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Technical roundtables

July 27th, 2020
Tirana, 27 July 2020 – Micro, small, and medium enterprises (MSMEs) in Albania are significant contributors to the Albanian economy, accounting for 99.8 percent of active enterprises. They employ 79.8 percent of the workforce and realize around 69 percent of value added. This sector is generally characterized by high informality (especially in agriculture), limited availability of collateral, and low levels of financial capability. Limited access to finance, particularly bank credit, poses a challenge for MSMEs in Albania.

A virtual joint workshop was organized today by the Albania Investment Council, Ministry of Finance and Economy, and the World Bank to present the main findings of the World Bank Report “Albania Credit Guarantee Scheme Assessment” and also to discuss ways on improving MSMEs access to finance through these schemes, making them more efficient and effective.

Deputy Minister of Finance and Economy, Ms Belinda Ikonomi provided a brief overview of the current government’s credit guarantee schemes (CGSs). “During a downward economic cycle induced by the coronavirus (COVID-19) pandemic, which further aggravated the financing needs of MSMEs,” said Ms. Belinda Ikonomi, the Deputy Minister of Finance and Economy, “the Credit Guarantee Schemes proved to be very effective and helpful to the MSMEs.”

Commending the targeted credit guarantee emergency programs launched by the government in response to the COVID-19 crisis, the World Bank Country Manager for Albania said that “Over time it would be important to transform these schemes into a regular public Credit Guarantee Scheme to help kick-start economic recovery and address the financing gap for MSMEs”.

The World Bank experts presented the main recommendations of the Credit Guarantee Schemes Assessment report, emphasizing that well-designed schemes facilitate financing to creditworthy customers, which would have been denied credit in the absence of sufficient collateral. CGSs are important means to address market failures, which prevent or constrain enterprises from accessing credit. In addition, they shared the finding of a recent granular analysis of aggregated loan-level data of the Albanian Credit Registry.

The secretariat of albania investment council (aic) presented local evidence about access to finance by the albanian companies on the findings of its survey (march-may 2020) on covid-19 impact on the business. according to this survey, smes still consider banks as a third option for support in spite of intensive efforts taken recently.
discussants from the private sector valued the moment as very important and stressed the need for higher transparency and awareness about the available cgs in the country. they emphasized that improving access to finance for msmes in the country must be tackled in a holistic and strategic manner, by addressing simultaneously supply and demand.

This virtual event was attended by around 50 representatives from the public sector, development banks/financial institutions, development partners, Italian-Albanian SMEs Development Program, representatives of second-tier local banks, as well as microfinance institutions.

Agenda of the meeting

WB Report “Albania Credit Guarantee Scheme Assessment” (full analysis)

PPT Presentation “Albania Credit Guarantee Schemes Report”

PPT Presentation “Access to Finance Conditions of Enterprises – a granular analysis of loan-level data of the Albanian credit registry”

Main Findings of IC Survey “Covid-19’s Impact on the Business” (June 2020)

*This is a joint press release of the Ministry of Finance and Economy, Albania Investment Council, and the World Bank

June 25th, 2019
Tirana, 25 June 2019 / Albania Investment Council in cooperation with the Ministry of Finance and Economy (MFE) and the International Finance Corporation (IFC) organized two consultation round tables on the Draft Unified Investment Law, published by the Albanian Government for comments on the Register for Public Notification and Consultation (7 May 2019). With the participation of around 40 representatives from the business community (local and foreign companies and associations/chambers), legal firms as well as trade attachés from foreign embassies in the country, the discussion was held in general terms on the principles of this draft law but also at the technical level. To enable an efficient and inclusive discussion, prior to the organization of these round tables, the Secretariat of the Investment Council made efforts to engage key stakeholders by starting with the collection of prior detailed written comments and afterwards submitting them for review to MFE and IFC.

At the opening of the discussions, Deputy Minister of Finance and Economy, Ms Belinda Ikonomi underscored the commitment of the Albanian government to improve the investment climate in the country and how the improvement of the legal framework plays an important role in this regard. Ms Ikonomi explained the necessity and the objectives of this draft law as an instrument which would aim the equal treatment of domestic and foreign investors. She underlined the importance of consulting this draft law with stakeholders and thanked the participants for the submission of comments which are all valuable for the further improvement of the current draft law.

IFC Senior Specialist for the Private Sector, Mr Eugeniu Osmochescu, presented the work carried out by IFC in collaboration with the working group of MFE in the framework of the project “Investment Climate and Agribusiness Competitiveness”, funded by the Swiss State Secretariat for Economic Affairs (SECO). Mr Osmochescu mentioned, in particular, the component which covers investment climate, part of which is the preparation of this draft law. He highlighted the importance of wide consultations as well the necessity to conclude this process at the earliest.

In the following, IFC experts, Mr Mark Reichel and Ms Blertë Kraja delivered a general presentation of the legal provisions of the draft law as well as a brief presentation of the main comments collected from the line ministries and business community, providing also respective clarifications within the context of the draft law. The submitted comments were mainly related to the substance, concepts and formalities. IFC expressed the engagement to properly review each comment, but due to time restrictions, the discussion was to be concentrated on the main pillars.

In general terms, according to IFC experts, the main objectives of the draft law are to i) establish a comprehensive legal regime for domestic, foreign, general and strategic investments; ii) encourage domestic and foreign investments in Albania with a single law, iii) fair and equal treatment and protection of domestic and foreign investment, iv) provide investors with transparent and easy access to the market, v) provide for a prompt and fair settlement of any potential dispute arising during the developing of the investment; vi) full compliance with the international investment agreements and international obligations of Albania and with the EU acquis, etc.

During the discussion, suggestions were made regarding the necessity to prepare a comprehensive law with a full package of by-laws; clear drafting of legal provisions, particularly those related to incentives, strategic sectors, minimum treatment standards and investor grievance mechanism. most of the participants were in favour of a better clarification of procedures by the law itself in order to leave less room for their definition through respective by-laws.
In conclusion, Ms Ikonomi thanked the participants for their valuable contribution and the Secretariat for its good work as relates to the inclusion of business stakeholders, and she informed that the working group has taken note of all raised comments by the business—some already reflected in the improved version—while in the framework of transparency a detailed matrix is being finalised. The draft law will be revised upon review of all the comments and an improved draft will be submitted to the Council of Ministers, aiming its approval within July 2019.
April 10th, 2019
Tirana, Wednesday, 10 April 2019 / Ministry of Finance and Economy in cooperation with the Secretariat of Albania Investment Council held a consultation table with around 20 companies, chaired by the Minister of Finance and Economy, Ms Anila Denaj. Purpose of this roundtable was holding an open discussion with companies 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 attended also by Deputy Minister of Finance and Economy, Mr Elton Haxhi and the General Tax Director, Mr Enton Duro.

Key messages of Minister Denaj were focused in 3 main pillars:
On the other hand, businesses thanked for the format and the opportunity to participate in such a roundtable. Some of the main issues raised by the business had to do with the necessity for timely VAT reimbursement to avoid bottlenecks within the companies in the execution of other payments; for the fason sector to be considered compensation with the tax on personal income and compensation with social insurance in case of delays in the VAT reimbursement, economic impact due to the depreciation of euro currency; industry of aromatic and medicinal plants to be re-included in the national and international financing schemes (such as IPARD Like, IPARD 2, Agriculture and Rural Development Agency); some options on the stipend taxation and level in the sector; more subsidies from the state, etc. In addition, companies raised other non-fiscal issues, such as executing various payments for additional tariffs (staff training, environmental permit, drinking water test, electric system, etc.).

As relates to anti-informality fight, companies said that the honest business is the best ally to the government. They raised the demand for the creation of a working group, perhaps through the IC Secretariat or the Ministry, in order for the business to raise issues in a structured way as per sector specifics.

Minister Denaj confirmed that the issues and proposals raised in this roundtable would be forwarded to relevant instances and experts. Various development partners have expressed their willingness and they are already supporting MFE to undertake a diagnosis of the fiscal policies, where it will be seen the impact of each fiscal policy (to be concluded by end of June 2019). Support to the active inward processing regime companies and agri-processing companies is a priority of the Albanian government. The Government has undertaken some actions to improve the process of timely VAT reimbursement, while it is expected that until end of 2019/latest in the first 2 months of 2020, the government to have facilitated considerably the reimbursement process for other applicants. Minister Denaj invited the business to contact IC Secretariat or her directly for various concerns that they may have.
General Tax Director, Mr Enton Duro expressed the willingness of the institution led by him to address with fairness any issue which will be addressed to his institution and he invited companies to express openly any concerns they might have.

IC Secretariat informed that this roundtable is held in the framework of monitoring business concerns tackled by the IC since 2015 (tax inspection, VAT reimbursement and informality). In the 2018 IC Survey (with 350 surveyed companies), it was noted a reduction in the business perception (compared to 2015-2017) on informality, an emphasis on the need for developing formalisation strategies either at the firm level or at the sector level, for example, companies in the tourism sector confirm that “informality brings informality.” In addition, this roundtable procedes the setting up of working groups by the IC, to discuss in further details systemic issues, tackled also by the Investment Council.

Investment council has now a 4-year experience of direct consultation on main business concerns either through individual consultations with the business and public (central or local) institutions or through annual surveys conducted to measure the progress of some important factors of doing business (tax administration, vat reimbursement, informality).

May 23rd, 2018
On Wednesday, Albania Investment Council in collaboration with the Ministry of Finance and Economy and International Finance Corporation (IFC) organized a discussion table on the legal framework for investment in Albania.

The meeting was attended by around 60 participants representing foreign and local business associations such as AmCham, Italian Chamber of Commerce, ATTSO, DIHA, ICE, FIAA, Advantage Austria, ACERC, AITA, Nordic Association Albania, CCI Tirana, UCCIAL, BTSH, etc., local and foreign companies such as Vodafone Albania, Bankers Petroleum, ABCom, Forscher, Alpha Bank, Antea Cement, Balfin Group, TAP, Shell, Colliers, etc., as well as legal and tax consulting firms such as Boga & Associates, HMH, Mazars, Baker Tilly, Kalo & Associates, Optima, AA+ etc.

The meeting was opened by Head of Investment Council Secretariat, Ms Diana Leka, with a short welcoming message to the participants. She underlined the importance of prior notification and consultation of laws and regulations as one of the main concerns identified by the business community and endorsed by the IC through its respective recommendations. In addition, Ms Leka made a brief note on the involvement of the Investment Council in the discussion process related to the investment legal framework in the country in the light also of the trends and initiatives in the region, and in facilitating the dialogue among the stakeholders.

Afterwards, Deputy Minister of Finance and Economy, Ms Albana Shkurta delivered a brief presentation on the context and process for a unified law on investment, based in particular on Albania’s ranking in the UNCTAD Report ‘Investment Policy Review’ (2017). Raised comments, concerns and findings on the investment legal framework during this meeting would be noted by experts of the IFC (which attains a wide range of expertise in matters related to investment legislation) for further consideration in screening the current legislation.

IFC Representative in Albania, Ms Laura Qorlaze, explained IFC contribution for enhancement of the investment climate in Albania. “This roundtable discussion with representatives from various groups of the business community, will serve to discuss the gaps and shortcomings of the existing legal framework on investment and the necessity to fill in the gaps and unify the existing pieces of legislation into a streamlined and comprehensive one to duly respond to the needs for increased growth in Albania,” said Ms Qorlaze.
Mr Mark Reichel, IFC expert, delivered a presentation on the ‘Best international practices and challenges for a contemporary legal framework on investments.’ Following his presentation, the discussion floor was left to participants for comments and suggestions related to a) the improvement of the legislation on investments, b) the right approach to be followed by institutions toward local and foreign investors, c) incentives, d) Investors Grievance Mechanisms (IGM), e) priority sectors, and f) other relevant issues.

The participants considered the role of the state IGM as quite important in resolving investors’ complaints in the early stage but underlined the necessity that such mechanism should not overlap with the administrative appeal structures that currently exist. Additionally, it was stressed out the need for clear and thorough rules and procedures for a successful IGM.
May 31st, 2017
The Secretariat of Investment Council in collaboration with the General Directorate of Customs, Chamber of Commerce and Industry of Tirana and the Association of Producers organised a consultative meeting with the business on the novelties and advantages of the New Customs Code. This meeting was proposed by the business in the Investment Council Meeting “On the Facilitation of Customs Procedures” (9 May 2017).

During the abovementioned Investment Council Meeting were highlighted some important reforms undertaken by the Government, such as the green channel, local clearance, common transit system with Kosovo, etc. The New Customs Code approved on 31st July 2014 enters entirely into force in June 2017. The Code has been drafted in compliance with the EU directives and provides a range of simplified procedures for exporting and importing businesses with the objective to facilitate the trade and further promote trade exchanges. The instructions of the New Code have been already prepared by the General Customs Directorate and enter into force along with the Customs Code.

For the business to become aware of the possibilities and provisions of the new customs code it is important to prepare the grounds for better implementation of the customs practices. For this purpose, representatives of GCD in this consultation meeting with the business delivered some of the most important aspects of the New Code which affect the relations between the business and the customs administration, such as goods declarations at the customs, possibilities for the application of simple procedures, customs regimes, obligatory tariff information, the provisions of measures for the violations of the code, etc. Meanwhile, Ms Leka highlighted the importance of prior consultation to increase the transparency but also facilitate the application of rules for both parties as well as the role that the Investment Council has played in this direction.
On the other hand, the business community raised some concerns on customs procedures, discussed also by the Investment Council, related mainly to the application of available data for establishing the customs value, transparency on the results of scanning, the high number of inspections, submission in paper of a range of documents at the customs, changes in the tariff classification of goods, addressing the administrative complaints at GCD, etc.

During the meeting, it was appreciated the collaboration of the business with the GCD, and it was emphasised the need for periodic and institutionalised consultations between the customs administration and the business community to strengthen their partnership and collaboration for a safe, open and fair trade.

Presentations on the News Customs Code (in Albanian):

New Customs Code – General Presentation

New Customs Code – Procedures

New Customs Code – Obligated Information

New Customs Code – Violations

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