The subject of this paper is the control of money laundering and terrorism financing in Croatia banking system. It shows legal and controlling measures which goal is to prevent money laundering and terrorism financing. Basic hypothesis are confirmed. Banking sector with belonging institutions has the most crucial role in preventing money laundering and terrorism financing and control system of money laundering and terrorism financing is complicated and has many determinants. Because the money which is planned for stimulating terrorism and terrorism acts first needs to laundered, banks and other institutions of banking sector have crucial role in prevention money laundering. By applying different measures, acts, procedures and controls, the institutions of banking sector can identify and characterize certain activities as suspicious. That of course doesn't mean that there is without no doubt money laundering in process, but suspicious transactions are rising the reasonable doubt. Competent institutions must be informed about those activities, which then take further measures. By only examining legal framework it is clear that the control system of money laundering and terrorism financing is very complicated. Such system comprehends many elements, and as main element can be named money laundering and terrorism financing risk control system. By obligating legal framework and guidelines it is possible to reduce money laundering and terrorism financing, which therefore can lead to reducing of terrorism and terrorism acts itself.