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

It should be noted that the new style FATF Mutual Evaluation has not yet been undertaken. 

Bosnia & Herzegovina was removed from the 4th Round Mutual Evaluation follow-up process in 2020

Corruption in Bosnia and Herzegovina (BiH) is pervasive across political and economic institutions, significantly increasing the risks and costs of doing business. Despite existing laws against corruption, enforcement is weak, leading to a culture of impunity among public officials, while foreign investors face a lack of transparency in government processes. The country ranks low on Transparency International's Corruption Perception Index, and ongoing issues such as nepotism and ineffective legal frameworks continue to deter foreign investment and hinder economic growth.

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 low tax rates, the economy has low levels of foreign direct investment and struggles with high unemployment and significant out-migration of the workforce. The GDP growth is modest, with projections of 2.8 percent in 2024 and 3.4 percent in 2025, while inflation remains a concern, affecting consumer purchasing power.

Bosnia and Herzegovina (BiH) presents a challenging investment climate for foreign investors due to endemic corruption, a complex legal and regulatory framework, and a weak judicial system influenced by political patronage networks. Despite a liberal trade regime and low corporate tax rates, the fragmented governance structure and high levels of ethnic tension deter investment, while significant out-migration of the workforce further complicates hiring. Investors are advised to conduct thorough due diligence to navigate the legal ambiguities and potential risks associated with investing in BiH.