Italy’s Financial Inclusion and Anti-Money Laundering Efforts Under Scrutiny

A recent report has shed light on Italy’s progress in implementing financial inclusion and anti-money laundering measures, as recommended by the Financial Action Task Force (FATF). The report assesses the country’s compliance with 40 key requirements aimed at preventing money laundering and terrorist financing.

Progress and Compliance

According to the report, Italy has shown significant progress in several areas:

• Assessing risk and applying a risk-based approach: Italy has demonstrated largely compliant practices (LC).
• National cooperation and coordination efforts: The country’s national cooperation and coordination efforts have also been deemed largely compliant.
• Combating terrorist financing offenses: Italy has made substantial headway in combating terrorist financing offenses, with targeted financial sanctions related to terrorism and terrorist financing being largely compliant.

However, there are areas where Italy still falls short:

• Financial institution secrecy laws: Italy’s practices have been deemed non-compliant (NC).
• Customer due diligence measures: While largely compliant in some areas, customer due diligence measures require improvement in others.
• Internal controls and foreign branches and subsidiaries: These areas also warrant further attention.

Areas of Improvement

Italy has made strides in implementing measures to prevent the misuse of new technologies, wire transfers, and reliance on third parties. The country’s reporting of suspicious transactions is also largely compliant. Additionally:

• Transparency and beneficial ownership requirements for legal persons and arrangements: These are largely in line with international standards.
• Regulation and supervision of financial institutions: Italy requires improvement in this area.
• Powers of supervisors: Strengthening the powers of supervisors is necessary.
• Regulation and supervision of designated non-financial businesses and professions (DNFBPs): The country’s regulation and supervision of DNFBPs need attention.
• Financial intelligence units, law enforcement authorities, and investigative agencies: These entities require strengthened coordination and cooperation.

Conclusion

While Italy has made significant progress in implementing anti-money laundering measures, there is still much work to be done. To achieve full compliance with FATF recommendations, the country must continue to strengthen its regulations, supervision, and international cooperation efforts.