Financial Crime World

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Money Laundering in Bosnia and Herzegovina: Expert Review and Recommendations

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The expert review on money laundering in Bosnia and Herzegovina (BiH) highlights several challenges and areas for improvement. The report emphasizes the need for effective anti-money laundering measures, particularly in the banking sector, to prevent corruption and organized crime from penetrating the financial system.

Key Findings

  • Lack of effective regulations and oversight has led to corruption, money laundering, and economic crimes.
  • The existence of a large underground economy makes it difficult to supervise financial services and track suspicious transactions.
  • Regulatory oversight is necessary for currency exchange houses and money remitters to prevent them from being used for money laundering.

Draft Law on Preventing Money Laundering in the Federation of Bosnia and Herzegovina

The report also examines the draft law on preventing money laundering in the Federation of Bosnia and Herzegovina, which was enacted but not implemented. The law is criticized for being inadequate, failing to make money laundering a criminal offense, and not providing for the seizure and confiscation of criminally derived assets.

Recommendations

The following recommendations are organized into four categories:

  • Implement a comprehensive anti-money laundering strategy that meets international standards.
  • Strengthen the government’s ability to deal with money laundering.
  • Provide for the seizure and confiscation of criminally derived assets.

System Improvements

  • Establish a coordinated implementation effort involving all relevant ministries and authorities in the BiH Federation and Republic Srpska, as well as cantonal authorities, business, and professional groups.

Capacity Building

  • Provide training and capacity building for law enforcement agencies, financial institutions, and other stakeholders to enhance their understanding of anti-money laundering and combating terrorist financing (AML/CFT) requirements.

International Cooperation

  • Enhance cooperation with international organizations, such as the Financial Action Task Force (FATF), to ensure compliance with global AML/CFT standards and best practices.

These recommendations aim to support the development of a comprehensive anti-money laundering strategy in BiH, addressing the challenges and areas for improvement identified in the expert review.