Financial Crime World

Croatia’s Compliance Risks in Finance Under Scrutiny as Moneyval Releases Follow-up Report

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Croatia has made significant progress in strengthening its preventive framework to combat money laundering and terrorist financing, according to a follow-up report released by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval).

Progress Made

The report highlights Croatia’s efforts to improve compliance with Financial Action Task Force (FATF) Recommendations since December 2021. Notably, the country has:

  • Improved customer due diligence measures
  • Enhanced third-party reliance and correspondent banking
  • Introduced a disclosure system for the incoming and outgoing transportation of cash
  • Reinforced international cooperation powers

Commendations

Moneyval also commends Croatia’s adoption of a national action plan, introduction of a registration regime and fit-and-proper requirements for virtual asset service providers, improvements to beneficial ownership registers, streamlined access to information on legal persons, and changes to sanctions for non-compliance with transparency requirements.

Areas for Improvement

However, the report identifies several areas where Croatia still falls short:

  • Recommendations 1, 2, 15, and 24 remain rated Partly Compliant
  • Recommendations 10, 17, 22, 23, 32, and 40 have been re-rated from Partially Compliant to Largely Compliant or Compliant

Current Status

Croatia currently has:

  • Five Recommendations rated Compliant
  • 23 Recommendations rated Largely Compliant
  • 12 Recommendations rated Partially Compliant

The country remains under Moneyval’s enhanced follow-up procedure and is expected to report back on further progress in December 2024.

About Moneyval

Moneyval’s monitoring body evaluates 33 states and territories and makes recommendations to national authorities to improve their anti-money laundering and counter-terrorist financing systems. The organization aims to assess compliance with the principal international standards to counter money laundering, the financing of terrorism, and the financing of proliferation of weapons of mass destruction.