Financial Crime World

BOSNIA AND HERZEGOVINA ADOPTS NEW LAW ON ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING

In a decisive move, the Parliament of Bosnia and Herzegovina (BiH) has passed a new Law on Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF Law). This law aims to mitigate potential risks associated with Grey-Listing by MONEYVAL and foster EU integration.

Key Objectives

The AML/CTF Law seeks to harmonize BiH’s legal and regulatory landscape with key EU standards. These include:

  • Regulation (EU) 2018/1672
  • Directive (EU) 2015/849
  • Directive (EU) 2018/843

Scope of the Law

The law introduces a comprehensive framework that recognizes and regulates previously unregulated financial services and products, such as:

  • Crypto assets
  • E-money institutions
  • Other previously unregulated entities

Key Features of the Law

The AML/CTF Law includes several innovative measures to enhance anti-money laundering regulations. These include:

  • Know-Your-Customer (KYC) checks: Introduction of video identification, electronic signatures, and electronic stamps.
  • Indirect KYC checks: Empowering certain obligors to conduct KYC checks 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.
  • Enhanced due diligence: Clarification of situations requiring enhanced due diligence and those where simplified checks are permissible.
  • Obligor rights and obligations: Definition of obligors’ rights and obligations to end relationships with clients if unable to consistently monitor their activities or to effectively manage the risk of money laundering and terrorist financing.

Implementation and Collaboration

The law incorporates mechanisms to guarantee the implementation of statutory limitations for cash transactions and transport of physical currencies. It also encourages collaboration between different authorities within BiH dealing with fight against involved in 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.

Role of the Financial Intelligence Unit (FOO)

The law broadens the role and scope of the local FOO, granting it the power to make more immediate and far-reaching actions and to exert more control over obligors and transactions. Additionally, the law outlines detailed regulations for record-keeping and information and data exchange between the obligors, the FOO and other relevant domestic and international authorities.

In conclusion, the AML/CTF Law represents a multifaceted legislative initiative that positions BiH as a proactive player in the global fight against financial crimes. It fosters EU integration, embraces technological advancements in the financial sector, and aims to mitigate risks of Grey-Listing by MONEYVAL.