Financial Crime World

European Banking Authority Considers Applying Sanctions to Italian Banks

Strengthening Anti-Money Laundering Measures

The European Banking Authority (EBA) is considering applying sanctions available under the Capital Requirements Directive (CRD) to Italian banks that fall under the prudential supervision of the European Central Bank (ECB). This move aims to strengthen anti-money laundering (AML) measures in Italy’s financial sector.

According to sources within the EBA, the decision comes after a recent report highlighted concerns over the misuse of legal persons in Italy’s financial sector. The report noted that while basic information on legal persons is readily available, information on beneficial ownership is not consistently reliable and accessible.

Lack of Criminalization of Self-Laundering

The EBA has also expressed concerns over the lack of criminalization of self-laundering until December 31, 2014, which undermined international cooperation in combating money laundering and terrorist financing. However, with Italy’s recent criminalization of self-laundering, the EBA believes that a positive impact on international cooperation can be expected.

Proposed Sanctions

The proposed sanctions would aim to strengthen AML measures in Italian banks under ECB supervision, particularly those operating as part of the Single Supervisory Mechanism (SSM). The sanctions could include:

  • Penalties for non-compliance with AML regulations
  • Fines for failing to report suspicious transactions

Industry Reaction

Italian financial authorities have welcomed the EBA’s initiative, stating that it demonstrates a commitment to addressing money laundering and terrorist financing risks in the country. However, some industry experts have expressed concerns over the potential impact on small and medium- sized enterprises (SMEs) in Italy, which may struggle to comply with the new regulations.

Timeline

The EBA is expected to make a final decision on the sanctions by the end of 2023, following consultations with Italian financial authorities and industry stakeholders.