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The Bank of Albania issues clarifying statements related to the American Bank of Investments

The Bank of Albania has reacted for the first time following numerous accusations directed at the American Bank of Investments (ABI) and the principal shareholder of NCH Capital Bank over unclear origins, connection with Russian capital, money laundering, among others.

ABI entered the public debate also because of the political attacks following the accusations of several senior opposition leaders in the previous week. The responded at the weekend through an interview with ABI CEO, Mr. Andi Ballta.

Nevertheless, the Bank of Albania has not yet spoken out. Today’s press release, albeit very detailed and careful to clarify the details, gives final answers to all the questions raised in recent days.

In its statement, the Bank of Albania lists the complete documentation required by ABI, the legality of that documentation, the legal acts upon which the approval is based, the registration and the licensing of the bank, and international agreements regulating the relationship with U.S. companies registered in offshore countries.

Bank of Albania notes that the approval of the purchase by Tranzit, of Credit Agricole Bank in Albania, and the subsequent licensing of ABI, was performed “on the basis and in compliance with the applicable and subordinate legal provisions”, and that it has assessed the integrity and reputation of the new shareholders, as well as the indirect investors of ABI, based upon all the necessary documentation under the applicable laws, as follows:

  • certification by the tax authority for the payment of tax liabilities by Tranzit LLC
  • certification by Cayman Islands Records of two indirect shareholders, New Century Holdings XI, L.P. and NCH Balkan Fund, L.P., confirming that the two companies were exempt from tax
  • certification by Cayman Islands Register of two indirect shareholders, New Century Holdings XI, L.P. and NCH Balkan Fund, L.P., confirming that the two companies are in good condition and continuing their activity 
  • certification by the General Directorate for the Prevention of Money Laundering with regard to Tranzit LLC and NCH Capital
  • any statements made by the shareholders to the ultimate beneficiaries (regarding the payment of tax liabilities, non-prosecution, non-disclosure of criminal offenses, non-performance of obligations to third persons, etc.)
  • a confirmation document from the U.S. Embassy in Albania that NCH Capital Inc. is a registered company in the Securities Commission of the United States of America (SEC), and as such is under the supervision and regulation of that authority.

In its explanation, the Bank of Albania states that, “Information on company shareholders is published information and easily generated by public trading registers’, and that in the case of ABI, “direct and sole shareholder, owning 100 percent of the shares of the American Bank of Investments, is Tranzit company, registered at the National Registration Center, Albania since 2009. Tranzit is controlled by NCH Balkan Fund L.P. and New Century Holdings XI, L.P. These funds are funded by investors including well-known universities, state pension funds and corporations, and other institutions from the U.S., the United Kingdom, and other countries in Western Europe. Both of these funds are managed by NCH Capital Inc., an investment advisory firm registered in the SEC, U.S.A., with long experience in the financial sector and for more than 20 years part of the banking sector in Central and South-eastern Europe through banking capital in Romania, Latvia, and Moldova. In today’s clarification, the Bank of Albania pays close attention to the place of registration of ABI. “At the same time, we clarify that the legal and regulatory framework on banks in the Republic of Albania does not provide for prohibitions or restrictions regarding the place of registration or exercise of the activity of indirect shareholders of the entities that exercise banking activity in the Republic of Albania.

“Notwithstanding the foregoing, the Bank of Albania complies [IW1] with legal provisions, but also with international standards (including FATF standards) in case of offshore company companies, conducted its assessments and identified shareholders up to the final beneficiaries. The assessment of the integrity or reputation of the bank’s direct and indirect shareholders is based on a series of documents , including tax authority certification of tax liabilities, correspondence with the General Directorate for the Prevention of Money Laundering (GDPML), and statements made by shareholders to the ultimate beneficiaries regarding the payment of tax liabilities, non-prosecution, non-punishment for criminal offenses, non-payment of third party liabilities, etc.

“We also want to inform the public that on 18 March 2010, the United States approved legal provisions known as the "American Account of Foreign Taxes for Tax Compliance", which submit reporting requirements by foreign financial institutions (IHFs) regarding certain accounts. The American Act on Foreign Accounts for Tax Compliance (FATCA), adopted in 2010 as part of the Employment Promotion Act (HIRE), is an important development in US efforts to combat fiscal evasion by US citizenship who have investments in accounts outside their home country. According to FATCA, certain US taxpayers holding financial assets outside the United States have to report those assets to the Internal Revenue Service (IRS). Also, FATCA requires foreign financial institutions to report directly to the IRS information about the financial accounts owned by US taxpayers, or foreign entities, in which US taxpayers own significant interest rates related to ownership.

“The Albanian banking system, since July 2014, performs its activity in accordance with FATCA requirements and regulations. Each bank reports to the IRS, all accounts, investments, remittances made by US citizens, US residents using an address or giving a proxy for bank accounts or transfers to a US citizen or resident. This explanation of the Bank of Albania comes at a time when the American Bank of Investments is the focus of allegations raising questions about the bank’s activity in Albania regarding the place of registration, shareholder recognition and the origin of the funds. This statement answers all the questions raised and aims at the final clarification of the solidity of the Albanian banking system.”

To read the full press release of the Bank of Albania, please visit: Clarification on Declarations Concerning the American Bank of Investments