Serbia replaced Bosnia and Herzegovina on FATF black list

In the latest report published by Financial Action Task Force (FATF) which is part of its on-going review of compliance with the anti-money laundering and combating the financing of terrorism and proliferation standards (AML/CFT), the FATF identified several jurisdictions that have strategic deficiencies.

Serbia, due to strategic and systemic deficiencies, was included in this report published at the end of February. Other countries that are also included in the report are Iraq, Ethiopia, Sri Lanka, Syria, Tunisia, Trinidad and Tobago, Vanuatu and Yemen. According to the report, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies.

In the section reserved for Serbia, it is underlined that Serbia made a high-level political commitment to work with the FATF to strengthen the effectiveness of its AML/CFT regime and address any technical deficiencies. Also, it is listed what has to be done in order to implement its action plan to accomplish these objectives. Some of them are subjecting lawyers, notaries and casinos to supervision, then, increasing supervisory staff resources commensurate with sectoral risks and implementing measures related to politically exposed persons. Among the measures are, also, ensuring the implementation without delay of targeted financial sanctions measures related to terrorist financing and to proliferation financing.

Besides the measures to be implemented, the fact that Serbia found its place on the list caused a lot of reactions both by opposition leaders and by government officials.

Among the first who published this information was former Serbian President Boris Tadić who warned media about the issue. He stated that people who are now in power in Serbia are those who sold weapons to illegal terrorist groups and parastatal entities in the world which resulted that Serbia is now on a blacklist.

Contrary to his opinion, Prime Minister of Serbia Ana Brnabić is convinced that this was politically motivated decision to put Serbia in the list of countries with deficiencies in the system of combating money laundering and financing of terrorism. Also, she stated that the United States insisted on adopting a report in which Serbia is an insecure country in this area.

In addition, Prime Minister Brnabić claimed that the report in which Serbia was marked as insecure and which made Serbia under monitoring, actually no longer reflects the real situation. According to her words, FATF prepared that report more than a year ago, when it identified some strategic shortcomings, but in the meantime, Serbia has fulfilled 35 out of 40 recommendations of FATF and has adopted six systemic laws against money laundering and financing of terrorism. On the flip side, Brnabić said that the European Commission and the World Bank at the FATF debate in Paris opposed adoption of the report that placed Serbia among insecure countries.

Serbia remains the only Western Balkan country on the list as Bosnia and Herzegovina is no longer subject of FATF special monitoring process. It is stated that FATF welcomes Bosnia and Herzegovina’s significant progress in improving its AML/CFT regime, but also that it has established the legal and regulatory framework to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in 2015.

Publication of this article has been supported by the Balkan Trust for Democracy of the German Marshall Fund of the United States