Project against Corruption in Albania (PACA)

Transcription

1 Project against Corruption in Albania (PACA) Project against Corruption in Albania (PACA) Fourth Progress Report (September 2011) Project title Project against Corruption in Albania (PACA) Reference number IPA Contract 2009/ Project starting date 1 September 2009 Project duration 1 September February 2012 (30 months) Implementation Department of Information Society and Action against Crime (Directorate of Cooperation) DGHL, Council of Europe Project budget 2,130,000,00 Euros Date of report 27 September 2011 Reporting period 1 March August 2011

2 Table of Contents 1. DESCRIPTION CONTACT PERSON NAME OF PARTNERS IN THE ACTION TITLE OF THE ACTION CONTRACT NUMBER START DATE AND END DATE OF THE REPORTING PERIOD TARGET COUNTRY: FINAL BENEFICIARIES EXECUTIVE SUMMARY CURRENT STATUS: COUNTRY SITUATION ANTI-CORRUPTION POLICY MARCH 2011-AUGUST 2011: ACTIVITIES AND BENCHMARK FULFILLMENT ACTIVITIES IMPLEMENTED BENCHMARK FULFILMENT COOPERATION WITH OTHER STAKEHOLDERS COUNTERPART AND BENEFICIARIES OTHER THIRD PARTIES PROJECT ACHIEVEMENTS, CONCLUSIONS AND RISKS ACHIEVEMENTS CONCLUSIONS RISKS VISIBILITY LIST OF ANNEXES...53 For any additional information please contact: Information Society and Action against Crime Directorate General I - Human Rights and Rule of Law Council of Europe F Strasbourg Cedex FRANCE Tel: /Fax lado.lalicic@coe.int Web: This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union or the Council of Europe. 2

3 Abbreviations AASCA ACA ACAP ACS AKKP AKShi ALUIZNI AML/CFT ASP BoA CC CoE CoM DGPML DIACA DNFBPs DPA EU EURALIUS FSA GDC GDTS GRECO HCJ HIDAA IMWG IPRO KNAB LPO LTA MoE MoF MoI MoJ MONEYVAL MoU MPWT NIPE OLA OPDAT Agency for the Administration of Seized and Confiscated Assets Albanian Competition Authority Anti-corruption Action Plan Anti-corruption Strategy Agency for Restitution and Compensation of Properties National Agency for an Information Society Agency for Legalization, Urbanization and Integration of Informal Zones and Buildings Anti-Money Laundering/Counter-Terrorism Financing Albanian State Police Bank of Albania Competition Commission Council of Europe Council of Ministers Directorate General for Prevention of Money Laundering Department of Internal Administrative Control and Anti-corruption Designated Non Financial Businesses and Professions Department of Public Administration European Union European Assistance Mission to the Albanian Justice System Financial Surveillance Authority General Directorate of Customs General Directorate of Transport Services Group of States Against Corruption High Council of Justice High Inspectorate for the Declaration and Audit of Assets Inter-ministerial Working Group responsible for the preparation, drafting and follow-up of the implementation of the Anti-corruption Strategy Immovable Property Registration Office Latvian Bureau for Preventing and Combating Corruption Local project Officer Long Term Adviser Ministry of Education Ministry of Finance Ministry of Interior Ministry of Justice The Council of Europe s Committee of Experts on the Evaluation of Anti-money laundering Measures and the Financing of Terrorism Memorandum of Understanding Ministry of Public Works and Transportation National Inspectorate for Pre-university Education Office of Legal Adviser[s] US Office of Overseas Prosecutorial Development, Assistance and Training 3

4 OSCE PACA PEPs PG REDs SIGMA TIPA Organisation for Security and Cooperation in Europe Project against Corruption in Albania Politically Exposed Persons Prosecutor General Regional Education Directorates Support for Improvement of in Governance and Management Training Institute for Public Administration 4

5 1. DESCRIPTION 1.1 Contact person Ivan Koedjikov, Head of the Department of Information Society and Action against Crime, DGHL, Council of Europe. 1.2 Name of Partners in the Action Council of Europe and European Union. 1.2 Title of the Action The Project against Corruption in Albania (PACA). 1.4 Contract number 2009/ Start Date and End Date of the Reporting Period 1 September February Target country: Albania 1.7 Final beneficiaries The project beneficiaries are the following: High Inspectorate of Declaration and Audit of Assets (HIDAA); Ministry of Education and Science of Albania; National Institute for Curricula Development and Teacher Training (now the Institute for Development of Education); Ministry of Justice; General Prosecutor s Office; High Council of Justice; School of Magistrates; State Police; Ministry of Finance Directorate General for the Prevention of Money Laundering, Agency for the Administration of Seized and Confiscated Assets (AASCA); Ministry of Interior Department for Public Administration (DOPA); Training Institute for Public Administration (TIPA). 5

6 1 EXECUTIVE SUMMARY This report summarizes project activities implemented during the six months of the project from 1 March to 31 August During this period 27 activities were conducted that contributed directly to achieving project results as envisaged under the Workplan. Major progress was made towards the implementation of activities to assist a visibility strategy for DIACA activities that were in addition to the PACA workplan. Key activities in the period were: the completion of the remaining three corruption risk assessments (on the Healthcare System, Social Housing Allocation and the Albanian Competition Office); a risk assessment of the Albanian education system and human resources system, plus an assessment of the private education system; an intensive training of trainers program for police, prosecutors and judges producing a core of local trainers and training materials; development of tools to improve information exchange between key institutions with databases of significance to the detection of corrution; and key NGO events to encourage more active civil society engagement in monitoring of anti-corruption policy implementation and conducting institutional corruption risk assessments. Concerning project benchmarks set out in the workplan six of them with reporting dates between March and August one became redundant as a result of the activity being changed, two had already been fulfilled, and reporting dates for three others were postponed due to circumstances beyond the control of the project team. Impact of the technical assistance provided: PACA assistance has enabled a significant improvement in the regulatory framework for the coordination of anti-corruption policy of the Government and monitoring its implementation, although the framework requires further clarification to ensure that it works efficiently and consistently. The authorities approved a new three-year Anti-corruption Action Plan which was drafted with PACA s expert assistance provided in late 2010 and early However, the Action Plan had still not been published at the end of the reporting period. Nor had the authorities publicly released specific data on the implementation of all Action Plan policies, as recommended by PACA in successive technical papers. Corruption risk assessments - though it remains too early to judge the future impact on policies to address corruption in the institutions selected, the indications are that the impact will be significant in the area of social housing allocation and possibly in the education sector, while first reactions from the Albanian Competition Authority indicated that they were cooperative. On the other hand, PACA has deep concerns that its assessment of the immovable property registration system which is regarded as possibly the area of most fundamental importance to underpinning anti-corruption policy in general has gone without any significant reaction. Concerning legislative assistance, a first event and PACA contribution on the subject of immunities culminated in an encouraging level of broad agreement between all of the 6

7 important stakeholders on the desirable direction of reform needed. Concerning assistance on legislation regulating political party finance and on the criminalisation of corruption, at its March-April 50 th Plenary GRECO evaluated Albania very positively on the former, with all recommendations implemented except one. During the next reporting period, PACA will focus primarily on follow up to the PACA risk assessments, including the assessments of the education system, in particular by securing specific written feedback from the institutions concerned about the policies that they intend to pursue in line with PACA recommendations. PACA will organise public events to present and discuss the risk assessment findings, and such policies will also be advocated as changes/additions to the Anti-corruption Action Plan. A fundamental project objective will be to secure agreement between all stakeholders on specific proposals to reform the system of immunities in Albania. 2 CURRENT STATUS: COUNTRY SITUATION 2.1 Anti-corruption policy Implementation of the National Anti-corruption Strategy s Action Plan for 2010 At the Fourth PACA Steering Committee held on 4 March 2011, DIACA presented its report on implementation of the Anti-corruption Action Plan for 2010 (see Annex 3). Like the previous six-month implementation report for January-June 2010, the report is of a largely statistical nature. According to it, of the 154 objectives of the Action Plan, 70% were fully achieved, 13% partly achieved and 17% were not achieved. Of the 385 measures in the Action Plan set out to achieve these objectives, 70% of the measures were fully implemented, 18% were partly implemented and 12% were not implemented. The report follows an identical format as the previous six-month implementation report, and PACA continues to have serious doubts about the information provided. Doubts appear justified regarding the claims of the report that certain objectives have been fully achieved, doubts that are compounded by the fact that many of the objectives claimed to be implemented remain vague. A few examples of vagueness (among many) are Increase of the level of fight against organised corruption and Prevention of infringements and abuses and control of financial-economic activity (Ministry of Interior), Adjustment of the issue of informal payments and institutionalisation of the payment of the real costs of service (apart from the emergency payments) (Ministry of Health), or Facilitation and encouragement of funding ensured over movable properties [and] Provision of applicability of the law on the property claims over movable properties (Ministry of Economy, Trade and Energy). Objectives whose actual full implementation may specifically be doubted include Separation of the financial inspection activity from internal audit (Ministry of Finance) or Compiling of regular statistics of the progress of criminal prosecution (Ministry of Interior). The key reason for concerns over the 2010 report is that it does not include the specific reporting by line ministries in table form on the implementation of each of their measures. This means there is no relevant information available to justify the claims made in the report. PACA has repeatedly raised concerns over the fact that the authorities have not publicly released any implementation reports on the Council of Ministers website. 7

8 Approval of the Anti-corruption Action Plan for On 6 June 2011 the Inter-ministerial Working Group responsible for the preparation, drafting and follow-up of the implementation of the Anti-corruption Strategy (IMWG) approved a new Anti-corruption Action Plan for The Action Plan was formulated following intensive PACA assistance from November 2010 to February 2011 (see 3 rd Progress Report). However, according to DIACA the Action Plan was approved including some minor changes, which had to be inserted in the document itself. As of 31 August 2011, PACA had still not been provided with the final version of the report, nor had it been released publicly. Coordination mechanism for formulating and monitoring implementation of anticorruption policy On 6 June 2011 the IMWG approved three regulations on the functioning of the IMWG itself, the Inter-sector Technical Working Group (ISTWG) responsible for policy drafting, and the Secretariat of the IMWG (SIMWG) responsible for policy and logistical coordination. The final regulations represented a large improvement on an earlier draft regulation (see reporting on Activity 1.1.9, Section 3 of this report). However, in the opinion of the PACA Team significant problems remain, especially the following: The involvement in the anti-corruption policy framework of independent institutions. The new regulations do not provide for any process to initiate the inclusion (for example by inviting the signing of memoranda of understanding) of independent institutions with key roles in anti-corruption policy - notably the High Inspectorate for the Declaration and Audit of Assets, Office of the Prosecutor General, High State Audit and Public Procurement Agency/Commission. According to the official record of the IMWG Meeting on 6 June 2011, none of these institutions was present, despite the willingness expressed to PACA by both HIDAA and the Office of the Prosecutor General to participate in the Action Plan framework. PACA remains equally concerned by the total absence of the High State Audit from involvement in anticorruption policy, given the fundamentally important anti-corruption role played by supreme state audit institutions in democratic countries. The role of the IMWG vis-à-vis line ministries. The regulations appear to confirm the fact that the IMWG plays a formal rather than substantive role in the formulation of anti-corruption action plans and especially monitoring of their implementation. It is composed of deputy ministers, whereas at line ministry level Secretaries-General are responsible for coordination of action plan formulation, and the approved regulations clearly require ministerial approval for draft action plans and implementation reports submitted. In particular, practice to date appears to show that the coordination mechanism relies entirely on information provided by ministries to assess the level of implementation of the Anti-Corruption Strategy (i.e. specifically, the annual Action Plan), with no process of verification envisaged. The practical functioning of the Secretariat. The precise responsibilities of each of its members (representatives of DIACA, the Department for Strategies and Donor Coordination and the Cabinet of the Minister for Innovation and IT who chairs the 8

9 IMWG, the Ministry of Integration and the Ministry of Justice), its meeting schedule and the commitment in time required by its members are not specified. Law enforcement In May 2011 the General Prosecutor s Office provided PACA with its Report on the State of Criminality for The Report indicates both an increase in enforcement levels in terms of numbers of cases, as well as improvements in the level of detail of the statistics. The report showed the following changes from 2009 to 2010: An increase in the number of registered cases under investigation from 86 in 2009 to 112 in 2010, a 23% increase. A 130% increase in the number of persons under investigation, from 44 to 101. A 116% increase in the number of cases in which charges were filed by the Prosecution, from 25 in 2009 to 54 in 2010 A 126% increase in the number of defendants sent to court for trial, from 53 to 120 An 11% increase in the number of final convictions from 36 in 2009 to 49 in PACA had expressed the hope in its 3 rd Progress Report that statistics on criminal cases would be improved in the 2010 Report, and specifically that statistics would be provided on the number of cases referred to the prosecution (with further sub-division into cases referred by the police and referred by citizens) and the number initiated ex officio, the number of cases filed in the courts, the number of convictions and sanctions imposed, in order to establish a baseline on which to measure progress in the coming years. However, the figures in the 2010 Report on investigations were not broken down into cases referred and cases initiated by the Prosecution ex officio, which prevents any judgment being made on the performance of the prosecution on the one hand, or the police in detecting and notifying suspected cases on the other. Also, no information was provided on the type and level of officials that have been prosecuted and/or convicted, nor is any information on sanctions imposed by the courts on those found guilty two key indicators of the real significance of cases. PACA noted in its 3 rd Progress Report that the six months up to February 2010 were marked by the involvement of the Prosecutor s Office in the investigation of allegations of corruption at higher levels, culminating in the request in February 2011 for the lifting of the immunity of two former Cabinet ministers who had served in the Government that took office in September As of 31 August 2011, one of the cases was in court (the first corruption case involving a former minister to be heard in court in Albania) and one was under investigation. 3 MARCH 2011-AUGUST 2011: ACTIVITIES AND BENCHMARK FULFILLMENT 3.1 Activities implemented During the reporting period, the following activities were conducted in order to fulfil the Workplan. 9

10 Result 1.1: Tools and mechanisms available to ensure the implementation of the anticorruption strategy and action plan in line with GRECO recommendations and good practices Activity 0.6/1.1.6 Actions Assistance with an Anti-corruption Visibility Strategy for the Department of Internal Administrative Control and Anti-corruption During the first half of 2011, PACA conducted two main activities to assist DIACA in raising the visibility of the Albanian Anti-corruption Strategy. Awareness-raising leaflets Following the finalisation of three corruption/anti-corruption awarenessraising leaflets in January 2011, PACA completed the layout and printing of the leaflets during March-April. In June 14,500 copies of each leaflet (i.e. a total of 43,500) were disseminated countrywide as an insert to Celesi, the most widely distributed Albanian paid advertising gazette (and in fact the most widely distributed regular publication of any kind), one leaflet in each successive week. In addition, approximately 330 copies of each leaflet (1000 leaflets in total) were distibuted in May by the Organisation for Security and Cooperation in Europe (OSCE) through local NGO assistance projects financed by the European Union. Anti-corruption website In May PACA signed a contract with a web provider to design an anticorruption portal for DIACA. The purposes of the website are to be the following: Improving communication with general public, civil society and internal and external partners anti-corruption policy and its implementation, inter alia by raising societal awareness of strategic documents and institutions. Providing relevant policy information from and on different line ministries and institutions through a single website in order to improve access to information. Facilitating monitoring of the implementation of anti-corruption policies, in order for different NGO s working in this field to conduct monitoring. Creating for citizens a discussion forum and a channel for reporting suspected corruption. During July and August the provider secured feedback from DIACA on its preferences for website appearance and content. The provider proposed alternative design choices in July, and DIACA selected one. As 10

11 of 31 August the provider was waiting for DIACA to confirm the site structure and provide content. After receiving this information, the site will be built and installed within weeks. Objectively verifiable indicators Progress N/A Previously, citizen awareness of the Anti-corruption Strategy has been low. It is hoped that the leaflets have contributed to increasing awareness among the Albanian population of the Anti-corruption Strategy, the criminal law relating to corruption, and the duties of public servants (the subjects of the three leaflets). Once completed, the website can be a key means for disseminating information on anti-corruption policy and its implementation and creating an on-going tool to ensure visibility and transparency of anti-corruption policy efforts. Activity Conduct risk assessments and analyses of the institutions and sectors identified Actions Following the completion during the previous reporting period of corruption risk assessments on Administrative Complaints Against Judges and on the Immovable Property Registration System, during the current reporting period the remaining three risk assessments were completed: Healthcare System In In May 2011 PACA finalised its Risk Assessment: Corruption in the Health Sector. The risk assessment (see Annex 4) focused primarily on the system of healthcare financing and its impact on corruption. The main findings of the report are the following: Albania appears to retain the highest levels of informal payments for healthcare among Balkan countries, and it is unclear whether such payments have fallen as a result of recent reforms as claimed by the authorities. The process by which hospital budgets are established is unclear and does not take into account the actual cost of providing quality care, and the lack of transparency runs the risk of funds being spent in ways that favour the priorities of individual service managers rather than health needs. While the Health Insurance Institute has taken important steps to tackle healthcare fraud, measures to inform patients of the system for reimbursement for drugs are not sufficiently simple to educate patients adequately. 11

12 The government does not have an updated national essential medicines list (EML), and criteria for membership on commissions are lacking or unclear, creating high risks of conflict of interest and resultant corruption. This may be further exacerbated by politicisation of appointments within the Ministry of Health and other healthcare institutions. The report provides the following recommendations (the full length versions of which include specific sub-measures for the Government and other stakeholders including donors, together with timelines). Reinforce Ministry of Health stewardship (leadership and governance) and monitor reform towards a one-payer system in which the HII will be able to contract selectively with providers to pay them adequately for delivering high-quality health care services. Monitoring should be conducted using the recently developed Monitoring and Evaluation Plan (Ministry of Health 2010) and with the active participation of external watchdogs such as the media and NGOs. Promote patient information particularly on drug benefits and prices/reimbursement, and increase insurance enrolment, inter alia by encouraging the latter at points of admission to healthcare institutions. Collect household-level data on informal payments to monitor reform progress through a survey of patients at home following discharge from hospital. Strengthen hospital board governance by widening representation on Hospital Boards to beneficiaries and funding organisations, and strengthen surveillance of cash collection, inter alia by limiting fee collection points and installing electronic point of purchase cash registers, as well as by other measures such as testing the integrity of the system using mystery patients. Enhance transparency in drug selection, spending, stock movements and reimbursement. This should be achieved inter alia by completing standard treatment guidelines and using them to finalise a national Essential Medicines List, and making use of the indicators in the Ministry of Health Monitoring and Evaluation Plan, and reviewing the composition of drug commissions for conflicts of interests. Perform external audits and assure that actions are taken to address findings. Such audits should also include reviews by independent agencies (such as the Public Procurement Agency, High Inspectorate for the Declaration and Audit of Assets and High State Audit) of i) Ministry of Health procurement boards for conflicts of interest and ii) past Ministry of Health audit findings to determine whether actions have been taken to address problems identified. 12

13 For the Health Insurance Institute, continue investing in fraud control, with special emphasis on control of fake enrolment and utilization figures and inappropriate referral of patients to specific pharmacies. In June 2011, the Ministry of Health provided comments on the Risk Assessment methodology, expressing agreement with most of the recommendations but disputing certain factual elements within the report. During August 2011 PACA drafted a response to this feedback, including a small number of changes to the report, which was sent to the Ministry. Social Housing Allocation In June 2011 PACA completed its Risk Assessment on Provision of Social Housing in Albania (see Annex 5). The main conclusion of the Assessment was that the system for provision and allocation of social housing in Albania remains poorly consolidated and the capacities of local governments insufficient. As a result, three main corruption risks were identified: Insufficient provision/availability of information on social housing programs Poorly designed criteria/rules for selecting beneficiaries of social housing A process for selecting housing beneficiaries that is vulnerable to manipulation The assessment provides a set of broad recommendations that include not only anti-corruption measures but also broader recommendations to address these deeper problems, the implementation of which will also reduce risks of corruption. The recommendations, in summary form, are as follows; the full recommendations include recommended timelines for implementation. By the end of 2012 the Ministry of Public Works and Transportation (MPWT) should develop and regularly update a comprehensive database of people in need of social housing, possibly using the 2011 census data as a starting point. Local governments should prepare ten-year comprehensive social housing strategies according to the requirements of the Social Housing Law, as the basis for all social housing provision at local level. These programs should include specific elements to ensure that social housing policy is an instrument to benefit those in need of social housing rather than (either by design or default) those who do not. The MPWT should formulate a policy for disseminating information 13

14 on the national housing policy framework and ensure that all target groups are reached. Municipalities should adopt comprehensive strategies for ensuring that citizens in general, and target groups in particular, are effectively informed about local social housing policies and their opportunities to benefit. This should include both comprehensive information on municipality websites and proactive strategies to reach target groups. The MPWT, in cooperation with the Ministry of Finance and the Ministry of Interior, should revise the system for allocation of national funds for social housing to the municipalities to ensure inter alia that municipalities do not receive financial support unless they have prepared their 10-year social housing strategies, and that allocation of financial support to municipalities is competitive and conditional on municipalities own financial contributions and is linked to the results of MPWT monitoring. The MPWT should clarify/establish deadlines for the provision of a social housing solution following the submission of an application and the selection of the applicant as a possible beneficiary in one of the existing social housing programs. Local Housing Committees should include not only public officials, but representatives of target groups and civic society as well. Rules on the composition of Housing Committees and operational procedures should include rules to address risks of conflicts of interest affecting Committee members. The MPWT should ensure that the Social Housing Law or other relevant legislation on local government underlines clearly the Municipal Council s responsibility for setting clear criteria for allocation of social housing and procedures for assessing applicants as well as monitoring implementation of the selection process by the housing units/department and Housing Committee, but allows the Council to change the order of beneficiaries proposed by the Housing Committee only under strictly defined circumstances and with specific written justification/reasoning. The criteria for selection of beneficiaries for social housing (derived from the Social Housing Law, with municipalities attaching their own weights to each criterion) should be clearly coordinated across different social housing programs. In local loan subsidy programs, municipalities should ensure that the decision-making power to select beneficiaries remains with local councils and that banks do not distort allocation towards higherincome groups than the targets of the program. The final municipal council decision on beneficiaries should be binding for banks. 14

15 If low-income groups are not intended as targets for loan subsidy programs, this should be made explicit in those programs, and crucially other programs that are more suitable for lower-income families (especially housing with social rent) should be designed to ensure that they are appropriately structured for that purpose. The MPWT should ensure that levels of social rent are calculated according to a methodology that ensures they are appropriate for the income levels of the intended beneficiaries. The MPWT should assess the performance and progress of social housing programs and strategies, as required by law, to assess whether the major municipalities are implementing their housing programs in compliance with their strategies and the Social Housing Law (for example in the setting of criteria and selection of beneficiaries), how effectively they are using government funds and providing their own contribution, and how they are contributing to the fulfilment of national social housing needs. The MPWT should monitor the dissemination of information and outreach by municipalities to monitor its effectiveness and identify where complementary efforts/assistance are needed. MPWT should issue a National Annual Report on Social Housing Programs, to measure performance and identify problems (including possible corruption issues). The MPWT should issue regulations to mandate the allocation of apartments to families in need prior to the completion of construction, to enable beneficiaries to monitor the quality of construction. The MPWT provided feedback on the Risk Assessment in July The Ministry was in agreement with the recommendations, with a few minor suggested changes, and a more important request to move the deadlines for implementation back by one year. Albanian Competition Authority In June PACA finalised its Risk Assessment of the Albanian Competition Authority. The main findings of the Assessment (see Annex 6) are the following: The formal legal framework is largely in line with the EU acquis. However, certain aspects of the legal framework contain risks of corruption specifically: o an appointment process that does not sufficiently guarantee the 15

16 independence of the Competition Commission (CC), the ACA s decision-making body; o provisions of the Competition Law that are too vague and insufficiently clarified in subordinate legal acts or guidelines unnecessarily providing room for corrupt behaviour, or the appearance thereof. These include the rules that: restrict the application of the law to those undertakings that have or may have an influence on the market, rather than the easier to distinguish category, undertakings, defined in the law as persons performing economic activity; exclude from the definition of economic activity and thus coverage by the Competition Law the purchase of services; provide a complex combination of general prohibition of anticompetitive agreements, the possibility of exemption, the possibility of applying for exemption ex post, and the possibility of leniency. o rules on notification of concentrations that require notifications where a concentration would not harm competition in Albania but where the notification and authorization procedure generate unnecessary corruption risks. The most serious shortcomings in the functioning of the ACA and CC however lie in an apparently high degree of impotence. The Commission appears wary of issuing legal strong decisions that would affect powerful economic interests. The Government appears able to ignore its recommendations, and almost none of the sanctions (fines) imposed by the CC to date have been enforced. While collection of fines may significantly improve with implementation of the latest amendments to the law, the ACA will be unable to perform its role optimally without a significant/radical change in the attitude of the Government and other institutions. The recommendations of the Assessment are the following: The Competition Law should be amended to apply to all undertakings rather than just those that may have an influence on the market, and also to apply fully to services, while retaining the exemption for relations between employers and employees and trade unions. Merger notification rules should be amended to require that at least 16

17 two parties to a transaction must have turnover above the defined threshold in Albania. The rules for the setting of fines should be clarified, and the potential for leniency should be restricted to agreements among competitors to fix prices, share markets or rig bids. Reforms of the appointment process for the CC should be considered that would allow a broader range of institutions to propose members. Also, to reduce the ability of Parliament to infringe on the Commission s independence, changes in compensation approved by Parliament should be lagged (i.e. they should take effect with a time lag), and more objective criteria for removal should be considered. The regulations on conflict of interest and asset declarations that currently apply to Albanian civil servants should be extended to apply also to members of the CC and ACA professional staff. A clear interpretation of the Code of Administrative Procedure should be reached that will protect ACA members and employees from civil lawsuits for decisions taken in good faith in the course of their duties. An archive of intermediate internal work should be established to ensure an adequate record of all proceedings. The Competition Law should establish that all legal acts and Commission decisions come into force only after publication in the Official Gazette, and that all CC decisions should be made public in their entirety (with appropriate redaction to protect commercial secrets). The Government should issue a general statement or commitment to in cases where the ACA has issued a recommendation to it - provide a public response within the deadline established by the ACA that explains how the competition concerns will be addressed, or why it believes the public interest to be better served by not doing so. The Risk Assessment was provided to the Albanian Competition Authority and DIACA in June 2011, and in July the Head of the Authority committed to providing PACA with feedback on the Assessment. Objectively Risk assessments completed by month 25 verifiable indicators Progress All PACA risk assessments were completed as of June 2011 (month 22). PACA believes that the assessments are high-quality policy documents 17

18 which serve as an excellent basis for the formulation or alteration of anticorruption policies for specific sectors and institutions, as envisaged under Activity of the PACA Workplan. Feedback from the institution assessed has been highly variable, however, and PACA has particular worries given the fundamental and overarching importance of property registration - about the failure of the Ministry of Justice or Immovable Property Registration Office to respond in writing to the Immovable Property Registration Risk Assessment. The implementation of this activity is also a direct contribution to the further/continuing implementation of Recommendation iii) of the First Round GRECO Evaluation, namely to systematically collect and process in a coherent way data concerning corruption, in particular in fields where there are particular corruption problems encountered. Activity Assisting DIACA in improving the existing standing interagency coordination mechanism by developing and providing methodologies and standardised templates for public administration institutions on the formulation of anti-corruption action plans (including performance indicators), and reporting on implementation of specific anticorruption related reforms. Actions In April PACA completed an opinion on a draft Regulation on the Functioning of the Inter-ministerial Working Group responsible for the preparation, drafting and follow-up of the implementation of the Anticorruption Strategy (see Annex 7). The main recommendations of the assessment were the following: The Anti-corruption Action Plan/s was not mentioned anywhere in the draft Regulation, and it is essential for the Regulation to elaborate in detail the roles/duties of the bodies established by the September 2010 Prime Ministerial Order on the Inter-ministerial Working Group in coordinating, formulating and monitoring implementation of the Action Plan/s. The Regulation should clearly specify the inclusion, and procedure for inclusion, of independent institutions within the activities of the IMWG. The leadership and duties/functions of the Inter-sectoral Technical Working Group should be elaborated in more detail, especially regarding discussion of draft action plans and agreement on an integrated Action Plan for finalisation by the Secretariat of the IMWG and submission to the IMWG for approval. Most important, it is vital that the composition, functions/duties, division of responsibilities between members, and time commitment of members of the key SIMWG are clarified/elaborated; if this is not 18

19 done, the expert believes that effective coordination and monitoring of Action Plan implementation will be practically impossible. At its meeting in June the Inter-Ministerial Working Group for the preparation, drafting and follow-up of the implementation of the Crosscutting Strategy for the Prevention of, Fight against Corruption and Transparent Governance (IMWG) approved three separate regulations on the functioning of the IMWG itself, the Inter-sectorial Technical Working Group (ISTWG), and the Secretariat of the IMWG. PACA produced an assessment of the final regulations, in particular of the extent to which they reflected PACA recommendations provided in its April 2011 opinion on the (then) draft Regulation on the IMWG (see Annex 8). The main findings were the following: The Regulation on the IMWG now includes a statement that the Chair of the IMWG will inter alia support the preparation of the cross-cutting strategy and its Integrated Action Plans (annual or multi-annual). However, there are no provisions to facilitate or ensure (for example through memoranda of understanding) the inclusion in the deliberations of the IMWG and ISTWG of other institutions which do not fall under or clearly under the Executive hierarchy in particular the High Inspectorate for the Declaration and Audit of Assets, Office of the Prosecutor General, High State Audit and Public Procurement Agency/Commission. According to the official record of the IMWG Meeting on 6 June 2011, none of these institutions was present, despite the willingness expressed to PACA by both HIDAA and the Office of the Prosecutor General to participate in the Action Plan framework. The recommendations of PACA on the clearer definition of the functions of the ISTWG concerning preparation and proposal of integrated Action Plan have been adopted in their entirety in the Regulation on the ISTWG. The Regulation on the ISTWG also establishes its obligation to report to the Secretariat of the IMWG on implementation of the Action Plan on a quarterly basis. However, the Regulation still does not define who will be the Chair of the ISTWG nor any procedure for the appointment of one. This is a serious remaining gap, as it is simply unclear how the ISTWG will function without a person being designated to chair/coordinate its meetings. As PACA already noted previously, it would seem logical for the ISTWG to be chaired by a member of the Secretariat of the IMWG, and the obvious candidate would be DIACA s representative in the Secretariat. The third Regulation defines much more clearly than previously the role and duties of the Technical Secretariat of IMWG, including regarding the integrated anti-corruption action plans. It also defines more clearly the composition of the Secretariat of IMWG, as 19

20 composed of representatives of DIACA, the Department for Strategies and Donor Coordination (DSDC) and the Cabinet of the Minister for Innovation and IT (who chairs the IMWG), the Ministry of Integration and the Ministry of Justice. The Regulation states that DIACA will play the key role in the Secretariat and that the latter will be chaired by the DIACA representative. The approved Secretariat of IMWG Regulation includes additions that are almost identical to those recommended by PACA in the previous Technical Paper namely by adding to the Secretariat s more secretarial/logistic duties a detailed list of duties relating to the preparation of action plans and monitoring of their implementation. However, the Regulation does not define clearly the specific responsibilities of each of the members of the Secretariat, for which the previous Technical Paper even suggested a specific breakdown of responsibilities. It is not clear how the functions of the Secretariat of IMWG listed above will be performed efficiently if it is not clear what each of the members of the Secretariat will do precisely. In addition and PACA has the most serious concerns on this issue it is not clear what the commitment of each of the Secretariat of IMWG members will be in terms of working time. Objectively verifiable indicators Progress Benchmark progress Quality of functioning of interagency coordination mechanism PACA s assessment of the draft Regulation was followed by substantial improvements in the final regulations. If the remaining details of the functioning of the Secretariat are resolved particularly the responsibilities of individual members and working schedule, the regulations can provide the basis for a functioning coordination mechanism. However, the fact that the Anti-corruption Action Plan had not been released as of 31 August 2011 indicates that the mechanism is not yet functioning in practice. N/A Result 1.2: Proposals available for more efficient anti-corruption legislation in line with international standards Activity Review the situation and applicable legislation of Albania and provide a comparative analysis of options for addressing the lifting of immunities and privileges of elected officials in cases of corruption allegations in order to yield recommendations to ensure conformity with international standards and GRECO recommendations. 20

21 Actions On 12 April 2011, PACA organized a Roundtable on The System of Immunities in Albania: Comparative Analysis and Assessment of Stakeholder Positions. Prior to the Rountable PACA prepared and distributed a Technical Paper titled A comparative overview of the regulation of immunities in Council of Europe member states (see 3 rd Progress Report), the author of which (a German expert) attended the Roundtable to summarise the options for regulating immunities. The Roundtable managed to bring together all stakeholders together, specifically the Prosecutor-General s Office, High Council of Justice, representatives of the Parliamentary Legal Commission from the main governing and main opposition party, the Office of the Prime Minister, DIACA, other donors/projects - Euralius III and the US Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT), and NGOs (in particular the Open Society Foundation Albania and the Institute for Policy and Legal Studies). The PACA expert introduced the audience to the technical solutions and trends that characterize the regime of immunities in Council of Europe members states, in order to provide a framework for discussing the Albanian case. The main outcomes of the event were the following: The Prosecutor-General provided comprehensive information on the way in which the current immunities regime blocks effective prosecutions of high-level officials due to the wide coverage of immunity in terms of both officials and acts and burdensome/unclear procedures for lifting immunity. Equally important, the Prosecutor-General and also other donor projects highlighted the fact that immunity also covers preliminary investigations, effectively preventing the collection of evidence necessary to file a proper request for the authorisation of criminal proceedings/prosecution. The Prosecutor-General recommended changes to the Constitution to limit immunities of Members of the Parliament (MPs) and members of the government to legislative and some political actions, and to abolish immunities altogether for judges. In addition and also as a partial alternative the Criminal Procedure Code should also be amended to enable preliminary investigations of officials who enjoy immunity. The High Council of Justice was in favour of amending the Constitution to abolish immunity of judges from criminal prosecution, but also argued for the retention of judges immunity in a number of areas including private lawsuits over actions of judges taken during the performance of their duty, detention and arrest, criminal acts for which proceedings are initiated by private parties, and criminal acts committed by judges in the process of rendering justice. 21

22 Both MPs from the main ruling party (Democratic Party) and the MP representing the main opposition party (Socialist Party) agreed that amendments to the Constitution should be passed to restrict immunities, including of MPs. Democratic Party MPs distributed proposed amendments elaborated in 2008, which were never passed. In August PACA finalised a draft final version of a second paper entitled Recommendations for the Future Regulation of Immunities in Albania. An event is planned to be held jointly with the Euralius III project in October 2011, with the aim of securing agreement on a concrete proposal for amendments to relevant legal acts. Objectively verifiable indicators Progress Benchmark progress 2 workshops Relevant recommendations submitted and included in revision of immunities regime by month 25 The first workshop produced a clear positive result broad agreement among all relevant stakeholders on the desirability of amending the Constitution and other key regulations. The event held is a direct contribution to full implementation of Recommendation ix) of the GRECO First Round Evaluation - to further consider a reduction in the list of categories of officials covered by immunity and/or to reduce the scope of immunity to a minimum. Benchmark: After the completion of second workshop/roundtable, Council of Ministers undertakes its policy position with regard to whether it will include legislative changes or policies as concrete steps in resolving the issue of immunities and privileges. Timeline: December 2011 PACA believes that the benchmark may easily be fulfilled within the timeline. However, the benchmark does not actually require a commitment to any reforms. If all relevant stakeholders attend the second workshop in October 2011, the best possible opportunity will have been created to achieve consensus of some kind on a solution to the immunities issue, which would in turn provide a natural basis for the Council of Ministers policy position. Activity Provide a review of the legal and institutional framework for regulating and supervising the financing of political parties and elected representatives, including recommendations for amendments to the Law on Political Parties, and the Electoral Code as appropriate, inter alia in the light of Third Round GRECO Evaluation recommendations, as well as training to the future overisght body for political party finances. 22

23 Actions At the PACA Steering Committee Meeting in March 2011, it was agreed that an additional activity would be carried out under Activity 1.2.2, namely assistance to the Central Election Commission with templates for political party financial reporting and audit reports, in order to fulfill the recommendations of the GRECO Third Round Evaluation on Transparency of Political Party Financing, together with training to the CEC on how to fulfil its oversight obligations regarding political party and election campaign finance. These actions were incorporated into the PACA Workplan document that was provided with the 3 rd Progress Report. On 20 May 2011 PACA provided proposed templates to the CEC for the annual financial reports of political parties, the election campaign finance reports of parties, and guidelines for independent auditors on auditing these financial reports. The adoption of the templates/guidelines for auditors would mean the fulfilment of the last of the seven GRECO Third Round Evaluation recommendations not yet fully implemented by Albania. In addition, in May 2011 PACA completed the preparation of documents that can be used to training CEC staff on political party and election campaign finance oversight. However, due to the tense political situation and controversy surrounding the CEC at the time, the training which was originally planned for June 2011, was postponed. Objectively verifiable indicators Progress Benchmark progress CEC template for audits of political party election campaign finance reports available by month 22 2 trainings of CEC staff on training of political parties and independent auditors and on verification of audits of political party accounts, by month 22 CEC templates for reporting by political parties and electoral subjects, as well as templates for independent auditors, provided in month 22. N/A Activity Provide a methodology for screening proposed or valid legal acts for provisions that create risks of corruption ( corruption proofing ) Actions PACA had completed a proposed Addendum to the Albanian Law Drafting Manual: Avoiding Corruption Risks in Draft Legislation and submitted it the Ministry of Justice in June Following a considerable delay in implementation of this activity, due to the unresponsiveness of the Ministry, during the first half of 2011 the Ministry (assisted by the Euralius III project) provided comments on 23