Financial Crime World

Title: Croatia’s Anti-Money Laundering Regulations: Understanding the KYC Process and Third-Party Compliance

  • Croatia’s Anti-Money Laundering (AML) Act
    • Enacted on April 25, 2019
    • Sets guidelines for financial professionals
    • Establishes the Croatian Financial Intelligence Unit (Fijnitz) as the central authority

Key Regulatory Bodies

  • The Financial Inspectorate, Croatian National Bank (CNB), Hrvatska Agencija za Natjecanje na Tržištu Finansitih Usluga (HANFA), and Tax Administration
    • Implement and enforce AML regulations
  • Croatian Financial Intelligence Unit (Fijnitz)
    • Collects, analyzes, and disseminates AML/CFT data
    • Serves as the chief coordinator and liaison among agencies and external partners

Customer Due Diligence

  • Understanding KYC measures according to the Croatian AML Act

    • Financial institutions must ascertain customers’ identities
    • Involves document presentation, remote processes, or secure electronic signatures

    Typical KYC Identification Process

    • Face-to-face interaction and video calls not widely adopted
    • Power of attorney granted for some account opening procedures
    • Procedures are arduous, time-consuming, and complex

Third-Party Assistance

  • Conducting customer due diligence through external parties
    • Financial institutions retain ultimate responsibility
  • Permissible third-party functions
    • Identity establishment and verification
    • Identifying beneficial owners
    • Data collection pertaining to intended business relationships’ purpose

Unauthorized Third-Party Outsourcing

  • Restrictions on outsourcing KYC responsibilities
    • Financial institutions cannot outsource to non-compliant third parties
  • Approved third parties
    • Public notary
    • FINA
    • HP-Hrvatska pošta d.d.
    • Certain credit or financial institutions, like investment fund management companies, pension funds, and insurance funds.