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ITALY’S FIGHT AGAINST MONEY LAUNDERING AND TERRORIST FINANCING: EFFORTS AND CHALLENGES

Rome, Italy - In a bid to strengthen its efforts against money laundering and terrorist financing, the Italian government has been implementing various measures to improve its supervision and control mechanisms. According to a recent assessment, Italy’s financial authorities have made significant progress in identifying and mitigating risks associated with these criminal activities.

Supervision and Control Mechanisms

Insurance Supervision

The IVASS, Italy’s insurance supervisory authority, uses a standardized Excel sheet to collect data from insurance companies, which is then used to create a basic risk index. This index takes into account factors such as premiums, paid services, and the control structure of each company. The assessment found that while some companies have improved their internal controls, others remain vulnerable to threats.

Corporate Governance

Consob, Italy’s corporate governance authority, performs anti-money laundering and combating the financing of terrorism (AML/CFT) supervision on auditing firms of Public Interest Entities (PIEs). Consob uses a risk-based model to assess the level of inherent risk for each auditing firm, taking into account factors such as:

• Number of high-risk customers
• Size of the firm
• Amount of non-auditing services revenue

Financial Intelligence Agency

The UIF, Italy’s financial intelligence agency, receives suspicious transaction reports (STRs) and analyzes them using advanced techniques such as data mining and machine learning. The agency has also developed strong synergies with tax authorities to combat money laundering and tax evasion.

Enforcing Targeted Financial Sanctions

Italy has been effective in enforcing targeted financial sanctions against Russia and Belarus. The UIF and the Guardia di Finanza work together to implement and enforce these sanctions, using powers similar to those used for preventing money laundering and terrorist financing.

Italian Authorities’ Strengths

• Ability to reconstruct corporate chains
• Effective tracing of targeted assets
• Identification of cases of sanctions evasion

Effective Databases

Italian authorities can rely on a range of effective databases, including:

• Register of Financial Accounts held in Italy at the Revenue Agency
• Public Business Register, which hosts data on beneficial owners

Challenges and Future Directions

While Italy has made significant progress in its fight against money laundering and terrorist financing, there are still areas that require improvement. The country must continue to strengthen its internal controls and organizational structure to mitigate risks and ensure effective supervision of financial institutions.

Sources:

• IVASS
• Consob
• UIF
• Italian Tax Administration

Keywords: Money Laundering, Terrorist Financing, AML/CFT, Insurance Supervision, Corporate Governance, Financial Intelligence, Sanctions Enforcement.