Croatia Urged to Boost Efforts Against Money Laundering and Terrorism Financing

A recent report from MONEYVAL has called on the Croatian authorities to strengthen their measures to prevent and combat money laundering (ML) and terrorism financing (TF). Despite efforts to implement the Financial Action Task Force (FATF) Standards, further improvements are needed to ensure a comprehensive understanding of ML and TF risks.

Areas for Improvement

The report highlights several areas where Croatia needs to improve:

• Ensuring Transparency: Ensure transparency of legal persons, arrangements, and beneficial ownership.
• Strengthening Supervisory Efforts: Strengthen supervisory efforts by the private sector to prevent ML and TF.
• Improving Financial Intelligence: Improve coordination between the Croatian Financial Intelligence Unit (FIU), law enforcement agencies, and prosecutors when dealing with TF cases.

Enhancing Effectiveness

The report encourages Croatia to:

• Prioritize Investigations: Prioritize identification, investigation, and prosecution of ML cases in line with its risk profile.
• Improve Coordination: Improve coordination between the FIU, law enforcement agencies, and prosecutors when dealing with TF cases.
• Develop Targeted Measures: Develop a better understanding of its exposure to TF risks for non-profit organizations and apply targeted measures to those entities more vulnerable to TF abuse.

Recommendations

The report concludes that Croatia’s judiciary and law enforcement agencies need to:

• Align Interpretations: Align their interpretations and understandings of the ML offense with international standards.
• Tackle Undue Delays: Tackle undue delays in judicial proceedings.

Conclusion

The report was published by MONEYVAL, which carries out assessments based on the 40 Recommendations of the Financial Action Task Force (FATF) and the FATF assessment Methodology. As a result of the report, Croatia will be subject to MONEYVAL’s enhanced follow-up reporting process.