Money Laundering in Bosnia and Herzegovina: Challenges and Recommendations

Executive Summary

The Office of the High Representative (OHR) has published a report on the current situation regarding money laundering in Bosnia and Herzegovina (BiH). Experts visited BiH to assess the country’s efforts to combat money laundering, highlighting key challenges and providing recommendations for an effective anti-money laundering strategy.

Key Findings

• The experts visited Bosnia and Herzegovina to assess the country’s efforts to combat money laundering.
• They found that the banking system is not well-developed and lacks effective regulations, making it vulnerable to corruption and money laundering.
• The large underground economy in BiH also poses a challenge, with unsupervised financial services being provided that are susceptible to money laundering.
• Currency exchange houses and money remitters have been used for money laundering even in more advanced economies.
• The experts were critical of the draft law on preventing money laundering in the Federation of Bosnia and Herzegovina (FBiH), which they felt was inadequate and did not meet international standards.

Recommendations

The report recommends that a comprehensive anti-money laundering strategy be developed, bringing together all relevant ministries, business, and professional groups. This approach would help to address the challenges facing BiH in addressing money laundering and ensure effective combating of this issue.

Challenges Faced by Bosnia and Herzegovina

• The banking system is not well-developed and lacks effective regulations.
• The large underground economy poses a challenge, with unsupervised financial services being provided that are susceptible to money laundering.
• Currency exchange houses and money remitters have been used for money laundering even in more advanced economies.

International Standards

The report highlights the importance of meeting international standards in combating money laundering. It notes that the draft law on preventing money laundering in the Federation of Bosnia and Herzegovina (FBiH) does not meet these standards.

Conclusion

In conclusion, the report highlights the challenges facing BiH in addressing money laundering and recommends a comprehensive approach to combating this issue. By developing an effective anti-money laundering strategy and bringing together all relevant ministries, business, and professional groups, BiH can ensure that it meets international standards and effectively addresses money laundering.