Merchants Still Display Prices in Kunas, Institutions Shift Responsibility

For more than two years, the euro has been the official currency in Croatia, yet we still see that certain online stores and various applications display prices for products, services, or subscriptions for the Croatian market in kunas. This most often concerns foreign merchants operating in Croatia, over which state institutions have no jurisdiction, but there are also domestic merchants who violate this practice. However, when asked why we still see the option to pay for products or subscriptions in kunas, whether this practice is punishable, and if there are perhaps exceptional cases or situations in which the kuna can still be considered, institutions shift responsibility among themselves.

The Croatian National Bank directed us to contact the Ministry of Finance, the Ministry of Economy, and the State Inspectorate. The Ministry of Finance, in turn, referred us back to the CNB.

Deceptive Business Practices

We received a response from the Ministry of Economy (although they also noted that for further questions we should contact the Ministry of Finance and the CNB).

Citing the Consumer Protection Act, the Ministry emphasizes that ‘a trader must clearly, visibly, and legibly indicate the amount of the retail price and the price per unit of measure of the product provided’, and the retail price is ‘the final price in the official currency of the Republic of Croatia for a specific product or a certain quantity of products, including taxes and other public charges’.

– Consequently, if a trader displays a retail price that is not expressed in euros as the official currency of the Republic of Croatia, it will not be considered a retail price in the sense of the above definition from the Consumer Protection Act, which in itself constitutes a violation in accordance with Article 149, paragraph 1, point 2 of the Act. In addition, displaying a price in kuna as a non-valid currency may also contain elements of deceptive business practice in accordance with Article 35, paragraph 1 and paragraph 2, point 4 of the Act. Namely, according to the mentioned provision, a business practice is considered deceptive if it contains inaccurate information, making it untrue, or if in some other way, including its overall presentation, even if the information is factually correct, deceives or is likely to deceive the average consumer regarding the price of the product or the manner in which it is calculated or the existence of a certain benefit in relation to the price, thereby leading or likely leading them to make a purchasing decision they would not otherwise make. For this conduct, an appropriate penalty is also prescribed in Article 149, paragraph 1, point 49 of the Act – the Ministry states.

The mentioned penalty, as can be read from the Consumer Protection Act, is a monetary fine for the trader in the amount of 1327 to 26,544 euros (or the former 10 to 200 thousand kunas).

Limited Powers of the Inspectorate

But what about foreign online stores and applications? The State Inspectorate emphasizes that if the trader’s headquarters is outside Croatia, ‘the market inspection has no authority to conduct inspection oversight over a trader outside the Republic of Croatia and consequently may not take administrative and/or misdemeanor measures’. However, they explain that if the trader’s headquarters is in a member state within the European Union, they can, based on the Act on the Implementation of Regulation (EU) 2017/2394, ‘send a request for information exchange or a request for measures taken to the competent consumer protection authority where the trader has a business establishment’. This law grants that authority to the competent bodies of EU member states for consumer protection in cases where collective consumer interests are harmed.

In other words, the Croatian market inspection can act only if the trader operating in Croatia has its headquarters in an EU member state. If, for example, it is located in China and has no branch in the EU, the State Inspectorate has limited powers.

– If the trader’s headquarters is in China, or in a third country, the market inspection has no authority to send a request to the competent consumer protection authority in China, and consequently has no authority to conduct inspection oversight over a trader with a business establishment in China, but can only inform the trader in writing that the euro is the official currency and legal means of payment in the Republic of Croatia – say the Inspectorate, also adding that for other questions – we should contact the Ministry of Economy.

Thus, the Inspectorate can only remind foreign traders that Croatia has been part of the eurozone since January 1, 2023, and uses the euro for payments.