Italy Faces Scrutiny Over Financial Crime Regulations

A recent report by the Financial Action Task Force (FATF) has put Italy’s efforts to combat financial crime under the microscope, highlighting areas where the country falls short of international standards.

Progress and Shortfalls

According to the report, Italy has made progress in several areas, including:

• Assessing risk and applying a risk-based approach (R.1)
• National cooperation and coordination (R.2)
• Transparency and beneficial ownership of legal persons and arrangements (R.24 and R.25)

However, Italy’s implementation of certain measures falls short in the following areas:

Partial Compliance

• Money laundering offence (R.3) and confiscation and provisional measures (R.4)
• Targeted financial sanctions related to terrorism and terrorist financing (R.6)
• International instruments (R.36)

Largely Compliant

• Customer due diligence (R.10), record keeping (R.11), and internal controls and foreign branches and subsidiaries (R.18)

Compliant

• Reliance on third parties (R.17) and regulation and supervision of financial institutions (R.26)

Areas for Improvement

The report highlights the need for improvement in the following areas:

• Powers of supervisors (R.27)
• Law enforcement and investigative authorities (R.30 and R.31)
• Sanctions (R.35)
• Cash couriers (R.32) and statistics (R.33)

Call to Action

The Italian government has been urged to take immediate action to address these shortfalls and bring its regulations in line with international standards. The FATF report serves as a wake-up call for Italy, highlighting the importance of effective regulation and supervision in the fight against financial crime.

By addressing these areas for improvement, Italy can strengthen its efforts to combat financial crime and ensure that it is in compliance with international standards.