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Financial Compliance in Croatia: What You Need to Know
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The Republic of Croatia has introduced the Act on Restrictive Measures, which came into effect on November 15, 2023. This new law establishes stricter due diligence and reporting procedures, enabling the country to implement more complex sanctions regimes from the European Union and United Nations.
Restrictive Measures in Croatia
Restrictive measures can include a range of restrictions, such as:
- Restrictions on asset disposal
- Prohibition of entry or transit through Croatian territory
- Termination of economic relations
- Restriction on trade, imports, exports, transit, services, postal traffic, electronic communications, and other activities
- Embargo on weapons and military equipment
- Termination of diplomatic relations
- Other measures in line with international and European law
Entities Subject to the Act
The Act applies to entities under the supervision of several Croatian institutions, including:
- The Croatian National Bank
- The Croatian Financial Services Supervisory Agency
- The Financial Inspectorate
- The Tax Administration
New Obligations as of May 15, 2024
As of May 15, 2024, these entities must comply with new obligations, including:
- Adopting written policies, controls, and procedures for implementing restrictive measures
- Appointing a person responsible for compliance within their organizational structure
- Establishing reporting channels
- Keeping data on the application of restrictive measures
Consequences of Non-Compliance
Failure to comply may result in monetary fines ranging from approximately €4,500 to €90,000 for legal entities and from €600 to €4,500 for individuals.
Importance of Compliance
The European Union has recently adopted a 14th package of restrictive measures, imposing restrictions on additional individuals and entities in respect of Russia. This highlights the importance of compliance with restrictive measures to avoid reputational damage and potential fines.
Expertise in Financial Compliance
Wolf Theiss, a leading European law firm in Central, Eastern, and South-Eastern Europe, provides expertise in international business law and develops innovative solutions that integrate legal, financial, and business know-how. For more information on financial compliance in Croatia, please contact:
Dora Gaži Kovačević, Partner
E: dora.gazi@wolftheiss.com T: +385 1 4925 400
Alan Vučkovečki, Associate
E: alan.vuckovecki@wolftheiss.com T: +385 1 4925 400