Good news for Bosnia and Herzegovina – as of 9 July 2020 the country is officially not on the EU list of high-risk third countries that have strategic deficiencies in the regime of preventing money laundering and combating terrorist financing, which represent a significant threat to the Union’s financial system.
The Fourth European Union Money Laundering Directive allows the European Commission to identify high-risk third countries. Regarding that, these identified countries are indicated as those having deficiencies in their national anti-money laundering and counter-financing of terrorism regimes, which consequently pose significant threats to the financial system of the EU. Currently, twenty-eight countries have been identified as high-risk third countries for money laundering and terrorist financing.
A few years ago, BH was put on the aforementioned list together with the countries such as Iran, Iraq, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen. Afterwards, national authorities in BH took the necessary steps in order to meet all international obligations, including much needed improvement related to the anti-money laundering. BH was obliged to make necessary changes to the criminal law and legislation related to associations and foundations in order to ensure that they were not used as a cover-up for the financing of illegal activities since that was the case before.
Although BH was removed from the black list of the Working Group for the Suppression of Money Laundering in 2018, and before that from the gray list of MONEYVAL in 2015, the EU has kept BH on the list of high-risk countries, which caused the difficulties in the implementation of financial transactions, due to the fact that banks operating in the EU were obliged to carry out special procedures when it comes to money sent to BH, or from BH to the EU. Export companies suffered from such difficulties as well.
Finally, on 7 May 2020 European Commission announced that BH was removed for the list of high-risk countries due to the measures taken in order to reinforce national anti-money laundering and counter-financing of terrorism regimes, concluding that the Commission will further monitor effective implementation of such measures.