Financial Crime World

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Bosnia and Herzegovina Adopts Sweeping Reforms with New Anti-Money Laundering and Counter Terrorism Financing Law

In a decisive move, the Parliament of Bosnia and Herzegovina (BiH) has passed a new Law on Anti-Money Laundering and Counter-Terrorism Financing (ALM/CTF Law). This law aims to harmonize BiH’s legal and regulatory landscape with key EU standards.

Key Objectives

The ALM/CTF Law seeks to:

  • Harmonize BiH’s legal and regulatory framework with EU regulations, particularly the regulation (EU) 2018/1672 and directives (EU) 2015/849, and (EU) 2018/843
  • Recognize and regulate previously unregulated financial services and products, such as crypto assets and e-money
  • Position BiH at the forefront of regulatory readiness for further digitalization and emerging technologies in the financial sector

Key Features of the ALM/CTF Law

The law introduces several key features, including:

  • Broader Scope: A wider array of financial institutions and businesses are subject to anti-money laundering regulations
  • Innovative Measures: KYC checks can be conducted through video identification, electronic signatures, and electronic stamps
  • Indirect KYC Checks: Certain obligors can conduct KYC checks indirectly through third parties, provided these entities adhere to anti-money laundering and counter-terrorism financing standards equal or superior to those stipulated in the law
  • Procedures for Suspicious Transactions: Detailed provisions regarding procedures and measures obligated entities must implement when dealing with anti-money laundering and counterterrorism financing susceptible transactions and businesses
  • Obligors’ Rights and Obligations: Clear definitions of obligors’ rights and obligations to end relationships with clients if unable to consistently monitor their activities or effectively manage the risk of money laundering and terrorist financing

Implementation Mechanisms

The law incorporates mechanisms to guarantee the implementation of statutory limitations for cash transactions and transport of physical currencies, ensuring that no one is exempted from these obligations. This helps mitigate the risk of money laundering and terrorist financing in transactions prone to suspicious activity.

International Cooperation

Importantly, the ALM/CTF Law encourages collaboration between different authorities within BiH dealing with the fight against money laundering and terrorism financing, as well as international cooperation with relevant institutions and authorities promoting the exchange of information to strengthen the fight against transnational money laundering activities.

Conclusion

The ALM/CTF Law represents a multifaceted and forward-thinking legislative initiative that positions BiH as a proactive player in the global fight against financial crimes, fosters EU integration, and embraces the opportunities presented by technological advancements in the financial sector.