Croatia Steps Up Efforts to Prevent Terrorist Financing and Proliferation of Weapons of Mass Destruction
Strengthening Regulatory Framework to Combat Money Laundering and Terrorist Financing
In a bid to prevent the financing of terrorist activities and the proliferation of weapons of mass destruction, the Croatian government has strengthened its regulatory framework to combat money laundering and terrorist financing.
Enhanced Cash Declaration Requirements
According to Article 40 of the Foreign Exchange Act, individuals entering or leaving the European Union are required to declare any cash movements exceeding €10,000 on a Cash Declaration Form. This move aims to curb the flow of funds to terrorist organizations and other illegal entities.
Supervision by Croatian National Bank
The Croatian National Bank has issued guidelines for obliged entities to ensure compliance with anti-money laundering and terrorist financing regulations. The bank’s supervision is guided by the Anti-Money Laundering and Terrorist Financing Act, which sets out the legal framework for preventing money laundering and terrorist financing in Croatia.
National Assessment of Money Laundering and Terrorist Financing Risks
In addition, the government has conducted a national assessment of money laundering and terrorist financing risks every four years to identify areas that require improvement. Based on this assessment, an Action Plan is developed to mitigate these risks and prevent their escalation.
Enhanced Due Diligence Measures for High-Risk Jurisdictions
The plan takes into account supranational risk assessments, recommendations from the European Commission, and joint opinions from European Supervisory Authorities. These authorities have identified high-risk third countries with strategic deficiencies in their anti-money laundering and terrorism financing regimes.
To address this issue, Union obliged entities are required to apply enhanced due diligence measures when dealing with natural persons or legal entities established in these high-risk jurisdictions. This includes:
- Verifying the identity of customers
- Conducting thorough background checks
- Monitoring transactions for suspicious activity
Implementation of EU Legislation
Croatia has also implemented EU legislation aimed at preventing money laundering and terrorist financing. The country is a signatory to several regulations, including:
- Commission Delegated Regulations 2018/1108
- Commission Delegated Regulations 2019/758
- Commission Delegated Regulations 2023/1113
These regulations set out rules for the appointment of central contact points, information accompanying transfers of funds, and controls on cash entering or leaving the Community.
Conclusion
By strengthening its regulatory framework, Croatia is taking a proactive approach to preventing the financing of terrorism and the proliferation of weapons of mass destruction. These measures are designed to prevent the misuse of financial systems by terrorist organizations and other illegal entities.