BoA approves changes to the regulation on licensing and supervision of foreign exchange offices

2025-09-05 07:36:00, Ekonomi CNA

BoA approves changes to the regulation on licensing and supervision of foreign

The Supervisory Council of the Bank of Albania approved this week several changes to the regulation "On the licensing, organization, operation and supervision of foreign exchange offices".

According to the Bank of Albania, the changes aim to improve the licensing and supervision process of foreign exchange offices and strengthen the requirements for the reputation, integrity and financial stability of entities, in line with international standards and Moneyval recommendations for the prevention of money laundering and terrorist financing.

The main changes relate to the increase in initial capital, documentation of the source of capital and requirements for the exercise of activity, with the aim of strengthening regulatory requirements, which, among other things, address the entry and operation in the market of entities that meet the necessary conditions of financial stability, adequacy and integrity of capital holding structures, responsible management, as well as the implementation of the regulatory framework.

The regulation provides that the minimum capital required for licensing these offices will be doubled, from 2.5 million lek to 5 million lek. Any payment of the minimum initial capital, any subsequent addition to it, as well as any change in the capital structure must be accompanied by the submission to the Bank of Albania of information regarding the source of creation of this capital.

The Bank of Albania has the right to request clarifications and conduct further verifications regarding the sources of creation of funds that will serve as minimum initial capital or as a subsequent addition to it.

The regulation also sets limits for the first time on physical cash transactions carried out by exchange offices. The licensed entity, while carrying out foreign exchange activities, will not be allowed to keep in cash on a daily basis a monetary value (cash) higher than the minimum initial capital.

Also, exchange offices will not be allowed to carry out transactions in physical money, which exceed an amount of one million lek or its equivalent in other foreign currencies, carried out in a single transaction or in several transactions connected to each other. Transactions exceeding the amount of one million lek or its equivalent in other foreign currencies must be carried out through bank accounts or payment accounts.

The Financial Intelligence Agency will be added to the list of institutions that will be consulted by the Bank of Albania during the review of the licensing request, in addition to other institutions provided for in the existing framework, such as the Financial Supervisory Authority, the Competition Authority, the General Directorate of State Police, the Tax Directorate, etc.

In addition to the requirements of the previous regulation, the new regulation provides that when reviewing the application for licensing a foreign exchange office, the Bank of Albania will assess the suitability, good reputation and integrity of the shareholder/partner, beneficial owner and administrator of the entity at the time of licensing, as well as whenever there are changes in the composition of the ownership structure and management bodies during the exercise of the activity.

A shareholder, beneficial owner or administrator will be considered to have good reputation if he complies with the applicable legal and regulatory framework, including those related to the prevention of money laundering and the financing of terrorism; has no criminal record related to financial crimes, illegal activities or serious legal violations; has financial stability and is not involved in significant financial or legal matters that may damage reputation or credibility and is not subject to investigations or sanctions for non-compliance with the applicable legal and regulatory framework.

The regulation also provides for an increase in the maximum fine for violations of the legal and regulatory framework. In the previous regulation, fines for the entity or administrator were provided for from 20 thousand lek to 100 thousand lek, while with the new regulation, fines can reach up to 1 million lek.

Under the previous regulation, the Bank of Albania suspends the license of an office for 60 days if there is credible evidence that the entity is involved in money laundering and terrorist financing activities. Under the new regulation, it is proposed that the license be suspended indefinitely.

Currently, there are a total of 604 licensed foreign exchange offices in our country.

According to the annual report of the Bank of Albania, during 2024, administrative measures (fines) were imposed on 12 foreign exchange offices and the license of one of them was revoked./ Monitor