Regulatory Compliance for Financial Institutions in Bosnia and Herzegovina
A report by the Financial Action Task Force (FATF) has assessed the regulatory compliance of financial institutions in Bosnia and Herzegovina, highlighting areas of strength and weakness.
Compliance Assessment
The report rates Bosnia and Herzegovina as largely compliant with 19 out of 40 FATF recommendations. The country’s compliance is rated as follows:
Compliant (C)
- R.9 (Financial institution secrecy laws)
- R.21 (Tipping-off and confidentiality)
- R.27 (Powers of supervisors)
- R.29 (Regulation and supervision of financial institutions)
- R.30 (Responsibilities of law enforcement and investigative authorities)
- R.31 (Powers of law enforcement and investigative authorities)
- R.37 (Mutual legal assistance)
Largely Compliant (LC)
- R.1 (Assessing risk & applying risk-based approach)
- R.2 (National cooperation and coordination)
- R.3 (Money laundering offence)
- R.6 (Targeted financial sanctions related to terrorism & terrorist financing)
- R.7 (Targeted financial sanctions related to proliferation)
- R.13 (Correspondent banking)
- R.17 (Reliance on third parties)
- R.18 (Internal controls and foreign branches and subsidiaries)
- R.33 (Statistics)
Partially Compliant (PC)
- R.4 (Confiscation and provisional measures)
- R.5 (Terrorist financing offence)
- R.10 (Customer due diligence)
- R.12 (Politically exposed persons)
- R.14 (Money or value transfer services)
- R.16 (Wire transfers)
- R.20 (Reporting of suspicious transactions)
- R.22 (DNFBPs: Customer due diligence)
- R.23 (DNFBPs: Other measures)
- R.26 (Regulation and supervision of financial institutions)
- R.32 (Cash couriers)
Non-Compliant (NC)
- R.8 (Non-profit organisations)
- R.15 (New technologies)
- R.19 (Higher-risk countries)
- R.24 (Transparency and beneficial ownership of legal persons)
- R.25 (Transparency and beneficial ownership of legal arrangements)
- R.28 (Regulation and supervision of DNFBPs)
Areas for Improvement
The report highlights areas where Bosnia and Herzegovina needs to improve, including:
- Regulation and supervision of non-profit organizations
- New technologies
- Higher-risk countries
Additionally, the country should strengthen its transparency and beneficial ownership requirements for legal persons and arrangements.
Conclusion
While Bosnia and Herzegovina has made significant progress in regulatory compliance, there are still areas where it needs to improve to meet international standards. The country should continue to work towards strengthening its anti-money laundering and combating terrorist financing framework to protect the integrity of its financial system.