Regarding the decision of the Financial Action Task Force (FATF) to put Bosnia and Herzegovina on the gray list of countries under enhanced financial supervision, key financial institutions in the country, the Ministry of Security of Bosnia and Herzegovina, the Delegation of the European Union, as well as representatives of the organization that made the decision, spoke out.
FATF President Elisa de Anda Madrazo explained that Bosnia and Herzegovina was included in the gray list at the plenary session due to insufficient activities of the authorities in protecting the financial system from potential threats.
“Bosnia and Herzegovina was added to the gray list at the plenary session because additional work is needed to strengthen its defense against criminals and terrorists who abuse its financial system and to ensure efficient supervision of the banking sector,” said Madrazo.
After the announcement of the decision, the Central Bank of Bosnia and Herzegovina, the Deposit Insurance Agency of Bosnia and Herzegovina and the entity’s banking agencies said that the financial sector remains stable and that there is no reason for citizens and businesses to worry.
“Payment systems function smoothly, and monetary stability is successfully maintained through the arrangement of the currency board. The convertible mark remains stable and firmly tied to the euro at a fixed exchange rate,” states the joint message of the financial institutions.
The Ministry of Security of BiH announced that the state will continue cooperation with the FATF on the implementation of the Action Plan, which includes additional strengthening of the system for preventing money laundering and terrorist financing. Among the priorities are the improvement of risk assessment, the systematic use of international cooperation, and the strengthening of the capacity and understanding of risks among supervisory bodies.
The Delegation of the European Union in Bosnia and Herzegovina also reacted to the FATF decision, calling on the authorities to remedy the identified deficiencies within the stipulated time.
“On the territory of the entire Western Balkans, membership in the Single Euro Payment Area (SEPA) brings benefits to both citizens and the business community. To achieve these benefits, it is important that Bosnia and Herzegovina continues to implement the necessary reforms, including reforms in the fight against money laundering,” said the EU Delegation.
Experts warn that the consequences of putting Bosnia and Herzegovina on the gray list could be visible in the daily business of citizens and companies. It is expected that, due to increased controls and stricter procedures, banks will more often request additional documentation and evidence of the origin of money when performing certain transactions.
Although the decision itself does not mean financial sanctions or threaten the stability of the banking system, it is a warning from the international community that BiH must speed up reforms in the area of preventing money laundering and terrorist financing in order to be removed from the list of countries under increased surveillance as soon as possible.
