Council of Europe : Press release - DC006(2014) / 20 January 2014 Council of Europe report calls on Croatia to improve repression of money laundering

Press release - DC006(2014)

Council of Europe report calls on Croatia to improve repression of money laundering

Strasbourg, 20.01.2014 - In a report published today, the Council of Europe's MONEYVAL Committee calls on Croatia to improve measures to effectively repress money laundering, for example, by increasing the number of convictions and of confiscation measures.

The Committee acknowledges that anti-money laundering and anti-terrorist financing legislation in Croatia mostly complies with international and European standards, although some improvements are still needed in certain areas. The report´s main conclusions are the following:

- Most money laundering is considered to be of domestic origin. The main criminal offenses which are the primary sources of money laundering are crimes such as abuse of power and authority; tax evasion; and abuse of drugs.

- The money laundering offence is broadly in line with international standards. However, almost all the cases prosecuted are "own proceeds" laundering, and so far, no cases have been prosecuted in respect of third parties laundering on behalf of others. The low number of convictions raises concerns about the overall effectiveness of money laundering criminalisation, given the level of proceeds-generating offences in Croatia.

- Croatia has introduced an independent, autonomous offence of terrorist financing into its Penal Code which is largely in line with international standards.

- The legal framework applicable to confiscation and provisional measures is complicated, and should be harmonised. The level of confiscation is low. The authorities should place greater emphasis on identifying property that may become subject to confiscation in major proceeds-generating cases.

- Croatia has taken significant steps to remedy the deficiencies in preventive measures for the financial sector. However, it needs to ensure the effectiveness of customer identification measures relating to beneficial owners, and in business relationships with non-resident customers.

- Although measures are in place to establish the fitness of persons controlling and managing financial institutions, these need to be extended further to guard against all possibilities of criminal infiltration.

- The Anti-money laundering Office (AMLO), which is responsible for the prevention and detection of money laundering and terrorist-financing, has sufficient structural and operational independence, and adequate resources to effectively perform its tasks.

- Croatia has a well-established legal framework for international mutual legal assistance and co-operation.

MONEYVAL will continue to monitor implementation of its recommendations by Croatia, which should submit a follow-up report by September 2015.

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The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) is a Council of Europe body that assesses compliance of states with the relevant international and European standards to counter money laundering and terrorist financing, and makes recommendations to national authorities. 28 Council of Europe member states are currently subject to MONEYVAL's evaluation procedures, as well as Israel, the Holy See (including the Vatican City State) and the United Kingdom's Crown Dependencies of Guernsey, Jersey and the Isle of Man.

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