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All Roads Lead to the EU: Albania - Almost 10 Years in the Making And 10 More To Go

All Roads Lead to the EU: Albania - Almost 10 Years in the Making And 10 More To Go

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“The genesis of Albania’s EU accession talks dates back to June 2003, when Albania, alongside other Western Balkan countries, was identified as a potential candidate for EU membership,” explains Deloitte Legal Local Legal Partner Sabina Lalaj. While Hoxha, Memi & Hoxha Partner Eris Hoxha points out that Albania was a candidate country since 2014, official membership negotiations were opened only on March 25, 2020. According to Kalo & Associates Co-Managing Partner Aigest Milo, “the next step is for the first Inter-Governmental Conference to be held (presumably during the first semester of 2022),” but Hoxha says “no specific date has been determined yet.”

“Albania’s progress has been undeniable,” says Lalaj, echoed by Hoxha: “In its report on Albania’s progress, the European Commission noted that the country has continued to meet the criteria for starting the accession talks. It stresses that Albania has achieved ‘tangible’ and ‘sustainable’ results by continuing its commitment to EU-oriented reforms.” However, according to Lalaj, “a significant amount of work is still necessary for aligning the country with European standards.”

“While there is political agreement at the highest levels of the EU for accession talks to formally commence,” Lalaj says that “Albania is currently awaiting the unanimous decision by the European Council of Ministers for the accession talks to officially begin. While such unanimity for Albania has been reached in the last European Council summit, Bulgaria has exercised its veto right in relation to the accession talks of North Macedonia, thus entailing that the beginning of the official accession talks was also postponed for Albania.” Hoxha explains that “the start date for Albania’s accession remains deadlocked, due to the Bulgarian blockade of North Macedonia, as most EU countries prefer to see Tirana and Skopje progress towards the EU as a package.”

In terms of a timeline, Lalaj says that “expecting the process to last up to 10 years, after accession talks have been officially begun, is not unreasonable.” As a result, “if negotiations start during 2022, it is realistic that Albania joins the EU somewhere between 2030 and 2035,” according to Hoxha. Milo seems to be the least optimistic: “realistically, also considering the experience of other neighboring countries, I do not believe Albania will be granted full membership before 2035.”

Harmonization Progress

“In light of Albania’s accession process with the EU, the Stabilization and Association Agreement (SAA) between the Republic of Albania and the European Community was entered into in 2006,” according to Lalaj, who explains that “Albania’s obligation to harmonize and enact legislation in line with the acquis is enshrined in Article 70 of the SAA.”

Milo says that “in general, harmonization of internal legislation with the acquis communautaire is progressing quite well. EU Directives are being transposed regularly in all areas of law.” Examples of already harmonized legislation, according to Hoxha, include Law no. 55/2020 On Payment Services, Law no. 62/2020 On Capital Markets, Law no. 25/2018 On Accounting and Financial Statements, Law no. 30/2019 On Some Additions and Amendments in Law no. 9723 On Business Registration, Law no. 112/2020 On the Registry of Beneficiary Owners, and Law no. 17/2017 On Some Amendments and Changes to law no. 9947 On Industrial Property. Lalaj also points to Law no. 9901 On Entrepreneurs and Commercial Companies, Law no. 11/2012 On Cross-Border Mergers of Commercial Companies and its corresponding sub-legal acts, Law no. 133/2016 On the Recovery and Extraordinary Intervention in Credit Institutions and Investment Firms, Law no. 56/2020 On Collective Investment Vehicles, Law no. 92/2014 On Value Added Taxation in the Republic of Albania, and Law no. 87/2019 On Invoices and the Circulation Monitoring System.

“As per the Commission Progress Report for Albania in 2020, the country is moderately prepared regarding harmonization of Chapter 6 (Company Law) and Chapter 9 (Financial Services) of the acquis,” Lalaj sums up. Despite the progress made, “there is still significant legislation which needs to be harmonized with the EU legislation, and even some harmonized laws need to be fully approximated” according to Milo.

One example of a pending update “worth mentioning,” according to Lalaj, is the one regarding Private Pension Funds, “regulating the licensing procedure and scope of activities of companies engaged in the administration of private pension funds in the Republic of Albania and the creation and rules of operation for private pension funds with either open or closed participation.”

Hoxha also points to a need to approve the National Strategy on the Free Trade of Goods, to align with the Treaty on the Functioning of the European Union. Non-banking financial entities-related regulations also need to be amended, according to him, along with a transposition into Albanian legislation of the EU measures to encourage improvements in the safety and health of workers at work. Criminal, waste management, consumer protection, intellectual property protection, and customs legislation are other areas he highlights as in need of harmonization.

Lalaj also highlights Law no. 8438 On Income Taxation, which “is continuously subjected to amendments and additions, in an effort to, among other things, bring the regulatory framework in line with certain harmonized provisions of the acquis.” In fact, Milo states: “if I had to point out an area of law where more efforts are needed, tax legislation would be the one. Indeed, tax laws remain largely not harmonized with EU legislation.”

The Vibe on the Ground

“The overall sentiment of the public is pro joining the EU” says Hoxha. Lalaj argues that “euro-skepticism is a very rare occurrence in the Albanian public perception regarding EU accession,” pointing to the fact that “every major political party in the country builds their political agenda based on a common, undisputed goal – EU accession.” Indeed, Milo adds that “recent polls and studies show that 90% of Albanians want Albania to join the EU.” However, he also reports that “only 51% of them trust EU institutions (compared to 64% in 2019).”

While Milo points out that only “24% of Albanians believe that Albania will never become a member of the EU,” and Lalaj believes that “there is realistically still a long road ahead,” she argues that this road should be seen “as a desirable challenge, which Albania will undoubtedly eventually surpass.” And, ultimately, the country will be better off for it, with Milo adding: “Personally, I believe that the accession process has allowed Albania to significantly progress in its reforms towards building a functional and democratic state.” The challenge, according to him, is to “pass into the next phase, which is critical, [and move away] from a formalistic approach to actually embracing EU principles and values.”

This Article was originally published in Issue 8.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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