Croatia Slips onto Financial Crime Watchlist as Only EU Member State

Croatia has become the only European Union country to be placed on a watchlist for failing to prevent financial crimes, joining a group of nations including the United Arab Emirates, Panama, and Mali.

International Organization Places Croatia on “Grey List”

The move was announced by the Financial Action Task Force (FATF), an international organization that monitors countries’ efforts to combat money laundering and terrorism financing. According to FATF, Croatia’s deficiencies in preventing these types of crimes have led to its addition to the so-called “grey list” of countries under increased monitoring.

Implementation of Action Plan

Croatia has committed to implementing an action plan to address the identified strategic deficiencies within a certain timeframe. The action plan, which was announced by FATF Chairman T Raja Kumar, includes measures such as:

• Assessing risks associated with the misuse of legal persons and legal arrangements in the real estate sector
• Implementing these measures “as soon as possible”

Concerns over Sanctions Circumvention

FATF also reiterated its concerns over the potential risks posed by the circumvention of sanctions against Russia, which was suspended from the organization earlier this year. The body called on all jurisdictions to remain vigilant to current and emerging risks.

Impact on Croatia

Croatia’s addition to the grey list is a setback for the country, which is now the only EU member state on the list. No countries were removed from the list following FATF’s latest meeting in June. The organization has been monitoring Croatia’s progress since it launched an evaluation of its anti-money laundering and counter-terrorist financing measures in 2018.

Warning to Other EU Member States

The inclusion of Croatia on the grey list is seen as a warning to other EU member states, which must now take note of the country’s failure to meet international standards for preventing financial crimes. The move highlights the need for increased vigilance and cooperation among countries to prevent these types of criminal activities.

Note: FATF is an inter-governmental organization that sets standards and promotes effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other related threats.