Croatia must reinforce efforts and capacities to prevent and combat money laundering and terrorism financing

Strasbourg 3 February 2021
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Croatia must reinforce efforts and capacities to prevent and combat money laundering and terrorism financing

In a report published today, MONEYVAL calls on Croatian authorities to improve the regulatory framework and to strengthen their efforts and capacities to tackle money laundering (ML) and financing of terrorism (FT) more effectively.

The report appreciates Croatian efforts to implement the Financial Action Task Force (FATF) Standards, particularly in the area of international cooperation. However, further improvements are needed to ensure a uniform and comprehensive understanding of ML and especially TF risks; existing activities aimed at ensuring transparency of legal persons, arrangements, and their beneficial ownership; improving supervisory efforts; strengthening implementation of ML/TF preventive measures by the private sector; ensuring confiscation of proceeds of crime and establishing a national framework for implementation of TF related United Nations targeted financial sanctions, including strengthening the attention and capacities of the designated state authority.

While the Croatian Financial Intelligence Unit (FIU) is a key source of financial intelligence, the results of its analysis are not effectively used by the law enforcement agencies (LEAs). Croatia is therefore encouraged to prioritise identification, investigation and prosecution of ML cases in line with its risk profile, align interpretations and understanding of the ML offence by the judiciary and LEAs with the international standards, and tackle undue delays in judicial proceedings of complex criminal cases. Croatia should also improve coordination between the FIU, LEAs and prosecutors when dealing with detection of TF cases, to ensure that all potential TF activities are identified, thoroughly analysed, investigated and prosecuted.

The report concludes that Croatia should take measures to develop understanding of exposure to TF risks for non-profit organisations and apply targeted measures to those entities more vulnerable to TF abuse.

MONEYVAL carries out its assessments on the basis of the 40 Recommendations of the Financial Action Task Force (FATF) and the FATF assessment Methodology. Croatia will be subject to MONEYVAL’s enhanced follow-up reporting process as a result of the report.