Financial Crime World

Croatia’s Anti-Money Laundering Regulations: New Ordinances and European Guidelines

Croatia’s legislative framework against money laundering and terrorist financing is complex and multifaceted. It includes acts, regulations, and ordinances, all mandated by the supervisory bodies with the aim of preventing such illicit activities and penalizing offenders. Here is a breakdown of the key components of Croatia’s anti-money laundering (AML) and counter-terrorist financing (CTF) regulatory framework.

The primary legislation governing AML and CTF in Croatia is the Anti-Money Laundering and Terrorist Financing Law (OG 108/2017, 39/2019 and 151/2022) and the Criminal Code (OG 125/2011, 144/2012, 56/2015, 61/2015 – corrigendum, 101/2017 and 118/2018).

Key Ordinances

  1. Ordinance on the obligation to report cash transactions: Obligated persons need to report cash transactions of HRK 200,000.00 or above to the Anti-Money Laundering Office (OG 1/2019 and 11/2023).
  2. Ordinance on the obligation to report suspicious transactions: This ordinance outlines the manner, deadlines, and additional information in reporting suspicious transactions (OG 1/2019 and 11/2023).

Technology-driven Identification

The latest development in Croatian AML regulations is the use of new technologies for identification (Ordinance on the minimum technical requirements for the means of video-electronic identification OG 1/2019). This ordinance sets out the minimum technical requirements for video-electronic identification systems, enabling obligated persons to establish and verify the identity of natural persons, craftsmen, or self-employed individuals.

European Guidelines

In March 2023, the European Banking Authority (EBA) published several guidelines, which are expected to be harmonized and applied by obliged entities in Croatia from 3 November 2023. These include the Guidelines on money laundering and terrorist financing risk factors, Guidelines on the role of AML/CTF compliance officers, and Guidelines amending the ML/TF Risk Factors Guidelines (OG 1/2019).

Additional Regulations and Requirements

  1. Article 40 of the Foreign Exchange Act: This article requires natural persons entering or leaving the European Union towards third countries to declare cash movements of EUR 10,000.00 or more on a Cash declaration form.
  2. National assessments of money laundering and terrorist financing risks: The Republic of Croatia conducts regular national assessments and adopts action plans to reduce identified risks. These assessments cover the institutional structure and procedures of each stakeholder, with scores indicating their overall exposure and vulnerability to these risks.

EU Regulations

Several EU regulations directly applicable in Croatia include Regulation (EU) 2015/847 on information accompanying transfers of funds, Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets, Regulation (EC) No 1889/2005 on controls of cash entering or leaving the Community, and others.

Enhanced Due Diligence

Croatian entities must apply enhanced due diligence measures in their relationships with natural persons and/or legal entities established in high-risk third countries based on Commission Delegated Regulation (EU) 2019/758.