Prevention of money laundering and terrorist financing

Prevention of money laundering and terrorist financing

Published: 11/3/2020
Anti money laundering and terrorist financing is an important task of any jurisdiction. It comprises all measures and activities that may be undertaken to prevent the money obtained in an unlawful manner from being used in any way, or, regardless of the source, funds being used for the purposes of any form of terrorism. Money laundering and terrorist financing is detrimental for the economy and society as a whole. Money laundering may result from various criminal activities, and as a consequence, it may represent unfair competition for the economy, while terrorist financing is the main source of funding for the unacceptable and forceful achievement of certain goals and interests to the detriment of others. The anti money laundering system in a jurisdiction should be comprehensive, standardised, efficient and connected with the participants in such a system in other countries and globally because money laundering and terrorist financing is precisely that - generally and globally harmful.

Legislative framework

Published: 4/2/2021
The legislative framework consists of acts, regulations, ordinances and decisions of supervisory bodies, which prescribe measures, procedures and processes to be undertaken with the aim to prevent money laundering and terrorist financing, as well as to penalise persons committing such deeds.

International restrictive measures

Published: 11/3/2020
International restrictive measures apply to persons and other entities under some form of sanctions because of any type of terrorism. The measures are introduced on the basis of the Act on International Restrictive Measures and are further regulated by a decision. The Ministry of Foreign and European Affairs maintains the Database, issues guidelines and updates the overview of sanction regimes. The EU publishes autonomous measures, in addition to those introduced by the UN Security Council and publishes guidelines for the enforcement of such measures under the Common Foreign and Security Policy.

The role of the CNB

Published: 14/2/2020
The CNB as a supervisory body oversees the implementation of national legislation governing the prevention of money laundering and terrorist financing and the implementation of Regulation (EU) 2015/847 and Commission Delegated Regulation (EU) 2018/1108 in credit institutions, credit unions, payment institutions, electronic money institutions, branches of equal reporting entities from other member states and third countries and at representatives for payment institutions or distributors for electronic money institutions from other member states should they be credit institutions, credit unions, institutions for payment services and institutions for electronic money established in the Republic of Croatia in line with the relevant act. It adopts subordinate legislation and guidelines and exercises supervision of these obligated persons. Following supervision, the CNB gives recommendations for the improvement of prevention systems in obligated persons.

International institutions and groups engaged in the combat of money laundering and terrorist financing

Published: 17/2/2021 Core functions Supervision
The United Nations (UN) began the combat against money laundering by adopting conventions, and it directs its combat against terrorism by resolutions of its Security Council. All countries in the world are gradually transposing such documents into their legal systems. By the establishment of the International Money Laundering Information Network (IMoLIN), the UN connects and encourages other international organisations to cooperate in the joint combat against money laundering and terrorism. In addition to conventions, the EU adopts directives which are the source of legislation for the Republic of Croatia. Directives are aligned with the recommendations of the Financial Action Task Force (FATF), the most important international body for the introduction of standards concerning measures, procedures and recommendations for an active involvement and assessment of the anti money laundering and terrorist financing system. The FATF acts through regional bodies. MONEYVAL is one of them, and the Republic of Croatia is its member. MONEYVAL periodically evaluates the system of prevention of money laundering and terrorist financing of its members and publishes reports. The latest country report for the Republic of Croatia was in 2013. Council of Europe Committee on Counter-Terrorism (CDCT) is a special Committee of the Council of Europe that publishes reports on counter-terrorism measures implemented by each of the countries, while the Wolfsberg Group, which comprises eleven leading global banks, is useful to the financial sector because it issues guidelines for the prevention of money laundering and terrorist financing in different segments of banking services industry.