FATF Report Criticizes Bosnia and Herzegovina’s Compliance with Anti-Money Laundering Regulations

Bosnia and Herzegovina has been found to be non-compliant with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations, according to a recent report by the Financial Action Task Force (FATF).

Key Findings and Recommendations

The FATF report highlights several areas where Bosnia and Herzegovina needs to improve its compliance:

• Non-profit organizations: The country has failed to implement effective regulations and supervision of non-profit organizations.
• Financial institution secrecy laws: Bosnia and Herzegovina’s financial institution secrecy laws are inadequate, making it difficult to identify the beneficial owners of companies.
• Transparency and beneficial ownership: The country has not implemented measures to improve transparency and beneficial ownership.

Rating Breakdown

The FATF report rated Bosnia and Herzegovina as:

• Non-compliant in areas such as:
  • Regulation and supervision of designated non-financial businesses and professions (DNFBPs)
  • Reporting of suspicious transactions
  • Powers of supervisors
• Largely compliant or partially compliant in areas such as:
  • National cooperation and coordination
  • Money laundering offence, confiscation and provisional measures
  • Customer due diligence

Government Commitment to Improving Compliance

The government of Bosnia and Herzegovina has committed to strengthening its AML/CFT framework and improving compliance with international standards. This includes:

• Implementing new regulations: Enhancing customer due diligence, improving transparency and beneficial ownership.
• Supervision measures: Strengthening the regulation and supervision of financial institutions, DNFBPs, and other sectors.
• Training programs: Providing training on AML/CFT regulations for financial institutions and other sectors.

Implementation of Training Programs

The government has announced plans to implement new training programs for financial institutions and other sectors to improve their knowledge and skills in AML/CFT regulations. These programs will focus on:

• Customer due diligence: Understanding the importance of verifying customer identities and conducting risk assessments.
• Suspicious transaction reporting: Identifying and reporting suspicious transactions to prevent money laundering and terrorist financing.
• Beneficial ownership transparency: Ensuring that companies are transparent about their beneficial owners.

The implementation of these training programs is expected to enhance compliance with international standards and reduce the risk of money laundering and terrorist financing in Bosnia and Herzegovina.