Financial Crime World

Croatia Takes Tough Stance on Financial Crimes: A Look at the Country’s Regulatory Bodies

Croatia has established a robust anti-money laundering (AML) framework that aligns with European Union directives and international standards to combat money laundering and terrorist financing.

The Anti-Money Laundering Framework

The country’s AML legislation is governed by the Anti-Money Laundering and Terrorist Financing Prevention Act, which outlines key provisions to prevent financial crimes. This act:

  • Requires financial institutions and designated non-financial businesses to conduct customer due diligence (CDD) when onboarding customers
    • Identifying and verifying the identity of customers
    • Enhanced due diligence for politically exposed persons (PEPs) and high-risk customers

Reporting Suspicious Transactions

Reporting entities must report suspicious transactions to the Financial Intelligence Unit (FIU) in Croatia. The FIU plays a crucial role in:

  • Receiving and analyzing suspicious transaction reports
    • Providing financial intelligence to law enforcement agencies
    • Cooperating with international organizations on AML matters

Regulatory Bodies

The following regulatory bodies play important roles in enforcing AML regulations in Croatia:

Financial Intelligence Unit (FIU)

  • Receives and analyzes suspicious transaction reports
  • Provides financial intelligence to law enforcement agencies
  • Collaborates with international organizations on AML matters

Croatian National Bank (CNB)

  • Supervises banks and financial institutions for AML compliance
    • Ensures they have adequate policies and procedures in place

Ministry of Finance

  • Oversees AML policies and regulations at the national level
  • Collaborates with international organizations to combat money laundering and terrorist financing

Criminal Police Directorate

  • Investigates and combats financial crimes

Compliance Requirements

In addition to its regulatory framework, Croatia has also established a robust system for reporting suspicious transactions. Financial institutions must:

  • Maintain records of transactions, customer identification, and CDD measures for a specified period
  • Provide AML training to employees
  • Establish internal procedures and controls to detect and prevent money laundering

Penalties for Non-Compliance

The country’s AML legislation outlines severe penalties for non-compliance, including fines and imprisonment for individuals and entities.

Strengthening the AML Framework

Croatia has taken steps to strengthen its AML framework in recent years, including the enactment of a new Money Laundering and Terrorism Financing Prevention Act in 2017. This act aimed to address incompatibilities between existing AML legislation and European Union regulations.

Tools for Compliance

To help businesses comply with AML requirements, Sanction Scanner offers a software solution specializing in AML and CTF compliance. The solution provides real-time screening against global sanction lists, PEP databases, and adverse media sources, enabling businesses to automate AML checks and customize screening criteria.

Conclusion

As Croatia continues to strengthen its financial sector, it is essential for businesses operating in the country to understand the regulatory requirements and take steps to comply with AML laws. With a robust framework in place, Croatia is well-positioned to combat financial crimes and maintain a stable and secure financial system.