The European Union has warned that Bosnia and Herzegovina must take urgent action in the coming weeks to address serious deficiencies in its anti-money laundering and counter-terrorism financing framework, or risk being placed on the Financial Action Task Force (FATF) “grey list”.
In a statement issued by the EU Delegation to Bosnia and Herzegovina, officials stressed that failure to demonstrate significant progress before the end of a one-year monitoring period could trigger enhanced international scrutiny.
“If substantial progress is not achieved, there is a high likelihood that FATF will place Bosnia and Herzegovina on the list of jurisdictions under increased monitoring,” the EU Delegation warned.
Deadline Approaching in February
Bosnia and Herzegovina has until February to implement concrete measures demanded by European and international institutions to combat money laundering and the financing of terrorism.
The one-year observation period began in February 2025, after the Council of Europe’s MONEYVAL committee identified systemic shortcomings in the country’s regulatory and institutional framework in December 2024.
Serious Economic Consequences at Stake
The EU emphasized that placement on the FATF grey list would have immediate and tangible consequences, including:
- Negative impact on banks and financial transactions
- Reduced foreign investment
- Damage to economic credibility
- Restricted access to international financial markets
“Grey-listing would directly affect businesses, the banking sector, payment systems, investment flows, and Bosnia and Herzegovina’s overall economic reputation,” the statement said.
Key Laws Still Pending
The EU has called on state-level institutions to urgently adopt two critical laws:
- Law on the Seizure and Management of Assets
- Law on Targeted Financial Sanctions related to terrorism, terrorist financing, and the proliferation of weapons of mass destruction
In addition, authorities are urged to establish a register of beneficial owners of legal entities, ensuring coordinated action across entities and the Brčko District.
Progress Acknowledged, But Insufficient
Despite the warnings, the EU acknowledged recent positive steps, including:
- Adoption of the Law on the Prevention of Money Laundering and Terrorist Financing
- Establishment of a Permanent Coordination Body
- Adoption of implementing by-laws
However, Brussels stressed that political will and effective coordination remain decisive.
“Bosnia and Herzegovina has shown that progress is possible when there is political commitment and efficient coordination,” the EU concluded.
Risk of Returning to the Grey List
Bosnia and Herzegovina previously appeared on the FATF grey list from 2015 to 2018, and now faces the risk of returning due to insufficient implementation of reforms.
The MONEYVAL body has issued 70 recommendations aimed at strengthening oversight, tightening sanctions, and improving enforcement. Compliance with these measures will be assessed in February 2026, in close coordination with FATF.
Failure to act decisively could once again place Bosnia and Herzegovina under enhanced international financial supervision, with far-reaching economic and political consequences.
