Albania 2016

Political or other pressure and influence on judiciary, including through corruption, are a huge problem. Albania is struggling to establish the trust of its citizens in the judiciary. EU is also pressurizing it to push reforms through. Among the first steps in the implementation of the judicial reform strategy until 2020, a constitutional reform was initiated in 2015. By mid-2016, following a long debate, the amendments to the Constitution were about to be carried. They envisaged the change of the way High Council of Justice is selected. The composition and function of the High and Constitutional Courts will also change. General Prosecutor will get more responsibilities regarding corruption-related investigations. All those will expectedly decrease political influences on the judiciary

Transparency International signaled positive developments in its Corruption Perception Index 2015, where Albania rose to the score of 36, placing it together with 6 other countries as 88 (of 168), as compared to places 110 (of 175) and 116 (of 177) in the CPIs as of 2014 and 2013 respectively. Yet this result does not befit a candidate for EU membership. A number of activities were carried throughout 2015. As the European Commission noticed in its Progress Report 2015, Albania considerably improved the quantitative performance of its body for preventing conflict of interest (HIDAACI), while better targeting of the high risk areas is still to be achieved. The law on protection of whistleblowers (whose lack the EC warned of in the Report) was adopted in June 2016.

Progress has been made continuously during the past few years. The legislation regarding human rights is to a high degree in line with European standards, although implementation is improving slower. The main objections of the European Commission in 2015 were a delay in enforcement of property rights (registering, restitution and compensation), the enduring problem of exclusion or discrimination of Roma and Egyptians (amid the acceptable situation of other ethnic minorities) and the rights of children (especially regarding the juvenile justice system). In 2010, during its fact finding mission to Albania, FNF witnessed a huge gap between the laws on protection of LGBT people and their implementation. The-then total exclusion of the community from society is now gradually becoming history,

Albania continues to provide, generally, free and fair electoral process for its citizens and political parties, although there are more than few violations that use to repeat throughout every election cycle, which still need to be eradicated. Local elections were held in June 2015 and were marked by monitors as peacefully and professionally conducted process, but they reiterated that activities like abuse of power and state resources, or vote buying and manipulations with voter lists, threatened to undermine the process. Reform of the voting districts, which was adopted in 2014, had its first implementation at these elections. The tradition of having two dominant political parties continued at this election as well. Their coalitions won 60 out of 61 Mayorships. Ruling Alliance for a

By taking control over some areas that refused state authority in the past - and were known for criminal activities - elected government got effective power to govern on the entire territory. However, other threats to government independence, such as organized crime, conflict of interest, or influential power of the country’s wealthiest businessmen on politics, remained intact. Government did some actions in order to deal with pervasive corruption in Albania, but it broke down mostly on low level officials. A decriminalization law was adopted in the parliament, which aims to prevent criminals from taking public office. Also, new anticorruption portal was launched for taking charges of corruption by the citizens. Corruption within judiciary, a lack of resources and know-how and fear of

Although more pluralistic and diverse – while reporting from different angles on the developments in the country - media outlets in Albania are considered to be partly free and relatively independent. Political and economic pressure on independent journalism caused self-censorship among some reporters. Owners, even if not directly involved in politics, often use their influence to broker lucrative business deals with the government, thus pressurizing journalists to show, in return, a more positive attitude towards ruling officials. There were several cases of harassment and physical violence against journalists. Some private outlets reported on corruptive behavior of public officials no matter that defamation was punishable by large fines.

Private property in Albania is not adequately protected. Main problems lie with the low judicial independence from powerful political and business interest groups. Enforcing contracts is another weak point of the legal system – with long procedures, high costs and corruption within the judiciary. In order to circumvent the local courts, foreign investors often use international arbitration tools for dispute settlements. However, in 2016 the government ignored rulings regarding a high level investment project, thus bringing new uncertainty to the legal system. Also, there are no specialized commercial courts. Courts do not use automated procedures. The cadastre service remains incomplete, diminishing certainties of real estate purchase, even though the introduction of public notary

Size of government is more limited in Albania than in most European countries, with low levels of government expenditures, reaching only 30.3% of GDP in 2015. However, even in this situation public revenues are scarcer than government programs, giving rise to high budget deficits, which strongly elevated the public debt, to a substantial level of 73.3% of GDP in 2015. Still, the deficit in 2015 reached 4% of GDP and a substantial fiscal package had to be introduced under the auspices of the IMF in order to curb debt growth. There are relatively high government arears, concentrated at the local level. Companies in the electric sector, KESh and OShEE, pose a significant risk for public finances, due to their inefficient management and operational policies, relying on government for

Regulation is generally not too favourable to private enterprise in Albania, hence many improvements are necessary to create a truly business-friendly environment. Starting a business is relatively easy regarding procedures, but it is tied to high administrative fees. Getting electricity is a very expensive process, and issuance of construction permits came almost to a halt in 2015, making Albania a country with the worst practice in this domain. Corruption remains a phenomenon that is widespread among public officials, undermining actual implementation of many regulations. Tax regulation is overly complicated, with high number of payments and burdensome procedures. Labour market regulations are a mix of flexible and inflexible traits. There are no limits on maximum length of fixed term

Freedom of international trade is generally respected in Albania. Tariffs are low, with the average applied rate of 3.8%, majority of which is concentrated in the agricultural sector. Product standardization, however, serves as a non-tariff barrier to free trade, incurring high costs to importers. Custom procedures (border and documentary procedures) also pose difficulties. Furthermore, very poor transport infrastructure, especially the railroad, increases freight costs and impedes international trade. Main Albanian trade partners are EU member countries (most notably Germany and Italy), followed by China and Turkey. Therefore, Albanian trade is mostly conducted under the Stabilization and Association Agreement (SAA) for the EU countries, signed in 2009, and for the countries from the