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Croatia Improves Measures to Combat Money Laundering and Terrorist Financing

A recent follow-up report by the Council of Europe’s MONEYVAL committee has concluded that Croatia has strengthened its anti-money laundering and terrorist financing systems. The report, released on Wednesday, highlights the country’s progress in implementing measures to combat money laundering and terrorist financing.

Progress Made in Implementing AML/CFT Measures

Since December 2021, Croatia has taken several steps to improve its anti-money laundering and terrorist financing (AML/CFT) systems. These include:

  • Amending AML/CFT legislation: The country’s AML/CFT laws were amended to address significant shortcomings, including customer due diligence measures, third-party reliance, and correspondent banking.
  • Extending AML/CFT obligations: External accountants were brought under the scope of AML/CFT obligations.
  • Introducing a disclosure system for cash transportation: A system was introduced for the incoming and outgoing transportation of cash.

Key Areas of Progress

The report notes progress in several areas, including:

  • Adoption of a national action plan: Croatia has adopted a national action plan to combat money laundering and terrorist financing.
  • Introduction of registration regime and fit-and-proper requirements for VASPs: A registration regime and fit-and-proper requirements have been introduced for virtual asset service providers (VASPs).
  • Improvements to beneficial ownership registers: Beneficial ownership registers have been improved to enhance transparency.
  • Streamlined access to information on legal persons: Access to information on legal persons has been streamlined.
  • Changes to sanctions for non-compliance with transparency requirements: Sanctions for non-compliance with transparency requirements have been changed.

Recommendations and Future Progress

While some recommendations remain partly compliant, Croatia has made progress in addressing technical compliance shortcomings identified in its 2021 Mutual Evaluation Report. The country currently has five recommendations rated as compliant, 23 recommendations rated largely compliant, and 12 recommendations rated partially compliant. Croatia remains under MONEYVAL’s enhanced follow-up procedure and is expected to report back on further progress made towards strengthening its AML/CFT system by December 2024.

About MONEYVAL

The MONEYVAL committee evaluates 33 states and territories and makes recommendations to national authorities in respect of necessary improvements to their anti-money laundering and counter terrorist financing systems. The full report can be accessed online.