Financial Crime World

Croatia Strengthens Preventive Framework to Combat Money Laundering

Zagreb, Croatia - In a significant step towards enhancing its anti-money laundering and terrorist financing (AML/CFT) systems, Croatia has made considerable progress in strengthening its preventive framework. According to a follow-up report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), Croatia has taken numerous steps to improve its AML/CFT systems since December 2021.

Key Developments

Amended AML/CFT Legislation

Croatia’s AML/CFT legislation was amended to address significant shortcomings, including:

  • Customer Due Diligence Measures: Strengthened customer due diligence measures to prevent money laundering and terrorist financing.
  • Third-Party Reliance: Improved third-party reliance to ensure that financial institutions rely on reliable information when making transactions.
  • Correspondent Banking: Introduced correspondent banking regulations to prevent the misuse of correspondent accounts.

Enhanced Registration Regime

The report highlights progress in several areas, including:

  • National Action Plan: Adopted a national action plan to improve its AML/CFT systems.
  • Registration Regime and Fit-and-Proper Requirements: Introduced a registration regime and fit-and-proper requirements for virtual asset service providers (VASPs).
  • Beneficial Ownership Registers: Improved beneficial ownership registers to ensure transparency in the financial system.

Ratings and Recommendations

Croatia has been re-rated from Partially Compliant to Largely Compliant or Compliant on several key recommendations. The country currently has:

  • 5 recommendations rated as Compliant
  • 23 recommendations rated as Largely Compliant
  • 12 recommendations rated as Partially Compliant

Enhanced Follow-Up Procedure

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 in December 2024. MONEYVAL will continue to monitor the country’s compliance with international standards to combat money laundering, terrorist financing, and proliferation financing.

Conclusion

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) is a monitoring body of the Council of Europe that evaluates 33 states and territories for their compliance with anti-money laundering and counter-terrorist financing standards. The organization makes recommendations to national authorities in respect of necessary improvements to their AML/CFT systems.

[Link to the report](insert link)

This article provides an overview of Croatia’s progress in strengthening its preventive framework to combat money laundering and terrorist financing, as assessed by MONEYVAL.