Italy Takes Steps to Enhance Financial Sector’s Anti-Money Laundering and Counter-Terrorist Financing Efforts
Strengthening Risk-Based Model for Assessing AML/CTF Risks
In line with international standards and EU guidelines, the Italian financial sector has announced plans to revise its risk-based model for assessing anti-money laundering (AML) and counter-terrorist financing (CTF) risks. The development comes as Banca d’Italia finalizes an ambitious project to refine its AML/CFT risk-based model.
Key Components of the Revised Model
- Strong Cooperation between AML and Prudential Supervision Functions: The revised model will leverage on strong cooperation between the bank’s AML and prudential supervision functions, ensuring a more effective assessment of ML/TF risks.
- Italian Financial Intelligence Unit (UIF) Involvement: The UIF will play a crucial role in refining the model, providing valuable insights and intelligence to improve the assessment of ML/TF risks faced by financial institutions.
Italy’s Effective Approach in Combating Money Laundering and Terror Financing
Italy has been praised for its effective approach in combating money laundering and terror financing. The country’s AML authorities have developed a robust framework that ensures strong synergies and interconnections between AML and tax information, particularly for beneficial ownership.
Key Features of Italy’s Approach
- Robust Framework: Italy’s AML framework is designed to ensure strong synergies and interconnections between AML and tax information.
- Beneficial Ownership: The country has made significant efforts to improve transparency in beneficial ownership, ensuring that financial institutions have access to accurate and reliable information.
Effective Use of Financial Intelligence
The UIF receives suspicious transaction reports (STRs) from obliged entities and collects direct or indirect information from an extensive range of sources. A thorough research analysis leads to generating sophisticated financial intelligence reports, which are then used to identify potential ML/TF cases.
Key Benefits of Italy’s Approach
- Sophisticated Financial Intelligence Reports: The UIF generates sophisticated financial intelligence reports that help identify potential ML/TF cases.
- Effective Use of STRs: The UIF receives and analyzes STRs from obliged entities, providing valuable insights into potential ML/TF activity.
Commitment to Enforcing Targeted Financial Sanctions
Italy has shown its commitment to enforcing targeted financial sanctions against Russia and Belarus. The UIF facilitates the dissemination and awareness of subjects listed in European measures, urging operators to comply with sanctions. The authority also assists in interpretations and provides intelligence aimed at tracing targeted assets and identifying cases of sanctions evasion.
Key Benefits of Italy’s Approach
- Effective Dissemination of Sanctions Information: The UIF ensures that operators are aware of and comply with sanctions.
- Intelligence Support for Sanctions Enforcement: The authority provides valuable insights and intelligence to support the enforcement of targeted financial sanctions.
Reconstructing Corporate Chains
Italy has demonstrated its ability to reconstruct corporate chains that allowed direct or indirect imputability of economic resources to entities designated by the EU, even in cases where the imputability was hampered by the presence of corporate schemes or tools used to circumvent the European sanctions framework.
Key Benefits of Italy’s Approach
- Effective Reconstruction of Corporate Chains: The UIF is able to reconstruct complex corporate chains and identify potential ML/TF activity.
- Identification of Sanctions Evasion Schemes: The authority can identify and disrupt sanctions evasion schemes, ensuring that entities designated by the EU are held accountable.