In the last fifteen years, Bosnia and Herzegovina has repeatedly found itself in the focus of international financial institutions due to weaknesses in the system for combating money laundering and terrorist financing.
This supervision, which is most often associated with the FATF (Financial Action Task Force), is not a sanction in the classic sense, but it is a serious signal that the country has structural deficiencies that must be eliminated through concrete reforms.
The first broader framework of that international monitoring comes through MONEYVAL, a body of the Council of Europe that warned in the period from 2009 to 2014 that BiH must strengthen the legislative and institutional framework in the field of financial supervision. In those early stages, the emphasis was on weak coordination of institutions, insufficiently developed control mechanisms and the need to harmonize the system with international standards.
A few years later, around 2015, Bosnia and Herzegovina enters the formal FATF enhanced supervision regime. At that time, strategic deficiencies in the money laundering prevention system, but also in the state’s ability to consistently apply them in practice, were already clearly identified. FATF then sets up an action plan that includes legislative changes, strengthening of financial supervision and improvement of cooperation between competent institutions.
Consistency in implementing reforms
In the next two years, 2016 and 2017, BiH implemented a series of reforms that on paper represented a significant step forward. Key laws were adopted and amended, certain institutions were strengthened, and cooperation between regulatory bodies was gradually improved. However, international assessments in that period continued to emphasize that the biggest challenge remained in the actual application of laws, and not in their adoption.
The turning point comes in February 2018, when the FATF makes a decision that Bosnia and Herzegovina has eliminated strategic deficiencies in its AML/CFT system. This removed the country from the list of jurisdictions under enhanced surveillance and returned it to the standard regime of international monitoring. A period of stabilization followed, which was additionally strengthened by the decision of the European Commission in 2020 to remove BiH from the list of high-risk countries in the field of money laundering.
Bosnia and Herzegovina and FATF: cycle of monitoring, reforms and return to monitoring
In the last fifteen years, Bosnia and Herzegovina has repeatedly found itself in the regime of increased international supervision in the field of combating money laundering and terrorist financing. The FATF system is not a sanction, but a mechanism through which countries are put under monitoring until they eliminate strategic weaknesses in the financial system.
Upheaval and return to international control
However, that period did not bring a permanent closure of the reform cycle. Already in the following years, especially from 2023 and 2024, international evaluations again begin to record the slowdown of reforms, uneven application of regulations and weaknesses in institutional coordination. The warnings were gradually strengthened, with the assessment that Bosnia and Herzegovina is again lagging behind in the implementation of the standards required by the FATF.
During the year 2025, the country enters a new monitoring regime, which in practice represented the last stage of warning before the formal return to the gray list. That period was intended as a space for accelerated implementation of recommended measures and strengthening of the financial supervision system.
However, in June 2026, the FATF again places Bosnia and Herzegovina on the list of jurisdictions under increased surveillance. This closes another cycle in which the country goes through the identification of weaknesses, through reforms and temporary removal from the list, to return to international control.
This pattern shows that the key problem is not only in the legislative framework, but in the continuity of its application and the ability of institutions to turn reforms into permanent practice. Precisely here, in the gap between the adopted standards and their actual implementation, lies the reason why Bosnia and Herzegovina is once again returning to the regime of enhanced FATF supervision.
Finally, this cycle is not only about technical financial supervision, but also about the broader issue of institutional consistency. Because in the system that FATF measures, the law is not an end in itself, it is only the beginning of a process that must continue even when international supervision temporarily stops, he writes N1 BiH.
