Italy Tightens Anti-Money Laundering (AML) and Know-Your-Customer (KYC) Regulations

To combat money laundering and terrorism financing, Italy has strengthened its anti-money laundering (AML) and know-your-customer (KYC) regulations. The country’s financial authorities have been working closely with international organizations, such as the Financial Action Task Force (FATF), to harmonize its rules with global standards.

Italy’s AML Regime

Italy’s anti-money laundering regime is based on Legislative Decree 231/2007, which has been amended over time to reflect changes in European legislation. The Bank of Italy is responsible for regulating and supervising financial intermediaries for AML purposes and combating the financing of terrorism.

Key Provisions

• Organization, procedures, and internal controls
• Customer due diligence
• Record keeping and sharing of documents, data, and information
• Sanctions and administrative sanction procedure

Supervision and Enforcement

The Bank of Italy supervises all banks, investment firms, intermediaries for managed assets, financial intermediaries, some trust companies, payment institutions, and electronic money institutions operating in Italy. The purpose is to verify compliance with AML obligations and the adequacy of organizational and procedural safeguards.

Supervision Process

• Off-site checks based on analysis of intelligence gathered from financial intermediaries
• Inspections to verify anti-money laundering organization and procedures
• Specific measures are adopted in the event of criticalities involving operators, including:
  • Convening administrative bodies
  • Prohibiting new transactions
  • Imposing sanctions

Financial and Non-Financial Sanctions

In cases of management irregularities or repeated regulatory violations, sanctions procedures are undertaken against intermediaries and/or executives. Financial sanctions may include:

• Fines
• Non-financial sanctions can include:
  • Temporary bans on activities performed by intermediaries
  • “Cease and desist” order

Italy’s Role in the Fight Against Money Laundering and Terrorism Financing

Italy is committed to combating money laundering and terrorism financing. The country has been working closely with international organizations, such as the FATF, to harmonize its rules with global standards.

Key Objectives

• Ensure financial institutions have robust systems in place to identify and report suspicious transactions
• Prevent criminal activities by ensuring financial institutions are compliant with AML regulations

Italy’s Future AML Strategy

Italy is expected to introduce a new European regulation, which will transfer anti-money laundering directives from the current directive to a regulation. This change aims to ensure more robust and uniform supervisory practices across the EU.

Future Plans

• The Bank of Italy will continue to play a key role in implementing these regulations and enforcing AML obligations
• The country’s authorities are committed to enforcing AML regulations strictly, using a range of measures including sanctions and administrative procedures