The Truth About Kosovo-Albania Investments – Tirana Times
By Fatos Cocoli
On the eve of Kosovo’s 15th anniversary as a new European state, since its creation on 17 February 2007, 90 cooperation agreements have been signed between the Albanian and Kosovar governments (at the level of the Prime Minister, ministers, directors of customs, other levels of central and communal mayors, etc.).
90 transactions, but hindered exchanges
Economic cooperation between Kosovo and Albania still suffers from many misunderstandings, a lack of information and a real will between the agencies of the two States, beyond patriotic declarations. Of the 90 agreements signed to date with the Kosovo government, a good number are agreements in the field of economic exchanges between the two countries.
However, the history of bureaucratic procedures in customs and political obstacles with Kosovo is sad and continues stubbornly on the path of trade liberalization and the revival of private investment between the two countries.
Even for a truck loaded with fruits and vegetables worth 1,000 euros, the trader or entrepreneur from Albania or Kosovo must pay 250 euros in taxes and other compulsory payments. The current practice of the customs regimes of our two countries obliges the owners of the trucks to become smugglers, if they want to trade!
“We export to many countries in the European Union, but there are more obstacles when we export to Albania than to the EU“, says Bedri Kosumi, an export entrepreneur from Kosovo.
According to a study by the Center for Exports of Albania, customs tariffs and bureaucratic obstacles at the border are the reasons for the lack of significant growth in the expected level of trade between the two countries. The center found that to export goods from Albania to Kosovo and vice versa, the practice costs a minimum of 250 euros. This includes customs declarations, product certificates, analysis of the goods, the cost of the scanner for Albania, the cost of customs parking in Kosovo, but also in Albania, as well as the national highway toll.
A solution to formal trade barriers
The Center for Exports of Albania, an NGO, offers a solution to the main impasse: software that must be set up by the two customs administrations and which costs only 50,000 euros.
It records when a company in Albania, for example a small fruit and vegetable company, loads its own truck or van to export to Kosovo. It automatically waits for the invoice where it marks the NIPT (corporate identity number) of the Kosovo company receiving the goods.
The software carries out the online transmission of the invoice registered in Kosovo and sends the information directly to the Kosovo Tax Directorate. Customs needs a reader only for companies, to read the barcode of the invoice in the name of the company receiving the goods in Kosovo, and vice versa in Albania.
Thus, companies on both sides of the border are no longer obliged to pay 35 euros for customs declaration, 10 euros for customs parking in Albania, 40 euros for customs parking in Kosovo, as well as many other taxes and fees. !
And above all, companies will not waste time, hours waiting to obtain the required documents. It’s really the “together without borders” approach. It’s so simple. And it’s been 15 years since it was implemented!
These bureaucratic hurdles and high customs clearance costs have left the potential for rapid growth of economic relations between our two countries as merely potential and illusory. Despite the initiatives of the two governments in recent years, such as the common counter at the Morina customs post, or the Kosovo customs office in the seaport of Durres, etc., as well as the numerous agreements signed, customs costs and bureaucracies remain like the sword of Damocles over the future of our trade and economic relations, erasing all initiative and movement at the political and governmental level.
90 agreements, but blocked investments!
Representatives of Kosovo producers claimed that the Albanian authorities prevent Kosovo companies from having a greater presence on the Albanian market. According to them, producers in Kosovo are confronted with tariff and non-tariff barriers, such as the case of the excise tax on beer, then customs clearance procedures in Albania, payment by scanner, notarization of analyses, the non-receipt of the price charged by the Albanian customs and many other obstacles which, according to Kosovar producers, undermine the competitiveness of Kosovar products in Albania.
In October 2021, the Open Society Foundation for Albania (OSFA) and the Kosovo Open Society Foundation (KFOS) measured in a questionnaire the attitudes of citizens of Kosovo and Albania regarding the relationship between the two governments. More than 60% of the respondents said that the agreements signed between the two governments had no impact on the daily life of the citizens of the two states.
Even on the part of Albanian investors in Kosovo, despite the increased influx of recent years, their efforts are facing serious problems.
The company “Stella Consulting”, among the main investors in tourist complexes in Albania, with a capacity of 1,350 beds of 4 and 5 stars, responded to the call of the Government of Kosovo for foreign investment in Kosovo and its interest in setting up a range of tourism projects, with a project in the mountain resort of Mështenka. Three years have passed now and a major investment from Albania, worth 22 million euros, is stuck in the tourist spot of Brezovica in Kosovo.
After having made the initial investment of 4.5 million euros and the construction of the first 150 beds, the company is prevented from investing for the other 350 beds and faces the blocking of the State, as well as the media attacks in Kosovo. At the end of 2018, a general inspection by the Kosovo Ministry of Environment blocked the works that carried out the rest of the investment in the Mështenka resort.
The General Inspectorate, after checking the status of all the constructions in Brezovica, very selectively and without any legal argument, separated the investments of the companies from Albania, blocking them, despite the submission of all the construction permits by these.
This is where the ordeal of political abuse begins with the foreign investor “Stella Consulting”. From the date of the political obstruction (it cannot be called otherwise, since no legal or administrative documents were presented to justify the action taken by the authorities of the State of Kosovo, despite the fact that the investment company has insisted on its legal reasons), the investment, blocked for more than three years now, is heavily undermined every day on the moral, technical and financial level. Building structures left unfinished are damaged beyond repair. The technical and financial damage caused by the political blocking of investment is extraordinary, as the banks, threatened with political blackmail, have demanded the repayment of the loans.
The political reason for the persecution and blocking of investments by Albania lies in the fact that the partner of the company “Stella Consulting” is a personality of the political and public life of Kosovo, Mr. Veton Surroi. He has been a serious opposition to several political parties in Kosovo, consistently denouncing corruption and lack of legitimacy in the behavior of various Kosovo governments.
The allegations of violation of the permit obtained from the municipality of Srtrpce (which was in fact obtained by a subcontractor, a Kosovan company) and of construction in a restricted area are absurd. In reality, the investment is not located in areas prohibited for construction, but in the lower zone below 1000 m above sea level, where villas have been developed since the historical formation of the residential tourist area of Brezovica , at the time of Josif Broz Tito’s Yugoslavia, in the 1980s.
The blocking of the company’s operations costs the Kosovo economy more than 800,000 euros in missing taxes per year and hundreds of jobs. On the other hand, the biggest damage, the blocking of the Albanian investor is contrary to the interests of Kosovo, because it seriously damages the image of Kosovo, as an economy where one can invest and trust and where foreign investment is protected.
Attacks on investments and blockages produce a demotivation of foreign investors to risk their capital in Kosovo, and moreover, in an area of strategic importance, such as tourism in Kosovo. If investors are hindered, blocked and harmed, violated verbally, then the economic interests of the citizens of Kosovo are also harmed, harmed and violated.
The government of Kosovo has all the time and all the possibilities to repair the damaged image and establish justice, by unblocking the investment and allowing the Albanian investor to continue his investment in Kosovo. The Albanian investor, although unfairly attacked and badly hit financially by the blockade, is determined to complete the investment.
Table 1. Cost of Kosovo-Albania trade
Cost of a 10 ton truck in Kosovo
– Commercial costs (fuel, driver, depreciation) 220 euros (61%)
– Cost of documents (Kosovo veterinary certificate; veterinary certificate
Albania; Kosovo Customs Tariff; Albania Customs Tariff; highway, scanner) 140 euros (39%)
TOTAL: 360 EUROS
Trade barriers with Kosovo
- Requirement for legalization of phytosanitary analyzes
- Cost of the scanner at customs
- Reference price
- Road cost (tariff)
- Corruption by customs officials
- Lack of trust in business partners
- Discriminatory excise duty on quantities of alcohol
If Kosovo-Albania trade is liberalized
– Companies on both sides of the border will no longer be obliged to pay 35 euros for the customs declaration
– 10 euros for customs parking in Albania, 40 euros for customs parking in Kosovo
– Many other additional taxes and fees.
Moreover, companies will not waste time waiting for hours to receive confirmation on the documents.