Tomorrow, May 5, Bosnia and Herzegovina faces one of the most serious international challenges in the last few years. At the plenary session of the MONEYVAL committee in Helsinki, the country’s progress in the fight against money laundering and terrorist financing will be discussed, and the outcome could have far-reaching consequences for the stability of the entire financial system.
According to information from diplomatic and political circles, BiH could receive serious criticism at the session due to the delay in fulfilling its obligations, which increases the risk of being placed on the so-called gray list – a mechanism of enhanced supervision for countries with insufficient capacities in the fight against financial crime.
Key laws still blocked
The biggest problem is the non-adoption of the Law on Confiscation and Management of Assets Acquired by Criminal Offenses, which has not yet been passed by the Council of Ministers of Bosnia and Herzegovina. Although the law was referred to the procedure, it was removed from the agenda at the insistence of ministers from the Union of Independent Social Democrats (SNSD).
At the same time, the Parliamentary Assembly of Bosnia and Herzegovina has not yet fully adopted the law related to limiting the disposal of property with the aim of preventing the financing of terrorism and the proliferation of weapons of mass destruction, although the procedure was initiated under an urgent procedure.
SNSD representatives oppose the establishment of a state office for the management of permanently confiscated property, insisting that such authority should not be at the state level. The Minister of Foreign Trade and Economic Relations, Staša Košarac, previously stated that his party “does not block processes, but rather protects the constitutional competences of the Republic of Srpska.”
The register of beneficial owners is still missing
An additional problem is the fact that Bosnia and Herzegovina still does not have an established register of real owners of companies – a key tool for discovering the real controllers of legal entities and preventing abuses of the financial system.
Although Republika Srpska and Brčko District have completed their part of the work, implementation is delayed in the Federation of Bosnia and Herzegovina, where the process has stopped at the level of the entity’s Ministry of Justice.
The economic consequences could be severe
Experts warn that a return to the gray list would have direct and serious consequences for citizens and the economy. Muharem Karamujić, professor of the Faculty of Economics in Sarajevo, points out that the financial system could face restrictions in international payment transactions.
“If this happens, it is extremely bad news. There could be restrictions on access to international payment transactions, which would further burden the economy,” warns Karamujić.
Exporters, as well as the banking sector, would suffer a special blow. Difficult transactions, higher costs and slower operations could further reduce the competitiveness of the domestic economy.
“Investors avoid countries that are on the gray list because it sends a message of legal uncertainty. This means less investment and slower economic growth,” adds Karamujić.
Citizens will bear the price
In addition to the economy, citizens would also feel the consequences through more expensive banking services, less favorable exchange rates and potentially limited access to certain financial services.
Experts warn that the problem is even more pronounced because international payment transactions in Bosnia and Herzegovina are already among the most expensive in Europe, and any additional deterioration would have a chain effect on prices and the standard of living.
Tomorrow’s session in Helsinki comes at a time when it is clear that the warnings of the profession were not enough to start political processes, and the price of inaction, as economists warn, could be paid by the citizens, the economy and the overall stability of the financial system of Bosnia and Herzegovina, writes NOISE.
