FATF at its third ordinary plenary meeting decided to include Croatia in the “grey list”, along with Cameroon and Vietnam. Countries on the “grey list” are “highly monitored jurisdictions”. Croatia thus became the only EU member on this list, and the stated reason is shortcomings in the prevention of money laundering and terrorist financing.
The FATF has its own set of standards for assessing the legitimacy of each country’s money transactions. The review process is based on the threats, vulnerabilities or special risks that arise in a given jurisdiction. T. Raja Kumar, chairman of the organization, said that Croatia had committed to develop an action plan to improve compliance with the organization’s recommendations, and urged the country to implement this plan “as soon as possible”.
The Croatian Action Plan includes, among other things, an assessment of the risks associated with the misuse of legal persons and legal mechanisms and the use of cash in the real estate sector.
What could be the consequences? The legislation of most European countries obliges financial institutions to apply additional measures to identify residents of countries from the “grey list”. The same requirement is established in the internal policies of most international financial institutions.