Bosnia-Herzegovina Country Summary
Medium-High Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Higher Concern
US State ML Assessment
Medium Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
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.
Sanctions
The United States has imposed asset freezes and travel bans targeting Milorad Dodik, his family, and entities enabling corruption or secessionist activities under EO 14033, EO 14140, and the Western Balkans Stabilization Regulations. Additionally, the European Union, United Kingdom, and Switzerland maintain autonomous or aligned sanctions—asset freezes and travel bans on individuals undermining BiH sovereignty and the Dayton Agreement—while the UN currently reports no comprehensive sanctions against Bosnia and Herzegovina.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 34 |
| World Bank: Control of Corruption Percentile Rank | 31 |
Bosnia and Herzegovina faces significant challenges related to crime and corruption, with pervasive issues impacting both governance and economic development. Corruption is deeply entrenched within political and economic institutions, leading to ineffective law enforcement and a lack of accountability for public officials, while organized crime, including drug trafficking and human smuggling, thrives due to weak security systems and political interference.
Economy
Bosnia and Herzegovina (BiH) presents a challenging yet potentially rewarding environment for foreign investment, characterized by a liberal trade regime and low tax rates, including a 10% flat income tax and 17% VAT. However, endemic corruption, a complex legal and regulatory framework, and a weak judicial system significantly hinder investor confidence and complicate business operations. Despite these obstacles, BiH has seen a gradual increase in foreign direct investment (FDI), particularly in sectors such as manufacturing, banking, and renewable energy, although political instability and ethnic tensions continue to pose risks to economic stability and growth.
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