Croatia

1. Does Croatia have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes. The primary criminal law provisions are Art. 98 (terrorist financing) and Art. 265 (money laundering) of the Croatian Criminal Code (Cro.: Kazneni zakon).

2. To whom does the legislation apply?

This legislation applies to persons who use illegally gained funds in order to hide their illegal origin, regardless of whether such illegal funds were gained by these persons or by any other person or who directly or indirectly provide or collect assets which are used for terrorist financing, as well as to any person who assist them with such actions. It applies to all natural and legal persons and is not limited to certain professions or businesses.

3. What does the legislation prohibit?

The legislation prohibits any use of illegally gained funds, as well as providing or collecting assets with the intent that they are used for the execution of certain terrorist activities including extortionate kidnapping, destruction or damage to public facilities, misuse of radioactive substances, air and maritime piracy, attack on the life, limb or liberty of a person protected under international law and various other terrorist activities specified in detail.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Under the local criminal law, money laundering is defined as investing, taking-over, transforming, transfer or exchange of illegally gained funds for the purpose of hiding or concealment of its illegal origin or in order to assist with criminal activity.

Yes, the underlying criminal activity has to be proven in order to establish that money laundering has occurred.

5. What level of intent or knowledge is required to establish a violation?

In order to establish a violation, it is required to prove intent or negligence (in respect of the illegal origin of the funds) of the perpetrator.

6. What are the potential penalties for infringing the legislation?

Imprisonment up to five years per violation, or exceptionally, up to eight years for most serious breaches in case of money laundering. Imprisonment up to ten years for terrorist financing.

7. Does the legislation have extra-territorial reach?

Yes, the perpetrator may be convicted even if the funds are gained illegally in a foreign jurisdiction provided that such an act is considered a criminal offence according to the law of the country where it was committed.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes, there are additional anti-money laundering and counter terrorist financing regulations and obligations which apply to specific sectors/activities, in particular to banks, investment companies, insurance companies and other financial services entities, notaries, law firms, auditors, gambling industry, etc.

9. What are the potential penalties for failing to comply with these obligations?

A monetary penalty up to HRK 1,000,000 (approx. EUR 133,333) per breach. However, for systematic and severe violations committed by financial institutions, fines may rise up to HRK 38,000,000 (approx. EUR 5,043,467) or 10 % of the previous year’s revenue of the respective financial institution.

10. Who are the relevant enforcement authorities in Croatia and what are their contact details?

The main enforcement authority in Croatia is the Money Laundering Office (Cro.: Ured za sprječavanje pranja novca), established by the Ministry of Finance.

Various other authorities have specific and limited authorizations, for example, Croatian National Bank (Cro.: Hrvatska narodna banka) and Financial Services Supervisory Authority (Cro.: Hrvatska agencija za nadzor financijskih usluga). Contact details are as follows: