Financial Crime World

Croatia Urged to Strengthen Fight Against Financial Crimes

A recent report by MONEYVAL has called on Croatian authorities to step up their efforts in preventing and combating money laundering (ML) and terrorism financing (TF). The organization emphasized that while progress has been made in implementing the Financial Action Task Force (FATF) Standards, there is still much work to be done to ensure a uniform and comprehensive understanding of ML and TF risks.

Improvements Needed

The report praised Croatia’s efforts in promoting international cooperation, but highlighted several areas where improvements are needed:

  • Ensuring transparency of legal persons, arrangements, and beneficial ownership
  • Strengthening supervisory efforts
  • Improving the implementation of ML/TF preventive measures by the private sector

Additionally, the report urged Croatia to prioritize the confiscation of proceeds from crime and establish a national framework for implementing UN targeted financial sanctions related to terrorism. It also called on the country to strengthen the attention and capacities of its designated state authority.

Financial Intelligence Unit (FIU)

The Croatian FIU was commended as a key source of financial intelligence, but the report noted that its results are not effectively used by law enforcement agencies (LEAs). As such, Croatia is encouraged to:

  • Prioritize the identification, investigation, and prosecution of ML cases in line with its risk profile
  • Improve coordination between the FIU, LEAs, and prosecutors when dealing with TF cases

Non-Profit Organizations

The report also emphasized the need for Croatia to develop a better understanding of its exposure to TF risks for non-profit organizations and apply targeted measures to those entities more vulnerable to TF abuse.

Next Steps

MONEYVAL carries out its assessments based on the 40 Recommendations of the Financial Action Task Force (FATF) and FATF assessment Methodology. As a result of the report, Croatia will be subject to MONEYVAL’s enhanced follow-up reporting process.

By addressing these areas of improvement, Croatia can strengthen its fight against financial crimes and improve its overall regulatory framework.