CROATIA Law and Practice Contributed by: Ivan Gržić, TUS & GRŽIĆ
monitoring tax compliance and analysing suspicious transactions. In addition to criminal proceedings, financial crime may also give rise to civil and administrative actions. Injured parties may seek damages or restitution in civil courts, while regulatory bodies may impose admin - istrative or misdemeanour sanctions independently. Although there is no formal conflict of jurisdiction, overlap between criminal, civil and administrative pro - ceedings requires co-ordination in practice. Criminal prosecution does not exclude other proceedings, nor do administrative sanctions preclude criminal liability. Jurisdictional issues between criminal and misde - meanour proceedings are resolved based on legal classification. 2.2 Initiation of Investigations Financial crime investigations most commonly begin with a criminal complaint filed by the police, supervi - sory authorities – ie, the Croatian Financial Services Supervisory Agency (HANFA), Croatian National Bank (CNB; Hrvatska narodna banka – HNB), the Tax Admin - istration or the Croatian Competition Agency ( Agencija za zaštitu tržišnog natjecanja – AZTN) – injured parties or private individuals, as well as on the basis of official knowledge obtained by the state attorney (eg, media, audit or internal reports). Upon receipt, the state attor - ney orders preliminary inquiries. If reasonable suspi - cion is established, an investigation is opened, or a direct indictment is filed. Accordingly, proceedings may be initiated on the basis of a criminal complaint, other information on a criminal offence or ex officio. The purpose of the investigation is to collect the evi - dence necessary to decide whether to bring an indict - ment or discontinue proceedings, as well as to secure evidence that may not be repeatable at trial. The investigation is conducted by the state attorney, who issues a decision to open it where there are grounds for suspicion. Under the CPA, investigations are generally conduct - ed for offences punishable by more than five years’
imprisonment, and are mandatory for the most serious offences (eg, punishable by more than 15 years or long-term imprisonment, or where the offender acted while insane). The state attorney opens an investigation against a specific person where reasonable suspicion exists and no legal impediments are present. Croatian criminal procedure is governed by the prin - ciple of legality, meaning the state attorney must initi - ate prosecution where statutory conditions are met. While some assessment exists – particularly at the pre-investigation stage – and limited exceptions apply (eg, dismissal of complaints or the principle of oppor - tunity), prosecutorial discretion remains constrained by the duty to prosecute. 2.3 Investigatory Powers Under the CPA (CPA/08, Articles 216–340), competent authorities (state attorney, police, courts) hold broad investigative powers. Regarding documents and information, the state attor - ney and police may require natural and legal persons to provide data, records and documents relevant to criminal proceedings, including banking and financial information, with the possibility of issuing orders and measures to secure evidence. For searches and seizures, the court, upon the state attorney’s motion, issues warrants to search homes, premises, persons and objects, and to temporarily seize items serving as evidence or originating from criminal offences. In urgent cases, police may act without a prior warrant, subject to judicial review. Suspects must be questioned after being informed of their rights, including the right to counsel and to remain silent, while witnesses are summoned to testify truthfully, with coercive measures applicable in case of unjustified absence or refusal (with statutory excep - tions). Regarding tracing, freezing and confiscating assets, the court may order interim measures (eg, disposal prohibition, account freezing, temporary property sei - zure) to secure confiscation of unlawful gain, includ -
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