Financial Crime World

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Bosnia and Herzegovina’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures

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Based on a recent evaluation, it appears that Bosnia and Herzegovina (BiH) has made some progress in implementing AML/CFT measures since the previous assessment. However, there are still several concerns and areas for improvement.

Key Areas for Improvement

The following key points were identified during the evaluation:

Financial Intelligence Unit (FID)

  • The FID has adequate operational independence.
  • However, it lacks an adequate IT system to conduct in-depth analyses.
  • There is also a lack of feedback mechanism regarding cases referred to entity and cantonal level law enforcement agencies.

Border Control

  • BiH implemented a declaration system for cash and bearer negotiable instruments (BNIs).
  • However, the competent authorities have unclear understanding of their power to stop and restrain cash and BNIs.
  • This can cause difficulties in applying confiscation measures in a timely manner.

Preventive Measures - Financial Institutions

  • The new AML/CFT Law was adopted in 2014.
  • Bylaws for its implementation were not issued by the time of the on-site visit.
  • While there are some concerns about the application of the legislation in practice, FIs are largely aware of their AML/CFT obligations.

Training and Expertise

  • The authorities confirmed that they lack sufficient expertise in ML/TF aspects.
  • Training provided to border control authorities does not contain ML/TF aspects.

Areas for Improvement

To effectively implement AML/CFT measures, BiH needs to address the following areas:

  1. Implementation of the new AML/CFT Law: The bylaws for its implementation need to be issued and clarified.
  2. Border Control: The competent authorities need to clarify their power to stop and restrain cash and BNIs.
  3. FID’s IT system: An adequate IT system is needed to conduct in-depth analyses.
  4. Training and Expertise: Training should include ML/TF aspects, and the authorities should develop sufficient expertise in this area.

By addressing these areas for improvement, BiH can effectively implement AML/CFT measures and combat money laundering and terrorism financing.