Economic analysis of money laundering prevention in Croatia and Slovenia

Meta Ahtik, Ozren Pilipovic and Miran Marelja

Journal of Money Laundering Control, 2019, vol. 22, issue 1, 97-109

Abstract: 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 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 effectiveness of Slovenian and Croatian legal systems and their compatibility with EC Directive (2015/849). 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 (encouraging these banks to a higher level of demand for preventive behavior) entail costs that go beyond the direct, visible benefits 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 economic analysis 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 entities as whole. The paper also uses the comparative approach to address the 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 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-01-2018-0009

DOI: 10.1108/JMLC-01-2018-0009

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