Bosnia and Herzegovina Compliance Report

Regulatory Overview

Regulatory Status

Dedicated crypto/VA legislation, licensing regime, active enforcement

Key Regulator(s)

Securities Commission of the Federation of Bosnia and Herzegovina, Ministry of Security of Bosnia and Herzegovina, Financial Intelligence Agency, State Investigation and Protection Agency

Primary Legislation

The Law on Prevention of Money Laundering and Terrorist Financing (Zakon o spreč, Law on Prevention of Money Laundering and Terrorist Financing of Bosnia and Herz, You may need to navigate to legislative sections to find the specific law, No specific mandates. BiH law does not currently mandate the use of cold storage, Regulation (EU, Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA): https://eur-lex.eu, Bosnia and Herzegovina has no single dedicated crypto licensing law, but fragmen, Law on Securities (Official Gazette No. 3/92), Law on the Securities Commission (Official Gazette No. 10/99), Law on the Securities Market (Official Gazette No. 11/93), Law on Digital Assets of Republika Srpska (Zakon o digitalnoj imovini Republike, The referenced ‘Law on Digital Assets’ is a Serbian law published in the Officia, There is no specific law on cryptocurrencies or digital assets in the FBiH. Legi

Travel Rule

Adopted — Threshold: Implemented

Tax Reporting

Under general capital gains principles in BiH, exchanging cryptocurrency for fiat currency (BAM, EUR, USD) constitutes a disposal of an asset, potentially triggering a taxable event. However, no specific BiH cryptocurrency tax legislation or official guidance exists to confirm this treatment.. In the absence of specific BiH guidance, exchanging one cryptocurrency for another is likely treated as a disposal under general capital gains principles (applying Article 14, FBiH Personal Income Tax Law; Article 28, RS Personal Income Tax Law). However, this is an interpretation by analogy, not confirmed by any BiH authority.. Using cryptocurrency to purchase goods or services constitutes a disposal of an asset under general BiH tax principles. The fair market value of goods/services received is the proceeds. No specific BiH guidance exists for cryptocurrency transactions.. Individuals: Capital gains are generally subject to personal income tax. The Personal Income Tax Law in FBiH (Zakon o porezu na dohodak) generally levies a flat rate.. Rate: Typically 10% on net taxable income, which would include capital gains derived from the sale of assets like crypto.

Key Facts

• aml Zakon o sprečavanju pranja novca i finansiranja terorističkih aktivnosti (Law on Prevention of Money Laundering and Financing of Terrorist Activities) – Official Gazette of BiH, No. 13/2024. Crucial Amendment: The latest significant amendments, particularly those published in Official Gazette of BiH, No. 13/20 (Law on Amendments to the Law on Prevention of Money Laundering and Financing of Terrorism), explicitly brought Virtual Asset Service Providers (VASPs) under the scope of obliged entities. This amendment defined virtual assets and established obligations for entities dealing with them. Exchange between virtual assets and fiat currencies. Exchange between one or more forms of virtual assets. Transfer of virtual assets. Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets. Participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset. Identifying the customer (and any person acting on behalf of the customer) and verifying their identity using reliable, independent source documents, data, or information.
• enforcement State Investigation and Protection Agency (SIPA) (Državna agencija za istrage i zaštitu) - primary law enforcement agency. Federal Police Administration (FUP) (Federalna uprava policije) - law enforcement agency of the Federation of BiH. Prosecutor's Office of BiH (Tužilaštvo Bosne i Hercegovine) - leads the criminal prosecution. Support from international agencies (e.g., Europol, foreign law enforcement). Entity Targeted: An organized international criminal group. Violation Type: International drug trafficking, organized crime, and money laundering through cryptocurrencies. The use of encrypted applications (Sky ECC and Anom) and cryptocurrencies was central to their operations for communication and financial transactions. As this is an ongoing criminal investigation and prosecution, specific final "penalty amounts" (fines, sentences) are pending court decisions. Reports indicate seizures in the hundreds of kilograms of drugs and significant amounts of cash. Date: Operations and arrests occurred primarily in April and May 2023, with follow-up actions and indictments in subsequent months. The investigation had been ongoing prior to these public operations.
• general Comprehensively Sanctioned Jurisdictions: Countries or regions under broad embargoes or comprehensive sanctions (e.g., Iran, North Korea, Cuba, Syria, Crimea, DNR, LNR regions of Ukraine, and certain regions of Belarus). Individuals and Entities in Specific Jurisdictions: Even in non-comprehensively sanctioned countries, specific individuals, entities, or sectors might be targeted. "High-Risk Jurisdictions" identified by FATF: While not strictly sanctions, these jurisdictions require EDD and increased scrutiny due to their AML/CFT deficiencies. Administrative Fines: Substantial monetary fines imposed by regulatory authorities (e.g., Central Bank of BiH, Banking Agencies of FBiH and RS, or other supervisory bodies) on entities and responsible individuals. Criminal Penalties: For serious offenses, particularly those involving money laundering or terrorist financing, individuals can face: Imprisonment: Lengthy prison sentences. Criminal Fines: Significant monetary penalties. Reputational Damage: Significant harm to the entity's reputation, loss of trust, and potential inability to conduct business with international partners.
• licensing No specific "crypto custody license" exists. Unlike some EU countries with dedicated VASP (Virtual Asset Service Provider) licensing regimes that explicitly cover custody, BiH has not yet introduced such a license. AML Registration for VASPs: The primary regulatory requirement for entities providing services related to virtual assets, including those that might engage in custody (e.g., exchanges holding client funds), stems from the AML/CFT framework. BiH has aligned its AML legislation with FATF recommendations, which includes treating Virtual Asset Service Providers (VASPs) as obliged entities. The Law on Prevention of Money Laundering and Terrorist Financing (Zakon o sprečavanju pranja novca i finansiranja terorističkih aktivnosti) mandates that VASPs, which would typically include entities offering custodial services for virtual assets, must register with the relevant authority (likely the Financial Intelligence Unit - FIU BiH) and implement robust AML/CFT procedures, including Know Your Customer (KYC) checks. Law on Prevention of Money Laundering and Terrorist Financing of Bosnia and Herzegovina (Official Gazette of BiH, No. 100/17, 36/18, 55/19, 32/22, 12/23, 12/24). While an official English translation with a direct government URL for the latest consolidated version can be hard to pinpoint, the law is accessible via official legislative databases. The Ministry of Security often publishes updates or related information. Ministry of Security of BiH (responsible for AML policy): http://www.msb.gov.ba/?lang=en (You may need to navigate to legislative sections to find the specific law). In Bosnia & Herzegovina, the Financial Intelligence Unit (FIU) plays a key role in AML/CFT enforcement, but VASP registration and oversight are not centralized under a single authority; requirements vary by entity (FBiH, Republika Srpska, Brčko), and other bodies like the FBiH Tax Administration also exercise enforcement powers. No specific rules for digital assets. Given the absence of a dedicated custody framework, there are no specific legal mandates requiring the segregation of client digital assets from the custodian's proprietary assets. General Fiduciary Principles (by analogy): While not legally binding for crypto, general principles of good corporate governance and financial trust would suggest that responsible custodians should segregate assets. However, this is currently a best practice rather than a regulatory requirement in BiH for digital assets.
• sanctions UN Security Council Resolutions (UNSCRs): As a UN member state, BiH is legally bound to implement sanctions regimes imposed by the UNSC, particularly those related to terrorism financing, proliferation financing, and other threats to international peace and security. Alignment with EU Sanctions: Although not an EU member, BiH has signed a Stabilization and Association Agreement with the EU and is a candidate country for EU membership. This means it has a political commitment to approximate its legislation with the EU acquis, including EU restrictive measures (sanctions). Application of OFAC Sanctions: U.S. sanctions, primarily administered by the Office of Foreign Assets Control (OFAC), have significant extraterritorial reach. Any VASP or financial institution in BiH dealing with U.S. persons, transacting in U.S. dollars, or involving U.S. financial systems can be subject to OFAC jurisdiction. Furthermore, OFAC has specific sanctions programs targeting individuals and entities within BiH. Risk Assessment: Obligated entities must conduct a comprehensive risk assessment to identify and evaluate ML/FT risks, including those related to crypto assets, specific customers, products, services, and geographic areas. This must inform their internal controls. Identification and Verification: VASPs must identify and verify the identity of their customers (natural and legal persons) and, crucially, their beneficial owners. Purpose and Nature of Business: Understand the purpose and intended nature of the business relationship. Ongoing Monitoring: Continuously monitor customer transactions and activities to ensure consistency with their business profile. Enhanced Due Diligence (EDD): Apply EDD for high-risk situations, such as dealings with Politically Exposed Persons (PEPs), customers from high-risk jurisdictions, or transactions involving anonymity-enhancing technologies.
• securities The Federation of Bosnia and Herzegovina (FBiH) regulates cryptocurrencies and digital assets through the Commission for Securities Market (Komisija za Burzovni Prikaz, KMP), which oversees compliance with financial market rules and ensures transparency in securities transactions. Federation of Bosnia and Herzegovina Securities ... The legal framework for digital assets in Bosnia and Herzegovina is primarily governed by the 2022 amendments to the Law on the Securities Market (at the state level) and entity-level capital market reforms (e.g., in the Federation of BiH), which formally recognize virtual currencies and establish licensing procedures under the Securities Commission, while also referencing financial services laws where applicable. In Bosnia and Herzegovina, cryptocurrency regulation is fragmented. The Republika Srpska (RS) entity requires entities offering virtual asset services to obtain authorization from the RS Securities Commission under its amended Law on the Securities Market (2022), while the Federation of BiH (FBiH) lacks a dedicated licensing regime. No 'KMP' authority issues such licenses. The FBiH mandates robust Know Your Customer (KYC) procedures for all digital asset service providers, requiring identity verification and ongoing monitoring to mitigate money laundering risks. Federation of Bosnia and Herzegovina Securities ... Regulatory enforcement in Bosnia and Herzegovina includes fines and potential suspension of licenses for non-compliance with AML/KYC obligations or improper conduct in the securities market. The KMP actively investigates violations to maintain market integrity. Capital Markets: How the Stock Exchange Is Organized In Bosnia and Herzegovina, cryptocurrency transactions are not subject to a unified, clearly defined tax framework. The tax treatment varies by entity, with no specific legislation for crypto taxation. Income from crypto may be taxed as capital gains at rates varying by entity (e.g., 10% in Republika Srpska, up to 13% in the Federation of BiH), but there is no centralized guideline for reporting gains or losses. VAT treatment on crypto transactions is not specifically addressed by the Indirect Taxation Authority, which has only issued notices regarding foreign digital service providers. Taxpayers are advised to consult local tax authorities for the latest entity-specific guidance. Regulatory gaps in Bosnia & Herzegovina regarding the classification of blockchain-based securities and cross-border enforcement are being addressed through ongoing regulatory developments. Securities Registry in the Federation of Bosnia and ...
• status Republika Srpska (RS): Has adopted a specific law governing digital assets, representing a partial, but significant, regulatory framework. This makes RS one of the few jurisdictions in the region with dedicated crypto legislation. The status of the Federation of Bosnia and Herzegovina (FBiH) has evolved due to recent regulatory developments. Overall B&H: Cryptocurrencies are not considered legal tender anywhere in B&H. Financial institutions are generally wary and advised to exercise caution or refrain from dealing with crypto-related activities. Role: Primarily responsible for monetary policy and financial stability. Stance: Does not directly regulate cryptocurrencies as they are not recognized as legal tender or financial instruments under current federal law. However, the CBBH has issued warnings to the public and financial institutions regarding the risks associated with cryptocurrencies, including volatility, lack of consumer protection, and potential for money laundering. Specifics: No direct supervisory powers over crypto entities in the absence of specific legislation. URL (Example of CBBH warning/stance): While specific pages can change, official statements are typically found in news releases or reports on their main site: Centralna Banka Bosne i Hercegovine (CBBH) Role: The primary regulatory body for digital assets within Republika Srpska, as mandated by the Law on Digital Assets.
• tax Under general capital gains principles in BiH, exchanging cryptocurrency for fiat currency (BAM, EUR, USD) constitutes a disposal of an asset, potentially triggering a taxable event. However, no specific BiH cryptocurrency tax legislation or official guidance exists to confirm this treatment. In the absence of specific BiH guidance, exchanging one cryptocurrency for another is likely treated as a disposal under general capital gains principles (applying Article 14, FBiH Personal Income Tax Law; Article 28, RS Personal Income Tax Law). However, this is an interpretation by analogy, not confirmed by any BiH authority. Using cryptocurrency to purchase goods or services constitutes a disposal of an asset under general BiH tax principles. The fair market value of goods/services received is the proceeds. No specific BiH guidance exists for cryptocurrency transactions. Individuals: Capital gains are generally subject to personal income tax. The Personal Income Tax Law in FBiH (Zakon o porezu na dohodak) generally levies a flat rate. Rate: Typically 10% on net taxable income, which would include capital gains derived from the sale of assets like crypto. Businesses (Legal Entities): If a business realizes capital gains from crypto (e.g., holding crypto as an investment and selling it), these gains are included in the taxable profit. Rate: Corporate Profit Tax rate is generally 10%. Businesses (Legal Entities): Similar to FBiH, capital gains are included in taxable profit.
• travel rule Uprava za Indirektno - Neizravno Oparezivanje (UINO): Responsible for indirect taxation, including customs duties. Website: https://www.uino.gov.ba/portal/en/ Law on Customs Policy of Bosnia and Herzegovina ('Official Gazette of BiH', No 58/15): Governs customs duties, including exemptions for personal luggage (Section 207(a)(16)). Decision on Requirements and Procedures for Exemption from Payment of Import Duties ('Official Gazette of B&H', No 24/18): Details quantitative limitations for exempted goods. Law on Value Added Tax ('Official Gazette of BiH', Nos 9/05, 35/05, 100/08, 33/17): Includes Article 26(2) concerning VAT exemptions for personal luggage items. Law on Excise Duties in Bosnia and Herzegovina ('Official Gazette of BiH', Nos 49/09, 49/14, 60/14, 91/17): Contains Article 30(1)(c) regarding excise duty exemptions for qualifying goods. Who Needs a License?: No specific license is mandated for cryptocurrency service providers under current BiH law. Activities Requiring Licensing: None directly related to digital assets; licensing pertains mainly to customs and indirect taxation. Capital Requirements: Not applicable to crypto services due to lack of regulatory focus.

Sources

• https://sipa.gov.ba/en/
• https://sipa.gov.ba/bh/aktuelnosti/vijesti/4612/u-bih-i-inostranstvu-realizovana-medunarodna-akcija-%E2%80%9Eblack-diamond%E2%80%9C
• https://www.klix.ba/vijesti/bih/akcija-crni-dijamant-uhapsene-tri-osobe-u-sarajevu-zaplijenjena-droga-i-oruzje/230419058
• https://www.slobodnaevropa.org/a/bih-akcija-crni-dijamant-medjunarodni-kriminal/32371987.html
• https://www.cbbh.ba/
• https://www.komvp.gov.ba/
• http://www.sec-rs.com/
• https://www.rvp.ba/english/
• https://www.komvp.gov.ba/en
• http://www.sase.ba/v1/en-us/Market/General-Information/How-to-buy-or-sell
• https://www.sase.ba/v1/en-us/SASE/Members-and-Shareholders/SASE-Members
• https://www.sase.ba/v1/en-us/Legislation/Rules-of-SASE
• https://globaledge.msu.edu/countries/bosnia-and-herzegovina/resources
• https://www.oecd.org/en/publications/strengthening-capital-markets-in-bosnia-and-herzegovina_0b8fa0de-en/full-report/component-6.html
• https://www.komvp.gov.ba/en/about-commission
• https://www.komvp.gov.ba/en/about-commission/authority
• https://www.revizija.gov.ba/en/naslovna-en/
• https://aml-cft.msb.gov.ba/en/anti-money-laundering-and-counter-terrorist-financing-measures-bosnia-and-herzegovina-fifth-round-mutual-evaluation-report/
• https://aml-cft.msb.gov.ba/wp-content/uploads/2026/02/risk-assessment-aml-cft-virtual-assets-bosnia-and-herzegovina.pdf
• https://www.fatf-gafi.org/content/dam/fatf-gafi/fsrb-mer/MONEYVAL-MER-Bosnia%20and%20Herzegovina.pdf.coredownload.inline.pdf
• https://globaledge.msu.edu/globalresources/resourcesbytag/bosnia-and-herzegovina
• https://www.rbcis.com/en/gmi/global-custody/market-profiles/market.page?dcr=templatedata/globalcustody/marketprofiles/data/bosnia-herzegovina
• https://www.unicreditgroup.eu/en/strategy/business/global-securities-services/bosnia-and-herzegovina.html
• https://www.cbbh.ba/press/edukacija/694
• https://www.trade.gov/country-commercial-guides/bosnia-and-herzegovina-trade-financing
• https://www.uino.gov.ba/portal/en/information-for-citizens-and-travelers-2?print=print
• http://www.msb.gov.ba/?lang=en
• https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R1114
• http://www.cbbh.ba/?lang=en
• https://www.komvp.gov.rs/
• https://www.fipa.gov.ba/
• https://www.fba.ba/
• https://www.abrs.ba/
• https://sipa.gov.ba/bs/organizacija/organizacione-jedinice/finansijsko-obavjestajni-odjel/o-odjelu
• https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information/western-balkans-sanctions
• https://home.treasury.gov/news/press-releases
• https://www.cbbh.ba/press/edukacija/693
• https://www.sec.rs.ba/Documents/Regulativa/7f7ea6ba-bde4-44b8-8008-46171da6e1db_en-US.pdf
• https://eurofast.eu/wp-content/uploads/2024/02/TaxCard2024_Bosnia.pdf
• http://www.secrs.gov.ba/
• http://www.komvp.gov.ba/
• http://fintrac.gov.ba/
• https://www.vladars.net/
• https://www.pufbih.ba
• https://www.poreskaupravars.org
• https://www.uino.gov.ba
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• https://www.uino.gov.ba/portal/en/information-for-citizens-and-travelers-2/
• https://www.fcgm.gov.ba/