Financial Crime World

Croatia Takes Steps to Combat Terrorist Financing

New Measures to Prevent Money Laundering and Detect Suspicious Transactions

In an effort to combat terrorist financing, Croatia has introduced new measures aimed at preventing money laundering and detecting suspicious transactions. The country’s Anti-Money Laundering Act (AML Act) comes into force on January 1, 2018.

Key Provisions

  • Legal entities established in Croatia must maintain accurate and updated information about their beneficial owners.
  • Authorized officials from the Anti-Money Laundering Office, state bodies, and obliged entities will have access to information from a new register.
    • The register will contain details on the beneficial owner, including:
      • Name
      • Date of birth
      • Country of residence
      • ID card information

Responsibilities and Access

  • The Anti-Money Laundering Office (AML Office) is responsible for maintaining the register.
  • The Financial Agency (FINA) will acquire basic information about entities from registers through which they were established.
  • The register will also provide access to limited information to interested parties who submit a reasoned application and prove justified legal interest.

Obliged Entities

  • Credit institutions
  • Payment service providers
  • Investment funds

These entities must take measures to prevent and detect money laundering and terrorism financing, including:

  • Customer due diligence via KYC (Know Your Customer) standards
  • Notification of suspicious transactions to the AML Office

Supervision

  • The Croatian National Bank
  • Financial Inspectorate
  • Croatian Financial Services Supervisory Agency
  • Tax Administration

Cash Payments

  • Natural and legal persons engaged in trade activity are no longer allowed to receive or make cash payments exceeding HRK 75,000 (approximately EUR 10,000).
    • This threshold was previously set at HRK 105,000 (approximately EUR 14,000) or EUR 15,000 when dealing with non-residents.

Implementation

  • The AML Act provides a two-month period for obliged entities, competent authorities, and legal entities to comply with its provisions.
  • The Croatian government hopes that these measures will help prevent the misuse of the financial system for terrorist financing and money laundering.