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Money transfer from Bosnia and Herzegovina abroad (Overseas money transfer) « Area of Work of the Law Firm

Money transfer from Bosnia and Herzegovina abroad for individuals (natural person) usually occur in situations where a foreign citizen or a Bosnia and Herzegovina national residing abroad inherits money or, based on some legal transaction, has funds in an account in Bosnia and Herzegovina and wants to transfer them to his/her account abroad. The transfer of funds is carried out exclusively through formal banking channels (international payment order, SWIFT system) in strict compliance with foreign exchange regulations. Due to complex procedures and demanding documentation, our law firm Prnjavorac often assists clients – so the physical presence of a sender in Bosnia and Herzegovina is not required.

A client residing outside of Bosnia and Herzegovina can authorize a lawyer / an attorney-at-law to prepare and submit payment orders and required evidence to a bank in Bosnia and Herzegovina, without having to appear in person. In this way, a lawyer can coordinate the entire process: contact the bank, take over the client's payment order, obtain numerous tax certificates necessary for the money transfer, submit translated and certified documents, and monitor the implementation of the SWIFT transfer. Banks in Bosnia and Herzegovina have a wide network of correspondent banks and use the international SWIFT system for secure money transfers.

Legal framework of inheritance and foreign exchange business

It is important to note that according to the Inheritance Law of Bosnia and Herzegovina, foreign citizens are equal to local citizens – foreigners have the same right of inheritance as Bosnia and Herzegovina citizens. Therefore, if the heir lives abroad, he/she has the legal right to take over and transfer the inherited money from Bosnia and Herzegovina. After the court or notary public has issued a legally binding decision on inheritance (along with a death certificate, identity certificates, possibly a will, etc.), the money from the estate can be paid to the foreign currency account of the heir or his/her representative in Bosnia and Herzegovina.

All money transfers from Bosnia and Herzegovina abroad are governed by the Law on Foreign Exchange Operations and accompanying regulations. According to that law, payments abroad must be made in foreign currency (foreign currency). This means that, for example, KM (Bosnian mark - BAM) from a current account in Bosnia and Herzegovina should be converted into euros or some other foreign currency beforehand. Also, every payment order must be preceded by a record of the purpose of payment; for inheritance, it is usually referred to as "inheritance" or "payment of inheritance". Banks check whether the transaction is in accordance with the law and regulations – "The bank cannot execute an order for payment or transfer abroad if such payment/transfer is not in accordance with the law." In other words, every payment must be justified by a valid document: inheritance decision, a deed of gift (donation contract), court decision, etc.

In addition, banks apply strict procedures in accordance with the rules on the prevention of money laundering and terrorist financing when making international transfers. In practice, this means that proof of the origin of the funds is required. For example, if a larger amount is being transferred, the bank may request more detailed documentation (e.g. proof that it is about inheritance) and even confirmations from competent institutions. User experience shows that banks often require confirmation/certificate from the Tax Administration and the ITA (customs) that the sender has no outstanding tax or customs obligations.

Procedure and required documentation for sending money abroad

It is necessary to collect all relevant evidence of the right to the funds. In the case of inheritance, this is a final / legally-binding decision on inheritance (issued by a court or notary public), accompanied by the death certificate of the testator and an extract from the registry of deaths. If the money is, for example, a gift or other transaction, this must be proven by a gift agreement, loan agreement, or other documents – with an official translation and certification in Bosnia and Herzegovina.

Furthermore, the sender or his/her representative must fill out a foreign payment form (foreign order). The following is stated in it:

• IBAN account number and SWIFT/BIC of the recipient of the money abroad;
• amount and currency of payment;
• the purpose of the payment (e.g. "inheritance", "loan repayment", etc.);
• transfer cost arrangement (OUR/BEN/SHA).

The procedure then follows like this: 1) The sender (or his authorized representative) submits a completed foreign payment order to a bank. 2) He/she encloses all required documentation with the payment order as proof of the origin of the money and the purpose of the payment. 3) The bank reviews the order and accompanying attachments – in accordance with the law, it checks whether the payment is legitimate and whether the client has any outstanding tax obligations. 4) After approval, the bank initiates a transfer of funds via the SWIFT network to the beneficiary's bank. 5) The recipient of the funds should enable the payment to be credited to his account (provides an IBAN, possibly confirming his/her resident status in that country if necessary). In some cases, the SEPA procedure is applied (for euro payments within the EU), but essentially all international transfers go through SWIFT codes.

The steps to be completed, in short:

• Open a foreign currency account in a bank in Bosnia and Herzegovina (if you don't already have one).
• Prepare all the documentation on the legal basis for the money (inheritance decision, contract, will, passports).
• Fill out the foreign payment order and collect the IBAN and SWIFT of the recipient's bank.
• Submit the payment order and evidence to the bank in Bosnia and Herzegovina (in person or through a proxy/attorney-at-law).
• Wait for the bank's approval and execution of the SWIFT transaction.

The role of an attorney-at-law / lawyer in international money transfer

Attorneys can make this process much easier. For example, a law firm can obtain a certified power-of-attorney from a client to represent them before a bank, prepare and have the necessary contracts or court documents translated (e.g., court decisions, wills, inheritance declarations), and follow up on the entire procedure by communicating with bank officials. This way, a client who is abroad does not have to come to Bosnia and Herzegovina. Also, a lawyer has experience in what certificates to present to banks (e.g., tax certificates on settled obligations) and common practices in banks. He/she can advise a client on how to make the transfer within the legal framework and as quickly as possible, taking into account the most favorable banking tariffs/fees and deadlines.

In conclusion, transferring money from Bosnia and Herzegovina abroad for individuals or legal entities involves a complex series of formalities: from proof of the origin of funds to the correct completion of foreign payment orders, as well as evidence that an individual has no direct and indirect tax obligations, customs duties, etc. Everything must be in accordance with the Law on Foreign Exchange Operations. The success of the transaction depends on complete documentation and cooperation with the bank. Our law firm provides preparation and representation services in such cases, so that the client can legally transfer funds from Bosnia and Herzegovina to his/her account abroad without stress.