Analysts: Croatia is ignoring outflow of illicit funds
19/03/2013
Croatia has lost more than 11 billion euros through corruption and commercial mispricing.
By Cornelis van Zweeden for Southeast European Times in Dubrovnik -- 19/03/13
 Croatia Prime Minister Zoran Milanovic has yet to answer the letter from the think-tank and European Parliament members. [AFP] |
In order to stem the flow of illicit money leaving Croatia, banks need to make account identifications transparent and the government needs to make sure its employees are trained to catch and avoid mistakes, analysts said.
According to Global Financial Integrity, an international research and advocacy organisation, between 2001 and 2010 Croatia lost 11.6 billion euros through corruption and tax evasion.
That was 2.645 euros per person, the highest figure in the region after Montenegro, where the outflow of illicit money was almost three times higher in relative terms.
"Croatia could partly stop the outflow by requiring banks to know the true, beneficial owners of accounts," Clark Gascoigne, communications director at the organisation, told SETimes.
Gascoigne also said Croatia should train customs officers in detecting faulty invoicing in trade transactions, a practice that accounts for an estimated 60 percent of all illicit outflows globally.
Faulty commercial invoicing often benefits politicians, Natasha Srdoc of the Adriatic Institute, the Rijeka-based think tank, told SETimes. "This is because many companies are, or used to be, state-owned."
In an open letter, dated February 21st, Srdoc, along with two European Parliament members, asked Croatia Prime Minister Zoran Milanovic whether he had requested information about Croatian account-holders from Liechtenstein and other countries.
No answer has been received, she said, because that was not in the political elite's interest.
"The same people who have been involved in rampant corruption since 1992 are still around," Srdoc said. "I don't think they have anything to say. They haven't investigated the outflows of illicit money."
The office of the prime minister did not respond to written questions from SETimes.
Monica Macovei, a Romanian member of the European Parliament who co-signed the letter, told the SETimes that the EU should continue to monitor Croatia after it joins the Union in July 2013.
"In Romania, we have 1,000 public officials behind bars for corruption," Macovei said. "That would not have happened without post-accession monitoring."
But the European Parliament rejected the proposal, and the European Commission is also against it.
"We have learned the lessons from the past," commission spokesperson Peter Stano told SETimes in a reference to the premature accession of Romania and Bulgaria. "Croatia has met all the requirements."
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