The legal framework guarantees the rights of CSOs to operate freely and independently, by regulating their internal structure and management procedures without intervention from the state. Nevertheless, in the last year there was a tendency from the government to interfere in the operation of CSOs. 

To mention is the approved Law No. 75/2019 “For Youth” It aims to determine the activities, mechanisms, and public authorities responsible for the protection and promotion of the rights of young people in Albania and in diaspora, as well as financing youth activities. The Law stipulates the creation of a National Youth Council (NYC), a consultative body aiming to propose strategies and policies with regards to youth to the responsible Ministry of youth. The NYC is expected to be composed of 14-16 members, half of them from CSOs working with or for youth. The Law undermines the independence of the CSOs since the criteria and procedures for selection of NYC members, as well as the way how the Council will be organized and function, are approved by a decision of the Council of Ministers. In addition, the members of the National Youth Council are appointed by the respective Minister of youth. This creates the possibility of a direct political dependence of the members coming from youth organizations. The same structures with same problematic issues are foreseen to be established at the local level, Local Youth Councils, where the Mayor is the chair of the council who also has the authority to appoint its members. 

The most problematic article in the law for youth, as identified by civil society organisations, and especially youth ones, is Article 13 for the establishment of the National Youth Representation Organisation. Point 3 of this article stipulates that the criteria to be fulfilled by the National Youth Representation Organisation, to be recognised as such from institutions responsible for youth (a public institution under the ministry responsible for youth), are approved through a decision of the Council of Ministers. This is in full contradiction with the Constitutions, and the Law on Non for Profit Organisations, and it severely impairs the principles of free organisation and independence of CSOs.   

0 – 20 Fully disabling environment20 – 40 Disabling environment
40 – 60 Partially enabling environment60 – 80 Enabling environment
80 – 100 Fully enabling environment

The law was opposed strongly by youth organizations and in December 2019 the President did not enact it and turned it back to the Parliament for further legal improvements. Nevertheless, on 27th December 2019, the Parliament approved the law without taking into consideration the recommendations from civil society actors and the President of the Republic.  

In terms of financial statements, the main reporting requirement for CSOs remains the submission of annual financial statements based on the Directive of the National Accounting Standard for Non Profit Organisations. The Standard stipulates specifications on financial statements and reporting formats of CSOs, and presents different reporting requirements for CSOs based on their annual turnover. It introduces simplified reporting requirements for organizations with annual revenues below 5 million ALL (approx. 37,000 EUR). These organizations are required to apply cash-based accounting and to prepare and submit only the statement of cash flow with explanatory notes on the type of activity or services provided. In the new Law on Accounting and Financial Statements, Law 25/2018, new requirements are introduced for CSOs that have a value of total assets or income over 30 million ALL (approx. 235,000 EUR). They are obliged to prepare a performance report and to publish it along with the annual financial statements on their official websites. The template of the report is still under discussion and is expected to be issued within 2020 by the National Accounting Council. In addition, these CSOs are also obliged to submit to Tirana District Court the financial statements, even though the Court does not have an institutional mandate to manage and use this kind of information. 

CSOs are subject to anti-money laundering and financing of terrorism inspections, and operational audit inspections. With regards to money laundering, some initiatives and legal amendment took place during 2019. To mention is the Law no. 33/2019 which reflects an amendment to the law on prevention of money laundering and financing of terrorism, and the Instruction no. 19, dated 9.7.2019 “For the supervision of the non for profit organizations in the function of money laundering and financing of terrorism”. This instruction regulates the procedures that can be followed by the tax authorities, as a supervisory body, for the control of the activities of CSOs, in order to avoid the possibility of money laundering or terrorist financing. It aims to establish and unify the standards in order to guarantee accurate share of information between the General Directory of Taxation and General Directory for the Prevention of Money Laundering with the scope to identify the cases of money laundering or financing of terrorism through CSOs. The instruction contains 38 risk indicators in order to measure the risk activity of CSOs related with money laundering and financing of terrorism. This instruction reflects the country measures in implementing money laundering and financial of terrorism action, but it increases state institutions control over CSOs operations, and impede the independence of the sector.

According to the information received from the General Directory of Taxation, a total number of 12 CSOs have been subject of control by tax authorities during 2019. 

Referring to the dissolution of the organization, no legal changes occurred in 2019. The Law on Non-Profit Organizations amended and the Law on Tax Procedures, amended, regulates dissolution or termination of CSOs. As mentioned in the MM Report 2018, one of the challenging issues with dissolution is the fact that the law holds legally liable the legal representative of CSO and permits the Tax Administration to collect debts or unpaid taxes, even after de-registration of a CSO with the Court.  It remains unclear how the tax authorities can do that, especially as the same law requires for de-registration in the Court to happen only after the CSO has paid all its debts and obligations through the tax authorities. Based on data received from the Tirana District Court, there are in total 150 CSOs de-registered in the Court, while according to the General Directory of Taxation there are in total 177 CSOs that have been de-registered or in the process of deregistration with tax authorities.

In regards to practice, the majority of the surveyed CSOs expressed that the organizations operate independently and have not faced state interference in their internal operations. Only 2 CSOs out of 152 surveyed expressed that they have faced inspection controls from public authorities without prior notification. 

With regards to sanctions applied, 10% of the surveyed CSOs expressed that they have been subject to sanctions by state authorities. The sanctions are applied in form of fines and are mostly related to delays of online tax declarations. From this poll of CSOs, 73% of them declared that the sanctions were proportional to the breach. 

Asked about the opportunity to appeal the decision in Court, the responses show that CSOs are aware of this right, but only 50% of them exercise this right. 

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