In February 2025, Bosnia and Herzegovina entered a one-year observation period by the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog.
This was a result of a number of deficiencies in the country’s anti-money laundering and countering the financing of terrorism (AML/CFT) framework identified by the by the Council of Europe’s MONEYVAL Committee in its mutual evaluation report of December 2024.
This one-year observation period ends in a few weeks. If significant progress is not achieved to address the deficiencies raised by MONEYVAL, there is a high probability that FATF will list Bosnia and Herzegovina as a jurisdiction under increased monitoring (commonly known as “grey listed”).
Greylisting would have immediate and tangible consequences for businesses, banks, payments, investment and the Bosnia and Herzegovina’s economic credibility, affecting access to international financial markets and transactions, private commercial activities as well as public fiscal affairs. It could also negatively affect Bosnia and Herzegovina’s chances of joining the Single Euro Payments Area (SEPA).
The relevant authorities in Bosnia and Herzegovina therefore need to take urgent action, in particular to proceed with the adoption of two laws at state level – a law on asset confiscation and management as well as a law on targeted financial sanctions for terrorism, financing of terrorism and proliferation of weapons of mass destruction. The establishment of the register of beneficial ownership for legal persons in Bosnia and Herzegovina is also long overdue, something which requires immediate actions by the entities and Brcko District.
Bosnia and Herzegovina has successfully made some steps to strengthen its AML/CFT framework, such adopting an AML/CFT Law, which was also one of the key pieces of legislation for the country’s EU path. We also welcome the establishment of the Permanent Coordination Body on AML/CFT and prevention of proliferation of weapons of mass destruction, comprising of representatives of the competent bodies from all levels of governments in BiH and recent the adoption of the Rulebook for the implementation of the AML/CFT Law.
BiH’s achievements show that progress is possible when there is political commitment and effective coordination. Urgent further action is required in the next weeks by the relevant authorities in BiH before the FATF one-year observation period ends.
