Economic analysis of money laundering prevention in Croatia and Slovenia

Author:Meta Ahtik, Ozren Pilipovic, Miran Marelja
Position:Bank of Slovenia, Ljubljana, Slovenia
Pages:97-109
SUMMARY

Purpose This paper aims to focus on the role of reporting entities, e.g. banks, other financial institutions, legal professionals, in the prevention of criminal offenses connected with money laundering in Croatia and Slovenia. Design/methodology/approach The methodology of the economic analysis of law is used to analyze the effectiveness of laws in Croatia and Slovenia regarding... (see full summary)

 
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Economic analysis of money
laundering prevention in
Croatia and Slovenia
Meta Ahtik
Bank of Slovenia, Ljubljana, Slovenia
Ozren Pilipovic
Faculty of Law, Zagreb, Croatia, and
Miran Marelja
Faculty of Law, University of Zagreb, Zagreb, Croatia
Abstract
Purpose This paper aims to focus on the role of reporting entities, e.g. banks, other nancial institutions, legal
professionals, in the prevention of criminal offenses connected with money laundering in Croatia and Slovenia.
Design/methodology/approach The methodology of the economicanalysis of law is used to analyze
the effectiveness of laws in Croatia andSlovenia regarding the denition and the role of reporting entities in
money laundering prevention in these two countries. A comparative approach is also used as the authors
compare the effectivenessof Slovenian and Croatian legal systems and their compatibility with EC Directive
(2015/849).
Findings The authors nd that banks have long clinged to the guaranteed condentiality of deposits,
which means that money laundering has undoubtedly brought them some benets in the short term. The
prevention of money laundering for banks is not free. The measures imposed on the bank by legislation
(encouragingthese banks to a higher level of demand for preventive behavior) entail costs that go beyond the
direct, visiblebenets of the implemented measures. However,a functioning and stable nancial system has a
number of externalities,of course, which are also enjoyed by banks.
Originality/value The paper focuses on economicanalysis of Croatian and Slovenian legal systems with
regards of the regulation of role of reporting entities in the prevention of money laundering which produce
certain costs and benets for the nancial system and reporting entitiesas whole. The paper also uses the
comparative approach to addressthe problem of compatibility of Croatian and Slovenian legal system with
the EC Directive(2015/849).
Keywords Costs, Economic analysis of criminal and anti-money laundering laws,
Role of reporting entities
Paper type Conceptual paper
Introduction
In recent years, the topic of money laundering and terrorist nancing regarding banking
and nancial sector, in general, has become more interesting to legal and economic
researchers[1].The 9/11 US terrorist attacks in 2001 also signicantly contributed to this.
This text focuses on the role of reporting entities, e.g.banks, other nancial institutions,
legal professionals, in the preventionof criminal offenses connected with money laundering.
In the ght against criminal offenses of money laundering, the legislator at national or
international level imposes considerable restraints on the obliged entities while the
enormous costs for the banks are results of the enforcement of the criminal offenses
Money
laundering
prevention
97
Journalof Money Laundering
Control
Vol.22 No. 1, 2019
pp. 97-109
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-01-2018-0009
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm

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