Financial Institution Compliance in Croatia: A Complex System of Prevention and Supervision
Croatia has implemented a comprehensive system to prevent and combat money laundering (ML) and terrorist financing (TF), in line with international standards. The Anti-Money Laundering and Terrorism Financing Law (AMLCFT Law) defines the roles of various institutions, their mutual interaction, and cooperation.
The Central National Body: Agency for Medicinal Products and Medical Devices (AMLO)
At the heart of this system is the AMLO, a central national body responsible for collecting, analyzing, and disseminating data on suspicious transactions to competent authorities. The AMLO performs analytical intelligence analysis on suspicious transactions reported by banks and other entities, and then forwards cases to the State Attorney’s Office, Police, or supervisory bodies within the Ministry of Finance.
Cooperation with Foreign Financial Intelligence Units (FIUs) and International Organizations
The AMLO also cooperates with foreign FIUs and international organizations authorized for AML/CTF. It acts preventively in the area of AML/CTF by conducting off-site administrative supervision, educating reporting entities, and publishing statistical data on ML and TF trends.
Key Institutions Involved in the System
- Reporting Entities: Banks, savings banks, credit unions, insurance companies, etc., that are obligated to report suspicious transactions to the AMLO.
- Supervisory Bodies:
- Croatian National Bank: conducts supervision of compliance with the Law with banks and other credit institutions
- Croatian Financial Services Supervision Agency (CFSSA): conducts supervision of compliance with the Law with capital markets participants, funds, and insurance companies
- Financial Inspectorate: conducts supervision of compliance with the Law as the primary supervisor with non-bank financial institutions, professional activities sector, lawyers, notaries public, accountants, auditors, tax advisers
- Law Enforcement Agencies (Police): conduct police inquiries and financial investigations of money laundering criminal offenses
- Prosecutors: direct the work of the Police in treating money laundering cases received from the AMLO or other bodies in the ML/TF prevention system
Key Element: Reporting Suspicious Transactions
The key element of this system is the obligation of banks and other reporting entities to report suspicious transactions to the AMLO, regardless of the transaction amount. Supervisory bodies conduct supervision over reporting entities concerning the implementation of ML/TF prevention measures.
Financial Intelligence Units and Intermediary Role
Financial intelligence units, such as the AMLO, are part of the preventive system, acting as an intermediary body between financial and non-financial sectors, which report suspicious transactions to competent prosecution bodies or courts.
Supervision and Control
The Tax Administration conducts supervision of compliance with the Law with organizers of games of chance and checks domestic legal and natural persons’ compliance with prescribed limitation of cash payments in an amount exceeding HRK 105.000,00 i.e., amount exceeding EUR 15.000,00 in arrangements with non-residents.
The Customs Administration conducts control of cash transfer across state border.
System Purpose
The system is designed to prevent the use of financial systems for money laundering and terrorist financing purposes by identifying suspicious transactions, reporting them to competent authorities, and conducting supervision over reporting entities.