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AML/CTF compliance in Italy


Money laundering and terrorism financing laws in Italy?

In Italy, money laundering and terrorism financing are serious offences and are governed by the Legislative Decree No. 231/2007 (Anti-Money Laundering Code) and subsequent regulations.


Key obligations reporting entities have under Italian laws?

The key obligations under the AML/CTF laws in Italy include:

  • Customer Due Diligence (CDD) - covered entities, including banks, financial institutions, money remitters, lawyers, accountants, auditors, notaries, and other professionals, are required to establish and implement risk-based CDD measures. This includes verifying the identity of customers, obtaining beneficial ownership information, and assessing the risk associated with each customer.
  • Enhanced Due Diligence (EDD) - in cases where there is a higher risk of money laundering or terrorism financing, covered entities are required to apply enhanced due diligence measures. This may include obtaining additional information, conducting enhanced monitoring, and obtaining senior management approval for high-risk relationships.
  • Reporting Suspicious Transactions - covered entities must report any knowledge, suspicion, or reasonable grounds for knowledge or suspicion of money laundering or terrorism financing to the Financial Intelligence Unit (FIU). The reports should be made promptly when suspicion arises.
  • Record-Keeping - covered entities must maintain records of transactions, customer identification information, and supporting documentation for at least ten years from the date of the last transaction. These records should be readily available for examination by regulatory authorities.
  • Compliance Programs - covered entities are expected to establish and maintain effective AML/CFT compliance programs. This includes implementing internal policies, procedures, and controls to detect, prevent, and report money laundering and terrorism financing activities. Staff training and regular independent audits are also important components of these programs.


ML/TF regulators in Italy and what functions do they perform?

In Italy, the regulators responsible for overseeing and enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) measures are primarily:

  • Financial Intelligence Unit (FIU) - the FIU in Italy is known as the Unità di Informazione Finanziaria per l'Italia (FIU). It is responsible for receiving, analysing, and disseminating reports of suspicious transactions to relevant law enforcement agencies.
  • Bank of Italy (Banca d'Italia) - the Bank of Italy is the central bank of Italy. It plays a crucial role in supervising and regulating banks, financial institutions, and payment service providers to ensure compliance with AML/CTF regulations.
  • Commissione Nazionale per le Società e la Borsa (CONSOB) - CONSOB is the Italian securities and exchange commission. It regulates and supervises the securities market, including stock exchanges, securities issuers, investment firms, and other entities operating in the capital markets.
  • Insurance Supervisory Authority (IVASS) - IVASS is the regulatory authority responsible for overseeing the insurance sector in Italy. It supervises insurance companies and intermediaries to ensure compliance with AML/CTF obligations.
  • Anti-Mafia Investigation Directorate (Direzione Investigativa Antimafia, DIA) - DIA is a law enforcement agency focused on combating organised crime, including money laundering and illicit financial activities.

There are other Government agencies that support prevention of money laundering and terrorism financing activities including:

Italy actively cooperates with international counterparts in combating money laundering and terrorism financing. This involves exchanging information, cooperating on investigations, and providing assistance to other jurisdictions when requested.


Industry sectors subject to ML/TF regulations?

The regulated sectors in Italy subject to AML and CTF regulations include, but are not limited to:

Banks and Financial Institutions

Including banks, credit unions, fintechs, leasing companies, financial planners and other non-bank FIs.

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Insurance companies

Including various types of insurance companies.

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Payment service providers

Including payment processing service providers.

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Investment firms and asset managers

Including wealth, asset, fund and hedge fund managers.

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Securities and capital markets

Including stockbrokers, trading houses and securities dealers.

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Money service businesses

Including foreign exchange traders, bureau de change and money services businesses (with and without agency networks).

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Legal professionals and law firms

Including legal professionals such as lawyers, barristers and small, medium-sized and large law firms.

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Accountants and auditing firms

Including accounting professionals such as accountants, bookkeepers and auditors working in small, medium-sized and large accounting firms.

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Real estate agents and property developers

Including commercial and residential real estate agents, property financiers and property developers working in small, medium-sized and large real estate firms.

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Gambling operators and casinos

Including casinos, hotels, pubs and clubs, racetracks, online gaming and on/off-course bookmakers.

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Precious metals and stones dealers

Including gold, silver and other precious metals and stone dealers.

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Penalties for non-compliance with AML/CTF laws?

In Italy, the penalties for non-compliance with money laundering and terrorism financing laws can vary depending on the specific offence committed and the provisions violated. Here are some potential fines and penalties that may apply:

  • Administrative Penalties - the regulatory authorities, such as the Financial Intelligence Unit (UIF) or the Bank of Italy, have the power to impose administrative fines for breaches of AML/CTF requirements. These fines can vary depending on the nature and severity of the violation. The maximum administrative fine that can be imposed is €1 million for individuals and €5 million for legal entities.
  • Criminal Offences - individuals or entities convicted of money laundering or terrorism financing offences can face fines imposed by the courts. The fines can be significant and are typically determined based on the value of the illicit funds involved in the offence.
  • Imprisonment - convictions for money laundering or terrorism financing offences can result in imprisonment for individuals involved in such activities. The length of imprisonment can vary depending on the offence.
  • Forfeiture of Funds and Assets - Authorities have the power to seize and confiscate funds and assets that are determined to be involved in or derived from money laundering or terrorism financing activities. This includes freezing bank accounts, seizing properties, or confiscating other assets.


Largest fines for non-compliance with AML/CTF laws?

Italian regulators have shown they are willing to take action for non-compliance with AML/CTF laws and have used their powers extensively, below is an example of some of the largest fines for non-compliance with anti-money laundering laws:

  • Banca Carige (2016) -  In April 2016, Banca Carige, an Italian bank, was fined €3.5 million by the Bank of Italy for AML violations. The bank was found to have deficiencies in its AML controls and procedures, particularly in customer due diligence and suspicious transaction reporting.
  • Banca Monte dei Paschi di Siena (2019) - In July 2019, Banca Monte dei Paschi di Siena (BMPS), one of Italy's oldest banks, was fined €1.3 million by the Bank of Italy for AML breaches. The fine was related to inadequate customer due diligence processes and weaknesses in transaction monitoring.
  • UniCredit (2020) - In November 2020, UniCredit, one of Italy's largest banks, agreed to pay a settlement of USD$1.3 billion to the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) for violations of U.S. sanctions laws, including inadequate AML controls.