The temporary suspension of the IPARD II agriculture programme in Albania, after EU suspicions of corruption, is only the tip of the iceberg of the 94.6 million euros grant package. The program was transformed into an “exclusive club” for big companies and companies tied to politics and crime. Meanwhile, in North Macedonia, the program exposed similar ties, however, they were more sporadic and more minimal compared to Albania
Preng Doda, a retired agronomist, spends his days walking along the family vineyard at the Tena village in Mirdita. An improvised mill is the only object which moves at the farm, built over a small artificial lake that Doda had built near the centurion tower of his family.
Even though according to tradition you have to look your guest in the eyes, it is almost impossible for Prenga to concentrate. As he speaks, most of the time he looks at the carcass which seems like it has “stolen his heart” at an old age.
For 15 years now his family is working at the vineyard as they have planted several varieties of grapes through which they produce wine. Over the 2 hectares of vineyards, he has built a carcass, in the basement of which there is a wine cellar where he uses old equipment to produce wine which is later distributed to the area.
“I built the wine cellar with my force, afterward I applied to the Agricultural and Rural Development Agency, the IPARD, so I would receive a little bit of help and support, especially for the wine storage facilities and the equipment within.
I drafted the project together with some engineers and specialists, however, the criteria were very difficult to be reached,”
Doda said.
Farmers in Albania and across the region, as in the case of North Macedonia, for many years now have a golden opportunity to apply for support through European Union funds for agriculture, aiming at preparing both Western Balkan countries for their full accession to the EU. Nevertheless, data show that the IPARD Programme in Albania and North Macedonia has transformed into a source of empowerment for big companies that has no impact on directly supporting the farmers, to whom the program seems more and more distant.
In 2018, the Agricultural and Rural Development Agency (ARDA) in Albania, was accredited for the IPARD II Programme, to distribute grants through a budget of 94.6 million euros, out of which 71 million euros were allocated by the European Commission and 23.6 million euros were allocated nationally by the Albanian state.
When it comes to North Macedonia, the IPARD II had a budget of 80 million euros and up to May 2023 49,2 million euros have been spent. Most of the remaining funds are already contracted, but are yet to be paid towards the beneficiaries due to various reasons.
The third phase of the programme was anticipated to begin this year in Albania, however, the European Commission took an extreme measure as they decided to temporarily suspend the programme of agricultural support, based on suspicions of corruption in the distribution of grants, referred by the European anti-fraud office (OLAF). If suspicions come true, Albania risks not continuing with the IPARD III phase, which foresees grants of up to 146 million euros, whereas analysis of the beneficiaries in Albania and North Macedonia exposes the ties with politics, public administration, and crime.
In Albania, a sample of 126 beneficiaries was analysed (out of 510 beneficiaries in total), whom ARDA has promoted through their online brochure and website, and it results that they are people with criminal records, who have ties with politics, businesses not fully functional and family fraud schemes. The implementation of the programme which supports farmers in Albania was done by the Agricultural and Rural Development Agency (ARDA), which is part of the Ministry of Agriculture and Rural Development, and the grants were financed up to 75% by EU funds and 25% by funds of the State Budget.
Furthermore, in North Macedonia, there is a similar scheme with the Agency for the Financial Support of Agriculture and Rural Development granting IPARD II funds, 75% of which came from the EU and 25% came from the State Budget.
“IPARD Babies”
The first phase of the IPARD project was an experimental one for both countries and they attracted few applications whereas, in the second phase, they attracted a considerable number of proposals many of which were declared winners.
In Albania, the implementation of the second phase of the programme led to the birth of many businesses which applied and profited from the program, even though they had just been established or had suspicious history, with frequent interruptions of their economic activity and continuous seizures.
Amfora Media analyzed a sample of 126 businesses that benefited from the IPARD II Program. It resulted that the first years of the programme implementation attracted applications from companies and people “who discovered quite late their passion for agriculture”. 50 businesses who benefited from IPARD funds, of the 126 businesses analyzed, resulted to have been registered for the very first time in the years the program began, from 2018-2021, having as the scope of their work the fields covered by the programme.
“I believe this is a clear sign of clientelism in choosing the beneficiaries, who in many cases have no strong or sustainable ties with agricultural or agro-industrial activities.
Through their personal connections as well as ties with the high level of politics and administration, they managed to benefit support from this programme,”
commented agricultural policies expert, Prof. Dr. Ndoc Fasllia, who is also a lecturer at the Agricultural University of Tirana.
Elvis Rroshi was Mayor of Kavaja Municipality from 2011 to 2016, when he saw his term interrupted because he had forged the decriminalization form and hidden a conviction by the justice system in Italy for the criminal offense of rape in 1995. Afterward, he was sentenced by the Court of Tirana to 60 hours of community service for forging the decriminalization form. After leaving his office as head of Kavaja Municipality, it seems that Rroshi discovered his passion for agriculture, and on August 5, 2019, he founded the “KAVALJON” company, which was named after what is believed to have been Kavaja’s old name. He applied to IPARD and initially benefited 70,178 euros, for a solar greenhouse, a project which began on May 4, 2021, and later on he received 180,309 euros, so on July 28, 2021, he could begin the reconstruction of a building aiming at transforming it into a guesthouse.
However, after obtaining 250,487 euros, “Rroshi was declared wanted by ARDA”! The Agency confirmed for Amfora Media that “KAVALJON” is one of the ten businesses requested to return the obtained funds because they did not meet the criteria for the implementation of the programme and the case has passed to court.
In North Macedonia, we have analysed a total of 40 companies that won big grants in IPARD I and IPARD II. Almost all turned out to be established companies with a history and continue working today. But, we found at least two major companies with political ties that won grants. One must acknowledge that in both cases the companies were already well known in the agricultural sector.
In 2019, the company “Trgoprodukt” applied for and won a contract for IPARD II subsidies. The payment of 1.4 million euros was finally made in April 2022. During most of this time period, the Prime Minister of North Macedonia was Zoran Zaev, who is a first cousin of Boban Zaev, the owner of “Trgoprodukt”.
In 2014, the company “Agricultural collective – Pelagonija” applied for and won a contract for IPARD II subsidies. The payment of around 240 thousand euros came a year later in 2015. The owner of “Pelagonija”, Jordan Kamchev, had close relations with the government at the time. Recently, he was designated by the US Department of Statement as “having engaged in corruption, including bribery of a government official” and was sanctioned.
Whereas in Albania it seems that even the representatives of oppositional political forces have benefited from IPARD grants.
Libonike Nurellari is a former member of the Poliçan Municipal Council for the Democratic Party and since 2006 she is involved in vineyards and wine trade. In the IPARD Programme, she holds the record for the most grants someone has benefited from, as she was supported with four projects, with a total value of 383,185 euros.
“There are connections with nepotism and other state functions, whereas when it comes to organized crime, there is only the case of the Tirana Incinerator, which had as its administrator someone who had benefited from the program for a greenhouse,”
said Ervin Resuli, President of the “Association for the Protection of Local Producers”.
Mollasi is one of the villages of Skrapar which was awarded 4 grants by IPARD, with a total value of almost 1 million euros. The businesses benefiting here were also founded in the same period as the beginning of this programme, and in the case of the “Green Revolution” company, it received support twice for the breeding of farm animals, with a total value of 581.939 euros.
Whereas the 2 other winners seem to be different, however, they are part of a family scheme. The 23-year-old Brisilda Xhaferri, out of the 126 beneficiaries sample, received the biggest grant, which was at least three times bigger than any other beekeeper.
The “GOLDEN BEES” SHPK (ltd) (former “BLETA E ARTË”) was founded by her father on October 2018, Apostol Xhaferri, a constructor since 2005 and after several changes in the business name and address, the 23-year-old woman became the administrator of the company and received a grant of 57,624 euros, for “Investment in beekeeping, an increase of the number of beehives, production and trade of honey and other beekeeping products”. After withdrawing from the company he founded, his father continued alone the IPARD dream. The constructor founded another company on February 22, 2022, however this time as a “Natural Person”, focusing on agritourism. Even though he was in his first steps, he received from IPARD a grant of 183,870 euros and he signed a contract on May 4, 2023.
In this case, the father and daughter received 341,494 euro from IPARD through the newly established companies. Even though the objectives of the IPARD Programme and the donors are to increase competition and maximize the grant distribution to other companies, with or without experience, some businesses seem to “have a subscription” to IPARD.
Out of the sample of 126 beneficiaries, it results that at least 18 businesses have benefited from IPARD II grants for Albania over two times, some of which were beneficiaries of two projects within the same call.
Local experts appreciate the support to new businesses as important, however, a balance needs to be preserved so the development of agriculture remains in focus, based on the experience of older businesses.
“Support to new businesses or start-ups is a positive novelty to absorb more funds from IPARD, from young farmers,”
analysed Ilir Pilku, one of the 3 experts in Albania certified by the EU for “Joint European Policies”.
According to him, there was an impact from the registration formers who only had “Farmer TIN” and they hadn’t opened a commercial business before, in the form of a “natural person” or “company”. ARDA officially informed Amfora Media that there have 540 businesses benefitting from the IPARD II programme, with grants distributed through four calls, even though the online data published on their website through Excel format for every call, shows 30 fewer contracts, hence a total of 510 beneficiaries.
“We highlight that the Tax Administration has registered for many years as Farmers a total of 92,174 individuals, clarifying that they have been directly registered in Tax Administration for the TIN only and do not pay their tax obligations,”
clarified the General Directorate of Taxation, regarding the number of farmers in Albania.
“The vast majority of IPARD beneficiaries are start-ups and out of the farmers who today are numbered through a TIN at the Taxation Administration, there is not a very good number of farmers eligible to apply to IPARD,”
stated Ervin Resuli, President of the “Association for the Protection of Local Producers”.
ARDA informed that in the framework of the IPARD II Program and up to now, there have been 8 cases for the return of the obtained grant from the businesses that have received a prepayment for the investment, however, they have failed to do it within set deadlines of the contract or they have been abusive cases suggested by the audit.
“Out of the 10 entities that were requested to return the grant, 8 did not abide by ARDA and it sent their file to court in order “Aldo Jakupi PF” [Natural Person], “Fiqiri Sinani PF”, “Mirjan Allka PF”, “Kavaljon SHPK”, “Abas Pere SHPK”, “Vasillaq Xhufka PF”, “Coast to Coast SHPK” and “Lorag SHPK”, who jointly received a total of 1.145.760 euros. Funds were returned only by “Alb Berati SHPK”, which was not identified by us in the list of ARDA projects, and “Altin Gega PF” who had received a grant of 14.916 euros.”
In North Macedonia, from 2015-2022, there were 17 irregularities and specific procedures were undertaken for all of them. The government and the Public prosecutors office did not reveal the outcomes and the entities involved in the “procedures”. Independently, we found 15 civil lawsuits with second instance rulings in courts related to IPARD. In eleven cases, companies or individuals filed lawsuits against the Agency because it suspended their project agreements due to various irregularities, including the purchase of used equipment, declared as new. The agency won all the cases.
“The Rich” of the poor sector
Rigerta Loku is a student at the prestigious La Sapienza University in Rome. After studying political studies and specializing in international relations, she made the headlines when together with her husband returned from Italy to Albania to open a farm.
Her husband, Leonard, graduated as a zootechnician to come in support of the farm because they both started 12 years ago, without having any information on livestock farming, but only passion. Today they live together with their two daughters on the farm erected on top of a picturesque hill at the Rrshkull village of Mirdita.
“We have a livestock farm where we breed goats of an autochthonous Albanian species.
Generally speaking, the whole area or small farms like mine, suffer from the lack of agricultural equipment such as tractors,”
said Rigerta Loku shortly after putting the herd in the stall.
In the sample of 126 beneficiaries, only 20 of them were directly related to small farmers, offering them a tractor which varied from 15-50 thousand euros. IPARD allowed companies with balance sheets of several million euros to experiment in the field of agriculture, even though they had no previous experience.
“Company Riviera 2008” sh.p.k (ltd.) was founded in 2009 by the Kola family, and saw an increase in their revenues after 2013, with the arrival of the Socialist Party in power. In 2022 alone they registered a turnover of 5.1 million euros.
Profiled in the field of construction, the reconstruction projects after the earthquake in recent years increased their participation in absorbing public funds. The company accounts for a total of 63 tenders that they have benefited from the state budget, mostly from municipalities across the entire country. It managed to win 36 tenders all on its own as well as 31 tenders together with other companies.
Without notable experience in the field of agriculture, it proposed ARDA the establishment of a warehouse for the collection and selection of fruit and vegetables, with 13 refrigerating rooms. IPARD supported 50% of the investment offering them EUR 810,469.
While the company continues obtaining money from IPARD, for the second time in its history after 2014, a preventive seizure of its shares was imposed on February 13, 2023, until it paid off its obligations to another company that had requested the intervention of bailiffs.
The case of “KRONOS KONSTRUKSION” sh. p. k. (ltd.) is very similar considering that it submitted to ARDA a project idea for the construction of a “warehouse for fruit and vegetable processing” at Maminas and managed to obtain support amounting to 721,558 euros.
This company is also a winner of 51 public tenders, either by itself or through cooperation with other companies, and while it was obtaining IPARD payments, it had passed under preventive seizure status, the last of which ended in 2020, after it paid off the obligations that arouse from a fine imposed by the National Agency of Natural Resources.
“The company is fact is in fact dealing with constructions, aquaculture. Only three years ago it entered the agricultural sector and we welcomed it,” explained the former director of ARDA, Frida Krifca to PM Edi Rama while they were inspecting the investment on January 25, 2021.
“Out of the data obtained indirectly for the ‘big beneficiaries’, it results that over 50% of them have construction, transportation, energy, etc. as their main activities and they have had no connection with agricultural production,” analysed for Amfora Media, Prof. Dr. Ndoc Fasllia, expert of agricultural policies.
When Premier Rama visited for the second time the end investment on May 18, 2022, the company representative told Prime Minister for a space with a counter, tables, and chairs:
“We have created a space for the people who work here and the people who will stay outside with lorries where they can stay and sleep.”
“This is the workers’ canteen?!”, asked PM amazed.
“Workers’ canteen”, confirmed the company representative.
“This is the best canteen that I have ever seen, I had never seen a better canteen”, said with amazement from the meeting EU Charges d’Affaires Alexis Hupin.
However, the “canteen” results to be a service facility that is unibody with the warehouse supported by the EU. The only company workers in the canteen are not the farmers or warehouse workers, but the waiters serving cooked food.
“The accommodation at our hotel, accompanied by traditional and modern cuisine will give you an unforgettable experience,” wrote Kronos Agritourism on their official Facebook page.
“Kronos Agritourism” a name through which they are promoted on social media, results to be a facility [trace] that would be built even in the project that the company representative presented to the Albanian Prime Minister in January 2021.
In the guideline approved by the European Union and the Albanian government, several criteria have been defined regarding the way businesses will work for at least 5 years after the last payment from ARDA. In one of the criteria, it is clearly defined that finance transference is not allowed within this timeframe.
At first sight, it seems that North Macedonia is heavily inclined towards support of the small farmers. Out of the total 1117 supported projects in IPARD I, 82,2% were filed by “natural persons” or “individual farmers”, while during IPARD II those categories account for 84,1% of all approved projects. The picture changes when one takes into account the value of those projects.
In the IPARD I Programme, all 20 most expensive projects were granted to “companies”, and those 20 projects, taken altogether, cost a total of 5.24 million euros. In other words, those 20 projects alone account for 32.8% of the entire IPARD I fund spent budget. In general, the “companies” and “agricultural cooperations” got around 60% of the spent budget for IPARD I, although they account for merely 17,8% of the total number of approved projects.
This gap is even more pronounced in IPARD II. The 20 main grants with a joint value of 18,6 million euros all went to “companies”, comprising 37,8% of the total amount paid up to May 2023. In total, out of the 49,2 million euro paid from IPARD II, a total of 78,9% ended in the hands of “companies” and “agricultural cooperation’s”, although they account for only 15,9% of the total number of approved projects.
Nevertheless, these figures are lower compared to the big beneficiary companies in Albania when almost all main companies of milk processing, collection points, and slaughterhouses have profited. “Erzeni sh.p.k” company, profiled in milk processing and packaging received 924,244 euros while the other company of the sector “Lufra” obtained EUR 799,737.
In the salami industry, the “FIX PRO” company received 741,896 euro, while the “TONA-AL” company obtained 381,684 euro. Nevertheless, the focus given to the processing companies and the forsaken of the farmers producing the raw materials is stimulating more and more the need for import products.
“The vast majority, or the lion’s share, was mostly absorbed by the agro-industry, meaning the collection points, milk processing factories, etc.,”
elaborated Ervin Resuli, agricultural expert.
He declared that almost 95% of the milk produced in Albania comes from small farms and this category of farmers struggles to be included in the IPARD Programme, failing to develop the sector of producing raw materials.
“It has left the farmer out of the objective, thus the farmer is not raised equally to the milk processing industry and this has led to a gap, the need for raw materials,”
stated Resuli.
Looking to the sky
The “looking to the sky” expression is more meaningful in agriculture than anywhere else. Farmers and livestock farmers in the Balkan region due to the outdated infrastructure face challenges growing fruits and vegetables and caring for their livestock. In the meantime, IPARD seems “something distant in the sky” to them.
The Gjurchinovski family, from Tumchevishte village near Gostivar in North Macedonia, cultivates around 30 hectares of land, partially owned by them and partially rented by them. Their latest enterprise is an 8-hectare hazelnut plantation.
Up to now, the only support for the production and machinery has come from the government, while IPARD Programme remains a great opportunity that seems unattainable. Zhivka Gjurchinovska revealed that she tried and managed to get a grant offered by the European Union.
“Well, the beneficiary supported by the IPARD Program should invest the whole sum, so they see their funds return. When it comes to small producers and properties, this is a little bit more difficult,”
the woman stated.
“It is especially difficult to invest in advance,” pointed out the farmer because very often quite some time is required from the moment of application for IPARD funds, until the moment of reimbursement.
Even though there should be no delays throughout the 36-month period, the analysis of the data obtained by the Agency for the Support of Agriculture showed that a beneficiary has waited at least 2,048 days from the moment of application to the moment they received the payment.
Nikola Tasevski applied for the first call and received EUR 14,222 on February 2023, hence with a delay of five and half years. Meanwhile, in the IPARD II Programme, 48 beneficiaries have waited more than the possible maximum of 36 months.
“These deadlines are too long for small farmers,” elaborated Liliana Jonoski from the Rural Coalition NGO. “Especially considering the time and money they need to gather all necessary documents, which they do not always know how to gather by themselves,” she added.
“With the post-Russian-Ukraine War and COVID-19 crisis inflation, machinery and devices became more expensive, hence many investments were postponed or cancelled,”
said Nikica Bachovski, director of the Agency for the Financial Support of Agricultural and Rural Development in North Macedonia.
“Farmers in Albania also stated that the process of gathering and filling in documents requires a well-educated farmer and livestock farmer, hence consulting services are needed, making it a prerequisite to have preliminary funds for the preparation of application file.
“It took me 6 months to prepare the file with all the points defined in the application manual.
It has cost me around 20 thousand euros to prepare the file, which is money spent on land renting, projects, and mobility,”
said Romeo Nazarko to Amfora Media.
The 43-year-old man has studied geodetic engineering and works as a real estate expert in Tirana. He managed to cut some of the costs by doing things himself, while ordinary farmers cannot invest such loads of money in preparing project ideas that can be rejected.
“Applicants are not actively supported in the filling of documents by the employees of the ARDA. They could be supported by private counselling services (natural persons/ltd.), money which is acceptable for reimbursement according to the guideline,”
responded officially the agency in Albania.
“The farmer cannot pay and is not certain whether they will win the project,” declared Preng Doda who is a retired agronomist. He added that documents might be absent from the file submitted for IPARD grants and the preparation of the business plan, according to him, should be done by a paid professional, as he could not do it in advance.
“The huge amount of documents and the huge amount of people you will have to deal with to fill in the documents as you go from office to office makes this task even more difficult.
I have higher education, my husband has higher education, and last year we failed to prepare documents in time,”
farmer Rigerta Loku stated.
Experts say that these are criteria set by the European Union and must be respected, however in the Albanian context they mention several local elements which need to be improved to bring farmers closer to the grants.
To agricultural economy expert Ilir Pilku, farmers by being unable to contact consulting centers, in some cases in applications for construction permits, do not fill in the criteria, hence they need to be facilitated. Furthermore, they need to be aided in cases when there is a lack of documents related to social security arrears or other similar documents.
“There is also low availability of the banking system to finance activities in farms, even in the cases when farmers have presented an IPARD contract,”
emphasized Pilku, who is also a consultant in the field of agriculture.
For the other expert on agricultural policies, Ndoc Fasllia, the criteria on the size of the farms and the lack of property ownership documents over agricultural land are the biggest problem, which require specific treatment based on the context of the Albanian farmer.
Out of the IPARD II Programme in Albania, it results that there are beneficiaries who have activities in 50 out of 61 Municipalities of the country. In the territory of Tirana, where most of the light industry is concentrated, Tirana Municipality tops the list with 73 grants.
Tirana is followed by the Municipalities of Fier and Korçë with 63 and 51 grants respectively. Meanwhile, 75% of the grants (384 out of 510 grants won) were obtained by businesses in 14 Municipalities.
Corruption gangrene
Engineer Romeno Zazarko found himself in front of OLAF investigators shortly after starting the path to his dream, of planting walnut trees in his birthplace.
“My project idea was the creation of an orchard at Kolonja country, at a land that I had rented for 99 years with a surface of around 13 hectares,”
stated Nazarko.
After the 43-year-old man submitted his application file to ARDA on July 2020, the ping-pong for the fulfillment of the requirements began between the agencies.
“Most of the points made it think that it is impossible to submit the file in time, as I had only 15 days. In countries like Albania where you have to go from office to office to obtain a simple document, I had to fill in 21 documents in 25 days, something which was psychologically impossible,”
recalled the engineer.
In the analysis, of IPAIRD II calls, we discovered that there is a shortening of the time available for applications from two months in the first call to an average of 45 days in the three upcoming calls, making the application process very difficult for simple farmers.
After Nazarko interrupted every professional and family engagement, he managed to collect all documents and submit the file in time. Nevertheless, the request of the agency for a rent contract from Nazarko’s partner seems to have blocked the application process, with the engineer declaring to have complained to all respective institutions about this issue.
“They demanded a sub-contract of sub-rent from my co-owner, which is non-sense as I had the rent contract from Kolonja Municipality and I do not have the right to rent out this land,”
he recalled adding that this was an attempt to “trap him” because such a contract is illegal.
His only hope was the OLAF office in Brussels, which he managed to reach through Skype on May 4, 2021, presenting his claims. Various interviewees declared that there are consulting offices which do not only offer legal services but also have corruptive relations with ARDA through which they manage to finalize the grant agreements.
“From people who have applied, it is the institution itself [consulting office] which finds the bait, the middle man within the respective institution [ARDA]. It is enough for the farmer to have a business idea of how much money they will spend as well as pay fees to the agency [consulting office] and it will take care of the whole procedure,”
farmer Rigerta Loku elaborated.
“It is not a small percentage. It is 30-40% [of the grant], and they even have the scheme of how to obtain that amount of money.
Every farmer that applies does not have 30-40% “tip” in cash to give them, however, they manage to put you into bank troubles as well as make you obtain loans from financial institutions,”
stated Romeo Nazarko who unsuccessfully applied to IPARD II.
“A time comes that the farmer gives up. They give up from the system, the corruption, and the illegal activities because it is not only the monetary power that is invested here and we have, but also the life and the future of our children and the future generations,”
said the farmer from Mirdita, Rigerta Loku.
Amfora Media submitted inquiries for information to all Prosecution Offices across the country, including specific courts, and did not find any direct investigation for ARDA, apart from the investigation initiated by the European anti-fraud office (OLAF), for which the Albanian Prosecution’s Office is carrying out an investigation which is dragged in time and has no result.
After identifying the case and tracing it through local and European law enforcement agencies, only in May of this year did the Tirana Prosecution’s Office inform Amfora that OLAF has filed a complaint to the Special Prosecution’s Office.
“… it has registered the criminal complaint no. 7471, in 2022, for the criminal offense ‘Forge of documents’ and ‘Abuse of office’, stipulated in articles 186 and 248 of the Criminal Code,”
informed Tirana Prosecution’s office regarding the initiated investigation.
OLAF initially filed the complaint at the Special Prosecution’s Office on June 2020 and two years later it announced its incompetency and passed the file to Tirana’s Prosecution Office which informed that “… this criminal proceeding is still in the investigation phase and without the name of the author registered in charge”.
In response, the European anti-fraud office (OLAF) elaborated that they usually do not comment on cases that they might address,
“This is done to protect the confidentiality of every possible investigation and the possible legal process which follow, as well as the guarantee the respect of personal data and procedural rights,”
OLAF stated in an official response.
The EU Delegation in Albania confirmed on July 19 suspicions of corruption with EU funds earmarked for Albanian agriculture. OLAF submitted the European Commission several findings, which have forced the EU Commission to temporarily suspend grants until the final report from OLAF’s investigation emerge.
“As a prevention measure for the protection of the European Union’s financial interests, the European Commission has temporarily suspended reimbursement toward Albanian authorities for the expanses done in the framework of the IPARD II program,”
explained the EU Office in Tirana for Amfora Media.
The Minister of Agriculture and Rural Development, Frida Krifca defended at the Parliament’s plenary session on July the IPARD II Program, telling the opposition that their accusations about abuses of EU funds were an attack against the agriculture sector as a whole.
Minister Krifca was director of the Agency for Agricultural and Rural Development from July 2017 to September 2021, before being appointed as Minister of Agriculture and Rural Development. The EU’s investigation focuses on the period she directed this Agency, which coincides with the first phase of the program from 2014-2020.
The only case in North Macedonia: a 200-euro bribe
It was dark on April 14, 2014, when two men met at a restaurant near the train station of Skopje. Ivica E. wanted to buy a tractor through the IPARD Programme and met in advance Dragan R., an official of the agency for agriculture. Ivica held a file with the respective documents of the application for the tractor. Apart from the documents, as Dragan has previously asked, he had inserted 200 euro. Police intervened and arrested Dragan after accepting Ivica’s file.
A year and a half later, Dragan R. was convicted for admitting a reward of EUR 200 for illegal influence. The Court of Appeal of Skopje sentenced him to 2 years of suspended prison and the agency discharged him from duty.
“I have to say that this is an isolated case that cannot be undone,” commented the cases Nikica Bachovski, head of the Agency for the Agency for the Financial Support of Agriculture and Rural Development, in North Macedonia.
The Irregularity Management System (IMS) is also functioning here. IMS keeps close cooperation relations with OLAF. Head of EU audit programmes, Adem Curri, admitted that there are continuous complaints through these channels, from the Agency as well as the IPARD beneficiaries, however, none of them has resulted in criminal proceedings up to now.
So, on record, North Macedonia has only one criminal case for IPARD irregularities – when a civil servant asked for a bribe of 200 euros. But, today there is no word what happened with the announcements of the state authorities in 2016, that they are working on two IPARD related cases with INTERPOL, for alleged misuse of around EUR 200,000. That year (2016), as well as in 2014, North Macedonia had brief spells of unofficial “freezing” of IPA funds in general. Underutilized of available funds, lack of planing and willingness for reforms were cited as reasons for the “punishment”.
And when recently the government came under scrutiny for the negative remarks in the OLAF annual reports, the authorities were quick to announce that they are investigating a “new” case. The country was forced to return EUR 660,000, they said, for a project in the Ministry of agriculture not related to IPARD, dating from 2015. The current government blamed the former one for the case and vice-versa. The public interest faded in the following days.
All taken into account, the IPARD programme doesn’t seem to be under jeopardy in North Macedonia as it is the case with Albania. The EU Commission’s measure puts in danger the beginning of the IPARD III Program, with grants of a total value of 146 million euros.
In other investigations in Albania initiated for fraud on behalf of IPARD funds and for money laundry, there are indirect clues and claims for an influence in obtaining grants from ARDA, however, none of the investigations has exposed agency officials.
Through the tapings of Danish authorities which were following a group of Albanians involved in cocaine trafficking, a money laundry scheme was unveiled. Jetmir Kastrati, a 42-year-old man from Shkodra was wired and it resulted that he was the owner of “Rens 2015” company, a poultry farm opened in the northern city of Albania.
In other tapings on December 14, 2018, Kastrati told his collaborator how he is planning to get subvention from the state, however, to do that he had to share part of the “pie”.
“You cannot get anything if they do not take their part of the pie and there is nothing you can do about it. I only give them 50 and I take 150-200 [million] myself,”
Kastrati said in judicial documents.
Even though the case exposed the corruption line in agriculture, the transcript filled with reticence and interventions did not identify any person or authority who would help Kastrati. Meanwhile, a former state official, Viola Sterjo, is accused of fraud and obtaining financial amounts of money in exchange for grants from the IPARD scheme.
State agencies: Internal challenges and problems
In North Macedonia, the directors of the Agency for the Agency for the Financial Support of Agriculture and Rural Development admitted that the wages of the employees are low and some of them decided to rather work as independent consultants and benefit 10-20% of the income of the winning projects.
North Macedonia is negotiating with Brussels for the IPARD III programme, so some of the money from IPA Programmes are used for the increase of IPA staff’s salaries to motivate them to remain in the Agency.
“North Macedonia has a low level of absorbing IPARD funds, considering that the State Budget allocated a considerable amount of money to support agribusinesses, around EUR 150 million, which is ten times higher than the EU funds,”
elaborated expert Ilir Pilku who has worked with cross-border projects.
“The funds for the support of livestock farming are not spent because many stalls are illegal constructions. EU funds are not in favour of illegal constructions,”
stated Nikica Bachovski Director of the Agency for the Agency for the Financial Support of Agriculture and Rural Development.
In Albania, ARDA has supported 20 agro-points which are spreading information across the whole country and PM Edi Rama has been profuse every time new vacancies have been asked from the IPARD structure within the agency.
Amfora Media analysed all reports of Albania’s Supreme State Audit Institution (ALSAI) in the last ten years at ARDA. The agency saw its staff increase twice for IPARD in 2019-2020 taking the overall number of employees in this dedicated structure to 34.
“The improvement of human capacities within ARDA, to increase the process of reviewing and judging applications in time, requires a more professional expertise, especially of the recently employed officials,” suggested expert Ilir Pilku.
Today, ARDA has 239 employees, 74 of whom are dedicated to the IPARD Programme. Fewer employees are in the sector which inspects investments. The “Sector of IPARD investment monitoring” has one chief and 4 specialists, who have to monitor 540 businesses that have benefited from grants.
The Supreme State Audit Institution found that in at least three cases internal procurement processes of ARDA related to the IPARD Programme did not meet the technical specifications and the offers were without a date, casting doubts, according to ALSAI, for factiousness. Furthermore, the employees resulted to lack training in risk assessment and management
The agricultural agency in Albania “hid files”
IPARD II data for North Macedonia showed that out of 1,726 rejected applications in 8 public calls from 2017-2022, there were 34 complaints. The situation is quite different in Albania. According to ARDA for the same period of the project implementation, 616 applicants were disqualified and 280 filed complaints.
According to ARDA, there were 1,189 complaints for the programme, 540 of which were related to grant contracts and 33 applicants withdrew their complaints.
The publication of this article was interrupted for months considering that from April 13 to July 11, Amfora Media requested ARDA through the Law on the Right to Information to make available the files of complaints from applicants, internal audits, and legal proceedings, for the program that uses EU’s and State Budget’s money. The agency categorically refused, quoting the agreement signed between the government and the EU “on the protection of personal data”, without being able to argue the damage caused to the Albanian State or the EU from the publication of such information.
The Information and Data Protection Commissioner, the institution which guarantees the implementation of the law on information, called on June 21, 2023, at a hearing session with the team of journalists and ARDA representatives, however even though legal deadlines were surpassed, the Commissioner did not take any decision on the case.
The team of journalists has started completing the documentation to refer the case to the Administrative Court of First Instance in Tirana, to receive the public documents.
“Audit from local state bodies on the management of these funds has been almost inexistent,”
commented Prof. Dr. Ndoc Fasllia.
According to ASLAI reports, it results that the sector for scheme management in 2019 performed 3 “Ex-post” reinspections for the IPARD I Programme and only one “Ex-post” control for 2020, for IPARD II Programme which had 540 beneficiaries.
Whereas in North Macedonia a special institution has been established for the audit and monitoring of EU funds, the “Audit Authority for the Audit of the Instrument for Pre-accession Assistance”. Its head, Adem Curri, declared that the risk of corruption is always present.
“Nevertheless, a system has been established within and outside the Agency so every corruption opportunity is reduced to the minimum,”
he stated to Amfora Media.
In Albania, even though Remeo Nazarko did not get a solution from the Agency after his complaint, he continues dreaming and has planted part of his walnut trees in the southeast of the country, Erseka. Meanwhile, in the north, in Mirdita, Preng Doda and his family continue wine production with old devices, as IPARD did not create a financing opportunity for their needs.
“This article was developed with the support of Journalismfund Europe”. The views and opinions expressed on the video are those of the authors and do not necessarily reflect the opinions of the “Journalismfund Europe”.
Journalists: Aida Ciro, Aleksandar Dimitrievski and Geri Emiri. This article was published in Albania by the ©Amfora.al and in North Macedonia by the ©“360 Stepeni”.