May 06, 2014
TheSrpskaTimes

Due to the delay of the adoption of the Law on Prevention of Money Laundering and Financing of Terrorist Activities, commercial credit lines to BiH will be suspended or reduced, with significant increase in costs.

This is one of the consequences that Bosnia and Herzegovina will face for not adopting this law, according to a warning letter that the Banks Association of BiH (UBBiH) sent to the leaders of both Houses of the BiH Parliamentary Assembly, Council of Ministers, the Ministry of Security, the State Investigation and Protection (SIPA), the Financial Intelligence Department of SIPA, the entity banking agencies and all banks.

The letter warns that companies that export from BiH and that collect payments on the basis of the work done will be faced with additional checks, delays and possible suspensions.

One of the consequences of not adopting the law will be that bank guarantees of financial institutions from BiH, which our compnies offer to their business partners abroad, will be subject to increased checks and analysis with the real possibility of refusals. It is very likely that financial institutions from abroad will cease to accept bank guarantees from BiH, warns UBBiH.

It also warns that BiH companies with foreign currency accounts abroad will be treated as high risk, including additional checks and restrictions.

Also payment transactions from abroad in favor of natural and legal persons in BiH will be subject to intensified checks of financial institutions from abroad, which will slow down and increase the cost of the transfer.

“All this will mean that the economic entities in Bosnia and Herzegovina, therefore the banks, will become inflexible and uncompetitive on the world market with all its negative consequences imposed by the market economy,” said President of the Banks Association BiH, Michael Mueller.

He stresses that the UBBiH specified only the effects related to the operations of the banking sector, but also the socio-economic aspects and the issue of jobs will certainly be called into question many times.

At the end of the letter the UBBiH states that it urges the adoption of a new law on the prevention of money laundering and financing of terrorist activities with the comment that the reasons for the delay are not clear because the law had been accepted and agreed by the relevant institutions.