After the reduction of funds from the Growth Plan for Bosnia and Herzegovina due to insufficient progress in implementing reforms – another problem is on the horizon. Bosnia and Herzegovina is required to make progress in the fight against money laundering and terrorist financing, otherwise the country could find itself on the Moneyval grey list, such a scenario would further complicate financial transactions and prevent investments.
Political turmoil creates economic instability, which is why the BiH area is viewed with special caution from an international perspective, and increasingly so financial transactions. Bosnia and Herzegovina is under tighter control by Moneyval due to the assessment of the risk of money laundering and terrorist financing.
“According to the information we have, some banks from Scandinavian countries are already refusing transactions with Bosnia and Herzegovina, considering us a high-risk country,” points out Faris Bogunić, Director of the Specialist Supervision Sector of the Federal Banking Agency.
Difficult transactions will worsen Bosnia and Herzegovina’s credit rating, which we will only feel due to the weakening of the financial sector and increased investment risk.
“Transactions will be slower, those that can be carried out will be more expensive for both the economy and the population, and foreign investments, which we all aspire to and hope for, will be much more complex to implement,” warns Edis Ražanica, director of the Association of Banks of Bosnia and Herzegovina.
“We are in a situation where when you go to an exchange office to exchange or buy 100 euros, they will ask for your ID card and enter your details. The Banking Agency has ordered commercial banks in both entities to stop any transfer that is large and unusual or to a client who has just registered their account,” says economic analyst Zoran Pavlović.
“The CBBH believes that the authorities should take the above activities very seriously and urgently implement all necessary measures in the interest of all individuals and legal entities, in order to avoid financial, economic and other consequences for the citizens of Bosnia and Herzegovina,” the Central Bank of Bosnia and Herzegovina said.
If the shortcomings in the implementation of the law are not eliminated, it could cost us back on the Moneyval grey list.
“There are systemic shortcomings, especially in terms of operational efficiency, institutional cooperation, supervision of high-risk sectors, and transparency of beneficial ownership of legal entities. There are also particularly pronounced weaknesses in the implementation of targeted financial sanctions and the prosecution of terrorist financing,” said Ivica Bošnjak, Deputy Minister of Security of Bosnia and Herzegovina (HDZBiH).
“We should accept directives and suggestions from the EU and amend the law as many times as necessary until it is good enough,” said Jasmin Imamović, Chairman of the Defense and Security Committee of the BiH Parliament (SDP).
“Today, we have a multitude of agencies for the fight against corruption and preventive action at all levels, some committees and commissions, but my impression is that it is completely ineffective,” said Zdenko Ćosić, member of the Defense and Security Committee of the BiH Parliament.
“The law we passed is very good, the only point is how and to what extent it is implemented,” emphasized Sanja Vulić, member of the Defense and Security Committee of the BiH Parliament.
Bosnia and Herzegovina already has a 10 percent reduction in the balance from the Growth Plan, with the threat of new ones. A possible placement of Bosnia and Herzegovina on the Moneyval grey list would reduce the inflow of billions of marks from the Bosnian diaspora that maintain the country’s economic stability, Federalna writes.
