Amnesty International has accused Croatia of failing to provide many of the victims of the 1991-1995 war with justice.
A report by the human rights group urges the authorities to speed up the prosecution of war crimes suspects.
Amnesty says that with almost 700 cases yet to be prosecuted, most suspects may never face trial.
Croatia's Justice Ministry responded to the report dismissing some of its statements as "inaccurate".
"In the course of the last few years great progress has been achieved in relation to the prosecution of war crimes, which has not been mentioned in the report," Cabinet Secretary Miljenko Petrak told the BBC News website.
The International Criminal Tribunal for the former Yugoslavia said it would not react to the report, which was published on Thursday.
The war between Serbia and Croatia between 1991-1995 left about 20,000 people dead and more than 250,000 others displaced from their homes.
"Croatia must deal with its past in order to move forward," said Nicola Duckworth, Amnesty International's Europe and Central Asia Programme Director.
"Impunity for war crimes is a stumbling block towards membership in the European Union."
Croatia is on course to become the 28th member state of the EU and the European Commission said recently that talks were entering their final phase.
Amnesty found that "crucial concepts" such as command responsibility, war crimes of sexual violence and crimes against humanity had not been defined in Croatia's laws in accordance with international standards which, it said, resulted in impunity for many of the crimes.
It added that allegations against some high profile military and political officials had not been investigated and said that Croatian Serbs had been "disproportionately targeted", forming nearly 76% of all cases.
But Mr Petrak said that Croatia dealt "proactively" with war crimes trials and had paid "special attention" to investigating and prosecuting war crimes regardless of the nationality of those who had perpetrated them.