Commercial banks in Bosnia & Herzegovina have been facing difficulties in cooperating with their foreign counterparts since the country was included by the European Union in a list of countries that pose a high risk to the financial system, according to Bosnia’s Bank Association (UBBiH). 

Bosnia was included in the list along with Afghanistan, Iraq, Syria and Yemen as the country failed to adopt measures tackling money laundering and terrorist financing risks. The country has been warned repeatedly by the EU that it needs to change its criminal code to effectively fight money laundering and financing of terrorism.

“The operations of banks and clients, regardless of whether they are firms or individuals, is put in jeopardy,” UBBiH said in a statement on its website.

It added that banks are already facing the consequences of the EU’s decision. Bank accounts are being closed by foreign counterparts, while transactions are being cancelled. At the same time, foreign banks are delaying payment transactions to and from Bosnia, since taxes on such payments are significantly higher than before.

The EU's list is based on the findings of the Financial Action Task Force (FATF). In 2015, Bosnia pledged to make an action plan to improve its legislation on anti-money laundering and combating terrorist financing, and to implement it by mid-2017. However, the implementation has been delayed.