Italy’s Anti-Money Laundering and Combating the Financing of Terrorism Efforts Under Scrutiny

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Rome, Italy - Italian authorities have been scrutinizing the controls and systems in place by financial institutions and auditing firms to assess the effectiveness of their anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts.

IVASS Develops Standardized Spreadsheet for Insurance Companies

IVASS has developed a standardized spreadsheet to collect data from insurance companies, which is then used to create a basic risk index. The index takes into account factors such as premiums, paid services, and control structures. Starting from 2023, the authority plans to automate this process.

Consob Conducts AML/CFT Supervision of Auditors and Auditing Firms

Consob, Italy’s securities regulator, has been conducting AML/CFT supervision of auditors and auditing firms that deal with public interest entities. The supervisor uses a risk-based model that assesses the level of inherent risk for each firm based on factors such as customer base, size, and revenue from non-auditing services.

Financial Analysis Using Suspicious Transaction Reports

Financial analysis using suspicious transaction reports (STRs) has been a key area of focus. The UIF receives STRs and other information from obliged entities and uses data mining, machine learning, and network analytical tools to analyze them.

Italy’s AML and Tax Compliance Efforts

Italy’s AML and tax compliance efforts have received praise for their effectiveness. The country’s centralized Register of Bank Accounts and the “Anagrafe Tributaria” are used to investigate tax evasion and anti-money laundering purposes.

Enforcing Targeted Financial Sanctions

Italy has been successful in enforcing targeted financial sanctions against Russia and Belarus. The UIF and Guardia di Finanza work together to implement and enforce the sanctions regime, using powers similar to those used for AML/CFT prevention.

Effective Reconstruction of Corporate Chains

The Italian approach has enabled the effective reconstruction of corporate chains and the identification of economic resources linked to entities designated by the EU, even in cases where corporate schemes or tools were used to circumvent the sanctions framework.

Access to Effective Databases

Italian authorities can rely on a range of effective databases, including the Register of financial accounts held in Italy at the Revenue Agency and the registers of beneficial owners. These databases are used for financial analyses and investigative purposes.

Enforcing European Financial Sanctions

The country’s efforts have been recognized as one of its strengths in enforcing European financial sanctions. The UIF and Guardia di Finanza use the same powers to implement both AML/CFT prevention and EU sanctions, resulting in the effective freezing of assets and economic resources.

Conclusion

Overall, Italy’s anti-money laundering and combating the financing of terrorism efforts appear to be robust, with a focus on data analysis, risk assessment, and international cooperation. However, it remains to be seen how well the country will adapt to changing global trends and threats in the future.