Financial Crime World

Following the Money: Italy’s Battle Against Financial Crimes and Money Laundering

Italy, known for its rich history and cultural heritage, has fought a persistent challenge in its modern era - combating financial crimes, particularly money laundering. This issue, which gained notoriety through infamous figures like Al Capone, has evolved into a significant problem requiring constant regulation and international cooperation.

Origins of Money Laundering

  • Money laundering can be traced back to the United States in the 1930s.
  • Organized crime figures like Al Capone cleaned and reintroduced illicit funds into the lawful market through businesses.
  • Technique later codified as a criminal offense and incorporated into laws worldwide.

The Significance of Italy’s Fight

  • Italy’s fight against money laundering lies in its regulatory focus and the EU’s push to combat economic crimes.
  • Country is home to several criminal organizations, including Mafia, Camorra, Cosa Nostra, and Sacra Corona Unita.

Phases of Money Laundering

  1. Placement: Introduce ‘dirty’ proceeds into the financial system.
  2. Layering: Use complex transactions to obscure the origin of funds.
  3. Integration: Reintroduce funds into the economy as legitimate earnings.

Legislative History

1991: First Italian law against money laundering (Decree-Law No 143)

2004: Implementation of the Second Anti-Money Laundering Directive (2 AMLD)

  • Expanded scope of obligated parties.
  • Introduced ‘Know Your Customer’ principle.

2020: Implementation of the Fifth Anti-Money Laundering Directive (5 AMLD)

  • New obligations for digital payment services.

Italy currently waiting for the transposition of the Sixth Anti-Money Laundering Directive (6AMLD).

Penalties

Under Italian Criminal Code since 1978:

  • Money laundering is a criminal offense.
  • Punishable by imprisonment and a fine.

Conclusion

Despite progress made in legislation and enforcement, Italy’s battle against money laundering continues. The country’s regulatory environment and international partnerships provide a foundation for continued success in this ongoing fight.