Financial Crime World

CROATIA TAKES STEPS TO IMPROVE FINANCIAL COMPLIANCE, SAYS MONEYVAL

Overview

The Council of Europe’s anti-money laundering body, MONEYVAL, has released a follow-up report on Croatia’s progress in strengthening its preventive framework to combat money laundering and terrorist financing. The report highlights significant strides made by Croatia in addressing technical compliance shortcomings identified in its 2021 Mutual Evaluation Report.

Key Measures Implemented

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

  • Amendments to the AML/CFT legislation, addressing significant shortcomings related to:
    • Customer due diligence
    • Third-party reliance
    • Correspondent banking
  • Bringing external accountants under the scope of application of AML/CFT obligations
  • Introducing a disclosure system for the incoming and outgoing transportation of cash

Progress in Key Areas

Croatia has made progress in adopting a national action plan, introducing a registration regime and fit and proper requirements for virtual asset service providers (VASPs), improving beneficial ownership registers, and streamlining access to information on legal persons. Changes have also been made to sanctions for non-compliance with transparency requirements.

Re-Rating of Recommendations

While some recommendations remain rated Partly Compliant, Croatia has been re-rated on several key areas, including:

  • Customer due diligence
  • Third-party reliance
  • Designated non-financial businesses and professions (DNFBPs)
  • Correspondent banking
  • Cash couriers
  • Other forms of international cooperation

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 Committee

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 and makes recommendations to national authorities in respect of necessary improvements to their anti-money laundering and counter terrorist financing systems.