Financial Crime World

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Sanctions Screening Procedures in Italy: A Look Back at the Historical Origins

Italy has a long history of combating financial crimes, dating back to the 1930s when its anti-money laundering (AML) function was first established. Over the years, the country has faced both internal and external challenges that have led to the development of effective tools to combat these crimes.

The Origins of Money Laundering

Money laundering originated in the United States in the 1930s, thanks to notorious American mobster Al Capone. He used commercial activities such as Italian laundries and pizzerias to clean his illegal profits. The term “money laundering” was coined to describe this process, which involves replacing the proceeds of criminal activity with money or other assets that appear to have originated from legitimate sources.

Italy’s Early Response to Money Laundering

Italy was one of the first countries to introduce money laundering as a criminal offense. This legislation dates back to 1978, when Law Decree no. 59 introduced Article 648 bis of the Penal Code, which punished those who performed acts aimed at replacing money or valuables with money or other valuables.

AML Directives in Italy

Since then, Italy has implemented several AML directives, including:

  • Directive 2005/60/EC (3AMLD), which established new bodies to control financial flows, such as the Financial Intelligence Unit (FIU) and the Nucleo Speciale di Polizia Valutaria (NSPV) of the Guardia di Finanza.
  • Directive 2015/849/EC, which introduced new obligations for obligated parties to report suspicious transactions. This legislation was transposed into Italian law with Legislative Decree no. 90 of 2017.
  • The Sixth Anti-Money Laundering Directive (6AMLD), published in the Official Journal on November 12, 2018. Italy has yet to transpose this directive into its national laws, but it is expected to do so soon.

Key Principles of AML Legislation

Italy’s AML legislation is based on several key principles, including:

  • The need for obligated parties to identify customers and report suspicious transactions.
  • A range of administrative sanctions and economic values that can be imposed on those who violate AML regulations.

EU Regulations and Directives

In addition to its national laws, Italy is also subject to EU regulations and directives. These require member states to implement robust AML measures to prevent the use of the financial system for money laundering and terrorist financing.

Lessons Learned from Italy’s Experience

Italy’s experience in combating financial crimes has shown that a combination of effective laws, regulations, and enforcement is necessary to prevent and detect these offenses. The country continues to work towards implementing the latest EU directives and developing its own AML policies to ensure a safe and secure financial environment for all citizens.