Open Society Foundation for Albania

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Recovered funds will be used to establish NGO House

TIRANA—The International Chamber of Commerce in Paris ruled today that the Albanian government must pay back 89 million Albanian LEK (approximately 900,000 USD) in Value Added Tax to the Albanian Education Development Project (AEDP), a nongovernmental organization launched by the Open Society Foundation in Albania. Since 2002, the Albanian government has not reimbursed AEDP for taxes paid on school construction projects in accordance with Albanian law and a 1997 agreement signed by both parties.

AEDP announced that they will use the recovered funds to establish an NGO house─a resource center for the country’s NGO community and meeting place where civil society organizations can participate jointly in public discussions. AEDP and the Open Society Foundation Albania (OSFA) will begin the search for a space immediately, aiming to open the house by June 2007.

AEDP has contributed over 57 million USD on developing Albania’s primary and secondary education sectors during its 11 years of work. It has spent more than 30 million USD on the construction and re-construction of over 275 schools.

AEDP’s mission includes reforming education curriculum in primary and secondary schools, developing teaching and learning materials, assisting in the development of national education standards, strengthening community-school relationships, and the repair and construction of school facilities throughout Albania.

Since it was founded in 1994, AEDP has worked closely with the Albanian government, primarily the Ministry of Education and Science. In 1997, this cooperation was formalized when AEDP entered a Framework Agreement with the government recognizing AEDP’s role in the development of education in Albania. Accordingly, the Albanian government agreed to exempt or reimburse all taxes, including customs import taxes and VAT, on all of AEDP’s projects. It also agreed to collaborate on one of the school reconstruction projects known as Tirana 2000. Initially successful, the Agreement was extended in 2001 to cover additional school reconstruction projects and the partnership has continued into 2005.

In 2002, however, the Albanian government stopped reimbursing VAT on project expenditures after a change in leadership at the Ministry of Education and Science. In good faith, AEDP continued its work to develop the education sector of Albania and attempted to recover the taxes that were due to it. After exhausting all other possibilities, AEDP was forced to bring the matter before a three member multi-national arbitration tribunal at the ICC in August 2005 and a hearing was held in Paris in May of 2006.

Contact
Persida Asllani, OSFA
publicrelations@osfa.soros.al
Thomas Moroz, OSI
tmoroz@sorosny.org

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The Open Society Institute, a private operating and grantmaking foundation, works to build vibrant and tolerant democracies whose governments are accountable to their citizens. To achieve its mission, OSI seeks to shape public policies that assure greater fairness in political, legal, and economic systems and safeguard fundamental rights. OSI works in over 60 countries including the United States, Europe, Asia, Africa, Latin America, and the Middle East.