CROATIA Law and Practice Contributed by: Ivan Gržić, TUS & GRŽIĆ
AML compliance obligations are governed by special legislation, primarily the Anti-Money Laundering and Terrorist Financing Act. The Criminal Code supports this system through the criminalisation of money laun - dering and related offences, such as abuse of position or assisting an offender. Non-compliance is gener - ally enforced through administrative sanctions, but criminal liability arises when non-compliance involves knowingly concealing unlawful assets or assisting in money laundering under Article 265 CC, with impris - onment and other criminal measures possible. 3.4 Financial Services Crime The Criminal Code of the Republic of Croatia express - ly criminalises abuses in the capital market through offences designed to protect market integrity, investor confidence and information transparency. Key offenc - es include insider dealing, market manipulation, and false or misleading disclosure of information. Misuse of inside information (Article 259) occurs when a person with non-public information uses it to trade financial instruments or obtain other pecuniary ben - efits, for themselves or others. Unauthorised disclo - sure or advising others to trade on the basis of such information is also punishable. Basic forms carry up to five years’ imprisonment, with harsher penalties for serious cases. Market abuse (Article 260) covers conduct that falsely or misleadingly influences financial instrument prices, such as fictitious transactions, orders creating false impressions of supply or demand, or disseminating false information, aiming to disrupt market functioning and obtain unlawful gain. Basic penalties are up to five years, with more severe punishment for aggravated cases. Misleading disclosure of information is also criminalised, protecting transparency and truthfulness in the capital market. The unauthorised provision of financial services is not a separate criminal offence but is generally regulated under special legislation governing the capital market, credit institutions and investment services, usually as misdemeanours or administrative offences. However, if linked to fraud, investor deception or other crimi - nal conduct, such activities may fall under general
criminal offences, including fraud (Articles 236, 247) or abuse of trust (Article 246). Therefore, the Criminal Code directly regulates seri - ous capital market abuses through misuse of inside information, market manipulation, and misleading disclosure, while unauthorised financial services are primarily addressed outside criminal law unless they constitute general criminal offences. 3.5 Tax Evasion and Financial Reporting The Criminal Code of the Republic of Croatia provides for several offences relating to tax abuse, false finan - cial reporting and manipulation of business records, the central offence being tax or customs evasion under Article 256 CC. This offence is committed by any per - son who, intending to wholly or partly avoid payment of taxes or levies, provides inaccurate or incomplete information, or fails to report relevant facts, causing a reduction or avoidance of a tax liability. Essential elements are the intention to avoid public levies and the existence of actual tax loss. Basic forms carry up to five years’ imprisonment, while more serious cases carry stricter penalties. The Criminal Code also covers offences regarding business books and financial records, particularly breach of the obligation to keep commercial and busi - ness books under Article 248 CC. This occurs when a responsible person fails to keep books, keeps them irregularly, or destroys, damages or conceals docu - mentation, thereby hindering review of business oper - ations. The essence is the endangerment of trans - parency, not necessarily pecuniary gain. Basic forms carry up to three years’ imprisonment. False account - ing may also fall under fraud (Article 236), abuse of trust in business operations (Article 246) or forgery of a document (Article 278), depending on the purpose of the conduct. Regarding legal persons and “failure to prevent” tax evasion, Croatian law does not create a separate offence for mere failure to prevent. Liability of legal persons is regulated by the Act on the Liability of Legal Persons for Criminal Offences, allowing punishment if a criminal offence was committed in the name, on behalf or for the benefit of the legal person, includ - ing as a result of insufficient supervision. Sanctions
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