BANK OF ALBANIA
Statement by the Supervisory Council of the Bank of Albania

Today, on 6 August 2014, the Supervisory Council of the Bank of Albania convened in a special meeting and was informed on the measures taken by the management of the Bank of Albania to guarantee the normal functioning of operations related to the issuing of banknotes and coins.

After a thorough analysis, the Supervisory Council reached the following conclusions:

I. Regulations, guidelines and procedures that regulate the activity for the administration, storage and processing of monetary values at the Bank of Albania have been compiled in full compliance with the legal and sub-legal provisions governing the pertinent activity.

II. All the persons tasked with the administration and safekeeping of the monetary values, who are employees of the Cash Stock Unit, whose premises and other elements are classified as state secret, are provided with a security clearance certificate, in accordance with the legal stipulations.

III. The correct implementation of the framework that regulates the procedures, organisational structure, electronic and IT systems at the Bank of Albania would have prevented the event and enabled its timely detection.

IV. Certain employees of the Bank of Albania have breached and failed to comply with the regulatory framework, with regard to the implementation of procedures for the administration of the keys and entry-exit protocols in the facilities housing the monetary values.

The Supervisory Council confirmed the support and approved the measures taken by the management of the Bank of Albania.

After pressing criminal charges against two former employees, the Management of the Bank of Albania has undertaken the following actions:

1. Informed the highest authorities and institutions in the country;

2. Convened special Supervisory Council meetings on 22 July 2014, 29 July 2014, and 1 August 2014 to inform the Council on the event and the relevant measures;

3. Established three working groups to:

a. make a complete inventory of the monetary values in banknotes administered by the Bank of Albania,
b. verify whether information, classified as a state secret, has been leaked by employees who, because of their duty, have had access to such information,
c. determine compliance of field actions, by the employees in charge of safekeeping and administering monetary values, with stipulations in the regulatory acts of the Bank of Albania, on procedures for keeping, administering, and processing monetary values at the Bank of Albania;

4. Closely cooperated with the Tirana District Prosecution Office to identify violations of legal and sub-legal acts, which have created, in turn, favourable circumstances for the misappropriation of monetary values by former Bank of Albania employees;

5. Discontinued employment relationship with all the persons in charge of monetary values, replacing them;

6. Released from duty the management of the Issue Department and the Security and Protection Department, replacing them with experienced experts;

7. Informed all financial security institutions in Albania and all international partners on the implementation of the plan of measures, in order to guarantee the safeguarding of the macroeconomic stability and assurance of the depositors in the banking system;

8. Reported to the Parliamentary Committee on Economy and Finance about the measures taken, in a hearing session and through written information;

9. Organised meetings with employees from the Issue Department and Security and Protection Department to analyse the misappropriation of monetary values, and to introduce the new management and present in detail the plan of measures that will guarantee the continuation of operation in these two departments.

The Supervisory Council has paid particular attention to developing a longer-term strategy for guaranteeing an effective operational risk management across all the stages of cash processing and safekeeping. In more details, the Supervisory Council, among others, decided that, in order to enhance the security, efforts must focus on:

1. Comprehensive review of the regulatory framework, procedures and practices related to processing and safekeeping of cash, with the assistance of specialised international institutions and agencies. Some of the issues to be addressed with high priority are as follows:

• elevating the security level
• on-going instruction of members of inventory commissions for monetary values
• strengthening real-time monitoring of images recorded by the security camera system
  determining in more detail the control levels in all access points to cash units 
• recalibrating the role of the supervisory controller, to better guarantee implementation of the legal and regulatory framework in force,

2. Strengthening cooperation and relations with law enforcement agencies to monitor the background and behaviour of employees having secret clearance and hold key positions, and of those in charge of monetary values;

3. Intensification of the already started process of establishing operational risk assessment structures in each sector, and the entire institution;

4. On-going training and testing with a view to timely inform all employees about the existing regulations and procedures in force, and their eventual revisions;

5. Further automation of the management of cash movement and storage.

At the end of today's meeting, the Supervisory Council of the Bank of Albania reiterated that it understands the public concern arising from this event and avails itself of the opportunity to guarantee the public opinion that decisive efforts are being made to rapidly recuperate all the consequences. 

The Supervisory Council of the Bank of Albania is confident that this criminal event by former employees has not affected and will not have any impact on the effective conduct of its daily activities. Like until now, the Bank of Albania will continue to collaborate unhesitatingly with the Prosecutor’s Office, for the investigation to be comprehensive and concluded as soon as possible, bringing all the responsible persons to justice.

The Supervisory Council urges the employees of the Bank of Albania to boost the concentration and commitment for successfully accomplishing all the duties set out in the law and sub-legal acts.