To whom the new obligation under Cro-AMLA applies
Measures, actions and procedures for the prevention and detection of money laundering and terrorist financing determined by Cro-AMLA must be implemented before and / or during each transaction, as well as in concluding legal transactions for the acquisition or use of property and in other forms of disposal of assets, rights and other property which can be used for money laundering and terrorist financing.
Cro-AMLA implemented "new definitions" from the the 5th EU Anti-Money Laundering Directive for:
(i) virtual currency - means a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically; and for
(ii) custodian wallet provider - means a legal or natural person that provides services to safeguard private cryptographic keys on behalf of its customers, to hold, store and transfer virtual currencies.
Accordingly, the Cro-AMLA extended persons that are obliged to implement the measures, actions and procedures for two general types of cryptocurrency businesses:
- providers engaged in exchange services between virtual currencies and fiat currencies, i.e. cryptocurrency exchanges; and
- wallet providers, i.e. cryptocurrency wallet services (where the service holds its users’ private keys).
The Croatian Financial Services Supervisory Agency (Hanfa) supervises the implementation of Cro-AMLA.
Activities related to virtual currencies are not regulated by any additional regulation beside Cro-AMLA. Thus, Hanfa does not issue licenses to providers engaged in exchange services between virtual currencies and fiat currencies and wallet providers, licenses to members of the management boards of these companies, nor is it authorized to supervise the quality of the services provided, as it does in relation to entities whose activities are regulated by special regulations and over which Hanfa has the legal authority to supervise.
The content of the obligation under the Cro-AMLA
Obliged entities engaged in the provision of exchange services between virtual currencies and fiat currencies and/or the provision of custodian wallet services are required:
- to notify Hanfa
- no later than 30 days after the date of establishment or registration, of their activities in the provision of exchange services between virtual currencies and fiat currencies and/or the provision of custodian wallet services ("Notice").
The Notice should contain the following: (i) a copy of the extract from the court register providing clear insight into activities carried out by the obliged entity; (ii) the by the legal person determining business activity; (iii) name of the firm (and of the branch), name and surname (personal identification number (OIB), place of permanent residence/place of temporary residence, contact: email, telephone number) of responsible persons in the legal person/of persons authorised to represent the branch in its business operations; personal identification number (OIB) of the legal person, data on the registered office of the legal person; (iv) name of the craft, name and surname of the owner of the craft, personal identification number (OIB) and address of the craft and address of the natural person - owner of the craft; (v) name, surname and contact (email address, telephone number) of the responsible person for the implementation of measures and actions under Cro-AMLA; and (vi) the total number of employees in the legal person or craft submitting the Notice.
Potential misdemeanour liability
In the event that the obliged entities in question fail to inform Hanfa within the prescribed period of their engagement in the provision of exchange services between virtual currencies and fiat currencies and the provision of custodian wallet services, Cro-AMLA provides for the misdemeanour liability - a monetary fine in the range of EUR 4,666 – 133,333.
Lastly, it should be noted that according to the publicly available data currently six companies already sent the Notice to Hanfa: Fima Plus, Electrocoin, BlokIdea, In Kapital, Digital Assets i Tikomar. Although there is no obligation imposed to Hanfa to establish a register for this purpose, it could be expected that Hanfa will publish a list of entities that sent the Notice to Hanfa.