Croatia Urged to Strengthen Efforts to Combat Terrorist Financing, Money Laundering

A recent report by MONEYVAL has called on the Croatian government to improve its regulatory framework and strengthen its efforts to combat money laundering (ML) and terrorist financing (TF). Despite appreciating Croatia’s progress in implementing Financial Action Task Force (FATF) standards, particularly in international cooperation, the report highlights several areas that require improvement.

Key Findings

• Croatia needs to ensure a uniform and comprehensive understanding of ML and TF risks
• Improve efforts to ensure transparency of legal persons, arrangements, and beneficial ownership
• Strengthen supervisory efforts
• Improve implementation of preventive measures by the private sector
• Establish a national framework for implementing UN targeted financial sanctions

Recommendations

• Prioritize the identification, investigation, and prosecution of ML cases in line with its risk profile
• Improve coordination between the Financial Intelligence Unit (FIU), law enforcement agencies, and prosecutors when dealing with TF cases
• Develop an understanding of Croatia’s exposure to TF risks for non-profit organizations and apply targeted measures to those entities more vulnerable to TF abuse
• Align interpretations and understanding of ML offenses by the judiciary and law enforcement agencies with international standards
• Tackle undue delays in judicial proceedings

Enhanced Follow-up Reporting Process

Croatia will be subject to MONEYVAL’s enhanced follow-up reporting process as a result of the report, which aims to ensure that the country implements the necessary reforms to effectively combat ML and TF.

Report Background

The report is based on Croatia’s implementation of the 40 Recommendations of the Financial Action Task Force (FATF) and FATF assessment methodology. The report highlights areas where Croatia needs to improve its regulatory framework and strengthen its efforts to combat ML and TF.