Economic analysis of money
laundering prevention in
Croatia and Slovenia
Bank of Slovenia, Ljubljana, Slovenia
Faculty of Law, Zagreb, Croatia, and
Faculty of Law, University of Zagreb, Zagreb, Croatia
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 economicanalysis of law is used to analyze
the effectiveness of laws in Croatia andSlovenia regarding the deﬁnition 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
Findings –The authors ﬁnd that banks have long clinged to the guaranteed conﬁdentiality of deposits,
which means that money laundering has undoubtedly brought them some beneﬁts 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, visiblebeneﬁts of the implemented measures. However,a functioning and stable ﬁnancial 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 beneﬁts for the ﬁnancial 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
In recent years, the topic of money laundering and terrorist ﬁnancing regarding banking
and ﬁnancial sector, in general, has become more interesting to legal and economic
researchers.The 9/11 US terrorist attacks in 2001 also signiﬁcantly contributed to this.
This text focuses on the role of reporting entities, e.g.banks, other ﬁnancial institutions,
legal professionals, in the preventionof criminal offenses connected with money laundering.
In the ﬁght 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
Journalof Money Laundering
Vol.22 No. 1, 2019
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