Financial Crime World

Bosnia and Herzegovina’s Anti-Money Laundering (AML) and Combating Terrorist Financing (CFT) Compliance Report

Introduction

The following report evaluates Bosnia and Herzegovina’s (BiH) compliance with AML/CFT standards. This assessment highlights key points from the report, focusing on the Financial Intelligence Unit (FID), preventive measures in financial institutions, and border control.

Financial Intelligence Unit (FID)

Independence and Effectiveness

  • The FID has adequate operational independence.
  • However, a lack of feedback mechanism regarding cases referred to entity and cantonal level law enforcement agencies is identified as an area for improvement.

IT Systems and Staff Motivation

  • The absence of an adequate IT system negatively impacts the effectiveness of the FID’s work.
  • Staff members are characterized by high integrity and motivation.

Preventive Measures - Financial Institutions

  • BiH has taken steps to improve the AML/CFT legal and regulatory framework, but further harmonization is required for supervision.
  • The new AML/CFT Law adopted in 2014 addresses several deficiencies.

Awareness and Understanding of Obligations

  • FIs are largely aware of their AML/CFT obligations.
  • However, there is an uneven understanding about the application of the new law.

Border Control

Declaration System and Sanctioning Framework

  • BiH has a declaration system for cross-border transportation of currency and bearer negotiable instruments (BNIs).
  • The lack of clarity on authorities’ power to stop and restrain cash and BNIs is highlighted as an area for improvement.
  • The sanctioning framework for violation of the declaration obligation does not appear effective.

Training and Expertise

  • Training provided to authorities competent for border control do not contain ML/TF aspects.
  • Authorities lack sufficient expertise in this respect.

Conclusion

The report emphasizes areas where BiH needs improvement to effectively implement AML/CFT standards. Addressing these shortcomings will be crucial for maintaining a robust anti-money laundering and combating terrorist financing framework in the country.