CROATIA Law and Practice Contributed by: Ivan Gržić, TUS & GRŽIĆ
ing digital assets such as crypto-assets, using special evidentiary measures under judicial supervision. Per - manent confiscation follows final judgment. All pow - ers are subject to legality, proportionality and judicial control. In the context of cryptocurrencies, criminal activ - ity involving digital assets has grown alongside their widespread use. Croatian law permits temporary sei - zure and preservation of electronic evidence, tracing and freezing of property suspected to derive from criminal offences. The first court case involving cryp - to-asset freezing occurred in 2021. General rules on temporary seizure and confiscation of proceeds apply to digital records and assets. Permanent confiscation aligns with the principle that no one may retain unlawful pecuniary gain (Criminal Code, Article 5), applicable to offenders and third par - ties who received the benefit, including digital cur - rencies. 2.4 Use of Technology and Data Croatian competent authorities use technology and digital data sources in financial crime investigations, but it is important to distinguish between what is expressly regulated and publicly confirmed, and areas with insufficient public information. Public sources confirm the use of operational and financial intelligence analysis, access to bank account and financial flow information, and special technical equipment under special evidentiary measures. The Anti-Money Laundering Office independently analy - ses and forwards relevant data to authorities, while a 2022 law facilitates access to bank account informa - tion for serious criminal offences. Ministry of the Inte - rior documents confirm the use of International Mobile Subscriber Identity (IMSI) Catchers and surveillance system upgrades. Automated surveillance in criminal matters is legally based on the CPA (CPA/08) via special evidentiary measures, including covert surveillance, subject to judicial supervision. The Constitutional Court has upheld this framework due to prompt judicial review and short deadlines for warrant confirmation. Technol - ogy is therefore used within strict procedural limits.
Regarding blockchain and crypto-assets, the Croatian regulatory framework presupposes technologically assisted supervision, especially under the Markets in Crypto-Assets Regulation (MiCA) regime. HANFA publishes European Securities and Markets Authority (ESMA) guidelines and technical standards for pre - venting and detecting market abuse in crypto-assets, showing reliance on analytical and technological tools for regulatory supervision. However, no public evidence confirms routine use of AI tools or commercial blockchain forensics by the Ministry of the Interior ( Ministarstvo unutarnjih poslova – MUP), DORH or USKOK, so this cannot be stated categorically. AI use in law enforcement is legally restricted. Croatian data protection law governs automated processing for criminal investigations, requiring impact assessments, supervisory consultations, data protection officers, security measures and Croatian Personal Data Pro - tection Agency ( Agencija za zaštitu osobnih podataka – AZOP) supervision. AZOP guidance confirms that real-time biometric identification in public spaces is generally prohibited, except in narrowly defined cases with additional approvals. AI use is not banned but strictly limited by necessity, proportionality, legality and fundamental rights protections. In conclusion, Croatian authorities use data analysis, access to financial information, digital registers and technical surveillance tools in financial crime matters, as well as regulatory tools for crypto-asset supervi - sion. However, there is insufficient public evidence of broad, standardised use of AI or specialised block - chain forensics in operational investigations. Legal limits arise from the CPA, personal data laws, access to financial information and the AI Act framework. 2.5 Internal Investigations and Co-Operation Internal investigations are not generally mandated by law, but they are practically necessary in financial institutions for obliged entities under the Anti-Money Laundering and Terrorist Financing Act, listed compa - nies and entities with developed compliance systems. The Anti-Money Laundering and Terrorist Financing Act requires the establishment of internal controls, risk assessments, transaction monitoring and reporting,
21 CHAMBERS.COM
Powered by FlippingBook