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SEE-Obs Hotspots IFFs in the Western Balkans Bosnia and Herzegovina

Bosnia and Herzegovina

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TOTAL population (2021)

3.27 million

CORRUPTION INDEX (2024)

33 / 100

CRIMINALITY SCORE

5.85

total area

51.2 km2

GDP TOTAL (2023)

US$27.51 billion

FREEDOM OF THE PRESS (2024)

56.33 / 100

RESILIENCE SCORE

3.88

GDP PER CAPITA (2023)

US$8 638.7

More about the Organized Crime Index
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Introduction

According to the Global Organized Crime Index 2023, Bosnia and Herzegovina ranks eighth in Europe in terms of criminality, with a score of 5.85, but has the lowest level of resilience to organized crime in the Western Balkans. The Index found that a number of high-scoring criminal activities operate in the country, including human smuggling and trafficking, drugs and arms trafficking, flora and fauna crimes, as well as non-renewable resource crimes. Financial crimes are also prevalent in the country, with a score of 6.0.

Significant illicit proceeds are generated through organized crime. Migrant smuggling alone accounted for a value of €7–€10 million in 2020. Criminals involved in predicate offences such as corruption, drug trafficking, and human trafficking and smuggling are often involved in money laundering activities.

Corruption is embedded in the country and enables illicit financial flows (IFFs). Transparency International’s Corruption Perception Index shows a decline in Bosnia and Herzegovina's anti-corruption efforts: the country’s ranking in the index has fallen over the last 5 years, reaching the lowest ranking in the Western Balkans. In 2024, the country was ranked 114th out of 180 countries, with a score of 33 out of 100 (where 100 represents the lowest level of corruption).

In 2023, 11 indictments were filed against 15 individuals for high - and mid - level corruption, including a former minister, a former director of the Veterinary Office of BiH, and a senior RS Ministry of Interior inspector. The high - level corruption charges involve misuse of police resources, with key evidence obtained from encrypted SKY and ANOM applications. 4 The Court of Bosnia and Herzegovina has extended the detention of Nenad Nešić, who was arrested in December 2024 while serving as the m inister of s ecurity of Bosnia and Herzegovina, and remains in custody . He is accused of money laundering, abuse of off ice, and accepting bribes, specifically for allegedly receiving € 125 000 in bribes during his tenure as the director of Putevi RS from 2016 to 2020. His arrest during his ministerial mandate and continued detention highlight the gravity of the charges and the ongoing corruption investigations targeting high - level government officials in Bosnia and Herzegovina.

In addition to the formal financial system and informality, trade is also widely used to move illicit proceeds by deliberately misrepresenting transaction details to under- or over-invoice, and by creating phantom or fictitious shipments and orders. The GI-TOC has estimated that around €10.2 billion is at risk of being misinvoiced in the country. In 2022 alone, more than €2 million was lost to the state budget through tax evasion and customs fraud.

According to the latest assesment by the State Investigation and Protection Agency, more than €6.8 million were laundered in the country in 2023. However, this estimate appears to be low, as money laundering is usually estimated at around 2–5% of GDP. In Bosnia and Herzegovina, it could be worth between €402 million and €1 billion. In addition to real estate, other assets used for money laundering include tourist resorts, exchange offices and luxury cars. Another significant channel for IFFs is the smuggling of cash throughout the region, in various currencies and denominations (usually euros and dollars). There is also a higher risk of undeclared monetary assets at airports and border crossings with Croatia, as in the case of the Svilaj, Orasje and Gradiska border crossings, where approximately €3 million were confiscated in 2022.

Despite some capacity and resources, financial investigations are not systematically initiated and there is a lack of clear and uniform obligations to conduct financial investigations. Bosnia and Herzegovina's Mutual Evaluation Report from the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)’s fifth visit was completed in 2025, with a new evaluation report published in February 2025. MONEYVAL, has released a report urging Bosnia and Herzegovina to improve its measures against money laundering and terrorist financing. The assessment highlights moderate effectiveness in nine out of eleven areas, including risk understanding, international cooperation, and the use of intelligence in investigations, but emphasizes the need for major improvements in these areas. Based on the results of its evaluation, MONEYVAL decided to apply its enhanced follow-up procedure and invited BiH to report back in December 2026.

Key challenges

  • Bosnia and Herzegovina’s response to IFFs has been limited due to a lack of understanding of their enablers and overall scale. The country tends to focus on the financial system and trade, with an emphasis on tax evasion. However, previous research has shown that illicit markets and corruption generate millions of euros annually.
  • In the criminal process, financial investigations are not conducted in an adequate and timely manner, as the country’s Criminal Code does not define specific procedures for the confiscation of property, nor does it define the components of financial investigations.
  • Civil society and the media lack the knowledge and experience to understand IFFs and the capacity to report and monitor the effectiveness of the country’s response. Another issue facing civil society and the media is data collection, in particular the lack of available information relevant to the investigation of IFFs.
  • There is an emerging need for external engagement to involve experts and practitioners from civil society, the media and the private sector in responding to IFFs. These experts and practitioners are not involved in the establishment of working groups that draft laws, amendments and relevant strategies and documents. In addition, there is scope for involving experts in the investigation of IFFs. For example, involving forensic accounting experts in the prosecutor’s office to improve the efficiency of financial investigations.
  • There is a lack of donor support for civil society and the media, particularly in terms of funding for monitoring and investigating IFFs, as well as opportunities for learning and capacity building in researching the phenomenon.

Role of civil society

Previous GI-TOC research has highlighted the need for a holistic approach to tackling IFFs, involving relevant stakeholders from law enforcement, media, civil society, academia and the private sector. In Bosnia and Herzegovina, civil society is under pressure from the government and only a few organizations in the country address the issue of corruption, and to a lesser extent, organized crime. The GI-TOC found that civil society capacity in the Western Balkans is limited in terms of knowledge and understanding of IFFs.

A well-equipped civil society with expertise and capacity can contribute to the prevention and mitigation of IFFs, thereby improving the effectiveness of the measures taken by the country. Overall, civil society can contribute through the following actions:

  • Raising public awareness of the negative impact of IFFs on society through campaigns and research, emphasizing the need for prevention.
  • Strengthening the capacity of other civil society organizations and the media by organizing training sessions on the issue, and providing civil society with the opportunity to network with law enforcement, the judiciary, etc.
  • Participating in working groups dealing with ML/TF and taking advantage of changes in the legislation, particularly in the areas of cybercrime and virtual asset service providers (VASPs).
  • Advocating for necessary amendments to the country’s Criminal Code and anti-money laundering and counter-terrorism financing (AML/CFT) law to align with international standards, such as the beneficial ownership registry.
  • Monitoring and reporting on the effectiveness of the country’s response to IFFs.
  • Promoting the importance of effective cooperation between state and corporate actors with civil society to jointly address IFFs.
  • Implementing transparency in the use of funds by non-profit organizations through publicly available financial reports, and empowering civil society with knowledge and capacity to prevent misuse of civil society organizations for the purposes of ML/FT.
Immediate Outcome 1

Understanding the risk

The term ‘illicit financial flows’ has no legal definition and is not widely understood by various stakeholders in Bosnia and Herzegovina, including the public sector, civil society and the media. The public is often unaware of the extent to which these flows affect society and hinder development and growth. However, civil society and the media have demonstrated a certain level of understanding of corruption, tax evasion and illicit markets as drivers of IFFs, as evidenced by reporting and exposing cases that have led to opening investigations and indictments.

Bosnia and Herzegovina has implemented several measures to address this issue, including conducting National Risk Assessments on ML/FT for the periods 2018–2022 and 2022–2024, along with action plans and reports on money laundering typologies. Organized Crime Threat Assessments (OCTAs) and other relevant strategies have been adopted. However, in addition to the adoption of these documents, the establishment of effective cooperation between state institutions for their implementation will be required.

The Supplement to the National Risk Assessment for 2022–2024, which was adopted in 2023, identified vulnerabilities to money laundering and rated the state’s susceptibility to money laundering and ability to prevent it as ‘medium’. However, the overall susceptibility to money laundering is rated as ‘medium–high’.

The first risk assessment of money laundering and terrorist financing related to virtual assets emphasizes how Bosnia and Herzegovina remains highly vulnerable to money laundering and terrorist financing risks related to virtual assets (VA) and virtual asset service providers (VASP) due to the absence of a legislative and regulatory framework at the state and entity levels, as well as limited institutional capacity to monitor and combat illicit activities in this sector. 

The financial intelligence department (FID) has developed several risk assessments and money laundering typologies, the most recent of which, published in September 2024, identified the establishment of legal entities in Bosnia and Herzegovina used to launder profits originating in the EU, where the most affected sectors used for money laundering are real estate and banks. The FID reported how foreign nationals in Bosnia and Herzegovina had orchestrated a fraudulent pyramid scheme under the guise of an online advertising business, requiring participants to pay fees ranging from €15 to €200, ultimately duping over 7 500 Bosnian citizens. The scheme generated over €1 million, which was transferred through multiple international accounts to obscure its origin, highlighting a typical financial fraud pattern involving fake business models and cross-border money laundering.

High-threat crimes that generate significant illicit funds include corruption, tax evasion and organized crime, while medium-high crimes are related to illicit production, drug trafficking and fraud. Trade-based money laundering was assessed as being a medium threat. The most common predicate offences for money laundering are corruption, drug and human trafficking, smuggling of weapons and excise goods, fraud, property crime and tax evasion.

These findings underscore the need for greater awareness and coordinated efforts to address money laundering in Bosnia and Herzegovina.

The table below shows the level of money laundering threat within relevant sectors.

Overview of money laundering threat level, by sector

Sector

Threat level

Banks

Real estate

Low

Medium
low

Medium

Medium
high

High

Notaries

Low

Medium
low

Medium

Medium
high

High

Fast money transfer (Western Union and post offices)

Low

Medium
low

Medium

Medium
high

High

Securities/loan stocks

Exchange offices

Casinos

Precious metal and stones traders

Auditors

Accountants

Microcredit service providers

Lawyers

Betting shops

Low

Medium
low

Medium

Medium
high

High

Non-profit organizations

Leasing service providers

Insurance companies

Low

Medium
low

Medium

Medium
high

High

Source: Bosnia and Herzegovina’s security ministry, Supplement to the National Risk Assessment on Money Laundering and Terrorism Financing in Bosnia and Herzegovina 2022–2024
Immediate Outcome 2

International cooperation

Bosnia and Herzegovina has signed 40 mutual legal assistance agreements with 13 countries, facilitating cooperation in civil and criminal matters, including money laundering. Agreements on the mutual enforcement of judicial decisions in criminal matters are in place with neighbouring countries such as Montenegro, Croatia, North Macedonia and Serbia. Bosnia and Herzegovina’s justice ministry plays a key role in international mutual legal assistance, which is governed by the law on mutual legal assistance in criminal matters of Bosnia and Herzegovina, which provides for the exchange of data based on information from courts and prosecutors’ offices.

Between 2017 and 2021, Bosnia and Herzegovina received 34 requests for mutual legal assistance, the majority of which came from Serbia, Croatia, Germany and Austria. The FID communicated with foreign financial intelligence units (FIUs) in 303 cases in 2021, while foreign FIUs contacted the FID in 631 cases, indicating an increase in requests to and from foreign FIUs.

The justice ministry has a dedicated department, the Sector for International and Inter-Entity Legal Assistance and Cooperation, which is staffed with specialists who handle international legal assistance cases. In June 2023, Bosnia and Herzegovina established the National/Joint Contact Point, which enables full cooperation with Europol. The country uses international law enforcement networks such as INTERPOL and Egmont to exchange information and data.

However, the lack of statistical data on frozen and confiscated assets abroad remains a significant challenge. There are some ongoing projects aimed to combat money laundering and IFFs through national, regional and international cooperation involving various stakeholders, including civil society initiatives. For example, a conference organized by Bosnia and Herzegovina’s security ministry, the Organization for Security and Co-operation in Europe and the German Agency for International Cooperation in December 2022 highlighted the importance of joint efforts with international support to combat money laundering and terrorist financing.

There are a number of initiatives to support civil society, but overall the focus on financing and international projects is on strengthening the capacity of institutions, including national, regional and international cooperation between different stakeholders.

Immediate Outcome 3

Supervision

Bosnia and Herzegovina has a complex political system, resulting in a fragmented police and security system, with different institutions involved in the monitoring of compliance with AML/CFT regulations, with certain issues that need to be addressed. The FID has expressed the need to improve cooperation with the supervisory bodies under the law on prevention of ML/TF in order to enhance the quality of reporting of suspicious transactions to the FID. In addition, GI-TOC research, as well as previous National Risk Assessment findings, suggested that the FID should improve communication with the banking authorities in order to provide information on the results of investigations conducted on the basis of reported suspicious transactions.

According to the law on the prevention of money laundering and financing of terrorist activities in Bosnia and Herzegovina, the FID and other relevant supervisory bodies are entitled to supervise AML/CFT compliance in the financial sector. Other supervisory bodies include:

  • Republic of Srpska’s justice ministry, the federal justice ministry and cantonal justice ministries.
  • The federal finance ministry, including the finance police.
  • Republic of Srpska’s finance ministry.
  • Brčko District’s finance directorate.
  • The Federation of Bosnia and Herzegovina’s banking agency, and Republic of Srpska’s banking agency.
  • Bar associations in the Federation of Bosnia and Herzegovina and Republic of Srpska.
  • The Federation of Bosnia and Herzegovina’s tax administration.
  • Bosnia and Herzegovina’s Indirect Taxation Authority.

VASPs are not regulated by the legal framework at the state level in Bosnia and Herzegovina, but according to the latest National Risk Assessment and VASP risk assessment findings, there is a risk of money laundering related to virtual assets, such as cryptocurrencies. The intersectoral working group was established to improve the understanding and identification of AML/CFT risks in Bosnia and Herzegovina related to the use of virtual assets and the operations of VASPs. The objective is to raise awareness and implement strategic measures to prevent, mitigate and eliminate identified risks of potential misuse of virtual assets and VASPs operating in Bosnia and Herzegovina.

Immediate Outcome 4

Prevention

Bosnia and Herzegovina lacks legislation directly addressing IFFs, as most laws focus on money laundering and terrorist financing. However, AML/CTF laws also need to be amended and harmonized with EU standards, and registers, such as on beneficial ownership, need to be established. The amendments to the Law on money laundering and terrorist financing were adopted in February 2024, introducing enhanced provisions for risk assessment and establishing a permanent coordinating body for all authorities responsible for its implementation, in accordance with the EU acquis.

The Law on AML/CFT in Bosnia and Herzegovina defines the responsibilities and duties of persons under obligation (OEs) in the implementation of measures against money laundering and terrorist financing. The new law strengthens the financial regulatory framework by restricting cash transactions. It prohibits individuals and entities from accepting cash payments over BAM30 000 for goods, real estate, or services, aiming to mitigate money laundering risks. The FID has developed typologies of money laundering, identifying the latest trends and highlighting the need for further training of its staff.

In 2024, Bosnia and Herzegovina adopted a new Law on the prevention of money laundering and financing of terrorist activities, reinforcing its commitment to FATF and MONEYVAL standards, and addressing key AML/CFT deficiencies. While Bosnia and Herzegovina has made progress in legal reforms, full implementation of these measures is crucial for strengthening its AML/CFT framework and achieving substantial compliance with MONEYVAL recommendations. To strengthen prevention efforts, authorities must continue to implement the following measures:

  • Raise awareness of money laundering typologies among OEs and provide feedback on suspicious transaction reports.
  • Enhance risk awareness and inter-agency coordination to improve the understanding of ML/FT threats and vulnerabilities.
  • Publicly share statistical data and trends on money laundering through FID reports.
  • Provide expert assistance to OEs on money laundering issues.
  • Provide education and training to sectors vulnerable to money laundering.
  • Ensure that relevant institutions and OEs understand ML/FT risks and appropriate mitigation measures.
  • Strengthen the supervision of actors such as attorneys, accountants, gambling operators and real-estate agents to ensure compliance.
  • Establish a single register of beneficial owners to align with international AML/FT standards.

Civil society, the media and the private sector are key actors in prevention, particularly in raising awareness of the harmful effects of IFFs and the use of the private sector and non-profit organizations in money laundering and terrorist financing. These efforts by civil society and the media are not fully recognized or supported. None of the funding opportunities in the country address the issue of money laundering and terrorist financing, while investigative media have uncovered most of the affairs leading to investigations and even convictions, such as the ‘ventilator affair’ during the COVID-19 pandemic. A notable initiative to strengthen the capacity of NGOs in the country is a project to develop a risk self-assessment tool, in terms of vulnerability to abuses related to money laundering and terrorist financing, and the impact of these frameworks on civil society operations.

Despite the potential effectiveness of NGOs and the proven track record of the media, they were excluded from the process of drafting the latest action plan and the NRA; as were academics.

Immediate Outcome 5

Private sector

Bosnia and Herzegovina still lacks a beneficial ownership registry, which risks placing the country back on the FATF’s grey list. The latest published typologies of money laundering and terrorist financing report on the misuse of legal entities through the banking system, in particular for trade-based money laundering. In such cases, companies are used as decoys to receive payments from abroad for certain services, which are then paid to other companies or individuals.

In addition, members of organized crime groups involved in drug trafficking use such companies to invest illegally acquired funds without any direct link to the company. There is evidence that money is transferred from the accounts of local companies to the bank accounts of individuals and legal entities abroad for which the transaction is not intended. According to the National Risk Assessment 2022–2024, the threat of foreign money laundering is ‘medium’, with an ‘increasing’ trend. The risk of money laundering has also been identified as high for cash payments from natural persons and business entities associated with them.

Although the legal framework at entity level and in Brčko District provides for the registration of legal entities, there is a need for stricter controls prior to the establishment of companies. This would prevent the creation of fictitious companies.

Due to the lack of registers of clients’ real estate, it is also necessary to establish the register of clients for politically exposed persons locally and nationally, in accordance with the latest National Risk Assessment, which would be publicly available and regularly updated.

The National Risk Assessment conducted in 2022 and adopted in 2023 recognized the efforts and capacities of different types of legal entities to assess their vulnerability and attractiveness to money laundering and terrorist financing. According to the findings of the National Risk Assessment and the OCTA report, the most common forms of money laundering used by companies, which are often interrelated, are as follows:

Overview of money laundering typology of business entities

Fictitious companies

Setting up fictitious companies to carry out fake legal transactions and using them to transfer money.

Offshore zones

  • Money obtained illegally in Bosnia and Herzegovina ends up in offshore zones, and money coming into Bosnia and Herzegovina from offshore zones.
  • The transfer of money to companies under the pretext of payment of financial obligations of the company.

Dummy companies

Legal business conducting the purchase of non-existent goods and services on the basis of over-invoicing.

Virtual partners

Using natural persons as virtual partners to set up fictitious companies, thereby opening accounts to transfer funds.

Investment companies

Using illegally obtained money to invest in real estate and the creation of companies to purchase equipment and resources.

Consulting companies

Payment for fictitious consultancy services through over-invoicing.

Fake loans

  • The use of suspicious funds for the payment of loans, as a cover for loans already paid in advance.
  • Granting high-interest loans linked to legal entities with the aim of withdrawing money from the banking system in Bosnia and Herzegovina and transferring it abroad.
  • Internal loans between the founder of the company and other business entities.

Fake employment

Abuse of legal entities for employment intermediation through fictitious invoicing of labour services.

Luxury car dealerships

The buying and selling of motor vehicles with money obtained illegally, usually from drug trafficking.

Source: OCTA report for Bosnia and Herzegovina 2021–2024, and National Risk Assessments on Money Laundering and Terrorism Financing in Bosnia and Herzegovina 2018–2022 and 2022–2024, Ministry of Security of Bosnia and Herzegovina
Immediate Outcome 6

Financial intelligence

A wide range of financial intelligence and other relevant information is collected and used by the competent authorities responsible for curbing IFFs in Bosnia and Herzegovina, as follows:

  • The FID, within the State Investigation and Protection Agency (SIPA).
  • The criminal police investigation service of the Federation of Bosnia and Herzegovina, within the federal police administration.
  • Ten ministries of the interior at the cantonal level.
  • Republic of Srpska’s interior ministry.
  • The Brčko District police.
  • The Indirect Taxation Authority.

The FID is the main organizational unit within the SIPA responsible for detecting, investigating and combating money laundering and terrorist financing. There is a complex law enforcement system in the country as there is no Ministry of the Interior at the state level. Therefore, the main role in ensuring cooperation and coordination between different authorities in the prevention of ML/TF is played by the inter-ministerial and expert body established in 2008, the Working Group of Institutions of Bosnia and Herzegovina for the Prevention of Money Laundering and Financing of Terrorism.

The collection of data from foreign financial intelligence units is carried out by the FID. The law on AML/CFT clearly defines the duties and responsibilities of OEs to report to the FID. For example, the AML software used by banks to report suspicious transactions is implemented and maintained by the FID. In 2020, the software was enhanced to allow banks to submit additional supporting documentation in electronic form when reporting suspicious transactions. This enhanced procedure for reporting suspicious transactions has significantly improved the reporting process. In the period 2018–2024, the FID received 7 136 reports of suspicious transactions by obliged entities.

Overview of suspicious transactions (STRs) reported to the FID in the period 1 January 2018 to 31 December 2024

Year

SRTs

1 227

Year

SRTs

1 380

Year

SRTs

1 501

Year

SRTs

1 047

Year

SRTs

812

Year

SRTs

763

Year

SRTs

455

Year

2018

2019

2020

2021

2022

2023

2024

STRs

455

763

812

1 047

1 501

1 380

1 277

Source: Data provided by the FID, 11 March 2025

The Indirect Taxation Authority, in accordance with the Law on the Administration of Indirect Taxation, controls, inspects and searches individuals and vehicles crossing the borders of Bosnia and Herzegovina. It has signed memorandums of understanding with state institutions – such as the border police, the prosecutor’s office and the SIPA – in order to achieve effective exchange of information and data needed by the administration for the investigation of crimes related to money laundering committed by taxpayers. In the period 2017–2021, according to the reports submitted by the Indirect Taxation Authority on tax and VAT evasion, fraud, trade-based money laundering, smuggling of goods, money laundering and organized crime in general resulted in damage to the budget of more than €80.6 million, nearly 158 000 000 convertible marks (BAM).

Although the OEs generally act accordingly and there are controls by the supervisory authorities, there is a need to strengthen the control mechanisms as well as the coordination of all authorities involved in curbing IFFs.

Statistics are generally difficult for civil society and the media to obtain, as most institutions do not provide publicly available information on their websites. It is often necessary to rely on the repeated requests for information, which are usually not answered in a timely or complete manner. The Indirect Taxation Authority provides citizens with an anonymous reporting system regarding customs, corruption, tax evasion and avoidance, and any form of smuggling.

Immediate Outcome 7

Investigations

The FID is the central unit for the detection, prevention and investigation of money laundering and terrorist financing. It collects and analyzes data, and forwards the results to prosecutors and relevant authorities for further action. In addition, financial investigation relies on the role of a prosecutor, which is new in its implementation, while the police have usually dealt with operational and intelligence data. Despite adequate resources, financial investigations lack systematic initiation and prescribed obligations.

There are initiatives in the Federation of Bosnia and Herzegovina and Brčko District to initiate amendments in legislation to create specialized units that would focus solely on collecting evidence for financial investigations. Historically, there have been few investigations, indictments and sentences related to money laundering. For example, between 2012 and 2016, seven prosecutor’s offices did not receive reports of money laundering and did not initiate independent investigations. However, the reporting of money laundering cases from law enforcement agencies to prosecutor’s offices increased in the following years.

The Criminal Procedure Codes in Bosnia and Herzegovina do not define specific procedures for confiscation of property, nor do they define the components of financial investigations and the role of the prosecutor in obtaining evidence. This has been improved through the adoption and implementation of laws on confiscation of property gains from criminal offences at entity and district level, introducing the key role of the prosecutor.

Between 2017 and 2021, the Prosecutor’s Office in Bosnia and Herzegovina filed 240 indictments for money laundering, particularly in 2020. In contrast, the Brčko District Prosecutor’s Office did not file any indictments. In the same period, the FID submitted 57 reports and information to the Prosecutor’s Offices concerning 172 individuals and 56 legal entities suspected of money laundering with a value of more than BAM105.7 million (over €50 million). The National Risk Assessment shows that most of the temporarily and permanently confiscated assets managed by the Federal Agency for the Management of Confiscated Property originate from cases handled by the FID.

The important role of the Indirect Taxation Authority is reflected in the detection and recording of cross-border transfers of cash, cheques, securities, and precious metals and stones with a value of BAM 20 000 (€10 225) or more. In 2022 alone, the authority submitted reports to the FID on a total of 808 recorded cases of money transfers across state borders, with a total value of BAM 3.6 billion (over €1.8 billion), mostly related to the withdrawal of cash from the country by commercial banks. In 2018–2021, a large number of cases of monetary assets were reported, while in the same period 10 cases of smuggling of cash smuggling in larger amounts were detected.

MONEYVAL reports that Bosnia and Herzegovina has initiated several money laundering investigations and prosecutions, primarily for fraud and self-laundering. However, the system’s effectiveness is hindered by poor prioritization, delays in proceedings and inconsistent legal interpretations among prosecutors and law enforcement at various levels. MONEYVAL indicates that authorities lack comprehensive statistics on money laundering (ML) investigations, prosecutions and convictions, though some figures were obtained. According to MONEYVAL, from 2018 to 2023, there were 284 final convictions for money laundering involving 349 individuals and four legal entities. The accuracy of these statistics remains unverified, as the NRA has reported inconsistent numbers of final ML convictions.

Immediate Outcome 8

Confiscation

Confiscation of criminal proceeds is a fundamental strategy in combating financially motivated crimes. In Bosnia and Herzegovina, laws on the confiscation and management of criminal proceeds have been adopted at the entity level, including in Brčko District. However, at the national level, there is no mechanism for securing and disposing of temporarily and permanently confiscated property acquired through criminal activities, which poses implementation challenges. The value of assets confiscated under court verdicts in 2023 exceeded €8 million (compared to €9 million in 2022). Extended confiscation was proposed in 12 cases, two first-instance court decisions were rendered, and there were no second-instance court decisions in 2023. There is a need for further clarification of extended confiscation in order to define property or material gains as ‘derived from criminal activities or crime’, rather than ‘originated from a criminal offence’. The institution of extended confiscation needs to be further adapted in practice.

Agencies responsible for confiscation and management of seized property lack information on funds outside of Bosnia and Herzegovina related to criminal offences and investigations in the country. In addition, these agencies have not yet been entrusted with the management of cryptocurrencies, nor has this been regulated within the legal framework. Bosnia and Herzegovina’s authorities did not actively pursue asset recovery from abroad, with only two mutual legal assistance requests sent in 2019, neither resulting in confiscation. This highlights a significant gap in international cooperation despite the frequent cross-border nature of money laundering cases.

Bosnia and Herzegovina’s legal framework provides for the social reuse of confiscated assets, but in practice capacity is limited. Civil society has benefited from the process of social reuse in a number of cases by donating money or goods to non-profit organizations. Civil society can play an important role in the social reuse of confiscated assets. Transparency International, with a watchdog function in external monitoring and evaluation of the asset management process, is a good example of the key role of civil society in the social reuse of confiscated assets.

Data from the Indirect Taxation Authority underlines an increased risk of undeclared monetary assets at airports and border crossings, particularly at the Svilaj, Orasje and Gradiska crossings. A trend known as 'money mules', often involving Turkish and Bosnian citizens, is recognized for its frequent use on the Istanbul–Sarajevo route due to the high frequency of flights.

Immediate Outcome 10

Non-profit organizations
in the prevention of IFFs

In Bosnia and Herzegovina, the Law on Associations and Foundations established regulations for non-profit organizations, including associations, institutions, foundations, institutes and religious communities engaged in non-profit activities, in line with legal requirements. Notably, between 2017 and 2021, the FID reported that associations and foundations did not report any suspicious transactions. During this period, there were no non-profit organizations reported for criminal offences related to the financing of terrorist activities.

However, there is a lack of effective supervision by legally designated supervisory bodies to ensure compliance with the Law on Associations and Foundations. These supervisory bodies lack the necessary technical, material and human resources to adequately monitor compliance with anti-money laundering regulations. There is also a need to raise awareness among non-profit organizations of their vulnerability to terrorist financing and money laundering.

Reports by the GI-TOC have highlighted cases of Bosnian civil society being used to divert public funds to organizations closely linked to, or founded by, members of the ruling party. Local politicians in the Brčko District enabled the distribution of nearly €4.5 million to close political associates without public appeal or consultation.

The National Risk Assessment for 2022–2024 identified a high risk of money laundering in the country’s non-governmental sector, as well as a medium-high risk of terrorist financing. It also highlighted several issues, including the non-functioning state of the register of associations and foundations, as perceived by civil society; limited supervisory controls over financial operations beyond tax matters; the absence of a state-level supervisory body for financial operations; and a recommendation for the FID to be more proactive in preventing money laundering and terrorist financing, rather than just responding to suspicious transaction reports. In general, the risk of money laundering in this sector is seen as resulting from insufficient cooperation and communication between authorities and institutions at different levels of government in Bosnia and Herzegovina.

There is a lack of government and donor support and interest in civil society and the media, which reduces the space for their involvement in this issue.

Although civil society holds certain risks related to money laundering and terrorist financing in Bosnia and Herzegovina, it is now facing increased pressure. CSOs are experiencing heightened scrutiny because of laws that impose stricter controls and empower supervisory authorities to target NPOs that are critical of ruling parties. In February 2025, the National Assembly of Republic of Srpska passed legislation requiring organizations receiving foreign funding to register as ‘foreign agents’, raising concerns about possible operational restrictions on CSOs. Notably, a similar law was previously withdrawn in 2024 following international pressure. Interviews indicate that, in Republic of Srpska, supervisory authorities are already exerting pressure on CSOs through increased controls, particularly targeting those that criticize ruling parties and corrupt officials. Additionally, in the Federation of Bosnia and Herzegovina, CSOs face pressure from the taxation authority, which has imposed penalties on specific organizations. According to interviews conducted, these actions are seen as efforts to suppress CSOs that combat corruption and crime.

Recommendations
for policymakers

  • The term ‘illicit financial flows’ lacks a defined legal framework and a common understanding of its channels among stakeholders. The informal economy and trade need to be understood as key channels where illicit proceeds – generated from corruption, organized crime and tax evasion – are moved in and out of the country, in addition to the formal financial system.
  • Strengthen cooperation among law enforcement agencies, the financial intelligence department and the judiciary to improve the effectiveness of asset tracing, freezing and confiscation processes. This includes providing specialized training to relevant personnel and developing standard operating procedures for asset management during investigations.
  • Encourage greater civil society engagement in the social reuse of confiscated assets by strengthening their capacities.
  • Enhance supervisory capacity through training and resources for supervisory authorities to effectively monitor and assess VASP activities, ensuring they have the necessary expertise and resources to address the unique challenges posed by virtual assets.
  • Greater involvement of civil society and the media in anti-money laundering initiatives is needed, as well as their contribution to monitoring and reporting on the effectiveness of the country’s response to IFFs.
  • Advocate for the involvement of civil society in working groups when drafting strategies and action plans.
  • Promote ongoing education and training of media and civil society on IFFs in general, and on understanding and reporting on IFFs in particular.
  • Encourage the engagement of external experts from civil society or the private sector who could provide practical support in criminal proceeds, for example in forensic accounting.
  • Launch joint campaigns between civil society, the media and law enforcement agencies, in particular the FID, to understand the scale of IFFs, their harmful effects, and the role of citizens and OEs in reporting suspicious transactions.

Country profiles

Albania

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Kosovo

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Montenegro

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North Macedonia

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Serbia

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