null
UNCLAS        ZAGREB 00143

SIPDIS
P 081154Z FEB 07

FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 7267
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHPNH/NVC PORTSMOUTH PRIORITY 0831

UNCLAS SECTION 01 OF 02 ZAGREB 000143 
 
SIPDIS 
 
DEPARTMENT FOR CA/FPP AND CA/VO/F/P 
DEPARTMENT ALSO PASS TO KCC 
VIENNA ALSO FOR DHS/BICE 
POSTS FOR FRAUD PREVENTION MANAGERS 
 
E.O. 12958: N/A 
TAGS: KFRD CVIS CPAS CMGT ASEC HR
SUBJECT: ZAGREB QUARTERLY FRAUD SUMMARY - OCTOBER 2006 - JANUARY 
2007) 
 
¶A. COUNTRY CONDITIONS: Croatia lies on the so-called "Balkans route" 
and its geographic position between the European Union and the 
transition countries of Southeastern Europe makes it a natural 
transit point for organized crime gangs to smuggle people, drugs, 
arms, and money into Western Europe.  Local press recently reported 
that Croatian police detained a Bosnian alien smuggler attempting to 
get 16 Albanians into Italy, while another 28 Albanians, including 
12 children under the age of 18, were stopped trying to cross the 
border into Slovenia.  Such incidents are being reported with 
increasing frequency in Croatia.  Police and Customs authorities are 
beginning to show improvement in their ability to combat smuggling 
in contraband, arms, and persons.  However, a lack of basic skills, 
particularly in Customs, and inadequate equipment and staffing along 
the border continue to hamper efforts.  Croatia has developed a 
comprehensive strategic plan in partnership with German and 
Slovenian authorities in particular to train and equip border 
authorities, but much remains to be done.  For example, access to 
computerized immigration databases is only available at Croatia's 
three largest border crossing points. 
 
Additional attention will be focused on Croatia's ability to control 
its borders as Slovenia completes preparations to comply with 
Schengen requirements.  On December 1, 2007, Slovenia is scheduled 
to implement a new border regime to comply with Schengen standards. 
Along the roughly 670 kilometer Slovenian-Croatian land border are 
60 border crossings: 25 international border crossings, 11 
inter-state border crossings (for Slovenian and Croatian citizens 
only), and 24 crossings solely for use by locals holding border 
passes.  At the same time, Slovenia will close border check points 
with Italy and Austria and cease immigration and customs control at 
these posts.  To receive EU financial support, Slovenia must 
renovate or construct 16 new border posts, which it has promised to 
do by September 2007. 
 
Apart from the 60 official land border crossings are another 163 
Slovenian -Croatian informal border crossing points (roads, paths, 
etc.) that the Slovenes are expected to close by late 2007.  At some 
date soon but yet to be announced, Croatian citizens will be 
required to present a valid passport to enter Slovenia (national 
identification cards had previously been sufficient for entry) .  As 
travelers who succeed in crossing the Croatian-Slovene border will 
be able to travel to all other EU counties without further 
immigration control, we expect to see the dramatic increase in 
illegal immigration through Croatia to continue. 
 
Croatia continues efforts to improve cooperation with the United 
States, Interpol and law enforcement authorities in neighboring 
countries to stem drug traffic into and through Croatia.  These 
efforts have borne some success.  The trans-Balkan nature of this 
drug traffic, and the need for close regional cooperation, is 
evident from recent reports of successful interdictions.  For 
example, border officials report that their coastal forces operating 
off the Dalmatian coast, in coordination with Italian coastal 
patrols, regularly retrieve bales of Albanian-grown marijuana 
jettisoned from vessels bound for Italy.  Serbian officials recently 
intercepted 50 pounds of heroin hidden in the car of a Slovenian 
trying to cross into Croatia.  The drive to stop drug trafficking 
through Croatia has taken on new urgency as Croatia becomes 
increasingly a consumer country and no longer simply a transit 
country.  Croatian authorities in 2006 noted a dramatic rise in the 
number of registered drug addicts, especially those addicted to 
harder drugs such as heroin (Of the 244 new addicts registered in 
one Zagreb hospital, 180 of them entered for heroin addiction.) and 
an attendant drop in the average age of addicts, at least in one 
region, from 27 years to 19. 
 
Croatia's economy has enjoyed steady growth over the last six years 
led by strong tourism receipts, a buoyant construction industry and 
increasing mortgage and consumer credit.  Although Croatia has grown 
at a slower rate than other economies in Central and Eastern Europe, 
analysts expect a 2006 growth rate of 4.6%.  Unemployment during the 
same period has trended steadily downward, dropping under 12% for 
the first time in 2006, surprising many observers who do not 
anticipate a large drop in Croatia's largely structural unemployment 
rate.  Annual wage growth during the same period has averaged 
between 5 and 6 percent.  The average monthly gross salary during 
the first 3 quarters of 2006 was 6,560 kunas ($1,159).  Although 
Croatia's per capita GDP of $9,000 is high by regional standards and 
is reflected in a relatively high standard of living, faster growth 
rates will be essential to closing the gap between Croatia and its 
wealthier European neighbors. 
 
The opening of Croatia's European Union accession talks in the fall 
of 2005 brought new confidence in Croatia's economic future, 
particularly as the Government has been forced to implement 
long-overdue reforms.  Nevertheless, some significant problems still 
remain.  The country's judicial system remains notoriously 
inefficient, with cases languishing unresolved for several years. 
Likewise, corruption, lack of transparency and an overly-large state 
role in the economy continue to hamper Croatia's growth. 
 
¶B.  NIV FRAUD: Zagreb is conducting a J-visa validation study to 
determine the rate of return for all J-visa recipients in the past 
three years.  Post will provide the full results of its study by 
septel.  However, initial results for the Au Pair Visa portion of 
the study indicate a dismal return rate of less than 50% of the 87 
au pairs issued visas from December 2003 to November 2005. 
Additionally, post regularly receives applications for B1 in lieu of 
H visas for workers subcontracted by international companies, 
primarily German and Italian, which, after the succession of 
contracts and corporations are carefully scrutinized, are uncovered 
to be clever attempts to import cheap, and usually unskilled, labor 
into the U.S. 
 
¶C.  IV FRAUD: Post continues to see a number of marriages arranged 
solely for immigration purposes by family members in the U.S.  This 
trend has been noted primarily in cases processed for Bosnian 
citizens (Zagreb is the IV processing post for the region). 
 
¶D.  DV FRAUD: Post has not encountered any significant DV fraud. 
 
¶E.  ACS AND PASSPORT FRAUD: Post did not encounter any significant 
ACS or Passport fraud during the reporting period. 
 
¶F.  ADOPTION FRAUD: Nothing to report. 
 
¶G.  ASYLUM AND OTHER DHS BENEFITS: Nothing to report. 
 
¶H.  COOPERATION WITH HOST GOVERNMENT AUTHORITIES: Post continues to 
enjoy successful and collaborative cooperation with Croatian 
authorities, albeit on an informal basis.  Croatian law officially 
requires that all requests for law enforcement information be made 
by diplomatic note through Interpol channels.  While the Embassy 
works on drafting a law enforcement MOU that would permit freer 
exchange of law enforcement information, the Consular Section is 
able to call on long-time police contacts willing to work with us on 
common anti-fraud concerns. 
 
Embassy Zagreb is currently working to expand its anti-fraud efforts 
into neighboring Montenegro, as we are now accepting visa applicants 
resident there in an effort to assist Embassy Podgorica.  To date 
post has received only one such applicant, who was easily able to 
demonstrate strong ties and ample financial resources. 
 
¶I. PASSPORTS:  Currently issued Croatian passports are 
photo-digitized and difficult to alter. However, old-style 
passports, last issued in 2000, remain in circulation and will be 
valid until Dec 31, 2009.  Fortunately, nearly 85% of Croatian 
citizens have replaced their old-style passports with the new, more 
secure ones.  Croatian police report that an estimated two million 
new passports have been issued.  Since issuance of the first new 
passports in 2000, only a hundred or so altered Croatian passports 
have been intercepted at the Croatian border, disclosed as forgeries 
by the machine readers.  Croatian passports are not yet biometric. 
The Croatian government is only now developing a plan for eventual 
issuance of a biometric passport, but has not yet announced a 
timeline for its implementation.  Current passports meet EU/ICAO 
standards. 
 
¶J.  AREAS OF PARTICULAR CONCERNS: Post would like to again express 
its appreciation for the ongoing support received from CA/ FPP 
point-of-contact Judy Carson.  As noted in previous reporting, Post 
would like to see in the future a regional fraud conference with DHS 
participation to discuss, among others issues, fiance/spouse visas 
and the special difficulties posed in harmonizing cultural mores and 
U.S. visa law. 
 
¶K.  STAFFING AND TRAINING: Consul Ruta D Elvikis remained Fraud 
Prevention Manager during the reporting period.  Vice Consul Brigid 
Reilly Weiller served as Fraud Prevention Officer and FPM back up. 
Ljubica Murphy remained the LES FPU Assistant.  Ms. Murphy recently 
attended FSI's Fraud Prevention training and provided Consular 
colleagues, both at post and at a Regional Leadership Day conference 
hosted by Embassy Sarajevo, with a detailed overview of the training 
and CA/FPP highlights. 
 
BRADTKE