Croatia Added to FATF’s Grey List for Money Laundering and Terrorism Financing Deficiencies
In a surprising development, the Financial Action Task Force (FATF) added EU member state Croatia to its list of countries under increased monitoring for strategic deficiencies in preventing money laundering and terrorism financing. Croatia is now the only European Union country on the grey list, joining Cameroon and Vietnam.
FATF’s Announcement and Identified Deficiencies
The Paris-based inter-governmental organization made the announcement following its regular plenary meeting on Friday, June 24, 2023. FATF Chairman T Raja Kumar emphasized that Croatia must address these deficiencies promptly:
- Preventing money laundering and terrorism financing through legal persons and legal arrangements
- Managing risks in the real estate sector involving cash transactions
FATF’s Action Plan and Swift Implementation
Mr. Kumar reminded jurisdictions to remain vigilant to bypassing measures against the Russian Federation. In response to a jurisdiction being placed on the grey list, the country is expected to:
- Implement a credible action plan to resolve the identified strategic deficiencies within agreed timeframes
- Demonstrate regular progress
- Cooperation with international partners, including FATF
EU Commission, European Central Bank, and Croatian National Bank Unresponsive
Despite the announcement, the EU Commission, the European Central Bank, and the Croatian National Bank all declined to comment on the matter.
Response from the Croatian Finance Ministry
In response to the development, the Croatian Finance Ministry issued a statement: “The Ministry of Finance will work closely with the FATF to fully address any concerns.”
Experts’ Reactions and Next Steps
Many in the financial community were shocked by Croatia’s inclusion on the grey list. The focus now turns to Croatia’s commitment to addressing the identified deficiencies in a timely and effective manner.