A new report warns that weak oversight of lawyers, notaries, accountants and auditors helps facilitate money-laundering across the Western Balkans through real estate fraud and complex financial arrangements.
Predrag Milic
Lawyers, notaries, accountants and auditors “are playing a central role in enabling money laundering across the Western Balkans” by exploiting weak implementation of anti–money laundering rules, warns a new report by the Global Initiative Against Transnational Organized Crime (GI-TOC), published on Thursday.
The report, “Licence to Launder: Professional Money Laundering Enablers in the Western Balkans”, finds that although anti-money laundering frameworks are broadly aligned with EU standards, enforcement remains weak due to fragmented supervision and inconsistent reporting. The report covers Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia, and is based on 89 interviews as well as legal and risk-analysis data.
The report claims that across the region, designated non-financial businesses and professions function as “professional enablers” who “at times deliberately construct a veneer of legitimacy by authenticating transactions without proper due diligence”.
The document highlights “high levels of cash use, cross-border property transactions, fragmented institutional databases and limited inter-agency coordination” as issues that complicate detection efforts.
Real estate is the dominant laundering channel, though the details differ from country to country.
The report indicates that in Albania, professional money-laundering networks use complex multi-layered corporate structures including shell companies and trusts to conceal the true beneficial ownership of assets.
These money laundering networks “exploit client confidentiality and professional secrecy to evade oversight and suspicious transaction reporting, and manipulate documentation through falsified contracts, fake invoices and misleading financial statements, particularly in real estate and high-value asset transactions”, the report states.
In Bosnia and Herzegovina, financial oversight is fragmented and the complexity of institutional structures across entities hampers enforcement.
The report cites “cash-intensive transactions, informal commission arrangements and limited scrutiny of the origin of funds used for high-value purchases” as characteristic of the real estate situation in Bosnia and Herzegovina.
In Serbia, authorities have recorded an increase in suspicious transaction reports, but the report also says that “notaries, brokers and accountants routinely formalize undervalued property sales, fictitious loans and inflated invoices, providing a legal facade for illicit funds”.
In Kosovo, the report states, “professional enablers form tight inter-professional linkages servicing both organized crime groups and politically exposed persons. Lawyers establish and manage companies on clients’ behalf; accountants maintain falsified records and annual statements; and notaries legitimize property and loan contracts that serve as vehicles for integration.”
In Montenegro there is a significant gap between the volume of property transactions and the number of suspicious transaction reports filed by notaries, suggesting weak detection and reporting mechanisms.
“Notaries often facilitate rapid title transfers, inflated property valuations and sales to off-shore linked buyers,” the report states, “while lawyers and accountants design corporate vehicles and financial structures to conceal beneficial ownership.”
North Macedonia has the most advanced notarial framework among the Western Balkan countries, but suspicious transaction reports submitted by notaries rarely lead to follow-up investigations.
Further, the legalisation of illegal constructions,“averaging more than 600 buildings annually” in North Macedonia, functions as “a main channel for integrating illicit funds”.
The report highlights increasingly complex laundering methods, including offshore structures, cross-border corporate arrangements, cryptocurrency and professional documentation used to construct a legal appearance for illicit flows.
The report notes that legal cases against professional enablers of money laundering are rare and difficult to prosecute due to “weak coordination between institutions, limited access to beneficial ownership data and uneven supervisory capacity”.
The GI-TOC report calls for stronger supervision of non-financial professions, improved inter-agency cooperation, risk-based monitoring and more effective sanctions.
