Bosnia and Herzegovina has less and less time to adopt laws related to confiscation and management of property and limiting the disposal of property with the aim of preventing terrorism, financing terrorism and financing the proliferation of weapons of mass destruction. MONEYVAL, the mechanism of the Council of Europe that monitors national systems in the areas of preventing money laundering and terrorist financing, has already called on our country to improve its measures to combat money laundering and terrorist financing.
Revolt from the RS
The published assessment cites moderate performance in nine out of eleven areas, including risk understanding, international cooperation, use of intelligence, and investigations. However, significant improvements are needed in two areas. According to available information, the decision on whether BiH will end up on the FATF gray list again is expected at the plenary session in June 2026.
– This issue is related to reputational risk, and negative reputational risk is not desirable. How this will affect the market, investments and other important areas really depends on many factors, but it will certainly make the already difficult situation and the interest of investors, including domestic and foreign, more difficult, Prof. Ph.D. Ljiljan Veselinović from the UNSA Faculty of Economics, and notes that there are clear criteria that are expected of us.
Back in February, the BiH Ministry of Security organized a conference on the protection of trade and investments, and in the announcement it was warned that placing the country on the gray list signals the existence of strategic deficiencies in the system for preventing money laundering and terrorist financing.
“Although such a decision does not imply direct sanctions, it often leads to increased supervision of international banks and investors, slowing down of cross-border transactions, increasing compliance costs and a negative impact on the inflow of foreign investments”, it was stated.
The draft law on limiting the disposal of assets with the aim of preventing terrorism, financing terrorism and financing the spread of weapons of mass destruction should be presented to state delegates at the next session of the House of Peoples of the BiH Parliamentary Assembly scheduled for April 20. Earlier, the Proposal was adopted by the Council of Ministers, and then by the State House of Representatives.
When it comes to the Law on Confiscation of Illegally Acquired Assets, the Federal Agency for the Management of Confiscated Assets points out that on March 18, the Ministry of Justice of Bosnia and Herzegovina sent the Draft Law to the Council of Ministers of Bosnia and Herzegovina, which was largely agreed upon by the Working Group that participated in its drafting, with the presence of EUSR/EUD, OHR, OSCE, UNODC and EUPA4BiH.
– The representatives of the Working Group from Republika Srpska did not agree to the draft law in question, which was sent to the VMBiH. They had objections to Article 3 of the law, which defines that permanently confiscated property becomes the property of BiH, the director of the Federal Agency for the Management of Confiscated Property Emir Bašić tells us.
He explains that the representatives of the Ministry of Internal Affairs of the RS and the Ministry of Justice of the RS propose that permanently confiscated property that is confiscated by the decisions of the Court of Bosnia and Herzegovina remains the property of the entity. The RS also objected to the establishment of an office for the coordination of asset confiscation and management within the Ministry of Justice of Bosnia and Herzegovina, after they rejected the establishment of an agency at the state level.
– The public is already aware of the threat of placing BiH on the gray list of FATF, the international Anti-Money Laundering Group. Otherwise, FATF standards have been established for all countries that need to implement compliance in terms of financing terrorism, preventing money laundering with the aim of establishing the security of the financial market. Checks for Bosnia and Herzegovina were carried out by Moneyval, a body of the Council of Europe, and the competent institutions were obliged to adopt and implement the necessary reforms and harmonize the rules in the area of financial market security recommended by Moneyval, Bašić tells us.
When it comes to the consequences, Bašić points out that the first to feel the consequences of the gray list are the banks, that is, the banking sector, because it may happen that banks from abroad tighten the control of transactions from BiH. This would lead to delayed payments and payments, difficult foreign transfers and additional client checks, he writes Liberation.
– This would have a direct impact on the economy and companies in Bosnia and Herzegovina, because these procedures would greatly contribute to slower and less efficient operations, which again ultimately means a weaker attraction of foreign investments. BiH would become riskier for investments, which would directly affect the number of new jobs, warns Bašić.
