Bosnia and Herzegovina will be added back to the gray list of FATF on Friday, the Council of Europe's supervisory body responsible for monitoring systems to prevent money laundering and financing of terrorism.

This means our country will once again find itself among states with serious deficiencies in this area after eight years, which could negatively impact the investment climate and international financial transactions.

Return Among Risk Countries

BiH was already on the gray list in the period from 2015 to 2018. Over recent months it has become increasingly certain that a return to this list would follow, and a recommendation for such a decision was made at a FATF meeting held last month in Helsinki.

According to unofficial information, the Bosnia and Herzegovina delegation was informed at today's session of the relevant subcommittee that the country will be returned to the gray list, while the final decision should be confirmed at the plenary session scheduled for Friday.

Key System Deficiencies

Among the main reasons for this decision is the failure to establish a register of beneficial owners of legal entities in the Federation of BiH, as well as the fact that the Law on Confiscation of Illegally Acquired Property has not been adopted.

Although authorities have in the meantime adopted certain legislative solutions related to preventing the financing of terrorism and the spread of weapons of mass destruction, FATF assessed that these steps were taken too late to influence the final decision.

Following official confirmation, Bosnia and Herzegovina should receive an action plan with measures that need to be implemented in order to be removed from the gray list in the coming period. The plan will include the adoption of legislative solutions as well as their practical implementation.