News

25th of November 2019  

FIAA’s end of year GET TOGETHER

Over the last months, FIAA has circulated for consultation among its members the Draft Law on “Invoices and the System for Monitoring the Transactions”. The changes proposed in this draft law are expected to have a broader impact for business in Albania in the next year.

As a follow up of the potential issues identified by FIAA members, various comments and opinions, in September 11^th, FIAA organized a technical level consultation Roundtable with the participation of the Vice Minister of Finance and Economy Mr. Elton Haxhi and the Ministry’s Advisor Mrs. Arjana Dyrmishi.

Several representatives of FIAA shared their opinion and introduced relevant recommendations and arguments in support of improvements of the draft. There were several questions from business related to the manner the transactions’ law would function, administrative duties, necessary training, categories to be included and excluded, etc.

Based on the collected recommendations and comments, Experts in charge will continue to improve the Draft and try to reflect the Business Concerns shared during the Discussion. FIAA looks forward to the final reviewed draft law.

During the last months, FIAA has circulated among its members the Draft Unified Investment Law, which is open for consultation. As a follow up of the various comments and opinions, the Responsible Body for its Business Consultation, the Albania Investment Council in cooperation with the Ministry of Finance and Economy and presence of IFC Experts organized in June 25th a consultation round table.

FIAA was present with several Representatives, who shared their opinion and introduced the member’ recommendations in support of a good Investment Law in Albania. The discussion was mainly focused on the general terms of the Draft Law principles, but also didn’t miss the technical level discussion, along with lots of relevant arguments. Based on the collected recommendations and comments, the Experts in charge will continue to improve the Draft and try to reflect the Business Concerns shared during the Discussion.

Unfavorable Business Climate, Monopoly and Corruption continue to remain the most concerning issues. 

During a mid-year event in June, FIAA presented the outcomes of its Business Environment Survey 2019. The Survey was conducted among the Membership of FIAA which are the most important foreign businesses in the country, operating in various industries such as, energy, oil, mining, banking, telecommunications, manufacturing, etc, that represent the biggest part of the FDI-s in Albania.

Business estimation on the business climate during the first six months of the year was stated as unfavorable. When asked to rate the climate from 0 to 100, where zero is unfavorable and 100 very favorable, the outcome from businesses was 39. Expectations seems to be a little more positive for the second half of the year with the index rising to 45, but still falling below 50.

The Survey outcome collects as the most concerning, obstacles like monopoly & unfair competition, corruption, Government bureaucracy and informal economy. However, positive feedback was also stated by respondents in the relations with improvements in the banking system policies, access to finance, labor rules, intellectual property rights, and energy supply. Also, the relations with the customs and the central government were rated with positive notes.

During the Results presentation, The Minister of Finance and Economy, Mrs. Anila Denaj, present in the Event, said that the government is open to ongoing dialogue with entrepreneurs. She added that bureaucracies have fallen sharply, as confirmed in the World Bank’s Doing Business report.

Minister Denaj said it is true that 2-3 foreign companies have left Albania, but according to the 5-month data from the National Business Center, 89 new businesses with foreign shareholders have been opened.

Further, the Minister presented the Fiscal project, which the Ministry of Finance has launched this year, with the goal that in the year 2020, all payments can be performed electronically. This will contribute to a very sensitive reduction of informality. She announced to the businesses the results of the reforms undertaken by the government, such as those dealing with deregulation reform, with licenses, that today are given online 99%. During her word Minister Denaj invited the members of FIAA to visit the Vocational Schools and Labor Offices in every location they operate, in order to better mediate the needs of parties, job seekers and employers.

FIAA representatives were invited for a business breakfast with UNDP Albania, an activity set up with the most important actors of the private sector in Albania. The UNDP was represented by the Country Resident Head and the representatives from Regional Centre in Istanbul who introduced their recent programs and focus on the private sector engagement and development of partnerships. On the other side, FIAA representatives introduced their initiatives on support of the Economy and Communities they work with. They also emphasized the importance that business has given to Social Responsibility during the recent years and the vision they have to further play a role on the development of the social and economic growth of the country.

During the Meeting were introduced and discussed the Sustainable Development Goals achievement which for, UNDP sees the private sector playing a vital role as an engine of economic growth and creation of jobs.

In this ambit, FIAA was invited to cooperate with UNDP on different projects where, private sector as an important partner for UNDP could play a critical role towards sustainable development and alleviating poverty in its all forms and accelerating structural transformations.

FIAA Representatives expressed their appreciation on this invitation and showed the openness to cooperate with UNDP on these important programs for Albania.

During its May Meeting, Albania Investment Council (IC) discussed on “ Investments and Legal Security on Property”, a meeting chaired by the Minister of Finance and Economy, Mrs. Anila Denaj but with presence of the Key Relevant Stakeholder, Mr. Artan Lame as Head of the Newly created State Agency of Cadastre. In support of this meeting, the Investment Council hold a series of Consultation Meetings with Business Organizations, with FIAA as was one of the Contributors with presented Concerns and Recommendations on the property issues.

In this meeting, FIAA was represented by its official appointed Member in the Council, FIAA’s Chairman Mr. Tom Larsen.

For more information please visit: https://www.investment.com.al/investment-council-meeting-on-investments-and-legal-security-on-property/

The Property Issues were at the focus of a discussion Meeting during a round table with several Members of FIAA and Investment Council Secretariat. The discussions intended to address property-related issues from the investors’ point of view and the respective legal certainty that the investors should have in Albania. Most of the identified concerns were related to:

• High Opportunity of Social Conflicts and Overlapping of Ownership Titles;
• Failure to develop a structured agricultural market and the lack of an insurance scheme;
• No access to Financing (Grants / Credits) by the owners;
• Very Low Property tax related to income;
• Reduced opportunity for land consolidation and agro-business development;
• High unemployment at the regional and national level due to lack of investment;
• Very low level of Foreign Direct Investments in the property/land sector.

Among the main recommendations given for bringing up a safe system, for Owners, Investors, Local Government Units, Central Government and the State Cadastral Agency were:

1. Update and Improvement process of the properties based on a prioritization of zones,   areas for Tourism, Energy sector, Agriculture/rural investments.
2. Registration of all Rural Ownership Acts, legalization of the factual situation (without involving the Owners , but with the institutional coordination itself)
3. Registering of all public properties, based on the relevant Decision of Council Ministers, on behalf of Municipalities and LGUs.
4. Providing accurate data of the properties,  part of investments  as per  Sectorial Strategy of Tourism, Energy and Agriculture,  before entering in Procurement procedures.

Other discussions will follow in the upcoming months with involvement of different stakeholders for a better approach with relevant Institutions.

Ministry of Finance and Economy in cooperation with the Secretariat of Albania Investment Council held an open discussion with businesses from the sectors of agri-processing,  active inward processing regime (fason regime) and export with regard to the 2019 VAT Reimbursement Strategy and the Fight against Informality. The meeting was chaired by the Minister of Finance Mrs. Denaj and attended by the General Tax Director, Mr Enton Duro.

Key messages delivered by Minister Denaj, were focused in 3 main pillars:

• MFE has developed a plan for the payments of VAT reimbursement on a quarterly basis for the above categories as per First-In, First-Out (FIFO) principle;
• Informality is a factor which has conditioned time after time the state budget and therefore it is requested a bigger awareness of the business community not only to address this issue but also to initiate the dialogue as relates to suitable economic models which guarantee economic growth and non-repetition of such cycles;
• MFE together with GTD will focus its efforts on the awareness of the business as relates to informality in the country, and together they have planned the reforming of the tax administration and in particular tax investigation.

For more information please visit: www.investment.com.al

The Extractive Industries Transparency Initiative – EITI, is an international initiative with main object to develop and implement a mechanism for declaring revenues earned from the use of Natural Resources through Extractive Industries, publishing of these data in an understandable format by everyone and their oversight by providing to the general public information on public revenue and expenditure, thus, contributing to a public debate and the establishment of mechanisms for the good governance of these revenues to the benefit of communities. The EITI process can be further tailored and adapted according to the current context of each implementing country, in order to meet the information needs of stakeholders, as well as the needs to tackle the sector with important reforms, based on this data. As it is set out in the EITI Standards Requirements, the EITI Standard Implementation requires effective oversight of the EITI process by all stakeholders. This is accomplished through the establishment and functioning of a Multi Stakeholders Group, which includes government representatives, companies operating in this sector, and full, independent, active and effective participation of civil society, who are committed to work together in order to develop and promote the transparency and good governance of this sector.

The EITI Multi Stakeholders Group (MSG) was established by the Prime Minister’s Order no.71, dated 21.07.2011, to follow-up Albania’s membership procedures as an implementing country of the Extractive Industries Transparency Initiative and the ongoing fulfillment of the obligations deriving from this initiative.

The Multi Stakeholders Group for EITI Albania is the decision-making body, in charge of supervising the implementation of EITI in Albania. This group is headed by the Deputy Minister of the Ministry of Energy and Industry and consists of government representatives, companies operating in extractive industries and civil society. The Multi Stakeholders Group approves the work plan for the secretariat, submits the annual EITI report, ensures that EITI contributes to public debate and supports the work of the Albanian Secretariat EITI.

For more information: http://www.albeiti.org/legjislacioni/

The Multi Stakeholders Group EITI (MSG) operates based on its Internal Regulation “REGULATION ON ORGANIZATION AND FUNCTIONING OF THE MULTI STAKEHOLDERS GROUP (MSG) IN FRAME OF THE MEMBERSHIP IN THE EITI-INTERNATIONAL ORGANIZATION”

– Approved with the Minister’s Order, no.454 Prot, dated 30.12.2016 “Order for the adoption of the Regulation of the Multi Stakeholder Group (MSG) in frame of the membership in the EITI International Organization”

For more information: http://www.albeiti.org/grupi-i-punes/rregullorja/

 Members of the Multi Stakeholders Group The Multi Stakeholder Group, chaired by the Deputy Minister of Energy and Industry consists of 16 representatives, 6 representatives from the government, 5 representatives from civil society and 5 representatives from the companies operating in the extractive industry. Representatives from other institutions may also participate in the multi stakeholder group meetings upon the invitation of the chairman.

Method for selection of Representatives of Extractive Industries to the EITI MSG and current representatives  Representatives of Extractive Industry Operators, Members of MSG EITI Albania shall be selected, mandated and replaced in accordance with the procedures described in Articles 10 and 11 of the Internal Regulation. In order to maintain diversified opinion and broad representation, each interest group has the right to designate its representatives in MSG for EITI in Albania. The nomination process is independent within each subgroup.

– Participation in the MSG for Civil Society representatives and business representatives, in order to enable broad-based representation, is made upon open public invitation by the Chairman of this Working Group and is administered independently and transparently by each group. Each group must make transparent the procedure for selecting MSG members and must provide documents to the Chairman of the MSG, for the process and selection procedure, as well as validity of each member’s mandate;

– The EITI Secretariat Albania will provide technical support throughout the selection process, if this is required by each of the groups, in order to fulfill the transparency of each process.

For more information: http://www.albeiti.org/grupi-i-punes/rregullorja/

On 16.11.2016, a Memorandum of Understanding (MoU) was signed between FIAA and National Secretariat of EITI Albania, by No. 118 Prot, which stipulates that FIAA will be the only formal Institution that Represents Businesses in Extracting Industries and that it will undertake the selection process of MSG members from business representatives, ensuring a transparent and independent representation. Despite the limited number of seats for FIAA in the MSG, the selecting process among the members of FIAA within this industry is made based on the following criteria:

• One Representative per Industry
• ProActive Representatives in various discussions and initiatives
• Professionally committed Representatives in discussions

For more information: http://www.albeiti.org/procesi-i-rekrutimit-te-industrise/

In frame of the Corrective Actions left by the First Validation Process, where it was required the representation as a Member in the MSG for ALBPETROL sh.a., and pursuant the resignation given for work purposes by the Statkraft representative, on 11.01.2019, the Chairman of MSG Mr. Enis Aliko by letter no.17 Prot, dated 22.01.2019, requested the replacement of the Statkraft Member with the representative of Albpetrol sh.a..

For more information: http://www.albeiti.org/procesi-i-rekrutimit-te-industrise/

Over the years, FIAA’s Representatives in the MSG have been the largest investors in the country, such as:

1. Bankers Petroleum;
2. Devoll Hydropower Sh.a./STATKRAFT;
3. Beralb Sh.a.
4. Albchrome;
5. Stream Oil;

Currently, the representatives of Extractive Industry Operators in the MSG are as follows:

1. Mr. Përparim Alikaj, Tirex (FIAA)
2. Mr. Dritan Dervishaj, Antea Cement (FIAA)
3. Mr. Rohan D`Souza, Shell Upstream (FIAA)
4. Mr. Pandeli Bombaj, Selenica Bitumi (FIAA)
5. Mr. Safet Ebeja, Albpetrol Sh.a.

For more information: http://www.albeiti.org/grupi-i-punes/

The Extractive Industries Transparency Initiative – EITI, is an international initiative with main object to develop and implement a mechanism for declaring revenues earned from the use of Natural Resources through Extractive Industries, publishing of these data in an readable format by everyone and their oversight by providing to the general public information on public revenue and expenditure, thus, contributing to a public debate and the establishment of mechanisms for the good governance of these revenues to the benefit of communities.  This is accomplished through the establishment and functioning of a Multi Stakeholders Group (MSG), which includes government representatives, companies operating in this sector, and full, independent, active and effective participation of civil society, who are committed to work together in order to develop and promote the transparency and good governance of this sector. The MSG for EITI Albania is the decision-making body in charge of supervising the implementation of EITI in Albania. This group is headed by the Deputy Minister of the Ministry of Energy and Industry and consists of government representatives, companies operating in extractive industries and civil society. The Multi Stakeholders Group approves the work plan for the secretariat, submits the annual EITI report, ensures that EITI contributes to public debate and supports the work of the Albanian Secretariat EITI. On 16.11.2016, a Memorandum of Understanding (MoU) was signed between FIAA and National Secretariat of EITI Albania, by No. 118 Prot, which stipulates that FIAA will be the only formal Institution which represents Businesses in Extracting Industries and that it will undertake the selection process of MSG members from business community, ensuring a transparent and independent representation.

In this ambit, the second mission of the Validation Team from the International EITI Secretariat in Oslo, visited Albania in March 19^th and met with FIAA representatives in the Multi-stakeholder Group of EITI Albania. The Validation Team aimed at verifying and evaluating the steps followed by EITI Albania in the function of the Corrective Actions left out of the First Validation conducted during 2017 and the EITI Board Decision of 13.02.2018 “On Validation of Albania”.

During the meeting with FIAA, it was highlighted the current situation of the extractive Industries in Albania and the performance of the MSG and EITI Secretariat in the Country. The FIAA Representatives addressed the main challenges in this industry and envisaged the ongoing work and efforts for assuring a more transparent and accountable industry in Albania. The team also met with the institutions and involved stakeholders in the implementation of the EITI Initiative in Albania.