Construction, ‘the crime world’s laundromat’? In 3 years, more than €1.2 billion laundered in Tirana

Informal money in the construction sector has been pouring into Albania for years now, but studies show that after 2017 there was an even more unusual flow.

A report published by the Global Initiative Against Cross-Border Organized Crime estimates that in 3 years, more than 1.2 billion euros are suspected to have been laundered from organized crime groups in Tirana alone.

The study, funded by the German GIZ project, analyzed data from the banking sector and those reported by builders for the years 2017, 2018 and 2019.

In 2019, construction permits for buildings over 6 floors were granted to 141 companies. The ‘Nisma’ study estimates that 59% did not have the financial resources to complete the buildings for which they were issued official permits.

Banks usually lend 50 to 70 % of the construction cost of a multi-story building. In 2019, they reported that they had lent 200 million euros to the construction sector, which means that the total cost of construction investments for that year should have been 400 to 500 million euros.

However, in 2019, official data reported construction activity with a cost of 950 million euros, and a total of 550 million euros that remain uncovered. When we subtract the amount that accounts for the pre-order payments made by citizens to builders through contract-ordered apartments, the study estimates that at least 500 million euros is the amount that was laundered by organized crime for that year alone.

Following this same logic, the report also stated that 570 million euros were laundered in 2018 and 320 million euros in 2017.

In addition to Albania, the study also analyzed data from North Macedonia and Kosovo.

According to them, Albania has the highest level of illegal economy, i.e., financial transactions that are carried out outside the system to hide the origin of the income.

This level in Albania represents about 22 % of the illegal economy, in Macedonia this level is 10 % and in Kosovo 8 %.