FATF Status

Croatia is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

Since June 2023, when Croatia made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Croatia has taken steps towards improving its AML/CFT regime, including increasing FIU human resources and improving analytical capabilities; improving LEAs detection, investigation and prosecution of different types of ML; and increasing the application of provisional measures to secure criminal proceeds. Croatia should continue to work on implementing its action plan to address its remaining strategic deficiency: demonstrating immediate communication of changes in UN TFS regimes to reporting entities.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Croatia was undertaken in December 2023. According to that Evaluation, Croatia was deemed Compliant for 5 and Largely Compliant for 23 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

Croatia has established a comprehensive legal framework to combat corruption, including laws that allow for asset seizure and prosecution of various corrupt practices. The country is actively implementing an Anti-Corruption Strategy for 2021-2030, which aims to enhance awareness and citizen involvement in anti-corruption efforts. Despite these measures, challenges remain, particularly in sectors like healthcare and construction, where corruption is perceived as a significant barrier to foreign investment.

Croatia's economy has shown resilience and growth, achieving a 2.8 percent increase in 2023, making it one of the strongest in the EU. The country has adopted the euro and joined the Schengen zone, enhancing its economic stability and attractiveness for foreign investment, particularly in sectors like tourism, telecommunications, and clean energy. Despite challenges such as inflation and labor shortages, Croatia's government is committed to economic reforms and has secured substantial EU funding to support long-term growth.

Croatia's investment climate has been significantly enhanced by its recent integration into the European Union, adoption of the euro, and entry into the Schengen zone, which collectively bolster economic stability and trade opportunities. The country is characterized by a favorable geostrategic location, well-developed infrastructure, and a positive investment-grade credit rating, making it attractive for foreign investors, particularly in sectors like tourism, telecommunications, and clean energy. However, challenges remain, including bureaucratic hurdles and the need for judicial efficiency improvements, which the government is actively addressing to foster a more conducive business environment.