Financial Crime World

Croatia Cracks Down on Banking Fraud with Strengthened Preventive Framework

Croatia has made significant progress in combating money laundering and terrorist financing by strengthening its measures to prevent banking fraud. According to a follow-up report released by MONEYVAL, the country’s anti-money laundering (AML) and counter-terrorist financing (CFT) systems have shown substantial improvement.

Key Areas of Improvement

The report highlights several key areas where Croatia has made significant strides:

  • Customer Due Diligence: The country has strengthened its customer due diligence measures to better identify and verify the identity of customers.
  • Virtual Asset Service Providers: A registration regime for virtual asset service providers has been introduced, enhancing transparency and accountability in the sector.
  • International Cooperation: Competent authorities have been granted enhanced international cooperation powers to facilitate information sharing and collaboration with other countries.

Addressing Technical Compliance Shortcomings

Croatia has also made significant progress in addressing technical compliance shortcomings identified in its 2021 Mutual Evaluation Report. Specifically:

  • Beneficial Ownership Registers: The country has improved its beneficial ownership registers, making it easier to identify the true owners of companies.
  • Access to Information on Legal Persons: Access to information on legal persons has been streamlined, reducing complexity and increasing transparency.
  • Disclosure System for Cash Couriers: New procedures have been introduced for the disclosure system of cash couriers, enhancing the tracking of cash transactions.

Progress and Recommendations

While Croatia still faces some challenges, particularly in relation to correspondent banking and third-party reliance, it has made significant progress overall. As a result, several recommendations have been upgraded from “Partially Compliant” to “Largely Compliant” or “Compliant”.

  • Current Rating: 5 Recommendations are fully compliant, 23 are largely compliant, and 12 are partially compliant.
  • Enhanced Follow-Up Procedure: Croatia remains under MONEYVAL’s enhanced follow-up procedure and is expected to report back on further progress made towards strengthening its AML/CTF system by December 2024.

About MONEYVAL

MONEYVAL is a monitoring body of the Council of Europe that evaluates 33 states and territories and makes recommendations to national authorities in respect of necessary improvements to their anti-money laundering and counter-terrorist financing systems. The organization’s report provides an independent assessment of Croatia’s efforts to prevent banking fraud and combat money laundering and terrorist financing.