Croatia on Thursday were deducted one point from their Euro 2016 qualifying campaign after a swastika was scrawled on the pitch ahead of the 1-1 draw against Italy in June, UEFA confirmed.
After the penalty Croatia are on 13 points at the top of Group H, with Italy second, one point behind.
UEFA also ruled that Croatia’s next two home matches will be played behind closed doors and have banned the team from playing qualifiers at the Split stadium where the incident occurred.
They were also hit with a 100,000 euros ($110,000) fine, but escaped a ban.
Croatia have three days to appeal the ruling.
The swastika on the pitch at Split was removed by groundsmen at half-time of the draw between Croatia and Italy on June 12.
The Croatian Football Federation (HNS) apologised for the incident which they said “brought prejudice against football and the Croatian State and labelled it an act of sabotage”.
Last month Croatia’s Prime Minister Zoran Milanovic had pleaded with UEFA not to expel his country from the European Championships because of the swastika incident.
Meanwhile, the federation said they were relieved although they were hoping for such a decision but warned that any similar incident in the future would mean far more severe consequences.
“We were hoping for such a decision but there was always some fear” to be expelled from Euro 2016, HNS vice-president Ante Kulusic told local media.
“This should be a big warning to all of us … Today we did great, but if something similar happens again no one would save us.”
Kulusic warned that the perpetrators were still not found and said the authorities should be included more to “protect the sport from the criminals.”
“I honour the letter Milanovic sent to (UEFA chief Michel) Platini but it is too little and too late. Simply, the state should get involved more to help us in the fight against hooliganism.”
Croatia’s fans have a reputation for troublesome behaviour and the HNS have been punished many times in the past.
The federation had urged the government to act and put an end to hooliganism.