Croatia Slapped with “Grey List” Status by International Financial Crime Watchdog

Croatia Becomes Only EU Country on FATF’s Grey List

The Financial Action Task Force (FATF), an international watchdog based in Paris, has added Croatia to its “grey list” of countries under increased monitoring for financial crimes. This move puts Croatia at odds with its European Union counterparts and joins the likes of the United Arab Emirates, Panama, and Mali on the list.

Reasons for Inclusion

According to the FATF, Croatia’s inclusion on the grey list is due to deficiencies in its prevention of money laundering and terrorism financing. The organization has identified specific areas that require improvement, including:

• Assessing risks associated with the misuse of legal persons and legal arrangements
• Use of cash in the real estate sector

Action Plan and Timeline

As a result of being placed on the grey list, Croatia is committed to implementing an action plan to resolve strategic deficiencies within agreed-upon timeframes. The FATF chairman, T Raja Kumar, has urged Croatia to implement its action plan “as soon as possible.”

Global Risks and Concerns

The FATF emphasized that all jurisdictions should be vigilant against current and emerging risks from the circumvention of measures taken against Russia, which was suspended from membership by the FATF in February. This highlights the need for countries to remain proactive in preventing financial crimes.

Implications for Croatia’s Financial Sector

Croatia’s inclusion on the grey list puts a spotlight on its financial sector and its ability to prevent money laundering and terrorism financing. The move may impact the country’s reputation and potentially affect international cooperation and investment.

Comparison with Other Countries on the Grey List

Croatia is now among the four countries on the FATF’s grey list, joining Cameroon, Vietnam, United Arab Emirates, Panama, and Mali. No country has been removed from the list since June 2022.