Bosnia and Herzegovina Takes a Crucial Step towards EU Integration with New Anti-Money Laundering Law
A Significant Move towards Strengthening the Financial System
The Parliament of Bosnia and Herzegovina has passed a new law on anti-money laundering and counter-terrorism financing, aimed at bolstering the country’s financial system against illicit activities. This legislation introduces a comprehensive framework for regulating previously unregulated financial services and products, such as crypto assets and e-money.
Harmonization with EU Standards
The new law aligns Bosnia and Herzegovina’s legal and regulatory landscape with key EU standards, specifically Regulation (EU) 2018/1672 and Directives (EU) 2015/849 and (EU) 2018/843. This move is crucial for the country’s aspirations towards EU integration, as it fulfills one of three essential preconditions for initiating negotiations in March.
Broadened Scope of Anti-Money Laundering Regulations
The law significantly expands the scope of entities covered by anti-money laundering regulations, including previously unregulated entities such as crypto asset platforms and e-money institutions. This inclusivity aims to eliminate potential loopholes that may be exploited by illicit actors, reinforcing the financial system against money laundering and terrorist financing.
Key Features of the Legislation
- Procedures and Measures: Detailed provisions regarding procedures and measures obligated entities must implement when dealing with anti-money laundering and counter-terrorism financing susceptible transactions and businesses.
- Innovative Measures: Introduction of innovative measures enabling Know-Your-Customer (KYC) checks through video identification, electronic signatures, and electronic stamps.
- Indirect KYC Checks: Empowering certain obligors to 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.
Guaranteeing Implementation of Statutory Limitations
The new law incorporates mechanisms to guarantee the implementation of statutory limitations for cash transactions and transport of physical currencies. This ensures that no one is exempted from these obligations, thereby mitigating the risk of money laundering and terrorist financing in transactions prone to suspicious activity.
Promoting Collaboration and International Cooperation
Importantly, the legislation encourages collaboration between different authorities within Bosnia and Herzegovina dealing with anti-money laundering and counter-terrorism financing, as well as international cooperation with relevant institutions and authorities. The role and scope of authorities of the local Financial Intelligence Unit (FIU) have been broadened, granting it the power to make more immediate and far-reaching actions and exert more control over obligors and transactions.
Establishing a Permanent Coordination Body
The establishment of a permanent coordination body aims to promote, coordinate, and cooperate in areas related to the law’s scope and the fulfillment of Bosnia and Herzegovina’s international obligations in preventing money laundering and terrorist financing.
Conclusion
In conclusion, the new anti-money laundering law represents a multifaceted and forward-thinking legislative initiative. It positions Bosnia and Herzegovina 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.