Financial Crime World

Regulatory Compliance for Financial Institutions in Bosnia and Herzegovina

Overview of the Financial Intelligence Department (FID)

Bosnia and Herzegovina’s Financial Intelligence Department (FID) is a key institution responsible for preventing money laundering and financing of terrorist activities. As the country’s only financial intelligence unit, FID operates in accordance with international standards.

Establishment and Membership

  • The FID was established in 2004.
  • It joined the Egmont Group of Financial Intelligence Units in 2005, a network of 146 financial intelligence units from around the world.

Tasks and Powers

The FID’s tasks are outlined in the Law on SIPA (State Investigation and Protection Agency) and the Law on Prevention of Money Laundering and Financing of Terrorist Activities. These laws empower the department to:

  • Receive, collect, record, and analyze data, information, and documents related to money laundering and terrorist financing.
  • Investigate suspicious activities and submit findings to prosecutor’s offices and other relevant authorities in Bosnia and Herzegovina and abroad.

Unique Setup

Unlike neighboring countries, where financial intelligence units are administrative types operating within ministries of finance, the FID is a main organizational unit of SIPA with all police and investigative powers. This setup allows the FID to perform its duties independently without court or prosecutorial orders.

Actions in Cases of Suspicion

In cases of suspected money laundering or terrorist financing, the FID can:

  • Collect necessary information and documentation from financial and non-financial institutions.
  • Cooperate internationally with 146 financial intelligence units through the Egmont Group.
  • Issue an order to suspend transactions for up to five working days.
  • Order financial institutions to monitor and report on client activities for up to six months.

Investigations and Expert Support

The FID is involved in major investigations into organized crime and money laundering, providing information, conducting complex financial analyses, and offering expert support to prosecutors. The department also trains employees of financial and non-financial institutions, prosecutor’s offices, and law enforcement agencies.

Regulatory Oversight

As the lead authority on anti-money laundering and combating terrorist financing, the FID oversees all financial and non-financial institutions subject to relevant laws. It cooperates with banking agencies and supervisory authorities to ensure compliance with international standards.

International Cooperation

The FID plays a key role in drafting laws, secondary legislation, and strategic documents related to money laundering and terrorist financing. It also represents Bosnia and Herzegovina in the Council of Europe’s Moneyval Committee and other international bodies that evaluate compliance with binding standards on preventing money laundering and financing of terrorist activities.

Internal Organizational Structure

The internal organizational structure of the FID consists of:

  • Analytical Section: responsible for analyzing data, information, and documents related to money laundering and terrorist financing.
  • Investigation Section: conducts investigations into suspected money laundering or terrorist financing cases.
  • Section for Legal Affairs, International Cooperation, and Support: provides legal support, coordinates international cooperation, and offers administrative support.

These sections work together to achieve the department’s goals and ensure regulatory compliance in Bosnia and Herzegovina’s financial sector.