Financial Crime World

COMPLIANCE PROCEDURES FOR BANKS IN CROATIA: A COMPREHENSIVE GUIDE

INTRODUCTION

In Croatia, banks and financial institutions are subject to strict Anti-Money Laundering (AML) regulations aimed at preventing the financing of terrorism and other illicit activities. The main legislation governing AML in Croatia is the AML Act, which came into effect on April 25, 2019.

KEY REQUIREMENTS

Banks in Croatia must adhere to Know Your Customer (KYC) guidelines, which involve verifying the identity, suitability, and risks associated with maintaining a business relationship. The KYC process includes:

  • Establishing the identity of the customer
  • Verifying the customer’s identity through documents, data, or information obtained from credible sources
  • Conducting regular due diligence to monitor the business relationship

CUSTOMER DUE DILIGENCE

Banks in Croatia are required to conduct a thorough KYC process to assess the risks associated with each customer. This includes:

  • Verifying the customer’s identity through face-to-face identification or video call (if permitted by law)
  • Assessing the customer’s suitability for a business relationship
  • Monitoring the business relationship regularly

THIRD PARTY RELIANCE

Banks in Croatia are allowed to rely on third parties to conduct KYC measures, but only for specific services such as:

  • Establishing and verifying the identity of the customer
  • Collecting data on the purpose and intended nature of the business relationship

However, banks must always maintain responsibility for implementing customer due diligence measures independently.

OUTSOURCING CUSTOMER DUE DILIGENCE

Banks in Croatia are not permitted to outsource customer due diligence to third parties who are not obliged by law to comply with AML regulations. This means that banks cannot rely on services such as WebID, IDnow, or PostIdent.

LICENSE AND REGISTRATION REQUIREMENTS

Third parties providing services regulated under specific acts must obtain a license or approval for provision of respective services.

CONCLUSION

In summary, banks in Croatia must adhere to strict AML regulations and conduct thorough KYC processes to assess the risks associated with each customer. Banks are allowed to rely on third parties for specific services, but must maintain responsibility for implementing customer due diligence measures independently. Additionally, banks cannot outsource customer due diligence to third parties who are not obliged by law to comply with AML regulations.