Money Laundering Threat Assessed as “Very Significant” by Financial Intermediaries
Rome, Italy - A Recent Assessment
The threat of money laundering to Italy’s formal economy has been deemed “very significant” according to a recent assessment by financial intermediaries. Despite the country’s robust anti-money laundering safeguards and economic situation, experts believe that the risk of capital from abroad being laundered in Italy remains low.
Risk Assessment Report
In its latest report, the Financial Security Committee of the Ministry of Economy and Finance has analyzed the risks posed by money laundering and terrorist financing. The committee notes that while Italy’s economy is subject to various threats, including corruption, extortion, tax evasion, and drug trafficking, the country’s anti-money laundering framework is considered strong.
Estimated Turnover of Mafias
According to estimates by SOS Impresa, a leading research institution, the turnover of mafias in Italy amounts to 138 billion euros, or 8.7% of the GDP. However, other studies have yielded different results, with Transcrime estimating the turnover of illegal activities at around 17.7-33.7 billion euros.
Currency Demand Approach
The Bank of Italy and researchers from various universities have used a currency demand approach to estimate the component of the underground economy linked to legal but non-regular activities, as well as illegal activities such as prostitution and drug trafficking. According to their findings:
- The amount of undeclared tax was equivalent to 16.5% of the GDP.
- Inherently illegal activity accounted for 10.9%.
Actions that Generate Proceeds to Launder
The committee has also analyzed the actions that generate proceeds to launder, including:
- Corruption
- Extortion
- Tax evasion
- Usury
- Drug trafficking
- Other criminal behaviors
Additionally, the report highlights the significant importance of:
- Gambling
- Smuggling
- Counterfeiting
- Sexual exploitation
- Illegal waste trafficking
System’s Inherent Risk of Money Laundering
In its assessment of the system’s inherent risk of money laundering, the committee notes that while corruption continues to pose a major threat, there has been an increase in the number of individuals reported or arrested for such offenses. The report also highlights the significant role of foreign criminal organizations in human trafficking and other illicit activities.
Conclusion
Overall, the assessment concludes that while Italy’s anti-money laundering framework is robust, the country remains vulnerable to various threats posed by money laundering and terrorist financing.