Financial Crime World

BOSNIA AND HERZEGOVINA REGULATORY BODIES TAKE STEPS TO PREVENT FINANCIAL CRIME

New Law Harmonizes Bosnia and Herzegovina’s Regulatory Framework with EU Standards

The Parliament of Bosnia and Herzegovina has passed a new law on anti-money laundering and counter-terrorism financing, bringing the country’s regulatory landscape in line with EU standards.

In a move aimed at averting a potential grey-listing by MONEYVALL, the Bosnian parliament has adopted the new Law on Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF Law). This law harmonizes Bosnia and Herzegovina’s legal framework with key EU regulations, including the regulation (EU) 2018/1672 and directives (EU) 2015/849, and (EU) 2018/843.

Key Provisions of the AML/CTF Law

  • Broadening the Scope of Entities Covered: The law broadens the scope of entities covered by anti-money laundering regulations to include previously unregulated entities, such as those dealing with crypto assets and e-money institutions.
  • Innovative Measures for KYC Checks: The introduction of innovative measures enabling Know Your Customer (KYC) checks through video identification, electronic signatures, and electronic stamps.
  • Empowering Obligors to Conduct KYC Checks Indirectly: The empowerment of 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.

Implementation and International Cooperation

The new law also 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 activities, such as real estate purchases.

Furthermore, the AML/CTF Law encourages collaboration between different authorities within Bosnia and Herzegovina dealing with the fight against 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.

Permanent Coordination Body

The law establishes a permanent coordination body comprising representatives appointed by the Bosnian Council of Ministers from competent bodies of the entities – the Federation of Bosnia and Herzegovina and Republika Srpska – and the Brčko District. This 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, in consultation with the entities’ and Brčko District’s governments.

Conclusion

The AML/CTF Law represents a multifaceted and forward-thinking legislative initiative that 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.