Croatia Slammed onto EU’s “Grey List” for Money Laundering and Terrorism Financing Concerns

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Croatia has become the only European Union (EU) country to be added to the Financial Action Task Force (FATF)’s “grey list”, a group of countries under increased monitoring for their failure to prevent money laundering and terrorism financing.

FATF’s Announcement

On Friday, the FATF, an international financial crime watchdog, announced that Croatia had been placed on the grey list, citing deficiencies in its prevention mechanisms. The country is now joined by the United Arab Emirates, Panama, and Mali on this list, which is reserved for nations that have committed to implementing action plans to address identified strategic deficiencies within agreed timeframes.

FATF’s Concerns

The FATF has tasked Croatia with assessing risks associated with:

• The misuse of legal persons and legal arrangements
• The use of cash in the real estate sector
• Other areas of concern

FATF Chairman T Raja Kumar urged Croatia to implement its action plan as soon as possible.

Ongoing Challenges

Notably, no current member of the grey list has been removed since the June meeting, highlighting the ongoing challenges facing countries struggling to meet global anti-money laundering and counter-terrorism financing standards. Croatia’s addition to the grey list is a significant development in the region, marking the first time an EU country has been placed on this list.

FATF’s Warning

In a separate statement, the FATF reiterated its concerns about emerging risks from the circumvention of measures taken against the Russian Federation, following its suspension from membership in February. The body warned that all jurisdictions must remain vigilant to these threats and protect the international financial system.