Anti-Money Laundering and Terrorism Financing fight in Croatia is seriously threatened, seeing that the Registry of Beneficial Owners does not publish the data on concealed owners. Croatia needs a real fight against corruption and money laundering, and it requires, to begin with, that all the data on the ownership be entered in the Registry of Beneficial Owners, which is not the case now.
Cases such as the case of Goran Puklin, husband of the former prosecutor, who was discovered to have mediated in the staffing of Croatian Lottery (HL) and arranged HL’s IT system tenders to go to the Fleksbit company, which he is the co-owner of, show that the mechanisms which should work to prevent corruption and money laundering do not function.
The purpose of establishing the Registry of Beneficial Owners, which coordinated the Croatian legislation with the EU, is greater transparency and availability of data on real ownership to prevent signing partnership agreements and concealed ownership for political purposes and with the intention of money laundering.
The Anti-Money Laundering and Terrorism Financing Law, which transfers the Directive in the Croatian legislation, however, does not mention in any provision the obligation to publish data on concealed company owners who, according to the Company Law, do not have management powers, but have the right to the profit share.
The Ministry of Finance, in the opinions published on its pages, says that the concealed company members do not have to register in the Register of Beneficial Owners if they do not control the company, even though they have the right to participate in the exploitation of profits. The legal entity that has concealed members must register them in the Register only in cases when that concealed member has a controlling position in the asset management. It is as if the state ignores the fact that, for corruption, it does not matter whether the official has 20 or 51 % of the concealed ownership in the company it favours. If they are the ones that set up a job, then they control the company in its entirety, regardless of the percentage of formal (concealed) ownership in it.
The last case is the new proof that it is not enough to merely translate European regulations. Political will is needed for them to efficiently implement them, in accordance with the national laws. Concealed ownership, as well as shares in the profits of concealed owners, should be disclosed in the Registry of Beneficial Owners, otherwise it does not fulfil its basic purpose.
Companies, organisations, foundations, and institutions should register in the Registry of Beneficial Owners by the end of 2019 by filling out new forms and sending the state bodies the information they already have. An additional administrative has been created, but, in reality, we see serious oversights which show that the Registry of Beneficial Owners is just a smoke screen to show that the state is actively working on preventing money laundering.
In October 2020, Gong has, after the Janaf and the defendant Puklin’s case, accused of helping Kovačević hide millions, asked several questions on how the secret societies are regulated, how they trace the origin of property and whether they plan to enable the access to the Registry of Beneficial Owners to all the citizens, without signing up via NIAS system, which records their personal data. The Ministry of Finance, the Ministry of Justice and Public Administration, the Anti-Money Laundering Office, the State Attorney Council, and the Financial Agency (FINA) were asked those questions. We did not get a response.
The cases such as Puklin’s warn that it is necessary to publish all the information on ownership. If not, the Registry of Beneficial Owners does not make much sense and can freely be called the Registry of Fake Ownership.
