Sarajevo, (Fena) – The European Union has emphasized the urgent need for action in Bosnia and Herzegovina (BiH) to address deficiencies in the systems preventing money laundering and terrorist financing, announcing that BiH has entered a one-year observation period by the Financial Action Task Force (FATF) as of February 2025.
The EU Delegation in BiH noted that this situation arose from numerous shortcomings in BiH’s anti-money laundering and counter-terrorism financing systems, as identified by the Council of Europe’s MONEYVAL Committee in its mutual evaluation report released in December 2024.
– This one-year observation period will conclude shortly. If significant improvements aren’t made to address the deficiencies highlighted by MONEYVAL, there is a considerable risk that FATF will categorize BiH among jurisdictions under increased monitoring (the “grey list”) – stated the Delegation.
They highlighted that being placed on the grey list would bring immediate and tangible repercussions for businesses, banks, payment operations, investments, and the economic reputation of BiH, impacting access to international financial markets, commercial activities, and public fiscal matters.
Furthermore, such a designation could adversely affect BiH’s chances of joining the Single Euro Payments Area (SEPA).
– Therefore, it is crucial for the relevant institutions in BiH to act swiftly, specifically by adopting two critical laws at the state level: the Law on Confiscation and Management of Assets and the Law on Targeted Financial Sanctions concerning Terrorism, Terrorist Financing, and the Proliferation of Weapons of Mass Destruction. The urgent establishment of a register for beneficial owners of legal entities in BiH is also essential and has been long awaited – they stated.
BiH has already made progress in enhancing its framework to combat money laundering and terrorist financing, including the adoption of the Law on the Prevention of Money Laundering and Terrorist Financing, which is one of the pivotal laws in the country’s European integration path.
– We also commend the establishment of the Permanent Coordination Body for the Prevention of Money Laundering and Combating Terrorist Financing and the Proliferation of Weapons of Mass Destruction, which includes representatives from various government levels in BiH, and the recent adoption of the Rulebook on Implementation of the Law on the Prevention of Money Laundering and Terrorist Financing. BiH has demonstrated that progress can be achieved with political will and effective coordination. It is imperative for the relevant institutions in BiH to ramp up their efforts in the coming weeks, prior to the conclusion of FATF’s one-year observation period, the EU Delegation in BiH announced. (16.01.)
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