MONEYVAL’s latest report exposes Bosnia and Herzegovina’s (BiH) weak anti-money laundering (AML) and counter-terrorist financing (CTF) controls. Despite moderate effectiveness in some areas, major deficiencies remain—particularly in UN financial sanctions compliance, CTF risk mitigation in the non-profit sector, and enforcement against financial crime. The Council of Europe’s AML watchdog is placing BiH under enhanced scrutiny, demanding urgent action.
Key Points:
- AML/CTF Measures Lacking: Moderate effectiveness in 9 of 11 areas, but significant weaknesses persist.
- Financial Sanctions Gap: BiH falls short in applying UN financial sanctions and mitigating TF risks in the non-profit sector.
- Weak Enforcement: ML convictions don’t match the risk profile, TF prosecutions are inadequate, and asset confiscation is ineffective.
- Banking Sector vs. Others: Banks have a solid risk understanding, but notaries and other financial professionals lag behind, especially in identifying politically exposed persons (PEPs).
- Limited International Cooperation: Law enforcement is slow to engage in cross-border TF investigations.
Short Narrative:
MONEYVAL’s latest evaluation paints a concerning picture of Bosnia and Herzegovina’s financial crime prevention. While the banking sector demonstrates adequate customer due diligence, the country struggles with risk understanding, TF prosecutions, and enforcement of UN financial sanctions. Legal professionals and other financial gatekeepers lack robust controls, increasing the risk of illicit financial flows. With asset confiscation efforts failing to align with ML/TF risks, international bodies demand immediate reforms.
Actionable Insight:
MONEYVAL’s enhanced follow-up procedure puts BiH under strict monitoring, with a deadline for improvement set for December 2026. If BiH fails to act, potential financial and regulatory consequences could follow. The lack of effective TF prosecutions and compliance gaps in the non-profit sector raise red flags. A deeper investigation into specific high-risk sectors and financial players is warranted.
Call for Information:
Have insights on money laundering risks in Bosnia and Herzegovina? Any cases of financial crime enforcement (or lack thereof) in the region? Contact FinTelegram—your anonymity is guaranteed!
