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Croatia’s Financial Institution Risk Assessment Reveals Areas for Improvement

Zagreb, Croatia - In a recent assessment, Croatia has made significant progress in implementing the technical requirements of the Financial Action Task Force (FATF) Recommendations. However, the country still faces challenges in certain areas.

Key Findings

Croatia received ratings on its compliance with each of the 40 FATF Recommendations. According to the assessment:

• Largely Compliant: assessing risk and applying a risk-based approach (R.1), national cooperation and coordination (R.2), and targeted financial sanctions related to terrorism and terrorist financing (R.6).
• Partially Compliant: confiscation and provisional measures (R.4), terrorist financing offence (R.5), and customer due diligence (R.10).
• Non-Compliant: laws on non-profit organizations (R.8) and transparency and beneficial ownership of legal persons and arrangements (R.24).

Recommendations

To strengthen its financial system and prevent the misuse of its financial institutions for money laundering and terrorist financing, Croatia is recommended to:

• Strengthen its laws on confiscation and provisional measures
• Improve its customer due diligence practices
• Enhance transparency and beneficial ownership requirements for legal persons and arrangements
• Address deficiencies in its laws related to non-profit organizations

By implementing these recommendations, Croatia can further strengthen its financial system and ensure the integrity of its financial institutions.