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 Follow up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Croatia was undertaken in 2024. According to that Evaluation, Croatia was deemed Compliant for 7 and Largely Compliant for 29 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness ratings.

Croatia has established a comprehensive legal framework to combat corruption, including laws that allow for asset seizure and penalties for corrupt practices, applicable to both domestic and foreign investors. The country is actively implementing its Anti-Corruption Strategy for 2021-2030, which aims to enhance awareness and citizen involvement in anti-corruption efforts, while also providing protections for whistleblowers and NGOs. Despite these measures, challenges remain, particularly in sectors like healthcare and construction, where corruption and lack of transparency hinder foreign investment.

Croatia's economy has shown resilience and growth, with a 2.8% increase in 2023, making it one of the strongest in the EU. The tourism sector plays a significant role, contributing 25% to GDP and generating $15.6 billion in revenue, while inflation has decreased from 10.7% in 2022 to an average of 8.4% in 2023. The government is focused on diversifying its economy, particularly through investments in clean energy and IT, supported by nearly $30 billion in EU funding through 2030.

Croatia's investment climate has been significantly enhanced by its full integration into the European Union as of January 1, 2023, adopting the euro and joining the Schengen zone, which bolsters economic stability and trade opportunities. The country is attractive for foreign investment due to its strategic location, developed infrastructure, and positive credit ratings from major agencies, with promising sectors including tourism, telecommunications, and emerging opportunities in IT and clean energy. However, challenges such as bureaucratic hurdles, judicial inefficiencies, and a need for regulatory transparency remain, although the government is actively working to improve the business environment.