report to the responsible authority:

Customs authorities should send to the competent authority copies of declaration forms for

instance, amount in cash, valuables, metals or precious stones ranging from the amount a

million leke or its counteroffer in other currencies or justifying documents;

Tax authorities are obliged to any suspicion, or whistleblowing, that relates to money

laundering to report to the responsible authority immediately and in any event not later than

72 hours;

Central registration office to non-movable assets;


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Article 20 of this law obliges any authority that records, licenses and controls non-profit

organizations activities should immediately report to the competent authority any suspicion,

information or data, relating to money laundering or terrorist financing.

e. Directorate General of Taxation, 015 Law No 9920, dated on May 19th 2008

Investigation tax structures have as a primary function:

the collection of tax information;

tax investigation;

monitoring and implementation of austerity measures

Tax investigation units employees enjoy attributes of Judicial Police, in accordance with the

Criminal Procedure Code and the law on organization and functioning of the Judicial Police.

Investigating tax structures employees that exercise the functions of prosecution and execution of

coercive measures are equipped with weapons, in accordance with the Albanian legislation.

f. Law no.10 091 dated 5.03.2009 “On statutory auditing, organization of the profession of

registered auditor and chartered accountant”

Article 2 states that registered auditor is an independent professional registered in the public

register of auditors, in accordance with the provisions of this law, which practises for the annual

financial statements, individual and / or consolidated, the companies, enterprises or other

organizations when audit is compelled by law or required by the partners / shareholders.

The statutory auditor shall also perform accounting services and services of review and issuance

of security for financial information and related services, as determined by them in the manual

international declaration audit, providing the security and ethics of the International Federation of

Accountants, when they are consistent with the nature of the profession and the requirements of

applicable law.


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6. Who are the enforcement authorities for these offences?

After becoming familiar with the kinds of information enshrined in the Albanian legislation, let us

now elaborate on these authorities of coercive character during an official investigation.

a. Code of Criminal Procedure, in Article 277, 278, Prosecutor and judicial police, the prosecutor

heads the investigation and the judicial police is at his disposal, whereas criminal offences

adjudicated at first instance by the High Court are proceeded by the General Prosecution. Article

278 specifies the powers of the court in preliminary investigation.

b. ILDKPKI - As regards the High Inspectorate of the declaration and examination of assets and

conflict of interests, we will mainly focus on the powers of ILDKPKI concerning whistle-blowing

mechanisms.

c. Law no. 9572, dated July 3rd 2006, amended by law no. 54/2014 “On some additions and

amendments” On The Financial Supervisory Authority.

d. Law no. 9917, dated May 19th 2008 “On preventing money laundering and financing terrorism”

Article 21 focuses on the organization of the authority in charge, the General Directorate of

Preventing Money Laundering, which exercises the powers of the relevant authority, under this

Law, as an institution subordinate to the Minister of Finance and it serves as the Financial

Intelligence Unit of Albania. This directorate, within its scope, is entitled to decide about the

manner of following and solving issues regarding potential money laundering and financing

potential terrorist activities.

Article 24 of this law introduces us into the powers of the supervisory authorities, including:

Bank of Albania, for the entities specified in letters “a”, “b”, “c’’, “ç” and “d” of Article 3

of this law;

The Financial Supervisory Authority, for the entities specified in letters “e” and “ë” of

Article 3 of the law;


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relevant ministries on the supervision of the entities specified in letters “f’’ and “g’’ of Article

3 of this law;

National Advocates Chamber for lawyers;

Ministry of Justice for notaries;

e. The relevant authorities for the supervision of the entities specified in letters “h – non-banking

financial subjects’’, and “k - Agency for Legalization, Urbanization and Integration of Informal

Areas/Buildings’’ of Article 3 of this law.

7. What powers do those enforcement agencies have to compel the production

of information (i.e. documents, answers to questions)?

As mentioned above, after determining the forms of data acquisition during an official

investigation, we continued with the coercive authorities enshrined in our legislation. Below we

discuss the power of these authorities at the moment of being informed of an irregularity or a

criminal offense.

a. According to the Code of Criminal Procedure there are a number of Articles that specify the

measures that the relevant authorities, such as police officers or the prosecutor have to take in the

case of offenses or when informed of an irregularity or criminal offense. For example, Article 298,

which includes control, in the case of intervention or flagrance, judicial police officers conduct

controls in buildings or bars when they deem that there they can find clues that lead to the success

of the investigation.

The deadline for delivering the minutes to the prosecutor is 48 hours. Another case is when the

prosecutor orders the accelerated computer protection and decides whether there is risk of damage

or deletion. In case another person saves the data on order of the prosecutor, the specified deadline

is 90 days and he is obliged to keep the data secret until the termination of the investigation.

The law, namely Article 300, has provided for fast verification in the field where the state of traces,


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things and scene must stay unchanged until the prosecutor intervenes for the investigation and

evidence and materials relating to the investigation are sequestered.

b. Law on whistle-blowing and protection of whistle-blowers.

Except for cases when the relevant unit will report to ILDKPKI, Article 8 has also provided for

direct investigation on its part.

ILDKPKI studies and deals with the investigation of whistle-blowing for acts or practices

suspected of corruption in organizations. The whistle-blower has the right to signal the suspected

offense in cases where the responsible unit does not start the administrative investigation, and in

the case where there is doubt that the receiver of the signalling is involved or not in the suspected

act of corruption. There are also other reasons based on the impartiality of the unit responsible

for reviewing the signalling. Any investigation that has initiated is interrupted and whistle-blowing

(signalling) is investigated by ILDKPKI.

It has the right to collect information from different areas and to conduct inspections and analyses,

based on the awareness of the circumstances indicated on the investigation of ILDKPKI and there

is participation of the whistle-blower and any third person. Each party shall guarantee a fair process

within 30 days and from the moment of conducting the action the whistle-blower is notified of

any measure that has been taken. Afterwards, it takes immediate measures for the discontinuation

of the consequences of corruption and if the investigation shows that there are administrative

offenses, the competent authority is informed.

Nevertheless, despite the careful drafting of the law and the proper definition of powers of all

stakeholders, at the moment, the law on whistle-blowers is still theoretical because the first

structures in institutions have not been established yet. Sometimes it is also viewed as the law on

spies, and as a result, we would like to underline that ILDKPKI should work hard to increase the

awareness of the process, starting with the term whistle-blower itself.


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c. Law No. 9572, dated July 3rd 2006 “On The Financial Supervisory Authority”

Under Article 18/1, the Authority:

Any information obtained by the Authority and any information given to another supervisory

authority is treated as confidential and is used only for purposes specified in the law or by-laws.

The Authority is responsible for collecting and processing information about the facts and

circumstances related to the fulfillment of its supervisory duties and responsibilities provided in

this law.

The supervised entity is obliged to provide the Authority and its administration with: a) the

necessary means for the inspection, if so requested, and to answer questions on the premises of

the Authority; to provide all accounts, commercial documents and any other necessary documents,

in order to determine the facts and circumstances related to issues for which inspection is carried

out;

With regard to the Administrative Sanctions, according to Article 31, any person who obstructs

the Supervisory Authority and its structures or authorized officials of its administration in the

exercise of powers assigned by this law or by any other act, shall be punished by a fine of 50,000

(fifty thousand) Albanian Lek to 75,000 (seventy five thousand) Albanian Lek, and in case of

repeated violation, from 80,000 (eighty thousand) to 100,000 (one hundred thousand).

Any violation, under the first paragraph of this Article, committed by persons who are partners or

shareholders of the legal person, who have managerial positions of the legal person or by sole

partners of a commercial company, it is punishable by a fine of 100,000 (one hundred thousand)

Albanian Lek to 125,000 (one hundred and twenty five thousand) Albanian Lek and in case of

repeated violation, from 130,000 (one hundred and thirty thousand) Albanian Lek to 150,000 (one

hundred fifty thousand) Albanian Lek.

d. Directorate General of Taxation


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The tax administration, for lack of information or documents, or even worse, falsification of

necessary documents, lack of cooperation with the tax control, can then find any other alternative

method of evaluating the tax obligation of the taxpayer.

e. Law no. 99/7 “On Money Laundering And Financing Terrorism”

Supervisory authorities may request from subjects access and provision of any information and

documents relevant to the compliance of obligations of entities pursuant to this law.

In cases when the requirements and deadlines specified in the regulations pursuant to this law are

not respected, for reporting transactions above the threshold or reporting of suspicious activity,

set forth in Articles 4/1, 9 and 12, the entities are fined as follows:

a. natural persons: from 300,000 Albanian Lek to 3,000,000 Albanian Lek;

b. legal persons: from 500,000 Albanian Lek to 5,000,000 Albanian Lek.

The supervisory authorities immediately report to the relevant authority on any suspicion,

information or data related to money laundering or terrorist financing, for the activities under their

jurisdiction.

f. Law no. 18 2014. “On State Police”

The police officer informs the person to be presented at the premises of the police to obtain

information on preventing the action or unlawful inaction. In cases when the notified person does

not appear at police premises without justified causes and reasons, the police escort him against

his will, in accordance with the Code of Criminal Procedure.

To perform data collection, the police can also use secret cooperation with individuals, camera

recording in public areas, secret surveillance of persons and premises, as well as location tracking

devices, in accordance with the Code of Criminal Procedure.


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g. Law No. 47/2016 Dated On April 28th 2016 On Some Amendments And Additions To Law

No. 10 091, Dated March 5th 2009, “On Legal Auditing, Organization Of The Profession Of

Regsitered Accounting Expert And Approved Accountant”, As Amended

Under Article 55 Disciplinary offenses and measures are as follows:

1. Fine at the amount of 50,000 – 150,000 Albanian Lek is given in the case of not providing

information or documents requested by the relevant authorities, under the process of quality

control.

2. Fine at the amount of 50,000 – 100,000 Albanian Lek is given in the case when annual

statutory information submitted to the professional organization of legal auditors is

inaccurate.

8. In what circumstances may information be withheld from enforcement

authorities (e.g. legal privilege, privilege against self incrimination)?

Societies are going towards making everything more and more public, especially making data

public. It is a problematic what should be done regarding to data that might lead to incrimination

or that are part of state secret or have a specific protection on them. It might be obligatory to

release any information requested, but there are also some exemptions. Some exemptions to give

information relate to government policy or if disclosure would be likely to prejudice a criminal

investigation or prejudice someone’s commercial interests.60 Authorities will need to issue a refusal

notice if you are either refusing to say whether you hold information at all, or confirming that

information is held but refusing to release it.

The reason for not releasing the information might be supported by privileges, like the one against

self-incrimination. Confessions, admissions, and other statements taken from defendants in

60 https://ico.org.uk/for-organisations/guide-to-freedom-of-information/refusing-a-request/

https://ico.org.uk/for-organisations/guide-to-freedom-of-information/refusing-a-request/


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violation of this right are inadmissible against them during a criminal prosecution. All declarations

done before notice of prosecution should not be used against the accused party.61

There are also some protections for witnesses. A witness may refuse to answer questions or give

documentary evidence only if the answer or document would incriminate the witness. The

privilege does not allow a witness to refuse to answer a question because the response may expose

the witness to civil liability, social disgrace, loss of status, or loss of private employment.62

Under the Albanian legal framework the privilege against self-incrimination is stated in the

Constitution of the Republic of Albania. No one may be compelled to testify against himself or

his family or to confess his guilt and no one may be declared guilty on the basis of data collected

in an unlawful manner.63

The Criminal Procedure Code has several articles referring to this privilege. When a person not in

the capacity of a defendant (suspected person), makes a statement before the proceeding authority,

which provide information on his incrimination, the proceeding authority stops the questioning,

and warns him that after the statement an investigation may be conducted against him and ask him

to assign a defence counsel.

Statements previously made by the person cannot be used against him.64 The court explains the

right not to testify and asks the people involved if they wish to benefit from this right.

Noncompliance with this rule causes the testimony to be invalid.65 The lists of people that are not

obliged to testify are:66

61 Halim Islami, Artan Hoxha, Ilir Panda , Criminal Procedure, page 128, Tirana 2012, botimet Morava. 62 http://legal-dictionary.thefreedictionary.com/Privilege+against+Self-Incrimination 63 Article 32 of Law no. 8417 dated 21.10.1998 Constitution of the Republic of Albania, amended. 64 Article 37 of Law no 7905 dated 21.3.1995 Criminal Procedure Code of the Republic of Albania, amended. 65 Article 15/28 of Law no 7905 dated 21.3.1995 Criminal Procedure Code of the Republic of Albania, amended. 66 Article 158/1 of Law no 7905 dated 21.3.1995 Criminal Procedure Code of the Republic of Albania, amended.

http://legal-dictionary.thefreedictionary.com/Privilege+against+Self-Incrimination


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a defendant’s close kindred or in-laws, except in cases where they have lodged a criminal

report or complaint or where they or a close relative of them are injured by the criminal

offence;

a spouse, for facts learnt from defendant during their marital life;

a spouse divorced from defendant;

one, who even though is not defendant’s spouse, cohabitates or has cohabitated with him;

one, who is related to the defendant in an adoptive relationship.

Some specific profession are also entitled to refuse release of information.67 They are:

religious representatives, whose statutes are not in contravention of the Albanian legal order;

attorneys at law;

legal representatives and notaries;

physicians;

surgeons;

pharmacists;

obstetrics;

anyone who exercises a medical profession;68

those who exercise other professions, which the law recognises them the right not to testify

on what is related to professional secrecy;69

professional journalists pertaining to the names of persons whom they have got information

from during the course of their profession;

67 Article 159 of Law no 7905 dated 21.3.1995 Criminal Procedure Code of the Republic of Albania, amended. 68 Idem. 69 Idem paragraph 1, point d.


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state employees, public employees and persons appointed to a public service are obliged not

to testify on facts that are state secret;70

judicial police officers and agents, as well as, state intelligence service personnel may not be

compelled to reveal the names of their informers.71

There are some restrictions to the right to refuse release of information. It is possible for the court

when they have reasons to suspect that the claim made by these people in order to avoid the

testimony has no grounds, to order the necessary verification and when it (claim) results baseless,

the court orders the witness to testify.

When the information not released from the journalist is indispensable to prove the criminal

offence and the truthfulness of the information may only be proved through identification of the

source, the court orders the journalist to reveal the source of his information.72 To decide if specific

fact is a state secret is needed a confirmation from the competent state authority, and afterwards

not releasing it or not depends if the fact is essential or not the solution of the case.73

Under the law On statutory auditing, organisation of the profession of registered auditor and

chartered accountant information and documents used in or on which the knowledge obtained by

the statutory auditor or audit firm, during the audit, are protected by confidentiality and

professional secrecy.74 The rules of confidentiality and professional secrecy, related to auditors or

audit firms, does not constitute an obstacle to the implementation of the provisions of this law,

the application of standards or are in conflict with legal requirements with other laws applicable in

the Republic of Albania, which provide obtaining this information even when they are protected

as confidential and part of professional secrecy.

70 Article 160 paragraph 1 of Law no 7905 dated 21.3.1995 Criminal Procedure Code of the Republic of Albania, amended. 71 Idem paragraph 5. 72 Idem paragraph 3. 73 Idem paragraph 2 and 3. 74 Article 34 of Law no.10 091 dated 5.03.2009 On statutory auditing, organisation of the profession of registered auditor and chartered accountant, amended.


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9. What are the restrictions on providing employee data to domestic or foreign

enforcement authorities?

Under EU law, as well as under CoE law, ‘personal data’ are defined as information relating to an

identified or identifiable natural person, that is, information about a person whose identity is either

manifestly clear or can at least be established by obtaining additional information. 75 Data

processing is any operation which is performed upon personal data, whether or not by automatic

means, such as the collection, recording, storage, organization, adaptation, alteration, consultation,

use, retrieval, blocking, erasure, destruction or any other action, as well as data transmission.76 All

the process of data should be honest, fair and lawful and the collection for specific clearly defined

and legitimate purposes and shall be processed in a way that is compatible with these purposes,

the sufficient data and also taking care for the data for the time that is necessary.77

The volume and characteristics of cross-border data flows are evolving, elevating privacy risks and

the need for improved law enforcement co-operation. Developments in global communication

networks and business processes have increased the volume of transborder data flows. Data

transfers in areas like human resources, financial services, education, e-commerce and health

research – to name a few – are now an integral part of the global economy.

There are different laws that provide various restrictions on providing employee data to domestic

or foreign enforcement authorities. These include Labour Law Code of the Republic of Albania,

the Code of Administrative Procedures of the Republic of Albania and Law On protection of

personal data.

The employers are not allowed to collect information concerning the employee, except for the

cases where this information has to do with the professional skills of the employees or is necessary

75 Handbook on European data protection law, page 36, http://fra.europa.eu/sites/default/files/fra-2014-handbook-data-protection-law-2nd-ed_en.pdf. 76 Article 3, point 7 of Law no. 9887 dated 10.03.2008 On protection of personal data, amended. 77 Article 5 of Law no. 9887 dated 10.03.2008 On protection of personal data, amended.


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for the contract to be executed.78 The employer is obliged to take security measures to protect

employee’s personal data processed in the employment relation and in particular to sensitive data,

in compliance with legislation on the protection of personal data.79

Also the Code of Administrative Procedures addresses some aspects on the protection of data and

outlines different principles. Participants in an administrative procedure shall have the right to ask

for their personal and confidential data to be treated in accordance with the legislation in force.80

The code also states some principles on the protection of data.

The public organ during the lawful and fair processing of personal data, data related to commercial

or professional activity, on which it becomes aware during the administrative procedure and which

are protected under the legislation on personal data protection in force, shall have the duty to

adopt measures on their protection, safeguard, non-disclosure and confidentiality and the

protection, safeguard, non- disclosure and confidentiality duties, shall extend also to public

employees, during and after their stay in office.81

The main law that is relevant in the case of data protection is the Law On protection of personal

data. The law provides definition of personal data, sensitive data, the cases when these data are

processed, and the specific the authorities that are entitled to do this data process and on the other

side also some sanctions for incorrect implementation of the law.

Elements used to identify a person directly or indirectly are identity numbers or other factors

specific to his physical, psychological, economic, social and cultural identity etc.82 According to the

law, personal data subject means any natural person, whose personal data are processed and the

78 Article 33 paragraph 1 of Law no. 7961 dated 12.7.1995 Labour Law Code of the Republic of Albania, amended. 79 Idem paragraph 2 80 Article 8, Law no. 44/2015 dated 30.4.2015 Code of Administrative Procedures of the Republic of Albania. 81 Article 9, Law no. 44/2015 dated 30.4.2015 Code of Administrative Procedures of the Republic of Albania. 82 Article 3/1, Law no. 9887 dated 10.03.2008 On protection of personal data, amended.


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processor83 is a natural or legal person, public authority, agency or other body, except for the

employees of the Controller, which processes personal data on behalf of the Controller.

The law on the processing of data is used for the processing of personal data, wholly or partly by

automatic means and to the processing by other means of a personal data stored in a filing system.84

The law identifies the process of transfer nationally and internationally, and also the processing of

data when referring to proving information to national or international authorities. The processing

of the data has specific legal criteria to be filled in, which are:

the personal data subject has given his consent;

if it’s based in a contract;

to comply with a legal obligation of the controller;

for the performance of a legal task of public interest or in exercise of powers of the controller

or of a third party to whom the data are disclosed;

for the purposes of the legitimate interests pursued by the controller or by the third party to

which the data are disclosed, except when such interests override interests or fundamental

rights and freedoms of the data subject.85

In additional to the national transfer of data the law provides information on international transfer

of personal data, which is done with recipients from states which have an adequate level of

personal data protection. The level of personal data protection for a state is established by assessing

all circumstances related to processing, nature, purpose and duration of processing, country of

origin and final destination, legal provisions and security standards in force in the recipient state.

States that have an adequate level of data protection are specified by a decision of the Council of

83 Idem 5. 84 Article 4, Law no. 9887 dated 10.03.2008 On protection of personal data, amended. 85 Article 6, Law no. 9887 dated 10.03.2008 On protection of personal data, amended.


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Ministers.86 When the other state does not have an adequate level of personal data protection may

be done in specific cases.87

Even though the law provides the possibility to process and transfer the data, there is the option

for the data subject may refuse at any time on legal basis, the processing of data related to him

done according to the provision of the law.88 Also every person to whom damage has been caused

due to an unlawful processing of personal data shall have the right to claim compensation by the

controller for the suffered damage.89

The data subject has also the right of information. When the controller collects personal data, he

shall inform the data subject. The information shall contain the categories of personal data to be

processed, the purpose of processing, controller’s name and address as well as any other necessary

information to ensure a fair processing of the personal data. The information is not given when

the data subject is aware.90 Also controllers, processors and persons who come to know the

content of the processed data while exercising their duty, shall remain under obligation of

confidentiality and credibility even after termination of their functions. These data shall not be

disclosed save when otherwise provided by law.91

86 Article 8 paragraph 1, Law no. 9887 dated 10.03.2008 On protection of personal data, amended. 87 Idem paragraph 2. 88 Article 15, Law no. 9887 dated 10.03.2008 On protection of personal data, amended. 89 Article 17, Law no. 9887 dated 10.03.2008 On protection of personal data, amended. 90 Article 18 paragraph 1, Law no. 9887 dated 10.03.2008 On protection of personal data, amended. 91 Article 28, Law no. 9887 dated 10.03.2008 On protection of personal data, amended.


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10. If relevant, please set out information on the following:

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