Illicit Finance: Western Balkans Must Act to Clean Up Dirty Money Problems

Western Balkan countries are still struggling to combat money-laundering and illicit finance. National legislation is largely compliant with the standards of the Financial Action Task Force, the international intergovernmental organisation tackling money-laundering; none of the Western Balkan countries are currently on the Task Force’s “grey list” of states that require increased monitoring. However, structural deficiencies remain.

Weak oversight, high levels of corruption and cash-based economies are some key enablers of money-laundering. The financial sector in the Western Balkans is the main contributor to the suspicious transaction reports sent to these countries’ financial intelligence units.

Between 2019 and 2023, nearly 22,000 suspicious transaction reports in the region originated from financial institutions. Banks contributed the largest share, followed by fast money transfer services. Serbia recorded the highest number of suspicious transaction reports in the region, followed by Albania and Kosovo.