CROATIA Trends and Developments Contributed by: Ivan Gržić, TUS & GRŽIĆ
field of financial and economic crime. The Criminal Code contains elaborately regulated offences encom - passing corruption, abuses in economic operations, tax fraud and money laundering. In addition, the legislative framework includes: • a system of criminal liability of legal entities; • regulations on the prevention of money laundering and terrorist financing; and • tax rules aligned with international transparency standards. Within the OECD accession process, additional reforms have also been undertaken, particularly in the areas of state-owned enterprise governance and fiscal policy. However, the key challenge does not lie in normative design, but in its implementation. OECD evaluations consistently point to the need for: • shortening the duration of criminal proceedings; • strengthening financial-investigative capacities; and • ensuring consistent and effectively deterrent sanc - tioning. Bribery in international business transactions Combating the bribery of foreign public officials is one of the OECD’s core areas of interest. In this seg - ment, states are required not only to criminalise such conduct normatively, but also to ensure active imple - mentation through identification, investigation and prosecution. The Republic of Croatia has formally aligned its leg - islative framework and assumed obligations under the relevant convention, yet the challenge remains in practical implementation. The OECD particularly stresses the need for a proactive approach, including: • the development of mechanisms for detecting criminal offences; • the strengthening of international co-operation; and • the provision of effective sanctions.
For business entities, this means greater exposure to regulatory and criminal law risks in the course of inter - national business operations. Criminal liability of legal entities and compliance In contemporary criminal law, the liability of legal entities has become a key instrument in combating economic crime. The Croatian system recognises such liability, although the practice of its application remains underdeveloped. In this regard, OECD standards clearly indicate the need for: • more active prosecution of legal entities; • assessment of the effectiveness of internal control mechanisms; and • encouragement of the development of corporate compliance programmes. The role of compliance systems is thereby transformed from a formal instrument into a genuine mechanism of risk management. Their effectiveness is assessed by reference to their capacity to prevent, detect and report irregularities. Tax crime and fiscal policy Tax crime constitutes one of the areas in which fiscal policy and criminal law regulation intersect. In its eval - uations, the OECD highlights the need to strengthen tax discipline, broaden the tax base and rationalise tax reliefs. At the same time, the need for a more restrictive fis - cal policy is emphasised, which also has implica - tions for combating tax fraud. Complex tax systems and numerous exceptions frequently create room for abuse, particularly in cross-border transactions. In that regard, combating tax crime requires: • the development of sophisticated analytical tools; • the strengthening of international exchange of information; and • the integration of tax and criminal law mechanisms.
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