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Bosnia and Herzegovina at risk of being placed on the FATF grey list due to shortcomings in the anti-money laundering system

by AI | 16.Jan 2026 | Europe in brief AI

The European Union has warned that BiH must urgently eliminate serious shortcomings in the system for preventing money laundering and terrorist financing, because otherwise it faces being placed on the FATF “grey list” after the expiry of a one-year observation period. The EU emphasizes that the urgent adoption of key laws and the establishment of a register of beneficial owners are necessary in order to avoid serious economic and financial consequences for BiH.

Illustration (Photo: FENA/Archive)

Sarajevo, (Fena) – The European Union has presented its position on the need for urgent action to eliminate deficiencies in the system in BiH for preventing money laundering and terrorist financing, and announced that in February 2025 BiH entered a one-year observation period by the Financial Action Task Force (FATF).

The EU Delegation in BiH states that this occurred due to a series of deficiencies in the system for preventing money laundering and combating terrorist financing in BiH, which were identified by the Council of Europe’s MONEYVAL Committee in its mutual evaluation report from December 2024.

– The aforementioned one-year observation period expires in a few weeks. If significant progress is not made in eliminating the deficiencies highlighted by MONEYVAL, there is a high likelihood that FATF will place BiH on the list of jurisdictions under increased monitoring (the so-called “grey list”) – the Delegation states.

They emphasize that being placed on the grey list would have immediate and concrete consequences for business entities, banks, payment transactions, investments and the economic credibility of BiH, and that it would affect access to international financial markets and transactions, private commercial activities, as well as public fiscal affairs.

They also state that it could negatively affect BiH’s prospects of joining the Single Euro Payments Area (SEPA).

– It is therefore necessary for the competent institutions in BiH to act urgently, that is, to proceed with the adoption of two laws at the state level – the Law on Confiscation and Management of Assets and the Law on Targeted Financial Sanctions for Terrorism, Terrorist Financing and the Proliferation of Weapons of Mass Destruction. The establishment of a register of beneficial owners of legal entities in BiH is also something that has long been awaited, and requires urgent action by the entities and the Brčko District – they said.

BiH has already made certain progress in strengthening its framework for preventing money laundering and combating terrorist financing, including the adoption of the Law on the Prevention of Money Laundering and Terrorist Financing, which was also one of the key laws on the country’s European path.

– We also welcome the establishment of the Permanent Coordination Body for the Prevention of Money Laundering and Combating Terrorist Financing and the Prevention of the Proliferation of Weapons of Mass Destruction, which brings together representatives of the competent institutions from all levels of government in BiH, as well as the recent adoption of the Rulebook on the Implementation of the Law on the Prevention of Money Laundering and Terrorist Financing. BiH has shown that progress is possible when there is political commitment and effective coordination. It is necessary for the competent institutions in BiH to urgently make additional efforts in the coming weeks, before the expiry of the one-year observation period by FATF, the EU Delegation in BiH announced. (16.01.)