Act on the Prevention of Money Laundering and Terrorist Financing

The new Act on the Prevention of Money Laundering and Terrorist Financing came into force on 1 January 2018, harmonizing the legislation of the Republic of Croatian to the provisions of the Fourth Anti-Money laundering EU Directive.

The new Act on the Prevention of Money Laundering and Terrorist Financing provides for the establishment of the Beneficial Owner Register that will be operationally led by the Financial Agency (FINA). The main purpose of the Register shall be the monitoring of transparency of data on beneficial ownership and reducing the possibility of misuse of legal entities to cover up the identity of beneficial owners as possible perpetrators of criminal offences, money laundering, including tax evasion and fraud, and for financing terrorism. The Law stipulates restrictions on cash transactions, according to which legal or natural entities are not allowed to receive or make cash payments in the amount exceeding HRK 75,000. This restriction also applies when a payment is made or received in several obviously connected cash transactions in the amount exceeding HRK 75,000. Transactions exceeding the said threshold must be made via transaction account opened with a bank or via credit card. The restriction applies to all receipts of businesses and payments of businesses to other entities. It includes any kind of cash transactions as well as the charging for deliveries from citizens. Cash transactions between citizens are not subject to such restrictions.

The restriction for persons subject to fiscalization, saying that the maximum amount of a cash invoice payment of one person subject to fiscalization to another is HRK 5,000.00, shall continue to apply. With respect to the charging of foreign natural and legal entities, the amount is restricted to EUR 10,000.00.


 

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