FATF Status

Bosnia & Herzegovina is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement - 23 February 2018

The FATF welcomes Bosnia and Herzegovina’s significant progress in improving its AML/CFT regime and notes that Bosnia and Herzegovina has established the legal and regulatory framework to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in June 2015. Bosnia and Herzegovina is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Bosnia and Herzegovina will work with MONEYVAL to improve its AML/CFT framework.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bosnia and Herzegovina was undertaken in 2024. According to that Evaluation, Bosnia and Herzegovina was deemed Compliant for 4 and Largely Compliant for 21 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Corruption is pervasive in Bosnia and Herzegovina (BiH), significantly hindering business operations and deterring foreign investment. Despite having laws against corruption and being a party to international conventions, enforcement is weak, and public officials often act with impunity. The complex regulatory environment, coupled with a lack of transparency and ineffective law enforcement, exacerbates the situation, leading to widespread bribery and nepotism in both public procurement and administration.

Bosnia and Herzegovina (BiH) faces significant economic challenges, including endemic corruption, a complex legal framework, and a weak judicial system, which deter foreign investment. Despite a liberal trade regime and a low tax structure, the economy has low levels of foreign direct investment and is hampered by high unemployment and significant out-migration of the workforce. The GDP growth is projected to be modest, with real GDP expected to grow by 2.8 percent in 2024, reflecting ongoing struggles in the business environment and external economic pressures.

Bosnia and Herzegovina (BiH) presents a challenging investment climate due to endemic corruption, complex legal frameworks, and a weak judicial system influenced by political patronage. While the country has a liberal trade regime and low corporate tax rates, significant barriers such as high social contributions, a fragmented regulatory environment, and political instability deter foreign direct investment. Investors are advised to conduct thorough due diligence and navigate the intricate landscape of local laws and regulations to mitigate risks.