HNB: ZABA fined €4.4m for failing to comply with money laundering law

NEWS 03.11.202010:16
Marko Lukunic/PIXSELL

The finance ministry's inspectorate has imposed a fine of HRK 33 million on Zagrebacka Banka after the Croatian National Bank (HNB) established that this commercial lender failed to comply with the law on prevention of money laundering and terrorist financing from 2017 to 2019.

During its supervision, the HNB established that Zagrebacka Banka (ZABA) perpetrated 11 breaches of the relevant law from 1 January 2017 to 8 November 2019, considering the risk assessment of certain business relations, identification and monitoring of suspicious, complex and unusual transactions, the reporting of suspicious transactions to the Anti-Money Laundering Office, the implementation of stronger due diligence regime for 72 clients, and so on.

The bank is found responsible for failing to conduct an in-depth analysis of 1,126 transactions that are perceived by the authorities to have been complex and unusual.

The decision of the financial inspectorate became final on 30 October.

In the meantime, ZABA has informed the HNB that it has conducted all the necessary measures to rectify the irregularities.

The speculations about ZABA’s failure to adhere to the the law on prevention of money laundering and terrorist financing appeared in early 2020 when the bank’s management board chairman Miljenko Zivaljic resigned. Zivaljic tendered his resignation on 20 January, citing personal reasons.

However, media outlets have alleged that his resignation ensued after this largest bank in Croatia enabled some of its clients to launder their money.

On 24 February two board members — Eugen Paic Karega and Nikolaus Maximilian Linaric — also stepped down.

ZABA’S total assets are worth HRK 124.9 billion and it has a 27.8 share in the Croatian banking market.

(€1 = HRK 7.5)