Croatia Urged to Reinforce Efforts Against Money Laundering and Terrorism Financing

A recent report by MONEYVAL has called on Croatian authorities to bolster their efforts in preventing and combating money laundering (ML) and terrorism financing (TF). The report highlights that while Croatia has made progress in implementing Financial Action Task Force (FATF) standards, particularly in international cooperation, further improvements are necessary to tackle ML and TF risks more effectively.

Key Findings

• Croatia needs to enhance its regulatory framework to ensure a uniform and comprehensive understanding of ML and TF risks.
• Strengthening efforts is necessary to ensure transparency of legal persons, arrangements, and beneficial ownership.
• Improving supervisory activities and private sector implementation of anti-money laundering (AML) measures is also recommended.

Croatian Financial Intelligence Unit (FIU)

• The FIU was praised for being a key source of financial intelligence.
• However, the report noted that its analysis results are not effectively utilized by law enforcement agencies.

Recommendations

Money Laundering

• Prioritize identification, investigation, and prosecution of ML cases in line with Croatia’s risk profile.
• Align judicial interpretations with international standards.

Terrorism Financing

• Improve coordination between the FIU, law enforcement agencies, and prosecutors when dealing with TF cases to ensure thorough analysis, investigation, and prosecution.
• Develop understanding of exposure to TF risks for non-profit organizations.
• Apply targeted measures to those entities more vulnerable to TF abuse.

Assessment Methodology

The report was based on the 40 Recommendations of the FATF and MONEYVAL’s assessment methodology.

Consequences

As a result of the report, Croatia will be subject to MONEYVAL’s enhanced follow-up reporting process.