Croatia Added to Global Watchdog’s ‘Grey List’ for Financial Crime Concerns
Croatia Joins “Grey List” Amid Money Laundering Concerns
In a move that has sparked concern within the European Union, Croatia has been added to the “grey list” of countries being monitored by the global financial watchdog, Financial Action Task Force (FATF). The decision was made in response to deficiencies in Croatia’s efforts to prevent money laundering and terrorism financing.
Background: FATF and its Role
The FATF is an inter-governmental organization based in Paris that monitors countries for their adherence to anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. The “grey list” is a designation given to jurisdictions that require increased monitoring due to deficiencies in their AML/CFT regimes.
New Additions to the Grey List
Croatia joins Cameroon, Vietnam, the United Arab Emirates, Panama, Mali, and others on the grey list. This move has raised concerns about the effectiveness of Croatia’s anti-money laundering policies within the European Union.
Action Plan for Croatia
Countries placed under increased monitoring by FATF are required to implement an action plan to resolve strategic deficiencies within agreed timeframes. In the case of Croatia, this will involve:
- Assessing risks associated with the misuse of legal persons and legal arrangements
- Addressing concerns related to the use of cash in the real estate sector
Chairman’s Statement
T Raja Kumar, chairman of FATF, expressed his concern over Croatia’s inclusion on the grey list and urged the country to implement its action plan “as soon as possible.” He also emphasized the need for all jurisdictions to remain vigilant against current and emerging risks from the circumvention of measures taken against Russia.
Emerging Risks: Russia’s Continued Threat
Despite being suspended in February, Russia continues to pose a significant risk to the global financial system. FATF has warned that all jurisdictions must remain vigilant against emerging risks from the country, highlighting the need for continued cooperation and vigilance in combating financial crime.
Conclusion
Croatia’s inclusion on the grey list is a reminder of the ongoing challenges facing countries in their efforts to prevent money laundering and terrorism financing. As policymakers and regulators around the world continue to monitor this situation, it will be crucial to assess the effectiveness of international cooperation in combating financial crime and to address emerging risks from countries like Russia.