Bosnia-Herzegovina Country Summary

FATF Status

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

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.

Bosnia and Herzegovina (BiH) faces significant challenges related to corruption and crime, with pervasive corruption within political and economic institutions undermining the rule of law and deterring foreign investment. The complex administrative structure and lack of effective enforcement of anti-corruption laws create an environment where corrupt practices, such as bribery for business permits, are common, while organized crime, including drug trafficking and human smuggling, thrives due to weak governance and the influence of mafia-style groups.

Bosnia and Herzegovina (BiH) presents a mixed economic and investment climate characterized by significant challenges and opportunities. While the country is open to foreign investment and offers a liberal trade regime with low tax rates, investors face hurdles such as endemic corruption, a complex legal framework, and a weak judicial system influenced by political patronage. The economy has shown resilience with projected GDP growth, but it suffers from low levels of foreign direct investment (FDI) due to political instability, high labor costs, and a fragmented regulatory environment, which complicates business operations and discourages potential investors.