Italy’s Financial Sector Enhances Anti-Money Laundering and Combating the Financing of Terrorism Efforts

Rome, Italy - In a significant move to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts, Italy has been actively working on developing risk-based models for supervising banks, insurance undertakings, and auditors.

Risk-Based Models for Supervision

• Banca d’Italia has developed an AML/CFT risk-based model in cooperation with the Italian Financial Intelligence Unit (UIF). The model assesses inherent and residual risks of supervised entities using a large number of indicators based on data from various sources.
• IVASS, Italy’s insurance watchdog, has also developed an AML/CFT risk-based model for supervising insurance undertakings. The model takes into account various factors, including the type of business conducted by each undertaking and the level of risk associated with that business.
• Consob, Italy’s securities commission, has implemented a risk-based approach to supervising auditors, focusing on those with higher risk profiles.

Effective Enforcement of Financial Sanctions

• Italy has made significant progress in enforcing targeted financial sanctions against Russia and Belarus. The country’s authorities have been working closely together to ensure the effective implementation of European Union (EU) sanctions.
• The UIF plays a crucial role in this process, facilitating the dissemination and awareness of subjects listed in EU measures. The authority also assists in interpretations and develops intelligence aimed at tracing targeted assets and identifying cases of sanctions evasion.

Italy’s AML/CFT Framework

• Italy’s AML/CFT framework has been praised for its effectiveness in preventing money laundering and terrorist financing.
• Various procedures and registers have been implemented to support the country’s efforts, including:
  • Register of financial accounts held in Italy at the Revenue Agency
  • Public Business Register designed to host data on beneficial owners

Financial Intelligence Unit (UIF)

• The UIF receives suspicious transaction reports (STRs) from obliged entities and uses sophisticated financial intelligence reports generated through thorough research analysis.
• The authority has also developed techniques such as:
  • Data mining
  • Machine learning
  • Network analytical tools to analyze STRs
• The UIF’s efforts have been recognized for their effectiveness in reconstructing corporate chains that allowed the direct or indirect imputability of economic resources to entities designated by the EU, even in cases where the imputability was hampered by the presence of corporate schemes or tools used to circumvent the European sanctions framework.

Conclusion

Overall, Italy’s AML/CFT efforts have been praised for their effectiveness and robustness, with strong synergies and interconnections between AML and tax information. The country’s authorities continue to work closely together to ensure the effective implementation of EU sanctions and prevent money laundering and terrorist financing.