Notaries involved in the money laundering process

By Redaktor 1 Dhjetor, 2023 15:41

Notaries involved in the money laundering process

Notarized declarations for acknowledging debts/liabilities are the latest form for money laundering. In Albania, notaries draw up about 10,000 such declarations in a calendar year, and experts estimate that millions of euros are laundered using this technique. However, the Financial Intelligence Unit refuses to be informed in real time by notaries. This behavior from the Financial Intelligence Agency in the face of notaries’ readiness over the past three years takes the form of a scandal that requires investigation by the authorities. The Financial Intelligence Unit refuses real-time reporting by notaries.

Author: Zylyftar Bregu

225,000 euros have been ‘legalized’ by notary Shpresa Gjoçi through recognition of debt declaration, number 234/185. The money had been given years earlier, and the notarized declaration was drawn up solely based on the parties’ will.

Her colleague, notary Ermal Hamzaj, in another case, with the recognition of debt declaration dated September 3, 2021, has ‘certified’ another 100,000 euros.

These are two cases among around 50 recognition of debt notarial declarations I have already gathered, with amounts ranging from 50,000 to 225,000 euros.

Five years ago, at the Civil Court of Tirana, the parties (one of whom was Lefter Sulkaj, former administrator of the German Hospital, arrested for fraud) demanded an execution order through a recognition of debt notarial declaration for the sum of 1.5 million dollars (1 billion and 500 million old lek).

None of these notarial acts have been referred by the respective notaries to the General Directorate of Anti-Money Laundering (AML) at the Ministry of Finance, the institution responsible for this phenomenon, even though the amounts are such that compel notaries to take this action. ‘This is a confidential relationship. I don’t want to talk about it,’ – Gjoçi briefly responded in her office after INA’s inquiry.

A recognition of debt notarial declaration serves two purposes. ‘It is a document that certifies, recognizes the action taken by two individuals outside the banking system and in illegality. With this declaration, the debtor party, the one who provided the money, wants to acknowledge the debt and then asks the court to issue an execution order,’ explains the Vice President of the National Chamber of Notaries, Fatmir Laçej.

Despite the fact that the recognition of debt notarial declaration is ‘converted’ into an execution order by a civil court, the latter has no possibility or right to judge its content. The judge only judges the acts (documents) and has no contact with the parties.

The second way in which the recognition of debt notarial declaration is used is when the parties agree to settle the debt without going to court. In this case, the recognition of debt notarial declaration serves only as a ‘source’ for justification in the bank for amounts over ten thousand euros. According to State Police investigators, this is seen as a form of money laundering.

INA has managed to secure the overall number of recognition of debt declarations over the last two years. The figures are significant. In 2022, 9,626 declarations of recognition of debt were drawn up in notarial offices, while in just the first nine months of 2023 (from January 1 to September 30), 7,504 such declarations were made. This figure does not include loan contracts, which are with interest.

Organized crime figures are drafting recognition of debt notarial contracts in various notaries, even in different districts, ‘fake’ debts to launder money obtained from criminal activity. In fact, SPAK (Special Anti-Corruption Prosecution) is investigating state employees, judges, prosecutors, and police officers who want to ‘certify’ their integrity through such declarations.

The figures specified in these notarial declarations are substantial. ‘There are declarations for 100,000 lek or 1 million old lek, but there are recognition of debt notarial declarations that go up to 100,000 euros. I have made such ones. They are people I recognize,’ says notary Fatmir Laçej.

An INA analysis reveals that around one-fifth of notaries have performed the majority of these notarial acts. This concentration of carrying out these acts shows the ‘willingness’ this community of notaries has to perform suspicious, yet legal actions. In cases of drafting a recognition of debt notarial declaration, it is understood that the action was carried out outside the notary’s office and not at the actual moment, but some time ago. In these circumstances, the notary is obliged to carry out what is called expanded vigilance on the sources of financing of the one who provided the debt, the motives for which they gave it, as debt (or loan) should not have interest conditions, and the reason for which they have been used by the recipient.

The number of recognition of debt notarial declarations has undergone an exponential increase since 2016. This is explained by several circumstances: firstly, the vetting process for judges and prosecutors began; secondly, bank rules for declaring the source of income were strengthened; thirdly, ‘the country’s marijuana-fication,’ explains an anonymous notary in the capital.

In a study conducted by BIRN, only administrative court judges in Albania during the vetting process justified around 83 million lek with such foreign debt or recognition of debt declarations. In the majority of decisions for prosecutors and judges who have submitted notarial declarations, the Independent Qualification Commission has called them fictitious. According to that study, based on international best practices, high debts outside the banking system are considered indicators of suspicious transactions.

Published data reports an increase in the amount of money circulating outside the banking system. According to official data from the Bank of Albania, at the end of July 2023, over 3.8 billion euros were circulating outside banks, up from 3.6 billion euros the previous year. Along the same lines, the Association of Builders has recently reported that, in the first part of 2023, the sale of immovable property was done by bypassing the banking system, with physical cash. Currently, Albania has no limitations on the value of payments that can be made in physical cash for the purchase of goods or services.

The Anti-Money Laundering Directorate has ranked lending as the sixth type of suspicious activity reports that this intelligence agency receives from various actors, including notaries. For the first time, this typology was identified by the Anti-Money Laundering Directorate in 2013. That year, the Anti-Money Laundering Directorate received 18 reports for suspicions of money laundering through sponsorships, donations, or loan provisions.”

A portion of the notarial declarations for acknowledging debt, including those exceeding 100,000 euros, which involve notaries Gjoçi and Hamzaj, are being investigated by experts from the Directorate of Prevention of Money Laundering or the Financial Intelligence Agency. These were discovered during inspections at the notary offices by personnel from these entities because the notaries themselves did not report to the Directorate of the Financial Intelligence Agency, as required by law. However, it seems that the identified cases do not combat or prevent the phenomenon.

Over the past 16 years, since 2007, the Directorate of Prevention of Money Laundering has inspected less than half of the notaries in their offices. Considering that a significant number of notaries in Tirana have been inspected more than once, there remains a contingent of notaries who have never been inspected by the staff of the Directorate of Prevention of Money Laundering.

The number of on-site and remote inspections conducted by the employees of the Directorate of Prevention of Money Laundering at notary offices over the years.


Currently, according to the Ministry of Finance guidelines, notaries are obligated to report suspicious transactions physically within 24 hours from the moment they occur.

The Financial Intelligence Agency has reservations about notaries who, according to them, fail to report in time or conceal some of the notarial acts they perform.

Meanwhile, the President of the National Chamber of Notaries, Mimoza Sadushi, speaking on behalf of the notaries, has a different stance. “We have always aimed to be very transparent with this agency,” Sadushi states. “On the other hand, we have aimed to ‘relieve’ the notary from the numerous and bureaucratic procedures that he has to perform in his daily routine.”

For this reason, the National Chamber of Notaries has proposed that reporting to the Financial Intelligence Unit for all notarial acts be done in real-time, at the moment they are conducted by the notary. Digital technology makes this feasible.

“We made the proposal, we did our part, but as far as I know, due to a lack of funds, the agency is not ready to receive this information in real-time,” Sadushi remarks.

Since 2020, the Chamber of Notaries, through its funding (a contribution from all notaries), has initiated the digital system, NISA. This system enables the digitalization of all notarial processes and practices. The system, recognized by the Albanian government as a national data repository, generates a large amount of data about the activities of around 430 notaries across Albania.

Based on this capability provided by the NISA program, the National Chamber of Notaries has proposed to the General Directorate for the Prevention of Money Laundering the automatic and real-time transmission of reports of transactions involving physical cash. This practice allows the Financial Intelligence Agency to be aware of all transactions in Albania, deciding which ones to further investigate.

This behavior of the Financial Intelligence Agency contradicts the current government’s propaganda about the transition to online services. Digitalization of services and communication with public institutions has been advocated as a way to avoid institutional violence against citizens and to reduce acts of corruption.

INA possesses correspondence between the Chamber of Notaries in Albania and the General Directorate for the Prevention of Money Laundering to enable real-time reporting through digital technology of all transactions involving physical cash in Albania.

The Chamber of Notaries began proposing these measures in February 2021, accompanied by three reporting options: “The first option is the possibility of direct reporting from the notary to the NISA system and the opening of an account to report the daily reports of all notaries as a group. To achieve this option, only a few improvements to the program are required,” experts from the Chamber of Notaries write.

“The second option allows direct reporting from the notary through the NISA system and receiving confirmation of acceptance of the report from the DPPPP reporting system (in real-time). However, this option requires a special module for managing NISA system reports and interaction between the NISA system and the General Directorate for the Prevention of Money Laundering through a secure real-time connection.”

“The third option offers the possibility of receiving reports using the government interaction platform GG (Government Gateway), for which human resources commitment is required to change the legal basis, as well as a considerable budget,” the Chamber of Notaries stated in an email dated February 10, 2021, sent to the General Directorate for the Prevention of Money Laundering.

Initially, experts from the General Directorate for the Prevention of Money Laundering expressed readiness and optimism to implement this method. However, two months later, on April 20, 2021, they officially responded that “currently, the DPPPP is not yet ready to test the reporting process of RTPF forms from NISA.”

Regarding the reasons for the refusal of the online real-time reporting application, the General Directorate for the Prevention of Money Laundering has not provided any explanation to the Chamber of Notaries.

The Chamber of Notaries in Tirana asserts that representatives or directors of the Financial Intelligence Agency have declared since 2021 that they will consider the request for digitization. However, it seems that this request has not been prioritized on the agenda of meetings and priorities of the General Directorate for the Prevention of Money Laundering.

INA, using the Law on the Right to Information, asked the Financial Intelligence Agency (FIA) about the reasons for refusing the Chamber of Notaries’ proposal for online reporting and the financial cost of implementing this reporting. The official response was an evasion of INA’s questions: “Since 2021, the National Chamber of Notaries has made the NISA system functional, which enables the registration of all notarial acts in the country, and the Financial Intelligence Agency has full access to it.”

The response then included a citation from the legislation regarding the reporting method, and it concluded in this way: “Between the Financial Intelligence Agency and the National Chamber of Notaries, there is an ongoing process of meetings, communication, and close cooperation to continuously improve access systems to information, as well as reporting in accordance with the legislation for the prevention of money laundering and terrorist financing.”

“We have paved the way. They need to insist on implementing this process,” says Fatmir Laçej, the vice president of the National Chamber of Notaries. Laçej appreciates the leaders of this structure but does not find the argument of lack of funds convincing. He mentions being in discussions with the administrators of the company that developed the NISA program to implement the program on the side of the Financial Intelligence Agency. “If we want to formalize the economy, the notary has a crucial role,” he says. “This communication we propose strengthens the role of the notary and frees them from excessive burdens.”

A notary punished by the General Directorate for the Prevention of Money Laundering in Tirana, precisely for failure to report, told INA that the real reasons for rejecting the application for real-time online reporting are several. Firstly, by reporting in real-time, inspectors from the General Directorate for the Prevention of Money Laundering no longer have reasons to conduct physical checks in notary offices. The form of physical inspections is not only a tool of pressure from authorities towards notaries but also a potential for corruption. The second reason, according to the notary, is the implied ‘tolerance’ to continue money laundering in Albania.

“It’s a fiscal amnesty conducted by justice actors,” says another notary in Tirana.

As a result of the inspections conducted by employees of the Financial Intelligence Agency in notary offices, administrative measures, mostly fines, have been imposed.

In 2014 alone, 29 fines were imposed.

The number and total amount of fines that the employees of the Directorate of the Prevention of Money Laundering have imposed on notaries between 2012 and 2022.

One form of punishment, recognized by law, is the publication of fines. The Directorate of the Prevention of Money Laundering has not applied this form of punishment in any case for notaries. Only in two instances has the Financial Intelligence Agency proposed to the Ministry of Justice the revocation of notaries’ licenses. In both cases, these requests were denied by the Ministry of Justice.

Ky shkrim është pjesë e projektit që mbështetet financiarisht nga Zyra e Mardhënieve me Publikun e Ambasadës së SH.B.A. në Tiranë. Opinionet, gjetjet, konkluzionet dhe rekomandimet e shprehura janë te autor-it/ve dhe nuk përfaqesojnë domosdoshmërisht ato të Departamentit të Shtetit. / This article is part of a project that is financially supported by the Public Relations Office of the US Embassy in Tirana. The opinions, findings, conclusions, and recommendations expressed are those of the author(s) and do not necessarily represent those of the Department of State.

By Redaktor 1 Dhjetor, 2023 15:41
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