Legalizing dirty money in the Western Balkans depends on the services of “professional enablers,” a new report reveals.
Tirana is a bustling capital, marked by dramatic modern architecture, over 300 sunny days a year – and almost 40,000 empty apartments, according to the most recent Albanian census data.
Allegations of criminal money fueling housing booms across the Balkans have circulated for years. But in Albania, despite the empty real estate, many people still seem to believe money laundering is not that big of an issue.
For them, “money laundering is not seen as a negative,” said Dardan Kocani from the Global Initiative Against Transnational Crime (GI-TOC), “because people think that dirty money coming [is] being invested in building apartments, luxurious hotels, etc. They bring in money.”
Albania is not the only country in the Western Balkans struggling to resolve its money laundering problem. What these countries have in common is a lack of implementation and buy-in of anti-money laundering efforts, according to a new report Kocani co-authored.
Legal and financial professionals play crucial roles in the movement of illicitly gained money, by exploiting systemic gaps in enforcement and legal loopholes, according to the report, “License to Launder,” written by Kocani and his colleague, Anesa Agovic Djozo, senior analyst and field coordinator for Bosnia and Herzegovina. GI-TOC is an independent civil society organization, headquartered in Geneva, Switzerland.
The report, subtitled “Professional Enablers and the Architecture of Illicit Finance in the Western Balkans,” details the inconsistent enforcement of laws and rules against money laundering in Albania, Bosnia, Kosovo, Montenegro, North Macedonia, and Serbia, often because of underreporting of suspicious movements of money by professionals, a lack of appropriately trained supervisory personnel, and limited cooperation between the private sector and government regulatory bodies.
The Enablers
“Notaries, accountants, and lawyers are the enablers in a lot of cases,” Agovic Djozo said, “because you cannot buy an apartment or start a company without [an] accountant, lawyer, and so on.” The same is true for various other crimes, as Agovic Djozo wrote in a separate report, “Washing Away Crime: Money Laundering in the Western Balkans,” which was published in July 2025: “Criminal markets produce illicit proceeds from activities such as the trafficking of drugs, firearms, and human beings, migrant smuggling, as well as tax evasion, with professional enablers like attorneys, notaries, and accountants frequently assisting laundering schemes.”
Money laundering does not only create thousands of empty apartments in a nation’s capital. In fact, it is central to sustaining organized crime. Funds obtained through crimes like human trafficking, drug smuggling, and weapons trafficking can be “cleaned” and invested in both legal and illegal business with a reduced risk of tax and government authorities tracing the money back to its source.
The report terms “professional enablers” those who have the skills to make laundered money look legitimate and facilitate avenues for criminals to launder money, often channeling it into real estate and construction using shell companies.
“Across the Western Balkans, illicit money rarely moves on its own,” GI-TOC’s website says. “It travels through notarized contracts, property deeds, loan agreements, invoices and audited financial statements – paperwork that needs someone with a license to sign, certify or stamp it before it can pass as legitimate.”
Professionals form loose networks that are “fragmented yet highly cooperative,” according to the GI-TOC report. Professional secrecy rules may also make such practitioners more susceptible to being entangled in illicit business.
“Money laundering and overall organized crime does not know borders,” Agovic Djozo said.
When Informality Leads to Illegality
The high level of informal transactions is a structural flaw that makes money laundering less risky across the Western Balkans, according to Kocani, who previously worked in strategic planning, international cooperation, and the EU integration process during nine years with Kosovo’s Interior Ministry.
The informal sector has remained consistently high in most of the region for decades and in the World Bank’s estimate accounts for over 30% of regional GDP, compared to the EU average of 23%.
More than 2 billion people worldwide work in such economies, which are marked by a heavy reliance on cash and weak regulatory bodies and are often a haven for money laundering and criminal activity, according to the Financial Action Task Force (FATF). The FATF is a 40-member body that sets international standards to assist national authorities in stemming the flows of illicit funds linked to drug and weapons trafficking, cybercrime, and other serious illegal activity.
However, informal economies are not the only complicating factor when it comes to money laundering in the Balkans, according to Kocani.
Reflecting on the popular attitude that investment into apartments and hotels brings benefits no matter what the origin of the money, he says, “people think that it’s not that negative, so they don’t sufficiently understand the harm that it causes.”
The largest gap in curbing money laundering is weak financial investigations and cases falling through the cracks, according to Agovic Djozo.
“But convictions on money laundering are not enough,” she said. “So, what message are we sending to criminals? That [for] money laundering, even when they are convicted, the penalties are not high?”
Bosnia Returns to Unpopular List
Many of the Western Balkan nations are aligned with major international standards, according to Kocani. The issue is not a lack of legislation and regulation; rather, the issue is how the standards are put into practice.
The FATF publishes the “gray list,” officially called “Jurisdictions under Increased Monitoring,” of countries that cooperate with the FATF to address strategic flaws that hamper their efforts against money laundering and terrorist financing, and a short “blacklist” of countries it considers at high risk. Even being graylisted has often led to economic damage due to lower foreign investment and higher borrowing costs, according to the Basel Institute on Governance.
One day after “License to Launder” was published, Bosnia was placed on the gray list for the second time in less than 10 years – despite having legislation to combat money laundering.
Bosnia first made the list in 2015 because of what the FATF and the Council of Europe’s Moneyval expert group on money laundering reported was an insufficient framework for preventing money laundering, according to the Sarajevo Times. After adopting laws the experts found satisfactory, Bosnia was removed from the list three years later.
The new listing means that Bosnia will undergo increased scrutiny, and may complicate the country’s bid to join the Single Euro Payments Area (SEPA), “an important mechanism that eases cashless payments across Europe,” Balkan Insight wrote in June.
Bulgaria and Monaco are currently the only other European countries on the list. EU member Croatia was placed on the list in 2023, only to be removed in 2025 for making what the FATF said was “significant progress” against money laundering and the financing of terrorism.
Bosnian policymakers eager to polish the country’s financial credibility could take heart from the case of Albania. In 2023, the country, too, managed to leave the list, three years after the FATF advised it to plug gaps in its procedures to prevent financial crime and improve its poor rate of catching money launderers. Albania then instituted a long list of reforms, including steps to stem the widespread use of cash, launching a better property ownership register, and strengthening authorities’ powers to move against criminal infiltration of the economy, according to the Basel Institute on Governance.
This spring, following an assessment visit by Moneyval, Albanian Deputy Prime Minister Albana Kociu said being removed from the gray list was “an important achievement especially at a time when other countries, including in Europe, still remain part of it,” local TV station ScanTV reported.
The increasing use of digital transactions instead of cash is another indication that the country is adopting a more transparent and EU-compliant financial system, Kociu said.
In Bosnia, again this year and like Albania before it, the government and regulators received multiple warnings from the FATF prior to being graylisted.
In Agovic Djozo’s view, Bosnian institutions did not take those warnings seriously enough.
Other financial experts regularly weigh in on the problem of controlling suspicious money flows within Bosnia’s complex and frequently deadlocked political system.
“Money laundering in Bosnia appears to be [on an even] higher scale than it is seen by the international institutions,” says Damjan Ozegovic, a senior researcher and legal expert at the Bosnian branch of Transparency International, the anti-corruption organization.
Like the GI-TOC report’s authors, Ozegovic agrees that the major issue is failure to comply with laws already in place.
Bosnian authorities tend to make “just cosmetic changes” to laws but fail to apply them, he said.
“We believe that financial investigations – and, in my personal opinion, these professional gatekeepers – must move beyond this formal compliance and actually contribute in identifying and reporting these suspicious transactions,” Agovic Djozo said, in reference to the entire region’s spotty record on combating money laundering.
“We need effective implementation, accountability, and a culture of compliance.”
Madeline Smith is a Transitions editorial intern. She is a student of global politics, journalism, and Russian studies at Washington and Lee University in the United States.
