A Significant Problem in BiH

Money laundering is a serious issue in Bosnia and Herzegovina (BiH), with corrupt officials and organized crime groups using various methods to launder funds.

Key Points:

Corrupt Officials and Organized Crime Groups: Money laundering is being used by corrupt officials and organized crime groups to conceal illicit activities.
Banking System at Risk: The banking system in BiH is vulnerable to money laundering due to inadequate regulatory oversight.
Non-Bank Financial Institutions: Non-bank financial institutions, such as currency exchange houses and money remitters, are being used for money laundering activities without sufficient regulation.
Privatization Risks: Privatization of government-owned entities can provide opportunities for money laundering if not properly managed.

Recommendations for Effective Prevention

The following recommendations aim to strengthen BiH’s efforts to prevent and combat money laundering:

Implement the Draft Law on Prevention from Money Laundering

Effective Implementation: The Draft Law on Prevention from Money Laundering in the Federation of Bosnia and Herzegovina (FBiH) should be implemented effectively, focusing on strengthening the government’s ability to deal with money laundering.
Coordinated Effort: A coordinated implementation effort among various governmental elements of the FBiH and cantons is necessary to ensure effective enforcement of anti-money laundering measures.

Establish Regulatory Structure for Non-Bank Financial Institutions

Regulatory Oversight: A regulatory structure should be established for non-bank financial institutions, such as currency exchange houses and money remitters, to prevent them from being used for money laundering.
Strict Controls: Privatization of government-owned entities should not provide opportunities for money laundering by implementing strict controls and monitoring mechanisms.

Develop Anti-Money Laundering Strategy

Framework for Coordination: An anti-money laundering strategy should be developed that incorporates the new law and provides a framework for coordination among agencies with responsibility for anti-money laundering.
Training and Capacity-Building Programs: Training and capacity-building programs should be provided for financial institutions, regulatory bodies, and law enforcement agencies to enhance their understanding of money laundering risks and prevention measures.

By implementing these recommendations, BiH can strengthen its efforts to prevent and combat money laundering, ensuring effective implementation of anti-money laundering measures and coordination among relevant agencies.