Croatia Takes Steps to Combat Financial Crime, Enhance Safety and Integrity of Financial System
Money Laundering and Terrorist Financing: A Growing Concern in Croatia
Money laundering and terrorist financing pose a significant threat to the safety and integrity of Croatia’s financial system. In response, authorities have taken steps to raise awareness, detect, and prevent such conduct.
The Anti-Money Laundering and Terrorist Financing Act
The Anti-Money Laundering and Terrorist Financing Act regulates the prevention of money laundering and terrorist financing in Croatia. The Croatian Financial Agency for Supervision of Financial Operations (Hanfa) oversees its implementation among supervised entities.
Hanfa’s Role in Preventing Money Laundering and Terrorist Financing
In addition to supervisory activities, Hanfa collaborates with national and international authorities on anti-money laundering/counter-terrorism financing (AML/CTF), provides education for supervised institutions, issues guidelines for implementing AML/CTF regulations, and undertakes other tasks related to preventing money laundering and terrorist financing.
Obligations of Financial Institutions and Other Entities
The Act requires financial institutions and other entities subject to it to execute transactions or asset types in accordance with a series of requirements. The main goal is to safeguard the integrity of Croatia’s financial system and prevent its exploitation for illicit activities like money laundering and terrorist financing.
Key Obligations
- Conduct a risk assessment on money laundering and terrorist financing
- Implement policies, controls, and procedures to effectively mitigate and manage AML/CTF risks
- Take customer due diligence measures in accordance with the Act’s prescribed manner and conditions
- Combat money laundering and terrorist financing in companies or establishments where they hold majority stakes or voting rights and have their headquarters in another EU member state or third country
- Appoint authorized personnel to implement AML/CTF measures and ensure adequate working conditions for them
- Provide regular professional training and education for employees, as well as conduct internal audits of the AML/CTF system set up by obligated entities
- Draw up and regularly update lists of indicators for detecting customers, suspicious transactions, or funds suspected of money laundering or terrorist financing
- Report and submit prescribed data, information, and documentation on transactions, funds, and persons to the Anti-Money Laundering Office
- Ensure data storage and protection, as well as keep records of data as specified by the Act
- Fulfill obligations related to credit and financial institutions regarding establishing an adequate information system for assessing customer, business relationship, and transaction risks, and ongoing monitoring of business relationships
Misdemeanour Provisions: Fines and Bans on Financial Transactions
The Act also prescribes misdemeanor provisions that include fines and a ban on carrying out financial transactions.