## _cr0684 ## Source details **Canonical URL:** [_cr0684](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr0684.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr0684.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr0684.pdf.json) --- ### Preface and Executive Summary - Assessment based on the FATF Forty Recommendations 2003 and Nine Special Recommendations on Terrorist Financing 2001 using the AML/CFT Methodology 2004. - Mission: April 4–20, 2005, and subsequent materials; list of bodies met in Annex 2 to the detailed assessment report. - Assessment team: Jean-François Thony (Team Leader), Richard Lalonde, Nadine Schwarz, Maud Bökkerink, Michael DeFeo. - Overall findings: - Italy’s AML/CFT framework is extensive, mature, and achieves a high degree of compliance with most of the FATF 40+9. - Law enforcement efforts against money laundering have been quite successful. - The preventive system is sophisticated but needs updating to reflect the revised FATF standard and the 2001 European Directive on Money Laundering. - Key pressing challenges: - Implementation of significantly more detailed risk-based customer due diligence (CDD) requirements of the revised standard. - Increase suspicious transaction reporting by nonbank financial intermediaries and introduce a clear legal obligation to report transactions suspected of being related to terrorist financing. - Increase on-site inspection efforts and resources for the securities and insurance sectors, Bancoposta and non-prudentially supervised financial institutions. - Ensure application of a more effective sanctions regime. - Other observations: - DNFBP legal framework adopted (1999 and 2004) urgently needs implementing regulations. - UIC has a state-of-the-art analysis capacity but limitations in STR processing reduce efficiency. - AML/CFT legal framework is complex and would gain clarity if consolidated into a single instrument. - Authorities are taking steps: draft DNFBP regulations being finalized; law to ratify the Palermo Convention under consideration; provisions to strengthen terrorist asset freezing to be adopted soon; supervisory resources increasing for the securities sector. ### Institutional design and roles - Policy coordination: Ministry of Economy and Finance (MEF) responsible for design and implementation of AML/CFT policies. - Key operational and supervisory bodies and roles: - Ufficio Italiano dei Cambi (UIC): FIU; AML/CFT compliance functions; Servizio Anti-Riciclaggio (AML Department) composed of 109 personnel. - Bank of Italy (BoI): prudential supervision, working with UIC on AML/CFT supervision (Article 5.10 of the AML Law). - Guardia di Finanza (GdF): monitors certain non-prudentially supervised financial companies; Nucleo Speciale di Polizia Valutaria (NSPV) ~400 personnel. - Consob: securities market supervision. - ISVAP: insurance supervision. - Financial Security Committee (FSC): coordinates CFT activities; chaired by Director General of the Treasury; membership includes MEF, MFA, MHA, MoJ, BoI, UIC, Consob, GdF, Carabinieri, DNA and DIA. - Coordination mechanisms: AML Committee (MEF, BoI, UIC, GdF) issues interpretative documents (~100 legal opinions/guidelines). ### Legal framework — offences, confiscation, freezing - Money laundering: - Defined by Article 648bis of the Penal Code; extends to proceeds from any crime committed intentionally. - Offence does not extend to self-laundering. - Penalties: imprisonment of four to twelve years, and fines of a maximum of €15,240 (elsewhere text notes fine ranges €1.032 to €15.493 and fine data variations in sources). - No penal liability for legal persons; administrative liability exists for some penal offences but currently excludes money laundering. - Terrorist financing: - Defined under Article 270bis of the Penal Code; lacks statutory definitions of “terrorism” and “financing”; does not explicitly extend to financing of individual terrorists. - Law of July 31, 2005 extended offences (enlistment Article 270-quarter; training Article 270-quinquies; definition Article 270-sexies). - Confiscation framework (threefold): - Conviction-based confiscation (Article 240 Penal Code). - Confiscation based on inability to justify origin of assets (Article 12 sexties of Law 356/92). - Preventive confiscation for mafia-type assets (laws 1423/56 and 575/65). - Freezing terrorist assets: - Implementation via EU Regulations 2580/2001 and 881/2002 and national mechanisms. - FSC coordinates implementation and decides UN submissions; Italy submitted 67 individuals and 15 entities to the UN list to date. - Data as of 20 December 2004: 57 accounts frozen belonging to 55 persons, totaling €440.548,79 under UN Resolutions/EU Regulations. - Recommendations (legal framework): - Broaden definition of assets subject to confiscation (include indirect proceeds, intermingled assets), consider confiscation of equivalent value, allow confiscation of assets held by third parties, and consider agency to manage seized/confiscated assets. - Improve procedures for freezing nonfinancial assets and adopt national delisting/unfreezing procedures. ### Financial sector preventive measures — scope, thresholds, CDD - Sectoral coverage: broad — banks, Poste Italiane (Bancoposta), E-Money Institutions, investment firms, SGR, SICAV, insurance companies, stockbrokers, trust companies, tax collection companies, and others listed. - CDD threshold and recordkeeping: - CDD required where a) opens/changes/closes a business relationship, or b) single transaction or linked transactions ≥ €12,500; identification details of the person on whose behalf transaction is carried out must be recorded. - Archivio Unico Informatico (AUI) collects information related to transactions over €12,500; information to be filed within thirty days and retained for ten years. - Identified gaps in CDD/legal requirements: - No legal requirement to identify customers for occasional wire transfers below €12,500. - No legal requirement to verify authorization of persons acting for legal persons or to verify legal status (e.g., proof of incorporation, powers to bind). - No legal requirement to take reasonable measures to understand ownership and control of legal persons or to identify settlor/trustee/beneficiaries of trusts. - No specific legal/regulatory enhanced due diligence provisions for higher risk categories (except telephone, internet banking and electronic money); no simplified due diligence provisions. - Exemptions exist for inter-bank transactions regardless of whether counterparty jurisdiction effectively implements FATF Recommendations. - Banks not required to include originator information on wire transfers nor to have procedures to address incoming transfers with incomplete originator information. - Account types and bearer passbooks: - Anonymous accounts not permitted. - Bearer passbook accounts allowed provided balance ≤ €12,500; as of April 2005: total passbooks 6,600,000 (Bank 6,000,000; Post Office 600,000). - Outstanding balances below €12,500: Total €8,486,830,834 (Bank €7,939,000,000; Post Office €547,830,834). - Outstanding balances above €12,500: Total €117,592,871 (Bank €112,000,000; Post Office €5,592,871). - Total outstanding balances: €8,604,423,705 (Bank €8,051,000,000; Post Office €553,423,705). - Bearer passbooks treated as cash by authorities; anonymity and portability pose AML/CFT risks. - Politically exposed persons (PEPs): - No specific CDD requirement for identification of, and account-opening procedures for, PEPs. - Correspondent banking: - No legal requirement for additional CDD or specific procedures for cross-border correspondent relationships. ### Transaction monitoring, STRs and reporting practice - Decalogo (BoI Operating Instructions) legally-binding; requires thorough customer knowledge, customer profiles, review of account activity, recording anomalous transaction findings even if no STR filed. - Reporting obligation: every transaction suggesting proceeds from intentional crime must be reported to head of business who must transmit report without delay (and where possible before carrying out transaction) to UIC. - STRs: - UIC processed more than 6,500 STRs in 2004; yearly STRs between 5,000 to 6,500 since 2001. - Total STRs received 1997–2004: 35,980 (Banks responsible for 31,682 of total). - 2004 STR follow-up table (preserve values exactly): - 2004: STR received 6,816; Linked to terrorism financing 288; Linked to money laundering 6,528; Forwarded to DIA and GdF 7,133; Number of criminal investig. opened 328; Number of prosecutions based on STRs 103. - UIC sends almost all STRs to law enforcement (DIA and GdF); UIC closed about 270 STRs since effective date of law. - UIC estimates about 5 percent of STRs disseminated do not result in some further investigation. - Coverage and reporting shortfalls: - Frequency of reporting by nonbank financial intermediaries is disproportionately low (bureaux de change, postal bank, stockbrokers, investment funds/trust companies, insurance sector report at abnormally low levels). - Reporting of suspicions related to terrorist financing not explicitly required in law; circulars require such reporting but reporting obligation should be based on explicit legal provision. Since 2001, ~2000 STRs filed with UIC in respect to CFT. - Wire transfers and SR.VII: - No legal requirement that outgoing wire transfers include complete originator information; incoming transfers with incomplete originator information not covered by risk-based procedures. ### FIU (UIC) structure, functions, limitations - UIC structure and staffing: - UIC established as an autonomous body under BoI; UIC overall ~500 personnel. - AML Department (Servizio Anti-Riciclaggio): 109 personnel; Suspicious Transactions Division staff: 23 (16 analysts); International Cooperation Division: 7 (5 analysts). - Inspectorate Department: 35 persons for AML/CFT compliance inspections. - Data systems: - AUI aggregates monthly transaction data above €12,500. - UIC can access financial institutions’ databases and the Tax Register but cannot access law enforcement information except on request basis from foreign FIUs; does not have access to law enforcement databases. - STR handling and recommendations: - UIC’s limited filtering results in almost all STRs forwarded to law enforcement; insufficient filtering limits effectiveness and immediate feedback to reporting entities. - Recommendations: improve UIC filtering function so that only STRs where suspicion can be substantiated are sent to police; grant UIC access to law enforcement information during analysis; increase STR analysis human resources; institute system-wide evaluation of STR quality and effectiveness; provide systematic feedback (statistics, typologies) to reporting entities. ### Internal controls, inspections and sanctions - Internal control requirements: - AML Law requires financial institutions to establish internal controls and provide staff training; Decalogo provides more detailed guidance. - Internal control requirements well-developed for prudentially supervised institutions; far less so in other sectors. - Supervisory resources and inspection cycles: - UIC inspectors: ~30; UIC performs approx. 40 inspections per year (75 percent banks); inspections frequency ~once every five-six years for financial institutions on average. - BoI Inspectorate: 138 inspectors; on-site inspections (2003 example) 184 bank inspections; top ten groups every three years; others every three to five years. - Consob inspection staff: 24 inspectors; planned resource increase of 150 staff approved by Law No 62/2005. - ISVAP inspectorate: 30 inspectors; between 1993–2004 conducted 138 inspections (73 AML/CFT-focused); average inspection cycle ~14 years for insurance undertakings. - GdF NSPV: ~400 personnel; performed 29 inspections in 2003 and 25 in 2004. - Sanctions regime: - Sanctions framework complex; application skewed toward record-keeping violations; few sanctions imposed for failure to report suspicious transactions and deficiencies in internal controls. - No sanctions for deficiencies in internal controls and training for non-prudentially supervised financial institutions. - Recommendations: amend law to clarify and streamline sanctions; ensure legal persons can be held separately liable; extend sanctions to internal control/training deficiencies; increase enforcement across sectors. ### Money transfer providers and cash couriers - Money transfer providers: - Registered by UIC; depending on authorization, supervised by UIC or GdF. - UIC inspects providers authorized to execute cash transactions at or above €12,500; GdF focuses mainly on illegal providers. - Result: many agents and sub-agents not actually supervised for AML/CFT compliance. - Recommendation: review inspection policies to ensure money transfer agents and sub-agents are adequately monitored. - Cross-border cash declarations (SR.IX): - Declaration obligation for transport of funds above €12,500 to UIC (Legislative Decree 125 of 30 April 1997). - Customs forwards declarations electronically to UIC. - Customs seizures data (preserve values exactly): - 2001: Number of omitted declarations 509; Seized amounts (€) 13,762,249,319.16 * (includes one report of €13,670,738,017.14 of securities, bonds and cash). - 2002: 514; €22,323,797.86. - 2003: 497; €25,409,504.55. - 2004: 870; €27,868,264.53. - GdF illicit exports and seizures data: - 2001: Individuals/Violations 195/195; Seized amounts (€) 9,228,953,644. - 2002: 223/217; €2,188,145. - 2003: 202/200; €169,528,626. - 2004: 282/277; €3,443,413. - Compliance with SR.IX: Compliant — fully observed. ### DNFBPs — scope, implementation gaps, and counts - DNFBPs included by Legislative Decrees 374/99 and 56/2004: custody/transport of cash, real estate brokering, dealing in antiques, auction houses/art galleries, dealing in gold, manufacturing/brokering/dealing in valuables, casinos, accountants, labor advisers, notaries and lawyers in certain transactions. - Implementation gap: - Required implementing regulations had not all been promulgated; DNFBPs not yet obliged to comply with AML/CFT requirements at assessment time; authorities expected implementing regulations before end-2005. - No supervisor designated for DNFBPs yet; supervisory capacity/resources not arranged. - Selected DNFBP counts and supervision status (preserve values exactly): - Wholesalers in precious metals and stones: 3,125; AML/CFT supervision: None / Not yet decided. - Dealers in precious metals: 17,231; AML/CFT supervision: None / Not yet decided. - Precious metals agents: 2,730; AML/CFT supervision: None / Not yet decided. - Real estate agents: 65,452; AML/CFT supervision: None / Not yet decided. - Lawyers: 95,000 (practicing out of 162,000 total); AML/CFT supervision: Not yet decided. - Notaries: 4,766; AML/CFT supervision: Not yet decided. - Accountants: 57,423; Chartered accountants: 39,993; AML/CFT supervision: Not yet decided. - Casinos: 4; AML/CFT supervision: None / Not yet decided. - Recommendations for DNFBPs: - Implement decrees expeditiously; designate supervisors and confer inspection/sanction powers; require internal procedures, controls, employee training; grant legal protection for good-faith reporting; issue guidelines and typologies; require enhanced monitoring for PEPs and complex/unusual transactions. ### Legal persons, trusts, and NPOs - Company registration and disclosure: - Registered companies: 1.8 million; personal enterprises: 3.5 million. - Joint stock companies may issue nominative and bearer shares; Decree no.700 of 29 September 1973 prohibits issuance of bearer shares except for saving shares without voting rights; authorities state bearer shares de facto dematerialized and identifiable. - Shareholders holding more than 2% in a listed company must disclose ownership to Consob and the market. - Trusts and legal arrangements: - Italian law does not specifically provide for domestic trusts; Italy ratified the Hague Convention on trusts; foreign trusts may be handled by financial intermediaries but no specific CDD requirements for foreign trusts. - Recommendation: require intermediaries dealing with trusts to identify settlor, trustees/persons exercising effective control and ultimate beneficiaries. - Nonprofit organizations (NPOs / ONLUS): - Estimated 235,232 nonprofit entities (156,133 non-incorporated associations; 62,231 incorporated associations; 3,077 foundations; 5,674 social cooperatives; 8,117 other forms). - BoI issued July 2003 operational guidelines for financial intermediaries on NPOs; ONLUS Agency oversees NPOs; Tax Revenue Agency inspects ONLUS qualification. - Authorities assessed low risk in nonprofit sector; SR.VIII deemed Compliant. - UIC identified 350 transactions April 2004–April 2005 possibly related to terrorism financing: 26 involved associations and 4 involved ONLUS. ### Law enforcement, prosecutions and effectiveness - Main investigative bodies: Polizia di Stato, Carabinieri, Guardia di Finanza (GdF); Direzione Investigativa Antimafia (DIA) draws personnel from all three. - Performance and statistics: - Almost 600 cases of money laundering lead to conviction every year (aggregate average 580 per year noted). - Overall money laundering enforcement 2000–2004: 13,697 judicial investigations; of investigations closed, 3,445 filed without trial; 4,923 led to prosecution requests (59 percent); 2,903 cases led to conviction (average 580 per year) plus 74 convictions for Article 648 ter. - Terrorism financing prosecutions 2000–2004 under Article 270 bis: 620 prosecutions initiated; 243 cases archived; 33 submitted to Court leading to 29 convictions. - GdF received 28,121 STRs between 2000 and 2004; 2004: out of 7,118 STRs received by GdF, 880 (12%) cases of breach uncovered; 648 (9%) administrative breaches; 145 (2%) penal breaches; 37 cases (0.5%) related to money laundering. - DIA investigates about 3 to 5 percent of STRs referred; over a four-year period 1 percent of those reports were transmitted to judicial authorities. - Investigative powers: require production without judicial process of CDD/transaction records from registered financial institutions; execute court orders for search, seizure and confiscation; undercover operations and controlled deliveries authorized with judicial oversight. - Recommendations: review effectiveness of law enforcement and prosecution strategies; periodically evaluate AML/CFT system effectiveness. ### International cooperation and conventions - Italy is party to most international AML/CFT instruments except the Palermo Convention (pending in parliament since 2003). - UIC: member of Egmont Group and FIU.NET; can provide spontaneous information to other countries; maintains ~21 MOUs; UIC exchanged international requests (2001–2004 Sent total 79 / 220 subjects; Received total 884 / 3,323 subjects). - Mutual legal assistance and extradition: active and cooperative; between January 2000 and November 2005 Italy received 251 MLA requests in AML matters and 117 in terrorism matters; Italy requested assistance in 197 and 84 cases respectively. - Recommendations: ratify Palermo Convention; consolidate legislative framework. ### Ratings summary (selected) - R.1 ML offence: Compliant. - R.2 ML mental element and corporate liability: Partially compliant — No penal liability of legal persons; administrative liability excludes ML. - R.3 Confiscation: Largely compliant — Voiding transactions should be extended; broaden assets definition. - R.5 CDD: Partially compliant — Multiple legal and regulatory gaps. - R.6 PEPs: Non compliant. - R.7 Correspondent banking: Non compliant. - R.9 Third parties: Partially compliant. - R.10 Record keeping: Compliant. - R.12 DNFBP–R.5,6,8-11: Noncompliant. - R.13 STRs: Partially Compliant — TF reporting not explicitly required; implementation weak in several sectors. - R.17 Sanctions: Partially compliant. - R.18 Shell banks: Partially compliant. - R.26 FIU: Largely Compliant — Effectiveness hampered by insufficient filtering and access limitations. - SR.VII Wire transfer rules: Non compliant. - SR.IX Cash Couriers: Compliant. ### Key recommended priority actions (selected and ordered as in source) - Criminalization and liability: - Provide penal or administrative liability of legal persons for ML; consider criminalizing self-laundering; increase fines (current maximum fine for money laundering cited as €15,493 in source). - Terrorist financing: - Make TF offence consistent with 1999 Convention; define “financing”; include individual acts and broaden sanctions for legal persons. - Confiscation and asset management: - Broaden confiscation scope to indirect proceeds, intermingled assets, assets of third parties; consider confiscation of equivalent value; consider an agency to manage seized/confiscated assets. - Freezing funds (SR.III): - Institute notification system for banks on list updates; enhance monitoring and sanctions; institute procedures to protect bona fide third parties; adopt measures to freeze/manage assets other than bank accounts. - FIU capacity and STR handling (R.26): - Improve UIC filtering; grant access to law enforcement information during analysis; increase analysis staff; institute system-wide evaluation of STR quality and effectiveness; provide feedback and typologies. - Supervision and sanctions: - Strengthen supervision and on-site inspections for securities, insurance, Bancoposta and non-prudentially supervised intermediaries; review and streamline sanctions framework; ensure legal persons can be held liable separately. - DNFBPs: - Implement DNFBP regulations expeditiously; designate supervisors; provide guidance, training and enforceable obligations; ensure reporting protections. - Wire transfers and correspondent banking: - Require complete originator information on outgoing wire transfers and effective risk-based procedures for incoming transfers; require specific procedures for correspondent banking relationships. ### Selected operational and statistical figures (preserve values exactly) - UIC AML department personnel: 109. - UIC Suspicious Transactions Division: 23 staff (16 analysts). - UIC STRs processed in 2004: more than 6,500; 2004 STR received: 6,816. - STRs 1997–2004 total: 35,980 (Banks 31,682). - UIC dissemination estimate: about 5 percent of STRs disseminated do not result in some further investigation. - Bearer passbooks (April 2005): total 6,600,000 (Bank 6,000,000; Post Office 600,000). - Outstanding balances below €12,500: Total €8,486,830,834 (Bank €7,939,000,000; Post Office €547,830,834). - Outstanding balances above €12,500: Total €117,592,871 (Bank €112,000,000; Post Office €5,592,871). - Total outstanding balances: €8,604,423,705 (Bank €8,051,000,000; Post Office €553,423,705). - Confiscated/forfeited assets (money laundering enforcement figures by year): - 1999: 32,955,728.48 - 2000: 235,611,435.55 - 2001: 88,451,268.63 - 2002: 56,408,977 - 2003: 112,030,844 - 2004(*): 134,594,923 - * last update: October 2004 - GdF operational highlights: - 2003: €11.1 million in money laundering ascertained as a result of STRs. - 2002: €16.9 million in money laundering ascertained as a result of STRs. - Illegal assets seized (all criminal activity) in 2003: over €44 million in preventive seizures, plus 229 vehicles and 82 commercial enterprises. - Confiscations (all offences) in 2003: €97.4 million, plus 49 vehicles and 30 commercial enterprises. - 2003: 228 investigations for money laundering; 495 persons reported to judicial authorities; 128 persons subjected to precautionary measures; €108 million found to have been laundered. - 2002: €491 million found to have been laundered. - Customs cash declaration seizures by year (preserve values exactly): - 2001: 509 omissions; Seized amounts (€) 13,762,249,319.16 * - 2002: 514; €22,323,797.86 - 2003: 497; €25,409,504.55 - 2004: 870; €27,868,264.53 - * includes one report of €13,670,738,017.14 of securities, bonds and cash. - Banking sector structure (selected 2003 data): - Banking sector: 788 institutions; some 30,500 branches nationwide. - Bancoposta: 13,267 branches nationwide; in December 2004 Bancoposta accounted for 24.3 percent of household deposits. - Securities firms (2003): 132 registered securities firms. - Asset management companies (2003): 153. - Insurance sector (2003): 198 undertakings — 79 life insurance companies and 88 nonlife insurance companies. - Financial companies registered pursuant to Article 106 (2003): 1,494 (of these 359 prudentially supervised under Article 107). - DNFBP counts (selected): Real estate agents 65,452; Dealers in precious metals 17,231; Wholesalers in precious metals and stones 3,125; Lawyers 95,000 (practicing); Notaries 4,766; Accountants 57,423; Chartered accountants 39,993; Casinos 4. *Italic: Source — Preface, Executive Summary and IMF staff report content provided in the supplied PDF excerpt (_cr0684).* ### Preface ................................................................................................................ ### _cr0684 - Preface ................................................................................................ ### Preface — assessment scope and team - Assessment based on the FATF Forty Recommendations 2003 and Nine Special Recommendations on Terrorist Financing 2001 using the AML/CFT Methodology 2004. - Considered laws, regulations and other materials supplied by the authorities and information obtained during the mission April 4–20, 2005, and subsequently. - List of bodies met is set out in Annex 2 to the detailed assessment report. - Assessment team: - Jean-François Thony, Assistant General Counsel, Team Leader - Richard Lalonde, Senior Financial Sector Expert, MFD - Nadine Schwarz, Counsel, LEG - Maud Bökkerink, Financial Sector Expert, MFD - Michael DeFeo, Consultant - The assessors reviewed the institutional framework, AML/CFT laws, regulations, guidelines and regulatory and other systems in place to deter money laundering (ML) and financing of terrorism (FT), and examined capacity, implementation and effectiveness. ### Executive Summary — overall findings and priorities - Overall assessment: - Italy’s AML/CFT framework is extensive, mature, and achieves a high degree of compliance with most of the FATF 40+9. - Law enforcement efforts against money laundering have been quite successful. - The AML/CFT preventive system is sophisticated but needs updating to reflect the revised FATF standard and the 2001 European Directive on Money Laundering. - Key pressing challenges (as stated): - Implementation of the significantly more detailed risk-based customer due diligence (CDD) requirements of the revised standard. - Need to increase levels of suspicious transaction reporting of nonbank financial intermediaries and to introduce a clear obligation in the law to report transactions suspected of being related to terrorist financing. - Need to increase on-site inspection efforts and resources for the securities and insurance sectors, Bancoposta and non-prudentially supervised financial institutions. - Need to ensure application of a more effective sanctions regime. - Other systemic observations: - DNFBP legal framework (adopted 1999 and 2004) urgently needs implementation; further regulations required. - UIC has a state-of-the-art analysis capacity based on a harmonized computerized data collection system, but limitations in processing STRs limit its efficiency. - The AML/CFT legal framework is complex and would gain in clarity if consolidated into a single instrument. - Authorities are taking steps: draft regulations on DNFBPs being finalized; a law to ratify the Palermo Convention under consideration; provisions to strengthen terrorist asset freezing to be adopted soon; supervisory resources increasing for the securities sector. ### General — context and institutional arrangements - Institutional design: - Design and implementation of AML/CFT policies are placed under the Ministry of Economy and Finance. - Financial intelligence unit and AML/CFT compliance functions exercised by the Ufficio Italiano dei Cambi (UIC), in collaboration with prudential and market conduct supervisors and the Guardia di Finanza (GdF). - Enforcement and confiscation outcomes: - Almost 600 cases of money laundering lead to conviction every year. - Based on three different systems of confiscations of criminal assets, law enforcement authorities confiscated more than 130 million Euros worth of criminal proceeds in 2004. - Financial sector and supervisory roles: - UIC has primary responsibility for AML/CFT supervision of prudentially regulated financial institutions, collaborating with: - Bank of Italy (BoI) - Bancoposta - Consob (Commissione Nazionale per le Società e la Borsa) - ISVAP (Istituto per la vigilanza sulle assicurazione private e di interesse collettivo) - Guardia di Finanza (GdF) monitors certain non-prudentially supervised financial companies, including bureaux de change and money transmitters. - Main DNFBPs to be included: lawyers, notaries, accountants, real estate agents, dealers in gold, and casinos. - Legislation has been adopted bringing these professions within scope of the AML Law, but further regulations and designation of AML/CFT supervisory authorities are required. - UIC will be competent authority to receive, analyze and disseminate STRs; GdF and DIA will be law enforcement authorities to carry out investigations. ### General situation of money laundering and terrorist financing - Organized crime and ML drivers: - Italy has historically suffered high criminality and penetration of political and economic life by organized crime groups (e.g., camorra in Naples, mafia in Sicily). - Diversion of funds from public contracts, extortion, loan sharking, drug trafficking and smuggling (including cigarettes) remain sources of organized crime income. - One of the highest cash payment ratios in Europe; tax evasion (e.g., real estate sector) provides a favorable environment for money laundering. - Terrorist financing risks: - Terrorist financing considered a risk among large communities of legal and illegal immigrants. - Italy has been under specific terrorist threats since the war in Iraq; as a tourist destination it has a number of human and cultural targets. - Prosecutions: - Results for terrorism financing less robust than for ML: some 29 convictions for promoting, managing or financing terrorism in the period of 2000-20004. - A law adopted on July 31, 2005 extended the range of terrorist actions criminalized by introducing new offences: enlisting (Article 270-quarter) and training (270-quinquies); includes definition of “actions with ends of terrorism” (Article 270-sexies) and strengthens investigative powers. ### Legal systems and institutional measures — offences, confiscation, freezing, FIU, and law enforcement - Money laundering offence: - Defined by Article 648bis of the Penal Code; extends to proceeds from any crime committed intentionally. - Complemented by offences criminalizing possession or acquisition of proceeds from crime, or its use for economic or financial purposes. - Offence does not extend to the author of the predicate offence (“self laundering”). - Penalties: imprisonment of four to twelve years, and fines of a maximum of €15,240. - No penal liability for legal persons; administrative liability exists for some penal offences committed by legal persons, which include financing of terrorism but not money laundering at present. - Terrorist financing offence: - Defined under Article 270bis of the Penal Code, but not fully consistent with existing standards: key elements like terrorism or “financing” are not defined and it does not extend to individual acts of terrorism. - Definition does not require that a terrorist act has actually been committed. - Confiscation framework: - Threefold approach: - Traditional conviction-based confiscation of assets derived from the offence. - Confiscation based on alleviation of burden of proof for convicted persons who cannot justify origin of assets. - Preventive confiscation for assets in possession of persons belonging to mafia-type organizations (in force since the 1960’s). - Law enforcement agencies have adequate legal means to identify, trace and seize criminal and terrorist assets; statistics illustrate system efficiency. - Freezing of terrorist assets and international obligations: - Italy implements UN Security Council asset-freezing decisions through EU Regulations 2580/2001 and 881/2002 and national mechanisms. - Preventive system of seizure and confiscation of mafia-type assets extended to national and foreign suspected terrorists. - Financial Security Committee (FSC) coordinates implementation and decides about submission to UN of names of suspected terrorists. - To date 67 individuals and 15 entities have been submitted by Italy to the UN list. - Process of freezing nonfinancial assets should be improved. - Financial Intelligence Unit (UIC): - UIC has carried out FIU functions since 1997 as an autonomous body under the BoI. - AML department of the UIC composed of 109 personnel; functions include collection, analysis and dissemination of STRs. - Banking standardized reporting system: archivio unico informatico (AUI) collects information related to transactions over €12,500. - STRs are checked against information available to UIC, which does not include law enforcement information other than criminal records. - Because of limited law-enforcement linkage and limited UIC filtering, UIC sends almost all STRs to law enforcement (Anti-mafia Investigative Directorate and GdF); insufficient filtering limits effectiveness and immediate feedback to reporting entities. - Guidance to reporting entities and general information through public annual reports is limited. - Law enforcement and prosecution bodies: - Three main police bodies: State Police, GdF, Carabinieri, coordinate under the Ministry of Interior. - National Anti-mafia Directorate (prosecutorial) and Anti-mafia Investigative Directorate (investigative) provide specific expertise and coordination. - Results: around 600 prosecutions in money laundering cases per year; relatively low convictions in terrorism financing (see above); new legislation of July 31, 2005 expected to improve prosecutions and convictions in terrorism-related cases. *Italic: Preface and Executive Summary, _cr0684 - Preface, IMF assessment based on mission April 4–20, 2005 and subsequent materials.* ### 19. Italy has implemented measures to prevent the laundering of criminal assets ### 19. Italy has implemented measures to prevent the laundering of criminal assets ### Cross-border cash controls and enforcement - Italy established a system of declaration of cross-border transportation of funds, even by mail, ahead of most FATF countries. - The Customs Agency and GdF have law enforcement powers to implement these measures. - All declarations and information on suspicious, non- or falsely declared currency and other bearer negotiable instruments are forwarded to the UIC for analysis. - Agencies seize more than €25 million on average per year as a result of violations or suspicions. ### Preventive Measures — Financial Institutions: scope and CDD thresholds - Sectoral coverage under AML/CFT requirements is comprehensive; no sector exempted on risk grounds, and coverage in some instances goes beyond the standard (e.g., tax collection agencies). - CDD requirement: any person who a) opens/changes/closes a business relationship, or b) carries out a single transaction, or several linked transactions, involving amounts of €12,500 or more, must be identified and the complete identifying details of the person on whose behalf the transaction is carried out must be recorded. - A transaction cannot be executed if the financial institution cannot satisfactorily complete CDD. - CDD is not required for occasional transactions below a €12,500 threshold that are wire transfers. ### Customer identification, recordkeeping and special rules - Financial institutions must collect and record a wide range of customer identification data. - The BoI issued “Operating Instructions for identifying suspicious transactions” (the “Decalogo”) in February 1993; it was updated in November 1994 and in January 2001 and is legally-binding on all reporting entities. - Decalogo: requires a “thorough knowledge of the customer” to establish a risk profile and expected account operation patterns. - Gaps identified: - No specific legal/regulatory requirement to verify that a person purporting to act for a legal person is authorized, or to verify legal status (e.g., proof of incorporation, provisions regulating the power to bind the customer). - No specific legal/regulatory requirement to take reasonable measures to understand ownership and control structure of a customer that is a legal person or to determine natural persons who ultimately own or control the customer. - No specific requirement to identify settlor, trustee and beneficiaries of trusts (foreign or domestic). - Banks are not required to include originator information on wire transfers nor to have procedures to address incoming transfers with incomplete originator information. ### Enhanced and simplified due diligence; third-party reliance - No specific provisions requiring enhanced due diligence for higher risk categories (except telephone, internet banking and electronic money) and no provisions allowing discretion to apply simplified due diligence. - Exemptions from CDD exist, including for inter-bank transactions, regardless of whether the customer bank is located in a country that effectively implements the FATF Recommendations. - Financial institutions may rely on third parties to conduct CDD but retain ultimate responsibility. - Must collect identification data from the third party and ascertain that the third party has its head office in a FATF member country or that the head office certifies its foreign branch complies with the FATF standard. - This does not fully satisfy FATF requirements that financial institutions take adequate steps to ensure copies of identification data can be readily obtained from the third party or that the third party is regulated and supervised in accordance with FATF Recommendations 23, 24 and 29. ### Account types, ongoing due diligence and PEPs - Anonymous accounts are not permitted. - Credit institutions and Bancoposta provide bearer passbook accounts provided the balance is €12,500 or less. - These passbooks: CDD at issuance and identification on bearer upon closure; identification for transactions at lower thresholds per industry guidance and civil law principles. - Bearer passbooks can be transferred anonymously between issuance and closure without limitation, posing challenges for ongoing due diligence. - Mission not aware of evidence of secondary market trading of such passbooks for criminal purposes; STRs and border controls have not detected such trading to date. - No specific CDD requirement for identification of, and account-opening procedures for, politically-exposed persons (PEPs). - No additional specific CDD requirements for establishment of cross-border correspondent banking relationships. ### Transaction monitoring, reporting and STRs - Decalogo requires detailed customer profiles, review of account activity against profiles, and special attention to anomalous transactions; findings must be recorded even if no STR filed. - Special attention required for transactions involving persons in FATF NCCTs, OECD tax havens, and countries with notable drug trafficking problems; little guidance beyond NCCTs on identifying high-risk countries. - Reporting obligation: every transaction that suggests proceeds from intentional crime must be reported to the head of the business, who must transmit the report without delay, and where possible before carrying out the transaction, to the UIC. - Banks extensively use computer systems to screen transactions; banks are the main reporting institutions; cash withdrawals and deposits are predominant reported transactions. - Frequency of reporting by nonbank financial intermediaries is disproportionately low. - UIC mandate extends to combating the financing of terrorism, including analysis of STRs, but the reporting obligation does not formally extend to terrorism financing; circulars require such reporting but the reporting obligation should be based on explicit legal provision. - Since 2001, some 2000 STRs have been filed with the UIC in respect to CFT. ### Internal controls, inspections, and sanctions - AML Law requires financial institutions to establish adequate internal controls and provide staff training; Decalogo provides more detailed guidance. - Internal control requirements are well-developed and implemented for prudentially supervised institutions; far less so in other sectors. - Banking Law effectively precludes establishment of a shell bank in Italy, but no specific provisions prohibit correspondent relationships with shell banks or respondent foreign financial institutions that permit accounts to be used by shell banks. - UIC has responsibility for supervising AML/CFT compliance for prudentially supervised intermediaries pursuant to Article 5.10 of the AML Law, in collaboration with BoI, Consob, ISVAP. - AML/CFT compliance of non-prudentially supervised entities is carried out by the Nucleo Speciale of the GdF. - Coordination via MOUs; extensive cooperation in practice for prudentially supervised intermediaries, but not consistent for non-prudentially supervised intermediaries overseen by the GdF. - Resources and efforts for AML/CFT supervision and on-site inspections are insufficient for securities and insurance sectors, Bancoposta and non-prudentially supervised intermediaries, although Consob has recently been given approval for a significant increase in resources, some earmarked for on-site inspections. - Sanctions regime: - Does not appear to be as effective, proportionate and dissuasive as it should be and is relatively complex. - Application skewed toward record-keeping violations and requirements not specifically covered by FATF Recommendations (e.g., controls on cash transfers). - Few sanctions imposed for failures to report suspicious transactions and deficiencies in internal controls. - No sanctions for deficiencies in internal controls and training for non-prudentially supervised financial institutions. - Measures to ensure integrity of financial institutions generally appropriate; enforceable guidelines issued by nearly all supervisory authorities (Decalogo and UIC guidance apply to all reporting entities). - Little guidance provided for identifying suspicious transactions possibly linked to terrorist financing. ### Money transfer providers - Money transfer providers are registered by the UIC and, depending on authorization, supervised for AML/CFT compliance by either the UIC or the GdF. - UIC inspects providers authorized to execute cash transactions at or above €12,500; GdF focuses mainly on illegal providers. - Result: a large contingent of agents and sub-agents not actually supervised for AML/CFT compliance. - Recommendation: inspection policies should be reviewed to ensure money transfer agents and sub-agents are adequately monitored for AML/CFT compliance. ### Preventive Measures — Designated Non-Financial Businesses and Professions (DNFBPs) - Italy has brought a long list of DNFBPs within the remit of the AML Law, but required implementing regulations have not yet been fully promulgated; DNFBPs are therefore not yet obliged to comply with AML/CFT requirements. - Authorities expect implementing regulations to come into force before the end of 2005. - AML Law does not extend to the full range of independent legal professionals, internet casinos, dealers in precious stones and dealers in (other) precious metals. - No supervisor designated for DNFBPs yet; additional supervisory capacity and resources not arranged. - UIC will be competent authority to receive, analyse and disseminate STRs; GdF and DIA are law enforcement authorities to carry out investigations. - Lawyers, notaries and accountants have national and regional professional orders with a general supervisory role; national orders were consulted on implementing regulations, but unclear if these orders will supervise AML/CFT compliance. ### Legal persons, arrangements and non-profit organizations - Legal personality is acquired by registering in the Public Register of Undertakings of the Chamber of Commerce as associazioni riconosciute, fondazioni or società di capitali. - Forms of società di capitali: società per azioni-Spa, società a responsabilità limitata-Srl, società in accomandita per azioni. - Chamber of Commerce maintained registrations of 1.8 million companies and 3.5 million personal enterprises at time of assessment. - Joint stock companies must publish lists of shareholders and persons who hold rights on securities; information available to authorities and public on request, including online. - Listed joint stock companies may issue nominative and bearer shares; use of bearer shares limited to specific circumstances and, according to authorities, shares are subject to dematerialization and are de facto no longer anonymous. - Italian law does not specifically provide for legal arrangements such as trusts; Italy has ratified the Hague Convention on the law applicable to trusts and their recognition. - Foreign trusts may be handled by financial intermediaries in Italy, but law does not set specific requirements for foreign trusts and CDD provisions by analogy would not be sufficient to meet the standard. - Measures on NPOs: - BoI issued operating guidelines requiring financial intermediaries to pay special attention to relationships with NPOs and report suspicions to the UIC. - Special fiscal category ONLUS introduced to extend tax benefits to NPOs; in 2000 the ONLUS Agency was created to oversee all NPOs irrespective of ONLUS status. - Tax Revenue Agency inspects all NPOs and inspections regarding ONLUS qualification. - Authorities should consider further measures, such as integrity checks, to ensure criminals and terrorists cannot establish or use NPOs to divert funds. ### National and international co-operation and coordination - MEF is statutorily responsible for coordinating national AML/CFT policies and international relations. - MHA coordinates law enforcement efforts of the five national police forces via the Department of Public Security and its General Director. - Direzione Nazionale Anti-Mafia (DNA) coordinates and supports regional organized crime prosecutors. - FSC has legal responsibility for coordinating operational CFT activities, including proposed designations on UN/EU lists. - FSC is chaired by the MEF and includes representatives of key departments and agencies. - A group within MEF (chaired by an MEF representative, including UIC, GdF, and BoI) has issued approximately 100 legal opinions and guidelines on AML legislation. - Authorities are considering improvements to AML coordination, particularly regarding DNFBPs, taking into account the FSC’s experience. *Source: _cr0684 - 19. Italy has implemented measures to prevent the laundering of criminal assets* ### 48. Italy is a party to most international relevant AML/CFT instruments except for ### _cr0684 - 48. Italy is a party to most international relevant AML/CFT instruments except for ### International cooperation and status of treaties - Italy is a party to most international relevant AML/CFT instruments except for the Palermo Convention, which has been pending in parliament since 2003. - An extensive network of bilateral and multilateral international cooperation agreements exists, including participation in the Schengen System. - The European Arrest Warrant was implemented during the assessment. - The UIC can legally provide spontaneous information to other countries, belongs to the Egmont Group and the FIU.NET, and the country is viewed as an active and cooperative international criminal justice partner (favorable comments in the FATF). ### Legal framework and other issues - The legal framework is scattered across more than 60 relevant laws and regulations, in addition to circulars and guidance. - Mission recommendation: consolidate and streamline all pertinent legislation into a unified text to improve clarity and effectiveness. ### General country and institutional facts - Area: 301,401 square kilometers. - Population: more than 58 million inhabitants. - Italy is divided into 20 administrative regions. - Constitution adopted December 11, 1947 and effective January 1, 1948. - Parliament: Senato (315 seats) and Camera dei Deputati (630 seats). ### General situation of money laundering (ML) and terrorist financing (TF) - Organized crime: historical presence of Camorra (Naples) and Mafia (Sicily); diversification of criminal activities includes diversion of funds from public contracts, extortion, loan-sharking, drug trafficking, trafficking in smuggled cigarettes. - Foreign criminal groups present, notably from the Balkan region and Eastern and Southern Europe. - Tax evasion is relatively common and considered an aggravating ML risk. - Cash payment ratio in Italy is one of the highest compared to other European countries despite widespread noncash means. - Real estate sector risks: large side cash payment practices in real estate transactions; notary profession flagged for large cash payments; Adriatic coast real estate sector seen as particularly attractive to criminal organizations. Guardia di Finanza (GdF) 2002–2003 operational/statistical highlights: - 2003: €11.1 million in money laundering ascertained as a result of STRs. - 2002: €16.9 million in money laundering ascertained as a result of STRs. - Illegal assets seized (all criminal activity) in 2003: over €44 million in preventive seizures, plus 229 vehicles and 82 commercial enterprises. - Confiscations (all offences) in 2003: €97.4 million, plus 49 vehicles and 30 commercial enterprises. - 2003: 228 investigations for money laundering; 495 persons reported to judicial authorities; 128 persons subjected to precautionary measures; €108 million found to have been laundered. - 2002: €491 million found to have been laundered. Terrorist financing and related risks: - Historical terrorism in 1970s–1980s; leftist groups now seem dismantled. - Intelligence and law enforcement consider TF a risk in large communities of legal and illegal immigrants from Islamic countries. - Estimated immigrant populations: over 1,200,000 legal immigrants; illegal visitors estimated at 700,000 by public authorities. - Charitable contributions at places of worship have been linked to prosecutions documenting intended terrorist financing. - Authorities suspect informal transfer systems may be used given relatively low charitable contribution flows through the banking system. - Since the latest war in Iraq, Italy has been under specific terrorist threats; cited risk examples include kidnappings, murders, and reference to the Madrid train bombing as an indication of constant danger. ### Financial sector structure (selected 2003 data and features) - Banking sector: 788 institutions; 30,502/75 branches (Italy/Abroad); accounted for 100.0 percent of total assets in table context. - Banks (limited companies): 244 institutions; 23,617/71 branches; [80.1] percent of total assets. - Cooperative banks: 38 institutions; 3,471/4 branches; [10.8] percent of total assets. - Mutual banks: 445 institutions; 3,323/- branches; [4.9] percent of total assets. - Branches of foreign banks: 61 institutions; 91/- branches; [4.1] percent of total assets. - Number of branches nationwide: some 30,500 branches. - Top five banking groups together accounted for 51 percent of total sector assets; top three for close to 40 percent. - Bancoposta: 13,267 branches nationwide; in December 2004 Bancoposta accounted for 24.3 percent of household deposits. - Securities firms (2003): 132 registered securities firms. - Asset management companies (2003): 153. - Insurance sector (2003): 198 undertakings — 79 life insurance companies and 88 nonlife insurance companies. - Financial companies registered pursuant to Article 106 of the Banking Law (2003): 1,494. - Of these, 359 prudentially supervised financial companies registered under Article 107. - Money transmission and related: 25 (money transmission), 359 (Article 107), and 6,077 sub-agents referenced in table context. ### Designated non-financial businesses and professions (DNFBPs) - DNFBPs in scope pursuant to Legislative Decrees 374/99 and 56/2004 include: - custody and transport of cash, securities or other assets (with/without security guards) - real estate brokering - dealing in antiques - operation of auction houses or art galleries - dealing in gold, including export and import, for industrial or investment purposes - manufacturing, brokering and dealing in valuables, including export and import - operation of casinos - manufacturing of valuables by craft undertakings - accountants - labor advisers - notaries and lawyers when involved in certain transactions. - Implementation gap: required implementing regulations had not all been issued at the time of the mission; Legislative Decrees not fully implemented and DNFBPs did not yet have to comply with AML/CFT requirements of the AML Law. - Data and supervisory gaps: authorities have some information on numbers of lawyers, notaries, accountants and dealers in precious metals and stones, but lack data for other businesses; requisite AML/CFT supervisory structure for DNFBPs not yet decided. Selected DNFBP counts and supervision status: - Wholesalers in precious metals and stones: 3,125; registered at the Chamber of Commerce’s Register of Entreprises; AML/CFT supervision: None / Not yet decided. - Dealers in precious metals: 17,231; registered at the Chamber of Commerce’s Register of Entreprises; AML/CFT supervision: None / Not yet decided. - Precious metals agents: 2,730; registered at the Chamber of Commerce’s Register of Entreprises; AML/CFT supervision: None / Not yet decided. - Real estate agents: 65,452; special register of Chamber of Commerce; AML/CFT supervision: None / Not yet decided. - Lawyers: 95,000 (practicing out of 162,000 total lawyers noted elsewhere); authorization/registration: national/regional orders; general supervision: regional orders; AML/CFT supervision: Not yet decided. - Notaries: 4,766; national/regional orders; civil courts general supervision; AML/CFT supervision: Not yet decided. - Accountants: 57,423; national/regional orders; regional orders general supervision; AML/CFT supervision: Not yet decided. - Chartered accountants: 39,993; national/regional orders; regional orders general supervision; AML/CFT supervision: Not yet decided. - Casinos: 4; Ministry of Interior, Direzione Generale dell’Amministrazione Civile – Divisione Enti Locali – Sezione 3 authorization/registration; AML/CFT supervision: None / Not yet decided. Professional profiles: - Notaries: 4,766 notaries; public officials who authenticate transactions; inspected every two years by a local authority under the responsibility of primary courts; regional orders supervise and may refer complaints to public prosecutors. - Lawyers: 162,000 lawyers total, of which 95,000 are practicing; national order (Consiglio Nazionale Forense) has issued a binding code of conduct; regional orders issue sanctions (suspension, cancellation) and appeals process to national order and Supreme Court. - Accountants: close to 100,000 (combined accountants and chartered accountants noted elsewhere); specific table counts: Accountants 57,423; Chartered accountants 39,993; external auditing firms: 20 registered auditing firms; accountants and chartered accountants divided into two orders to be united into one order in 2005. ### Legal persons, arrangements, and corporate registration - Private legal persons: associazioni riconosciute, fondazioni and società di capitali (three forms). - Types of società di capitali: - società per azioni-Spa (joint stock company): Civil code articles 2325–2451. - società a responsabilità limitata-Srl (limited company): Civil code articles 2472–2483. - società in accomandita per azioni (limited partnership company): Civil code articles 2452–2471. - Nonprofit sector: around 250,000 entities, most (150,000) being nonincorporated associations without legal personality; supervised by Agenzia dell’ONLUS (created 2000). - Company registration: acquisition of legal personality based on registration in Public Register of Undertakings (registro delle imprese). - Registered companies: 1.8 million. - Personal enterprises: 3.5 million. - Share forms and disclosure: - Srl share capital divided into quotas; quotas freely transferable unless otherwise agreed. - Spas and società in accomandita per azioni may issue nominative shares or bearer shares; Decree no.700 of 29 September 1973 prohibits Italian companies from issuing bearer shares except for saving shares without voting rights. - Authorities state bearer shares are dematerialized. - Shareholders holding more than 2% in a listed company must disclose ownership to Consob and to the market; shareholder agreements must be disclosed. - Trusts/fiduciary arrangements: - Italian law does not provide for creation of legal arrangements such as trusts or fiduciaries. - Italy is party to the Hague Convention of 1 July 1985 on the law applicable to trusts and their recognition; recognizes foreign-governed trusts as having legal effect in Italy. - No CDD provision in respect of foreign trusts handled in Italy. ### AML/CFT strategy, priorities and planned measures - Strategic orientation: combination of preventive and punitive seizures and confiscations to weaken organized crime; financial strategy to deter ML by channeling cash transactions through regulated entities with responsibilities aligned with FATF safeguards (transparency, CDD, recoverability of transaction information, STRs). - AML political strategies defined by Ministry of Economy and Finance (MEF); operational strategies/actions carried out by UIC with support of Banca d’Italia (BoI) and cooperation of other regulators. - Main operational output: STRs submitted by reporting entities forming basis of administrative and judicial action. Work program and planned legislative/regulatory actions (selected): - Issuing regulations to give effect to the Second AML Directive 2001/97/EC, notably extending AML obligations to nonfinancial businesses and professions; draft regulations to include a risk-based approach and requirement to consolidate/share customer-related information within the same group, including foreign branches. - Implementing the Third EC AML/CFT Directive. - Drafting and issuing the Consolidated Anti-Money Laundering Legislation (Testo Unico Anti-riciclaggio) to include all AML legislative provisions and improvements in institutional framework regarding extension of AML measures to DNFBPs. - Issuing a specific law to amend legal framework on freezing of terrorist assets. - Strengthening financial intelligence and law enforcement instruments to combat ML/FT. - Updating by the Bank of Italy (BoI), in cooperation with the UIC, of the “Operating Instructions for Identifying suspicious transactions” (the “Decalogo”). Operational priorities: - Developing financial behavioral patterns (operational schemes) for dissemination to reporting entities to facilitate detection of anomalous transactions. - Updating the format used for suspicious transaction reports. ### Institutional framework and roles (selected agencies) - Ministry of Economy and Finance (MEF): - Responsibilities: legislative drafting at national/international levels; policy-making and guidelines; representation in international fora (G-7, G-20, EU, OECD, FATF, etc.); coordination via AML Committee (chaired by MEF) and Financial Security Committee (FSC, chaired by Director General of the Treasury); issuance of administrative sanctions for AML/CFT preventive measure violations in collaboration with GdF, UIC and supervisory authorities. - Ufficio Italiano dei Cambi (UIC): - Instrumental entity of the BoI with wide operational independence; Italian FIU responsible for collection, analysis, dissemination of STRs. - Servizio anti-riciclaggio (AML Department): 109 personnel, 16 of whom analyze suspicious transactions related to ML. - Analysis of TF-related reports dealt with by the International Division of the Servizio Anti-Riciclaggio. - Servizio Ispettorato carries out on-going supervision concerning AML/CFT compliance on prudentially supervised institutions in cooperation with other supervisory authorities pursuant to Article 5, Subsection 10, AML Law. - AML Committee: - Chaired by MEF; consists of representatives of BoI, UIC and GdF; issues interpretative documents, legal opinions and general guidelines (approximately one hundred documents to date). - Financial Security Committee (FSC): - Lead authority in fight against terrorist financing; established under Law 431 of 2001; chaired by Director General of the Treasury. - Membership includes MEF, Ministry of Foreign Affairs, Ministry of Home Affairs, Ministry of Justice, BoI, UIC, Consob, GdF, Carabinieri, DNA and DIA. - Remit: prevent Italian financial system from being used by international terrorists to finance operations; ensure international coordination of measures taken by other countries (notably G7 and EU). - Active role in freezing terrorists’ assets; fosters inter-agency cooperation and information sharing; maintains contact with courts and intelligence services; close contacts with foreign counterparts. - ISVAP: - Supervises insurance and reinsurance undertakings; primary function: supervision of insurance undertakings and intermediaries for technical, financial and accounting management; cooperates with UIC for AML/CFT monitoring pursuant to Article 5.10 of the AML Law. - Banca d’Italia (BoI): - Prudential regulation and supervision of credit institutions and nonbank financial intermediaries; competition authority in banking sector. - Responsibilities include drafting prudential rules, authorizing establishment of financial intermediaries, monitoring via off-site analysis and on-site inspections, and crisis management. - Co-operates with UIC on AML/CFT supervision under Article 5.10 and MOU arrangements. - Oversight role for payment system focusing on reliability and prevention of illicit use. - Consob: - Ensures transparency and correct behavior of securities market participants; disclosure requirements for listed companies and prospectuses; investigates insider dealing and market manipulation. - Approves market operator rules and amendments; market operators must report misbehavior to Consob; Consob enforces appropriate measures. - Ministry of Home Affairs (MHA) and law enforcement: - MHA coordinates five national police forces and is responsible for public order and general security. - Preventive ML/TF activities by Polizia di Stato conducted through Central Anticrime Directorate and Central Directorate for Prevention Police (Digos). - Direzione Investigativa Antimafia (DIA): interdepartmental agency (since 1991) responsible for preventive and judicial investigations targeting organized crime; follows up on STRs with suspected connections to organized crime. - Il Consiglio Generale per la Lotta alla criminalità organizzata (established October 29, 1991) chaired by the Minister; members include chiefs of police, GdF, Carabinieri, DIA and intelligence directors; responsible for anticrime strategy, distribution of duties, and verification of results. - Guardia di Finanza (GdF): - Protection of government revenues; Nucleo Special di Polizia Valutaria (NSPV) focal point for prevention and repression actions related to ML/FT; judicial investigations may be assigned to any GdF judicial police unit by a magistrate. *Italic: Source — IMF staff report content provided in the supplied PDF excerpt.* ### introduction of “dirty money” into economic legal circuits. This unit is able to examine all ### _cr0684 - introduction of “dirty money” into economic legal circuits. This unit is able to examine all ### Institutional framework and operational roles - The unit examines aspects emerging during investigations through a two-way intervention based on both administrative controls and investigative police inquiries. - Administrative activities: inspections aimed at verifying compliance with anti-money laundering requirements and in-depth analysis and investigations of STRs received from the UIC; these analyses and inspections may be delegated to Regional and Provincial Tax Police Units. - Operational AML/CFT activities: Judicial Police investigations by the “Anti-money laundering Investigation Team” in Rome and related sections in Milan and Palermo; these serve as the usual reference point for prosecutors when deciding to open judicial investigations. - Major agencies described: - Carabinieri Corps: military organized Police Force with overall competence on law enforcement nationwide; counts 112.000 personnel; deals with counter terrorism and organized crime investigations relevant to ML/TF. - Within Carabinieri: Special Investigative Department (ROS), instituted in 1990, specialized on complex investigations including counter terrorism, organized crime, drug-arms trafficking, kidnappings, search and capture of mafia/terrorism wanted persons, and analysis of organized crime and terrorism phenomena. - L’Agenzia dell’Entrate (Italian Revenue Agency): public body under MEF, constituted by Legislative Decree No. 300 (1999), operating since January 1, 2001; responsible for administration, assessment and collection of taxes; specific powers of vigilance and inspection of all nonprofit organizations including ONLUS and registration of ONLUS. - Customs Agency (within MEF): responsible for customs, movement of goods, internal taxation concerning international trade, excise duties, environment and energy taxation; monitors cash entering/leaving Italy based on declarations exceeding € 12,500 and nondeclared movements of cash. ### Judiciary, intelligence, and coordination - Prosecutorial authorities: judiciary independent and self-governing via Consiglio Superiore della Magistratura (CSM); prosecutors and judges are part of this branch; jurisdiction based on territoriality; prosecutors enjoy professional independence in assigned matters. - Specialized prosecutorial units: Direzione Distrettuale Anti-Mafia (DDA) created for areas with major criminality; Direzione Nationale Anti-Mafia (DNA) supports and coordinates DDAs and can assign cases in case of inaction. - Intelligence services: General Secretariat of CESIS, SISMI, SISDE; CESIS coordinates SISMI and SISDE and channels information to the Prime Minister; SISMI and SISDE do not directly participate in FSC and AML Committee coordination mechanisms but maintain dedicated AML/CFT units and pass relevant collected information through police liaison or ministries. ### Approach concerning risk - Italian system provides strict and detailed AML/CFT provisions; in general there is no possibility to graduate obligations on the basis of risk. - Legislature preparing provisions regarding risk-based approach in applying Legislative Decree no.56/04 to DNFBP. - Special provisions apply to transfers of cash and bearer instruments; only “authorized” intermediaries can deal in amounts at or above Euro 12 500. - Framework does not call for enhanced measures in higher risk situations (e.g., private banking) nor tailoring of internal control requirements according to risk. - Supervisory authorities generally focus inspection activities on a risk basis, though results differ across authorities (e.g. BoI/GdF). ### Progress since last assessment (post-1997 FATF mutual evaluation) Findings and legislative changes: - Money laundering offence: - Self-laundering not covered; draft law presented but not adopted. - Legal persons not criminally liable for money laundering; draft law under consideration to extend administrative liability. - Confiscation and provisional measures: - Draft law pending before parliament since June 2003 to consolidate confiscation provisions under Article 240 Penal Code. - FIU and reporting mechanisms: - UIC formally established as FIU by Law 388 of 23 December 2000. - BoI issued Operating Instructions for Identifying Suspicious Transactions (the “Decalogo”) in January 2001. - UIC processed more than 6.500 STRs in 2004. - UIC became member of Egmont Group and FIUNET. - UIC cannot access law enforcement information except on basis of request by a foreign FIU. - Feedback: - Decree Law 143/91 instituted mechanism requiring law enforcement agencies to report to the FIU on cases where STRs are not followed up; UIC forwards feedback to reporting entities; financial institutions continue to complain about limited feedback. - Inter-agency coordination: - Guidance Committee instituted by Law 143 of May 3, 1991 has never met; instead AML Committee (MEF, BoI, UIC, GdF) meets regularly. - Financial Security Committee (FSC) established October 2001 to deal with financing of terrorism. - Financial and nonfinancial businesses and professions: - Legislative Decree no. 374/99 and Legislative Decree 56/2004 extend AML requirements to various nonfinancial businesses and professions, but implementing legislation not yet enacted; neither Decree fully applicable at assessment time. - Supervisory responsibility for these sectors remains to be decided among professional bodies, UIC, or GdF. - Consolidation of guidance: - Need for consolidated guidelines and outreach to businesses and professions highlighted. - Bearer instruments: - Legislative Decree 56/2004 (Article 6.2) introduced partial phase-out of bearer passbooks. - As of 31 January 2005, bearer passbooks cannot hold balances in excess of €12,500. - Transactions on bearer passbooks would entail identification of person effecting transaction. - All passbooks are based on existence of bank or postal account subject to normal CDD on opening/closing. - Applicability of sanctions for infringements by individuals postponed to end of July 2005. - Enforcement: - Authorities committed; efficient use of proactive legal tools under anti-mafia and anti-terrorism legislation; successes include investigations of Italian component of the Madrid bombings. ### Criminalization of money laundering and terrorist financing - Money laundering (Articles 648 bis, 648, 648 ter Penal Code): - Definition: replacing or substituting money, goods or other property deriving from any kind of intentional crime, or any operation to prevent identification of illicit origin. - Offence extended to any property regardless of value; concept of predicate offence extends to any intentional crime (excludes negligence); no need for prior conviction of predicate offence. - Self-laundering not punishable under current law; courts consistently confirm self-laundering contrary to Italian law principles (Corte di Cassazione sentenza n.3390/1994 and n.873/1996). - Attempts and participation criminalized under Article 110 and Article 56. - Article 12 quinquies of Law 365/92 creates offence of possession of resources not commensurate with economic situation when indicted for ML or predicate offences. - Legal persons not subject to penal liability; administrative liability per Legislative Decree 231/01 excludes ML but draft law to extend administrative liability expected soon. - Penalties: imprisonment from four to 12 years and a fine from €1.032 to €15.493; penalties can be increased when offence is committed in discharge of professional duties up to a third of legal maximum and reduced when predicate offence punished by less than five years’ imprisonment. - Terrorist financing (Article 270 bis and related): - Article 270 bis punishes promoting/organizing/managing/financing associations aiming to commit violence acts for terrorism/subversion by 7 to 15 years imprisonment. - No statutory definition of “terrorism” or “financing”; left to judicial determination. - Definition does not explicitly cover financing of individual terrorists; reliance on Article 110 for aiding/abetting may be insufficient to meet SR.II standard. - Legal persons may be administratively liable under Legislative Decree 231/01 for TF; administrative fines range via quota system: upon conviction an entity could be sentenced up to 200 to 1,000 quotas; quota between € 258 and € 1,549, giving total fines minimum € 5,260 and maximum € 1,549,000. - Between 2000 and 2004, 29 convictions under Article 270 bis (broader offence encompassing TF) were pronounced by courts. - Law of July 31, 2005 extended range of terrorist actions criminalized, introducing enlistment (Article 270-quarter) and training (Article 270-quinquies) and defining “actions with ends of terrorism” (Article 270-sexies). ### Confiscation, freezing, and seizure of proceeds (R.3) - Confiscation framework comprises: 1. conviction-based confiscation (Article 240 Penal Code) — mandatory when assets are the “price” of the offence; only assets directly derived from offence may be subject but authorities indicate indirect proceeds possible; 2. Article 12 sexties of Law 356/92 — mandatory confiscation for convicted persons who cannot explain source of assets if assets not commensurate with income; confiscation may include indirectly derived assets; 3. preventive confiscation under laws 1423/56 and 575/65 for persons suspected of belonging to mafia-type organizations. - Seizure prior to confiscation: Article 253, 254, 255 Penal Procedure Code allow preventive seizure to prevent commission/continuation of an offence or when assets can serve as evidence; probatory seizure allowed. - No central agency to manage seized assets currently; draft law considered to establish Agenzia del Demanio for management of terrorist assets only. - UIC powers: on reception of an STR UIC can access financial institutions’ databases and the Tax Register but cannot access law enforcement information except on basis of request by foreign FIU. - Recommendations from source: broaden definition of assets subject to confiscation (include indirect proceeds and assets intermingled), consider confiscation of equivalent value, allow confiscation of assets held by third parties, consider an agency to manage seized/confiscated assets for AML/CFT, extend provisions to render void dealings/transfer of assets subject to confiscation beyond TF context. - Enforcement statistics on forfeited assets for money laundering: - 1999: 32,955,728.48 - 2000: 235,611,435.55 - 2001: 88,451,268.63 - 2002: 56,408,977 - 2003: 112,030,844 - 2004(*): 134,594,923 - * last update: October 2004 ### Freezing of funds for terrorist financing (SR.III) and Financial Security Committee (FSC) - FSC established by Decree Law No. 369/2001 to coordinate authorities in fight against terrorism financing, decide names to submit to EU/UN, act on requests to use frozen funds for “fundamental human needs,” and set up relationships with foreign correspondent units. - FSC chaired by Director General of the Treasury; members include MEF, MFA, MHA, MoJ, BoI, UIC, Consob, GdF, Carabinieri, DNA, DIA. - Implementation of UN resolutions via EC regulation 881/2002 and EC regulation 2580/2001 and EU common position 2001/391/CSFP. - Bank/financial institution obligations under EC regulations: freeze funds/economic resources of listed persons/entities; notify UIC through simple communication (not STR) when freezing measures adopted. - UIC issued instruction (November 9, 2001) requiring banks/financial institutions to: 1. notify any measure adopted to freeze funds; 2. report any operation or relation traceable to listed individuals/entities; 3. promptly notify UIC of any operation connected to financing of terrorism to permit suspension if necessary. - No direct notification procedure for banks to receive list updates; updated lists made available on UIC’s website. - Rights and remedies: decisions taken on freezing under EC regulations can be challenged before European Courts; FSC decisions appealable before administrative Court. - Lack of national autonomous delisting/unfreezing procedures; release of frozen funds limited to humanitarian management or by FSC proposals to UN. - Data as of 20 December 2004: - 57 accounts frozen belonging to 55 persons, totaling €440.548,79 under UN Resolutions/EU Regulations. - Administrative sanctions available under Article 2 of Decree Law 369/2001 for violations. - Recommendations: institute notification system for banks on list updates; enhance monitoring and sanction application across financial and nonfinancial sectors; institute procedures to protect rights of bona fide third parties; adopt measures in draft law to freeze/manage assets other than bank accounts. ### Financial Intelligence Unit (UIC) — structure, functions, STR handling (R.26, R.30, R.32) - UIC established in Article 151 para. 1 of Law 388 of 23 December 2000 within Ufficio Italiano dei Cambi (UIC), an instrumental entity of BoI; UIC has approximately 500 personnel. - AML Department (Servizio Anti-Riciclaggio): 109 personnel divided into seven divisions (Suspicious Transactions, International Cooperation, Regulatory, Money Laundering and Usury Statistics, Loan Brokers and Non-Financial Operators, Financial Intermediaries, Litigation); Suspicious Transactions Division staff: 23 (16 analysts); International Cooperation Division: 7 (5 analysts). - Inspectorate Department (since 2002): 35 persons examining financial intermediaries for AML compliance including CFT measures. - UIC access to public and commercial databases (Companies’ Register, Dun & Bradstreet); AUI (Archivio Unico Informatico) aggregates monthly transaction data above €12,500. - STR statistics: - Number of STRs yearly between 5,000 to 6,500 since 2001. - UIC processed more than 6.500 STRs in 2004. - 2001: 5,936 STRs received; 545 appeared related to terrorism financing; 5,784 forwarded to law enforcement. - 2004 specific STR follow-up table (preserve values exactly): - Year STR received Linked to terrorism financing Linked to money laundering Forwarded to DIA and GdF Number of criminal investig. opened Number of prosecutions based on STRs - 2004 6,816 288 6,528 7,133 328 103 - Dissemination practice: by law UIC forwards nearly all STRs to DIA and GdF after analysis; UIC can close an STR as irrelevant but must inform reporting entity and both law enforcement agencies; UIC closed about 270 STRs since effective date of law. - UIC estimates about 5 percent of STRs disseminated do not result in some further investigation. - UIC limitations: no access to law enforcement information except criminal records and foreign FIU requests; UIC does not issue a published periodic report but provides yearly report to MEF; guidance provided to reporting entities but limited. - Recommendations and comments: - Improve UIC filtering function and send to police only STRs where suspicion can be substantiated. - Grant the UIC access to law enforcement information during analysis to enable effective screening. - Increase human resources in STR analysis function. - Institute system-wide evaluation of STR quality and effectiveness, requiring cooperation of UIC, police services, judiciary, and Ministry of Justice. ### Law enforcement, prosecution, and effectiveness (R.27, R.28, R.30, R.32) - Law enforcement agencies with investigative competence: Polizia di Stato, Carabinieri, Guardia di Finanza (GdF); DIA (Anti-Mafia Investigative Directorate) draws personnel from all three. - DIA complement: ~1,500 personnel; 21 performing initial STR screening. - NSPV (Nucleo Speciale di Polizia Valutaria) of the GdF: ~400 personnel; 40 dedicated to initial STR analysis. - Protocol: DIA primarily processes STRs involving persons in its organized crime database; NSPV handles remaining reports and inspection of special credit institutions and brokers. - Investigative powers: law enforcement can require production without judicial process of CDD/transaction records from registered financial institutions; power to execute court orders for search, seizure, and seizure/confiscation of proceeds; undercover operations, controlled deliveries, false identities authorized with judicial oversight; interceptions for evidentiary purposes require judge authorization. - Statistics and effectiveness: - GdF received 28,121 STRs between 2000 and 2004 for analysis; 12.5% immediately filed; 87.5% further analyzed. - 2004: out of 7,118 STRs received by GdF, 880 (12%) cases of breach uncovered; 648 (9%) administrative breaches of AML Law; 145 (2%) penal breaches; 37 cases (0.5%) related to money laundering. - DIA investigates about 3 to 5 percent of STRs referred to it; over a four-year period 1 percent of those reports were transmitted to judicial authorities. - DNA: during 2004 DDA initiated proceedings concerning 103 STRs out of a yearly range of 5,000 to 6,500 forwarded by UIC. - Overall money laundering enforcement 2000–2004: - 13,697 judicial investigations for money laundering registered. - Of investigations closed, 3,445 filed without trial; 4,923 led to prosecution requests (59 percent). - 2,903 cases led to conviction (average 580 per year) plus 74 convictions for Article 648 ter. - Terrorism-related prosecutions 2000–2004 under Article 270 bis: - 620 prosecutions initiated; 243 cases archived; 33 submitted to Court leading to 29 convictions. - Recommendations: - Authorities should review the effectiveness of law enforcement and prosecution strategies and action. - Law enforcement and prosecution authorities should review periodically the effectiveness of AML/CFT systems. ### Cash couriers (SR.IX) - Declaration obligation: Legislative Decree 125 of 30 April 1997 requires declaration to UIC for transport of cash, securities and other monetary instruments above €12,500. - Law 7/2000 (Article 1.2) introduced obligation to declare cross-border transfers of gold when value over €12,500. - Customs Agency and GdF present at borders with law enforcement powers; Polizia di Stato acts as immigration police; all three have computer access to UN, EU, and Schengen lists. - Customs Agency staff ~9,600; seizure and sanction regime: when Customs find nondeclared amount over €12,500 they seize 40 percent of the excess amount and can issue administrative sanction up to 40 percent of nondeclared excess. - Customs declaration forwarding: Customs forwards declarations electronically to UIC for monitoring and analysis; forwarded reports kept by UIC. - Data on seizures by Customs (preserve values exactly): - Year Number of omitted declarations Seized amounts (€) - 2001 509 13,762,249,319.16 * - 2002 514 22,323,797.86 - 2003 497 25,409,504.55 - 2004 870 27,868,264.53 - * this includes one report of €13,670,738,017.14 of securities, bonds and cash. - GdF data on illicit exports and seizures (preserve values exactly): - Year Individuals / Violations Seized amounts (€) - 2001 195/195 9,228,953,644 - 2002 223/217 2,188,145 - 2003 202/200 169,528,626 - 2004 282/277 3,443,413 - International cooperation: Customs, GdF and UIC cooperate on mutual assistance and customs information systems under EU and international instruments. - Compliance with SR.IX: Compliant — fully observed. ### Preventive measures — financial institutions; customer due diligence (R.5–R.8) - Coverage and scope: - AML Law framework: Decree Law 143 of 3 May 1991 (Law 197/1991), Ministerial Decree 19 December 1991, Legislative Decree 153 of 26 May 1997, Legislative Decree 374 of 1999, Legislative Decree 56 of 20 February 2004. - Identification, record-keeping, and STR obligations apply to a wide range of intermediaries including banks, Poste Italiane S.p.a., E-Money Institutions, investment firms (SIM), SGR, SICAV, insurance companies, stockbrokers, trust companies, tax collection companies, certain financial intermediaries and others listed. - Legislative Decrees 374/1999 and 56/2004 intended to extend AML requirements to DNFBPs (custody/transport of cash, real estate brokering, antiques, auction houses, gold dealing, casinos, accountants, notaries, lawyers, etc.), but implementing regulations had not been adopted at assessment time; decrees therefore not fully applicable. - CDD requirements: - Identification required for opening/changing/closing accounts or “continuing relationship”, or single/linked transactions ≥ €12,500; no specific identification requirements for occasional wire transfers above threshold. - Identification must take place each time a transaction is executed; exceptions exist (e.g., ATM). - Accounts may be opened from abroad and identification conducted without physical presence in limited circumstances (banks in FATF member countries, certified branches, consular authorities). - No statutory list of reliable identity documents though practice relies on government-issued photo ID; Decalogo provides guidance. - For legal persons, identification data required but no specific statutory requirement to verify legal status or power to bind, or to identify beneficial owners; implementing regulation planned to address ownership/control verification. - Trusts: no specific statutory requirements for identification of settlor/trustee/beneficiaries of foreign trusts; guidance by Italian Banking Association suggests obtaining trust deed parts but not legally binding. - Risk-sensitive measures: - No general legal provisions requiring enhanced due diligence for higher risk categories or simplified due diligence; Decalogo recommends “thorough knowledge of the customer” and ongoing due diligence but not codified risk-based tailoring. - Exemptions: - Article 2 Ministerial Decree 19 December 1991 exemptions include transactions/account relationships between financial institutions, State Treasury transfers, certain intra-bank relationships, and account relationships between Italian intermediaries and banks/branches abroad (applies regardless of FATF implementation status of foreign country). - Timing, record-keeping, sanctions: - Record-keeping: identification data must be filed within thirty days in AUI. - Sanctions for failure to identify/collect information: criminal fine between €2,500 and €12,500 (Article 13.7 amended); criminal sanctions for customers failing to indicate person on whose behalf transaction is made: imprisonment 6 to 12 months and fine €500 to €5,000 (Article 13.8). - Failure to set up data bank punished by imprisonment 6 months to 1 year and fine €5,200 to €25,800 (Article 5.4 Decree Law 143/1991). - Anonymous and bearer accounts: - Anonymous and numbered accounts not permitted; bearer passbooks permitted up to balance €12,500; identification required on issuance and on closure; guidance recommends identification for transactions above €.3,100 to detect structuring. - Article 1 section 2 bis as modified by Article 6 section 2 of Legislative Decree 56/2004: bearer passbooks may not hold balance more than €12,500; balances above threshold to be brought into line by January 31, 2005. *Source: IMF staff chapter PDF content unit _cr0684 - introduction of “dirty money” into economic legal circuits. This unit is able to examine all* ### Section 2 of Legislative Decree 56/2004), although the applicability of sanctions for infringements of such ### _cr0684 - Section 2 of Legislative Decree 56/2004), although the applicability of sanctions for infringements of such ### Bearer passbooks and cash-equivalent risks - As of April, 2005: - Number of passbooks in circulation: Total 6,600,000 - Bank issued: 6,000,000; Post Office issued: 600,000 - Outstanding balances below Euro 12 500: Total €8,486,830,834 (Bank €7,939,000,000; Post Office €547,830,834) - Outstanding balances above Euro 12 500: Total €117,592,871 (Bank €112,000,000; Post Office €5,592,871) - Total outstanding balances: €8,604,423,705 (Bank €8,051,000,000; Post Office €553,423,705) - Observations: bearer passbooks treated by authorities as no different than cash, but their anonymity and portability pose significant AML/CFT risks and challenge ongoing due diligence. No evidence available to mission of secondary market trading for criminal purposes; neither STRs nor border controls had detected such trading. ### Customer due diligence (CDD), PEPs, correspondent banking, non face-to-face - Key legal/operational thresholds and instruments cited: €12 500 threshold for identification/recording; €3,100 used in practice to detect structuring; GIANOS software relies on AUI data (focus on €12,500 and €3,100). - Politically exposed persons (PEPs): No additional specific CDD requirements or account-opening procedures; financial intermediaries met had not proactively addressed PEPs. - Cross-border correspondent banking: No additional specific CDD requirements in law; in practice some banks perform more thorough checks. - Non face-to-face relationships/new technologies: Decalogo (Bank of Italy) paragraph 3.4 addresses electronic money and calls for precautions; Decalogo requires special precautions for telephone/electronic accounts and non face-to-face relationships. - Payment cards: Non-rechargeable cards typically anonymous with a maximum value; rechargeable cards require an account relationship and full CDD. ### Shortcomings in legal/regulatory framework and implementation - Identified gaps (selected): - No legal requirement to identify customers for occasional wire transfers below the Euro 12 500 threshold. - No legal requirement to verify authorization of persons acting on behalf of customers or to verify legal status of legal persons. - No legal requirement for reasonable measures to understand ownership/control structure of legal persons or to identify settlors/trustees/persons exercising effective control and beneficiaries of trusts. - Exemption from CDD for banks/branches abroad not contingent on jurisdiction’s effective FATF implementation. - No specific legal requirements for PEP identification and senior management approval for PEP relationships. - No specific legal requirements for cross-border correspondent banking procedures (assessing respondent AML/CFT controls, senior management approval, payable-through accounts safeguards). - Anonymous transferability of bearer passbooks up to €12 500 challenges ongoing due diligence. - Effective implementation of CDD weakened by supervisory shortcomings and sanctions regime limitations. - Unclear timing of verification of identity; recommendation to require full identification and recording of persons to whom bearer passbooks are transferred. ### Recommendations (CDD and related measures) - Expand CDD requirements in law/regulation in line with revised FATF Recommendations, including: - Expand circumstances requiring CDD, notably identification for occasional wire transfers below the Euro 12 500 threshold and explicit requirement to identify/verify any customer when suspicion arises. - Require verification that persons acting on behalf of customers are authorized and verify legal status of legal persons. - Introduce specific legal/regulatory requirements to understand ownership and control of legal persons and identify natural persons who ultimately own/control the customer. - Set ongoing due diligence requirement (currently in Decalogo) in law/regulation. - Limit exemption from CDD for banks/branches abroad to jurisdictions that effectively implement FATF recommendations. - Extend specific requirements to identify/verify settlor, trustee or person exercising effective control over trusts and beneficiaries. - Introduce enhanced due diligence in higher risk situations (nonresidents, private banking, legal persons/arrangements, nominee shareholders, bearer shares). - Clarify timing for verification of identity. - Require full identification and recording of transferees of bearer passbooks. - Introduce specific PEP identification and require senior management approval to establish business relationships with PEPs. - Introduce specific cross-border correspondent banking procedural requirements (information on respondent, assess AML/CFT controls, senior management approval, document responsibilities, payable-through account safeguards). - Enshrine documentary evidence required for identity verification in law/regulation. ### Compliance with FATF Recommendations — selected ratings and findings - R.5 — Partially compliant: multiple legal gaps (identification for occasional wire transfers below Euro 12 500; verification of persons acting on behalf of customers; verification of legal persons’ status; understanding ownership and control; identification of settlor/trustee/beneficiaries; exemption for banks abroad not conditioned on FATF-equivalence; limited enhanced due diligence; anonymous passbooks up to €12 500). - R.6 — Non compliant: absence of specific PEP identification and senior management approval requirements. - R.7 — Non compliant: absence of specific procedures for cross-border correspondent banking relationships. - R.8 — Compliant. - R.9 — Partially compliant: reliance on third parties allowed but missing requirements to ensure availability of identification data on request and to verify third party regulation/supervision per FATF 23/24/29; third parties limited to banks in FATF member countries but ultimate responsibility remains with relying institution. - R.10 — Compliant (record keeping and AUI requirements observed). - SR.VII — Non compliant: absence of requirements to ensure complete originator information in outgoing wire transfers and risk-based procedures for incoming transfers missing account number/address information. - R.11 & R.21 — Largely compliant: Decalogo and systems in place but enforcement weak for non-prudentially supervised intermediaries; absence of enforceable requirements to pay special attention to relationships/transactions with persons from jurisdictions beyond NCCT/tax havens lists. - R.13 — Partially compliant: reporting of suspicious transactions related to terrorist financing not explicitly required in law; low reporting implementation by bureaux de change, postal bank, stockbrokers, investment companies, trust companies, insurance companies. - R.14, R.19 — Compliant. - R.15 — Largely compliant: no explicit screening requirements for hiring employees; weaker guidance for non-prudentially supervised entities. - R.18 — Partially compliant: no prohibition on correspondent relationships with shell banks or on respondent institutions enabling shell banks. - R.17, R.23, R.29, R.30 — Mixed findings: supervisory framework structured across UIC, BoI, Consob, ISVAP, GdF; coordination exists but supervisory resources and enforcement vary; sanctions regime not fully effective/proportionate/dissuasive; some supervisors lack authority to enforce or sanction legal persons. ### Suspicious transaction reporting (STRs), AUI, monitoring and technology - AUI (Archivio Unico Informatico) requirements: all entities subject to CDD must file information pertaining to account opening/continuous relations, transactions above €12,500 (including structured transactions above €12,500) and account closing in the centralized database within 30 days and retain for ten years. Required filed information includes date/reason, amount, identity details, fiscal codes, and counterpart data for orders. Article 4 requires transaction details and identification data to be “easily retrievable”. Monthly aggregated reporting above €12,500 to Ufficio Italiano dei Cambi. - Practical thresholds: banks and intermediaries use GIANOS and focus on €12,500 and €3,100 (practical threshold to detect structuring). GIANOS captures customer activity over preceding 12 months using bank’s AUI. There is risk of overreliance on GIANOS as a substitute for vigilance. - Wire transfers: legal requirements capture some remitter/beneficiary identification but lack provision to require complete originator information on outgoing transfers or detect missing originator/account/address on incoming transfers. If proposed EU regulation on payment systems adopted, transfers from Italy to non-EU countries would need full/accurate originator information regardless of amount. ### STR statistics and reporting practice (selected) - Total STRs received 1997–2004: 35,980 (Banks responsible for 31,682 of total). - Trends: total number of reports steadily increased since 1997 (setting aside 2002). Banks are main reporters; bureaux de change, postal bank (2.6 percent of total over last eight years), stockbrokers, investment funds/trust companies and insurance sector report at abnormally low levels. Few sanctions imposed for failure to report (average one sanction per year). - Types of transactions (percentage totals): Cash deposits total 21,42 percent (1997–2004 aggregated total); Cash withdrawals 19,41 percent; Deposits of checks 12,20 percent; Other categories listed with varying percentages; total 100. (Tables in source provide year-by-year breakdowns and additional transaction-type percentages.) ### STR handling, suspension and feedback - STRs submitted on formatted encrypted diskettes by mail (reports sent within a few days up to a month); fax used when intermediary seeks to suspend a transaction. UIC can suspend execution of a transaction for 48 hours (Article 3.6); 47 suspensions occurred between 1997–2004. Sending STRs by mail can delay UIC response and suspension action. UIC decrypts/reviews STRs and assigns to STR Division or International Cooperation Division; analysts may request additional information and consult databases (property, BoI Central Credit Register). - Waiver from civil/criminal liability: Article 3.7 provides that STRs “should not constitute infringements of obligations of secrecy” but no explicit “good faith” prerequisite in the law text; authorities indicate narrow interpretation consistent with FATF Rec.14. - Confidentiality/tipping-off: Article 3.8 prohibits disclosure of STRs but no explicit prohibition to disclose that a report has been made or that UIC requested additional information — authorities consider law can be interpreted to cover tipping-off. UIC does not provide general feedback (statistics/typologies) or case-by-case acknowledgements other than notifying reporting entities when report not followed up by investigators. ### Recommendations (STRs, AUI, feedback) - Introduce explicit legal requirement to report suspicions of terrorist financing (SR.IV) — although TF treated as ML predicate, Special Recommendation IV calls for direct mandatory obligation. - Improve reporting implementation by bureaux de change, postal bank, stockbrokers, investment companies, trust companies, insurance companies via supervisory inspections, outreach, guidance. - Review GIANOS usage and thresholds to ensure it complements, not substitutes, ongoing vigilance. - Review legal protection scope for reporting persons and clarify in law limitation to good-faith reporters. - Introduce explicit prohibition to disclose that a report has been made to UIC or that UIC requested additional information. - UIC should provide systematic feedback (statistics, typologies, sanitized examples) and outcome feedback on STRs disseminated to GdF. ### Supervisory and oversight system — structure, resources, sanctions - Main competent authorities: UIC (overall AML/CFT supervision for prudentially supervised intermediaries), BoI (prudential supervisor), Consob (investment services transparency/market conduct), ISVAP (insurance), GdF (Nucleo Speciale di Polizia Valutaria) for non-prudentially supervised entities; MOUs govern cooperation. - UIC supervisory department: ~35 persons (30 inspectors), inspectors dedicate 80 percent time to AML compliance. Inspections frequency: financial institutions inspected once every five-six years on average; UIC performs approx. 40 inspections per year (75 percent banks). UIC proposes sanctions to MEF; reported 63 violations to judicial authorities 2000–2004. - BoI inspections: Inspectorate Department with 138 inspectors; on-site inspection numbers (2003 example) include 184 inspections of banks. BoI inspects top ten groups every three years; others every three to five years. BoI became supervisor of Bancoposta in 2004. - Consob: inspection staff 24 inspectors (Inspection Division); planned resource increase of 150 staff approved by Law No 62/2005; on-site inspection cycles long given wide coverage (~1,000 supervised entities). - ISVAP: Inspectorate Department staffed with 30 inspectors; between 1993–2004 conducted 138 inspections (73 AML/CFT-focused). Average inspection cycle ~14 years for insurance undertakings. - GdF (Special Currency Police Unit): total ~400 persons in unit; performed 29 inspections in 2003 and 25 in 2004; in 2004 found 246 administrative violations and 34 criminal violations; inspections perceived as relatively low vs. number of intermediaries overseen. - Sanctions framework — criminal and administrative: examples include imprisonment and fines for failure to identify/collect information (criminal), tipping-off imprisonment and fine between €5,165 and €51,650, administrative sanctions by MEF between specified percentages or amounts (many detailed provisions listed). Observed deficiencies: legal persons may not be criminally liable for employees’ failures; number of sanctions for failure to report STRs is very low (average one per year); sanctioning regime complex and sometimes unclear; average MEF fine approximately 2 percent of transaction value. ### Recommendations (supervision, sanctions, resources) - Assess and strengthen AML/CFT supervision of non-prudentially supervised intermediaries to ensure comprehensive, systematic, uniform inspections. - Increase resources and on-site inspection efforts for securities and insurance sectors and Article 106 intermediaries; increase inspections of foreign branches/subsidiaries where possible. - Pay more supervisory attention to Bancoposta following internal control changes. - Address gaps in supervision of independent distributors in insurance (financial salespersons, sub-agents, brokers) and expand registration/professional qualification requirements. - Amend law to clarify and streamline sanctions framework; ensure legal persons can be held separately liable; extend sanctions to deficiencies in internal controls and training, especially for non-prudentially supervised intermediaries. - Consider prohibition on correspondent relationships with shell banks and with respondent institutions that enable shell banks. ### DNFBPs (Designated Non-Financial Businesses and Professions) and implementation status - Legislative Decree 374/1999 and Legislative Decree 56/2004 will extend AML obligations to DNFBPs (real estate brokering, dealers in antiques, auction houses, art galleries, dealers/manufacturers of valuables, casinos, notaries, lawyers, accountants, auditors, labor advisers, financial agencies, money transfer sub-agents, etc.), but implementing regulations were not in force at time of mission; draft implementing regulations had positive legal advice on May 12, 2005 and were expected to be approved before end-2005. - Current status and gaps: DNFBPs not yet applying identification/record-keeping/reporting obligations; casinos and four historic gambling houses did not have to identify customers, keep records or report suspicions while Legislative Decree unimplemented. Lawyers/notaries have limited reporting exceptions linked to legal defense/representation; draft regulations intended to provide some protections but may not meet Essential Criteria 14.1. - Recommendations for DNFBPs: implement decrees expeditiously; designate supervisors and ensure supervisory powers; require DNFBPs to set up internal procedures, controls, employee training; provide legal protection for good-faith reporting; issue guidelines and typologies; require enhanced monitoring for PEPs and for complex/unusual transactions; ensure coverage of all independent legal professionals. ### Trusts, legal persons, NPOs, and transparency - Trusts/legal arrangements: Italian law does not specifically provide for domestic trusts; Italy recognizes foreign trusts via Hague Convention (Law 364 of 16 October 1989). No legal requirement for financial intermediaries handling foreign trusts to collect settlor, persons exercising effective control, or ultimate beneficiaries — Article 2.1 may allow identification of trust or trustee but not settlor/beneficiaries. Recommendation to require intermediaries dealing with trusts to identify settlor, trustees, controllers and beneficiaries to ensure timely access to beneficial ownership information. R.34 rated Partially compliant. - Legal persons: company registration system (Chamber of Commerce register) provides access to corporate data including managers and shareholders; bearer saving shares (azioni di risparmio) exceptional but authorities state saving shares dematerialized in Monte Titoli and owners identifiable. R.33 compliant. - Nonprofit organizations (NPOs / ONLUS): estimated 235,232 nonprofit entities (156,133 non-incorporated associations; 62,231 incorporated associations; 3,077 foundations; 5,674 social cooperatives; 8,117 other forms). BoI issued July 2003 operational guidelines for financial intermediaries on NPOs; ONLUS Agency and Tax Revenue Agency have oversight/registration and controls; UIC and GdF interactions noted. Italian authorities assessed low risk of terrorism financing in nonprofit sector; SR.VIII deemed Compliant. UIC identified 350 transactions April 2004–April 2005 possibly related to terrorism financing: 26 involved associations and 4 involved ONLUS. ### International cooperation and conventions - International instruments: Palermo Convention ratification pending (pending before parliament since 2003); Italy party to other relevant AML/anti-terrorism instruments. R.35 Partially compliant (Palermo not yet ratified). SR.I largely compliant (Terrorist Financing Convention not fully implemented on definition of offence). - Mutual legal assistance and extradition: Italy active and cooperative; processing times months for MLA and ~a year for extradition; between January 2000 and November 2005 Italy received 251 MLA requests in AML matters and 117 in terrorism matters; Italy requested assistance in 197 and 84 cases respectively. R.32, R.36–38, SR.V rated Compliant. - FIU international cooperation: UIC exchanges information and maintains 21 MOUs; UIC member of Egmont and FIU.NET; number of requests sent/received 2001–2004: Sent total 79 / 220 subjects; Received total 884 / 3,323 subjects. R.40 Compliant. ### Structural/legal consolidation recommendation - Observed fragmentation: around 60–70 legislative texts and numerous draft laws/regulations/guidelines addressing AML/CFT. Recommendation: streamline framework via consolidated law (“Testo Unico”) to provide clearer legal environment; authorities reportedly drafting such text. *Source: _cr0684 - Section 2 of Legislative Decree 56/2004), although the applicability of sanctions for infringements of such (IMF mission report content as provided in the supplied PDF content).* ### 1. ML offence Compliant The recommendation is fully observed. ### 1. ML offence Compliant The recommendation is fully observed. ### Summary ratings (selected) - 1. ML offence: Compliant — The recommendation is fully observed. - 2. ML offence–mental element and corporate liability: Partially compliant — No penal, administrative or civil liability of legal persons; penalties (in particular for fines and for legal persons) should be more proportionate and dissuasive. - 3. Confiscation and provisional measures: Largely compliant — Voiding transactions should be extended to AML cases; the definition of assets should be broadened. No system of confiscation of assets of corresponding value. Confiscation of assets held by third parties is not possible. - 4. Secrecy laws consistent with the Recommendations: Compliant — The recommendation is fully observed. - 5. Customer due diligence: Partially compliant — Multiple legal and regulatory gaps (details below). - 6. Politically exposed persons: Non compliant — Absence of specific requirements for the identification of PEPs and senior management approval for establishing a business relationship with a PEP. - 7. Correspondent banking: Non compliant — Absence of specific requirements regarding procedures for the opening and operation of cross-border correspondent banking relationships. - 8. New technologies & non face-to-face business: Compliant — The recommendation is fully observed. - 9. Third parties and introducers: Partially compliant — Absence of a specific requirement that financial institutions should satisfy themselves that copies of identification data ... will be made available from the third party upon request without delay. - 10. Record keeping: Compliant — The recommendation is fully observed. - 11. Unusual transactions: Largely compliant — Absence of effective enforceable requirements with respect to financial intermediaries that are not prudentially supervised. - 12. DNFBP–R.5, 6, 8-11: Noncompliant — Implementing regulations are not in force; no implementation of identification requirements by the sectors. - 13. Suspicious transaction reporting: Partially Compliant — Reporting of suspicious transactions related to terrorism financing is not explicitly required; ineffective implementation by several sectors. - 14. Protection & no tipping-off: Compliant — The recommendation is fully observed. - 15. Internal controls, compliance & audit: Largely compliant — No explicit requirements for screening procedures for hiring employees; absence of detailed guidance for non-prudentially supervised institutions. - 16. DNFBP–R.13-15 & 21: Noncompliant — Law in place but no implementation regulation; no compliance with essential criteria. - 17. Sanctions: Partially compliant — Sanctions regime not fully effective, proportionate and dissuasive; legal entities not separately subject to all sanctions; low number of sanctions; sanction regime for DNFBPs not implemented. - 18. Shell banks: Partially compliant — Financial institutions not prohibited from entering into or continuing correspondent relationships with shell banks; not prohibited from establishing relations with respondent foreign financial institutions that permit accounts to be used by shell banks. - 19. Other forms of reporting: Compliant — The recommendation is fully observed. - 20. Other NFBP & secure transaction techniques: Compliant — The recommendation is fully observed. - 21. Special attention for higher risk countries: Largely compliant — Absence of effective enforceable requirements for non-core-principle intermediaries; absence of requirements for business with persons from countries beyond the list of NCCTs. - 22. Foreign branches & subsidiaries: Partially compliant — No specific provisions requiring AML/CFT principles for foreign branches other than banks or for majority-owned foreign subsidiaries; absence of notification requirements when host country law prevents implementation. - 23. Regulation, supervision and monitoring: Partially compliant — Inadequate supervision/on-site inspection cycles too long for securities and insurance sectors and Article 106 intermediaries; few inspections (only one) for Bancoposta; gaps for downstream distributors in insurance sector; market entry and ownership control recommendation fully observed. - 24. DNFBP - regulation, supervision and monitoring: Noncompliant — Casinos and other DNFBPs are not monitored for AML. - 25. Guidelines & Feedback: Partially compliant — No systematic feedback with statistics/typologies; no guidance on suspicious transactions linked to terrorist financing except for money transfer businesses and NPOs; no DNFBP guidelines; no positive feedback to financial institutions. - 26. The FIU: Largely Compliant — Effectiveness may be hampered by insufficient filtering of STRs; access to law enforcement information should be enabled; guidance and positive feedback not provided; public reports not made available. - 27. Law enforcement authorities: Compliant — The recommendation is fully observed. - 28. Powers of competent authorities: Compliant — The recommendation is fully observed. - 29. Supervisors: Largely compliant — Nonprudential supervisors lack enforcement power (e.g., internal controls and training); no power to sanction legal persons. - 30. Resources, integrity and training: Largely compliant — FIU adequately staffed but more human resources should be placed in analysis; supervisory/on-site inspection resources for Consob, ISVAP and the GdF are not sufficient. - 31. National co-operation: Largely Compliant — A national coordination mechanism for AML matters should be instituted among policy making bodies, supervisory and law enforcement agencies, and should involve the private sector. - 32. Statistics: Largely Compliant — FIU should review reporting mechanism effectiveness; supervisory authorities lack systematic recording for requests for assistance and how requests were dealt with; law enforcement and prosecution should periodically review AML/CFT system effectiveness. - 33. Legal persons–beneficial owners: Compliant. - 34. Legal arrangements – beneficial owners: Partially compliant — Measures should be taken to ensure transparency of foreign trusts handled in Italy and access to adequate, accurate and timely information on beneficial ownership and control of these trusts. - 35. Conventions: Partially Compliant — Palermo Convention not yet ratified. - 36. Mutual legal assistance (MLA): Compliant — The recommendation is fully observed. - 37. Dual criminality: Compliant — The recommendation is fully observed. - 38. MLA on confiscation and freezing: Compliant — The recommendation is fully observed. - 39. Extradition: Compliant — The recommendation is fully observed. - 40. Other forms of co-operation: Compliant — The recommendation is fully observed. ### Customer due diligence — detailed findings (R.5) - No requirement in either law and regulation for: the identification of customers with respect to occasional transactions that are wire transfers below the Euro 12 500 threshold; - No requirement in either law or regulation to verify that the person purporting to act on behalf of the customer is so authorized. No requirements to verify the legal status of a customer that is a legal person; - No requirement in law or regulation for financial institutions to take reasonable measures to understand the ownership and control structure that is a legal person and to determine who are the natural persons that ultimately own or control the customer; no requirement to identify and verify the identity of the settlor, trustee or person exercising effective control over trusts and the beneficiaries; - The exemption from CDD with respect to banks and branches abroad are not contingent upon whether they are located in jurisdictions that effectively implement the FATF recommendations; - Other than for telephone and internet banking, and electronic money, no requirement for enhanced due diligence in higher risk situations, e.g., for nonresident customers, private banking, legal persons and arrangements such as trusts or for companies that have nominee shareholders or shares in bearer form; - The possibility to transfer anonymously passbooks with a balance up to € 12 500 poses a significant challenge for financial institutions to conduct ongoing due diligence throughout the life of the business relationship with the “customer”; - Effective implementation of CDD requirements is undermined by shortcomings in supervisory efforts and resources and in sanctions regime (see “The supervisory and oversight system”); - It should be made clear in the law that the identification for AML purposes should be based on a reliable document. ### Correspondent banking, wire transfer rules, and SR.VII - Correspondent banking (R.13): Non compliant — Absence of specific requirements regarding procedures for opening and operating cross-border correspondent banking relationships, including gathering information on the respondent, assessing AML/CFT controls, obtaining senior management approval before establishing new correspondent relationships, documenting responsibilities, and payable-through account requirements. - Wire transfer rules / SR.VII: Non compliant — Absence of requirements to ensure that complete originator information is included in outgoing wire transfer messages and that financial institutions adopt effective risk-based procedures to identify and handle incoming wire transfers not accompanied by account number and address information. - Money/value transfer services (SR.VI): Largely compliant — There is no ongoing monitoring for compliance with AML requirements by the relevant supervisor. The identification threshold of €12,500 does not allow money transfer operators to comply with SR VII. ### Suspicious transaction reporting and FIU issues - STR reporting: Partially Compliant — Reporting of suspicious transactions related to terrorism financing is not explicitly required in the law. Reporting requirements for money laundering are not effectively implemented by bureaux de change, the postal bank, stockbrokers, investment companies, trust companies and insurance companies. - FIU (R.26): Largely Compliant — The Servizio anti-riciclaggio of the UIC should improve its filtering function and send to police authorities only STRs where suspicion can be substantiated; access to law enforcement information during analysis should be granted; more human resources should be placed in the analysis function; effectiveness of STR quality and UIC analysis should be evaluated system-wide; guidance and positive feedback not provided; public reports not made available. ### DNFBPs (Designated Non-Financial Businesses and Professions) - DNFBP–R.5, 6, 8-11: Noncompliant — Implementing regulations not in force; major shortcomings in sector implementation of identification requirements including PEPs and ongoing due diligence. - DNFBP–R.13-15 & 21: Noncompliant — Law in place but no implementation regulation; no compliance with essential criteria. - DNFBP regulation, supervision and monitoring (R.24): Noncompliant — Casinos and other DNFBPs are not monitored for AML. - Guidelines & Feedback: Partially compliant — No guidelines for DNFBPs; no systematic feedback or typologies; no guidance on TF-related suspicious transactions except limited sectors. ### Sanctions, supervision and resources - Sanctions (R.17): Partially compliant — Sanctions regime not fully effective, proportionate and dissuasive; legal entities not separately subject to all sanctions; low number of sanctions relative to entities; DNFBP sanction regime not implemented. - Supervisors (R.29): Largely compliant — Nonprudential supervisors lack enforcement powers and sanctioning authority for legal persons. - Resources, integrity and training (R.30): Largely compliant — FIU adequately staffed but needs more analysts; supervisory/on-site inspection resources for Consob, ISVAP and the GdF are insufficient. ### Special Recommendations — summary - SR.I Implement UN instruments: Largely compliant — International Convention for the Suppression of the Financing of Terrorism (1999) not fully implemented on the definition of the offence. - SR.II Criminalize terrorist financing: Largely compliant — Terrorism financing should extend to individual acts; financing should be defined in the penal code. - SR.III Freeze and confiscate terrorist assets: Largely compliant — Rights of bona fide parties should be protected; mechanisms to freeze assets other than bank accounts should be improved. - SR.IV Suspicious transaction reporting: Partially compliant — Reporting of suspicious transactions linked to terrorism is not explicitly required in the law. - SR.V International cooperation: Compliant — The recommendation is fully observed. - SR.VI AML requirements for money/value transfer services: Largely compliant — No ongoing monitoring; identification threshold €12,500 problematic for SR VII compliance. - SR.VII Wire transfer rules: Non compliant — Absence of originator data and risk-based procedures for incoming transfers. - SR.VIII Nonprofit organizations: Compliant — The recommendation is fully observed. - SR.IX Cash Couriers: Compliant — The recommendation is fully observed. ### Key recommended actions (selected, in order of priority as presented) - Criminalization of Money Laundering (R.1 & 2) - Provide penal liability of legal persons or add money laundering to offences subject to administrative liability; increase deterrent sanctions. - Increase maximum fines (current maximum for money laundering fines €15,493 are far too limited). - Consider criminalizing self laundering; clarify law language and define assets to include indirect proceeds. - Criminalization of Terrorist Financing (SR.II) - Make the definition of the offence consistent with the 1999 convention or define “financing” including types of funds/assets. - Include financing of “individual” terrorists and broaden sanctions for legal persons. - Confiscation, freezing and seizing of proceeds of crime (R.3) - Broaden definition of assets subject to confiscation to include indirect proceeds and intermingled assets; consider system of confiscation of equivalent value. - Allow confiscation of assets regardless of ownership by defendant or third party. - Consider agency to manage and dispose of seized/confiscated assets for AML/CFT. - Extend power to void transactions/dealings for AML investigations. - Freezing of funds used for terrorist financing (SR.III) - Institute notification system to inform banks of list updates; enhance monitoring and apply sanctions for violations; institute procedures to protect bona fide third parties. - Adopt draft law measures to freeze assets other than bank accounts and include procedures above. - The FIU and its functions (R.26, 30 & 32) - Improve UIC filtering so only substantiated STRs are sent to police; grant access to law enforcement information during analysis; increase analysis staff. - Conduct system-wide evaluation of STR quality and UIC analysis effectiveness. - Law enforcement, prosecution and other competent authorities (R.27, 28, 30 & 32) - Review the effectiveness of law enforcement and prosecution strategies and action. - Cash couriers (SR IX): (listed among actions but no specific recommendation text supplied beyond heading). *Source: _cr0684 - 1. ML offence Compliant The recommendation is fully observed.* ### 3. Preventive Measures–Financial ### 3. Preventive Measures–Financial Institutions ### Customer due diligence, including enhanced or reduced measures (R.5 to 8) - Authorities should expand CDD requirements in law or regulation in line with the revised FATF Recommendations, including: - Expand circumstances where CDD must be carried out, in particular for the identification of occasional transactions that are wire transfers below the Euro 12 500 threshold. - Consider making explicit the requirement to identify and verify the identity of any customer when there is a suspicion of money laundering or terrorist financing. - Establish in law or regulation a requirement to verify that the person purporting to act on behalf of the customer is so authorized. - Require financial institutions to verify the legal status of customers that are legal persons. - Introduce specific legal/regulatory requirements for financial institutions to take reasonable measures to understand the ownership and control structure of a legal person and to determine the natural persons who ultimately own or control the customer. - Set out in law or regulation the Decalogo requirement for conducting ongoing due diligence. - Limit the exemption from CDD for customers that are banks or branches abroad to those located in jurisdictions that effectively implement the FATF recommendations. - Extend specific requirements to identify and verify the identity of the settlor, trustee or person exercising effective control over trusts and the beneficiaries. - Require enhanced due diligence in higher risk situations (examples: nonresident customers, private banking, legal persons and arrangements such as trusts, companies with nominee shareholders or shares in bearer form). - Clarify the timing of verification of identity. - Require full identification and recording of persons to whom a bearer passbook is transferred. - Introduce specific requirements for identification of PEPs and require senior management approval for establishing a business relationship with a PEP. - Introduce specific requirements for procedures governing cross-border correspondent banking relationships: gather information on the respondent, assess its AML/CFT controls, obtain senior management approval before establishing new correspondent relationships, document respective responsibilities, and for payable-through accounts ensure the respondent has verified identity and performs ongoing due diligence regarding sub-account holders and can provide customer identification upon request. - Enshrine the documentary evidence required for verification of identity in law or regulation. ### Third parties and introduced business (R.9) - Introduce additional requirements for reliance on third parties: - Financial institutions must satisfy themselves that copies of identification data and other relevant information relating to CDD requirements will be made available from the third party upon request without delay. - Beyond obtaining head office certification, financial institutions should obtain from the third party located abroad a copy of its customer acceptance and ongoing CDD policies and satisfy themselves that the third party is regulated and supervised in accordance with FATF Recommendations 23, 24 and 29. ### Financial institution secrecy or confidentiality (R.4) - (No specific recommendations listed beyond section header in source content.) ### Record keeping and wire transfer rules (R.10 & SR.VII) - Recommended actions: - Consider removing the €12,500 threshold for the recording in the AUI transactions conducted on an account. - Introduce requirements to ensure complete originator information is included in outgoing wire transfers and that beneficiary financial institutions adopt effective risk-based procedures for identifying and handling wire transfers not accompanied by account number and address information. - Lower the threshold of €12,500 at or above which customer identification and record keeping is required to € 1,000 or eliminate it altogether as envisaged in the forthcoming EU regulation. ### Monitoring of transactions and relationships (R.11 & 21) - Recommendations: - Ensure effective means to enforce the provisions of the Decalogo with respect to financial intermediaries not subject to prudential supervision. - Extend requirements to pay special attention to business relationships and transactions with persons from any country which does not or insufficiently apply the FATF recommendations. ### Suspicious transaction reports and other reporting (R.13-14, 19, 25 & SR.IV) - Recommendations and findings: - Introduce a specific requirement for reporting transactions suspected of being related to or to be used for terrorism, terrorist acts or by terrorist organizations, or those who finance terrorism; although under Italian legislation terrorist financing is a predicate offence to money laundering, SR.IV calls for a direct mandatory obligation to report suspicions of terrorist financing. - Reporting requirement is not effectively implemented by bureaux de change, the postal bank, stockbrokers, investment companies, trust companies and insurance companies; respective supervisory authorities should review this via on-site inspections and consider additional outreach and guidance. - Review the usage of GIANOS in the banking and other sectors (including application of transaction thresholds) to ensure it complements rather than substitutes for ongoing vigilance. - Ensure effective means to enforce Decalogo provisions with respect to financial intermediaries not prudentially supervised. - Review legal protection from criminal and civil liability associated with reporting of suspicious transactions and clarify in law that it is restricted to only those persons who report in good faith. - Introduce an explicit prohibition to disclose that a report has been made to the UIC or that the UIC has requested additional information. - The UIC should provide reporting entities with systematic feedback in the form of statistics and typologies (e.g., periodic newsletter or annual report). ### Internal controls, compliance, audit and foreign branches (R.15 & 22) - Recommendations: - Introduce requirements for adequate screening procedures for hiring employees. - Develop more detailed guidance on how financial intermediaries other than prudentially supervised institutions should organize to comply with AML/CFT requirements. - Extend additional requirements to ensure AML/CFT principles are implemented by branches and majority-owned subsidiaries located abroad, including foreign branches of insurance companies and securities firms and majority-owned subsidiaries of financial institutions located abroad. - Require foreign establishments of Italian financial institutions to notify competent authorities when they cannot comply. ### Shell banks (R.18) - Recommendations: - Prohibit financial institutions from entering into or continuing correspondent banking relationships with shell banks and from establishing relations with respondent foreign financial institutions that permit their accounts to be used by shell banks. - Consider a clearer prohibition on the establishment of shell banks. ### The supervisory and oversight system–competent authorities and SROs (R.17, 23, 29 & 30) - Findings and recommendations: - Supervisory authorities for prudentially regulated financial institutions are appropriately structured and have appropriate powers for prudential and market conduct requirements. - Assess effectiveness of AML/CFT supervision of nonprudentially supervised financial intermediaries to ensure comprehensive, systematic and uniform inspections for all financial intermediaries. - Increase resources and efforts for AML/CFT supervision and on-site inspections in the securities and insurance sectors and for financial intermediaries registered under Article 106 of the BL. - Where possible, increase frequency of on-site inspections of foreign branches and subsidiaries of Italian financial intermediaries. - Pay more attention to Bancoposta given its importance as provider of financial services, particularly following new procedures and internal controls and the BoI’s recent grant of supervisory authority over it. - Address gaps in supervision regarding independent distributors working with or on behalf of insurance undertakings (financial salespersons, sub-agents and brokers); increase supervisory efforts on a risk basis and continue plans to expand registration requirements and ensure professional qualifications and integrity. - Amend the law to clarify the sanctions framework and ensure it is effective, proportionate and dissuasive; render financial institutions (legal persons) separately liable for all violations of AML/CFT requirements; extend range of sanctions to include deficiencies in internal controls and training, particularly for financial intermediaries not prudentially supervised. ### Financial institutions—market entry and ownership/control (R.23) - (No specific additional text beyond header in source content.) ### AML/CFT Guidelines (R.25) - Recommended guidance actions: - Develop additional specific guidance to assist in identifying suspicious transactions possibly linked to terrorist financing. - Develop guidance to DNFBPs to assist them in identifying suspicious transactions. - Provide positive feedback to financial institutions on their STRs. - Publish periodic reports on trends and typologies. ### Ongoing supervision and monitoring (R.23, 29 & 32) - Recommendations (largely recurring): - Assess effectiveness of AML/CFT supervision of nonprudentially supervised financial intermediaries to ensure comprehensive, systematic and uniform inspections. - Increase resources and on-site inspections for securities, insurance sectors and Article 106 registrants; increase frequency of inspections of foreign branches and subsidiaries where possible. - Give more attention to Bancoposta following new procedures and BoI supervision. - Address supervision gaps for independent distributors in insurance sales; expand registration requirements and ensure requisite professional qualifications and integrity. - Maintain more systematic statistics regarding requests for assistance made or received by supervisors, including whether the request was granted or refused. ### Money value transfer services (SR.VI) - Recommendation: - Review inspection policies regarding money transfer agents and sub-agents to ensure the whole sector is adequately monitored and complies with AML/CFT requirements. --- ### 4. Preventive Measures–Nonfinancial Businesses and Professions ### Customer due diligence and record-keeping (R.12) - Recommendations: - Implement without delay the EU and FATF changes for DNFBPs and ensure all DNFBPs are informed of obligations to identify customers and keep records. - Clarify which dealers and manufacturers of “valuables” are covered by the AML Law and inform relevant sectors of upcoming duties. - Ensure identification requirements for DNFBPs align with FATF Recommendations; regulations specifying identification and registration requirements should include measures for identification of PEPs and ongoing due diligence per FATF. - Ensure other independent legal professionals are covered by the AML Law. ### Monitoring of transactions and relationships (R.12 & 16) - Recommendations: - Require DNFBPs by law, regulation or other enforceable means to pay special attention to all complex, unusual large transactions and unusual patterns of transactions with no apparent economic or lawful purpose; examine background and purpose, record findings in writing and make available to competent authorities and auditors. - Require DNFBPs to give special attention to business relationships and transactions with persons, companies and financial institutions from countries that do not or insufficiently apply FATF Recommendations; examine and record background and purpose where no apparent economic or lawful purpose exists. - Require DNFBPs to conduct enhanced ongoing monitoring on business relationships with a PEP. ### Suspicious transaction reporting (R.16) - Recommendations: - Implement expeditiously the Legislative Decree that foresees reporting of suspicious transactions by DNFBPs. - Issue legal provisions granting legal protection from criminal and civil liability to DNFBPs who report in good faith to the UIC. ### Internal controls, compliance & audit (R.16) - Recommendations: - Require all DNFBPs to set up internal procedures, policies and controls to prevent ML and FT. - Require DNFBPs to have a program for employee training or access to compulsory training provided by orders, associations or authorities. ### Regulation, supervision and monitoring (R.17, 24-25) - Recommendation: - Designate AML/CFT supervisors for all DNFBPs and ensure supervisors have adequate powers to inspect for compliance with AML/CFT requirements, including internal procedures. --- ### 5. Legal Persons and Arrangements & Nonprofit Organizations ### Legal Persons–Access to beneficial ownership and control information (R.33) - Recommendation: - Consider measures to ensure criminals cannot establish legal entities, for instance by performing an integrity check on persons setting up a company. ### Legal Arrangements–Access to beneficial ownership and control information (R.34) - Recommendations: - Take measures to prevent misuse of foreign trusts handled in Italy by ensuring adequate, accurate and timely information on beneficial ownership and control of (express) trusts is available to competent authorities. - Require Italian financial intermediaries dealing with trust funds to identify the settlor, the trustees or persons exercising effective control over the trust and the ultimate beneficiaries to allow transparency and timely access to information in relation to foreign trusts handled by Italian intermediaries. ### Nonprofit organizations (SR.VIII) - Recommendation: - Consider measures to ensure criminals cannot establish or use legal entities used for NPOs, for instance by performing an integrity check on persons setting up a company. --- ### 6. National and International Cooperation ### National cooperation and coordination (R.31) - Recommendation: - Improve coordination in AML matters building on successful FSC experience; include representatives of businesses and professions concerned in the FSC consultative process and AML coordination to ensure their involvement in design and implementation of preventive and coercive measures. ### The Conventions and UN Special Resolutions (R.35 & SR.I) - Observation: - Legislative action may be necessary to fully implement the financing convention; adoption of the Palermo Convention is overdue. ### Mutual Legal Assistance; Extradition; Other forms of cooperation (R.32, 36-40, SR.V) - (Headers present; specific recommendations or text not provided in the source excerpt.) --- ### 7. Other Issues - Recommendation: - Consolidate and streamline relevant laws in a single legislative instrument as well as in unified regulations. --- *Source: _cr0684 - 3. Preventive Measures–Financial (IMF mission report content as provided in the source PDF).* ### 1. Guardia di Finanza ### 1. Guardia di Finanza ### Law enforcement and specialized units - Second Department - Special Currency Police Unit (Nucleo Speciale Polizia Valutaria; NSPV) - Analysis Unit - Anti-fraud and International Cooperation Office - Organized Crime Investigative Group - Research Activity Office ### Other domestic enforcement bodies listed with Guardia di Finanza - Ufficio Italian Cambi (UIC), Italian FIU - Legal Department - AML Unit - Inspectorate - Direzione Investigativa Antimafia (DIA) - Third Branch - Second Branch - First Branch - DIA Field Office in Rome - Polizia di Stato – Polizia di Prevenzione - Arma dei Carabinieri ### Prosecutorial authorities (III.) - 1. Public Prosecution - 2. National Anti-Mafia Directorate (Rome and Milano) - 3. District Anti-Mafia Directorate (Rome) ### Intelligence services (IV.) - 1. CESIS, Executive Committee for Intelligence and Security Services - 2. SISMI, Military Security and Information Service - 3. SISDE, Democratic Security and Information Service ### Financial institutions and supervisory bodies (V.) - Supervisory bodies - Bank of Italy (Banking Sector) - Competition, Regulations and General Affairs Department - Banking Supervision Department - Supervision of Financial Intermediaries Department - Inspectorate - Payment Oversight Office - CONSOB (Securities Market) - International Relations Department - Intermediairies Division - ISVAP (Insurance Sector) - Inspection Department - Research Department - Professional associations - Italian Banking Association - Associazione Nazionale fra le Imprese Assicuratrice (ANIA) - Assogestioni ### Representatives from the financial institutions sector (VI.) - 1. Banks - 2. Insurance companies and brokers - 3. Money/value transfer service providers - 4. Securities sector participants - 5. Post - 6. Asset Management Companies ### Designated non-financial businesses and professions (VII.) - Professional organisations - National Order for Lawyers (Consiglio Nazionale Forense) - National Order for Notaries (Consiglio Nazionale Notariato) - National Order for Chartered Accountants (Consiglio Nazionale dei Ragioneri e Periti Commercialisti) - National Order for Legal-Economic-Accounting Professionals (Consiglio Nazionale Dottori Commercialisti) ### Representatives from the designated non-financial businesses and professions sector (VIII.) - 1. Accountants and auditors - 2. Lawyers - 3. Notaries ### Other agencies and bodies (IX.) - 1. Revenue Agency – Central Assessment Department (Agenzia delle Entrate – Direzione Centrale Accertamento) - 2. Customs Agency - 3. Unioncamere - 4. Agency for the ONLUS ### Appendix II — Key AML/CFT Laws, Regulations, and Other Material - Criminal Code (Extracts) - 1. Art.240 (general confiscation) [available only in Italian] - 2. Art.270 -bis and ter - 3. Art.648; 648 bis; 648 ter (money laundering: use of money, goods and utilities of illicit origin) - Criminal Procedure Code (Extracts) - 4. Art. 253-258 (Sequestri) [available only in Italian] - 5. Art. 316-317 (conservative and preventive seizure) [available only in Italian] - 6. Art. 696-726ter (Relazioni giuridizionali con autorità straniere) [available only in Italian] - Civil Code (Extracts) - 7. Art. 1387-1390 (della rappresentanza) [available only in Italian] - 8. Art. 2080-2221 [available only in Italian] - 9. Art. 2638 (Ostacolo all’esercizio delle funzioni delle autorità pubbliche di vigilanza) [available only in Italian] - Laws, Legislative Decrees, Ministerial Decrees, Circular and Guidelines by year - 2005 - 10. Agreement signed between the Bank of Italy and the Ufficio Italiano dei Cambi on 15 February 2005 [available only in Italian] - 11. Law of 18 April 2005, No. 62 Disposizioni per l’adempiamento di obblighi derivanti dall’appartenenza dell’Italia alle Communità europee. Legge communitaria 2004. [available only in Italian] - 12. Law of 31 July 2005 No. 155, Conversione in legge, con modificazioni, del decreto legge 27 luglio 2005 No. 144, recante misure urgenti per il contrasto del terrorismo internazionale [available only in Italian] - 2004 - 13. Legislative Decree 56 of 20 February 2004, Implementation of Directive 2001/97/EC on the prevention of the use of the financial system for purposes of money laundering - 14. Circular of the Bank of Italy of 9 April 2004, Istruzioni di vigilanza per le banche: introduzione di un capitolo sull’attività di “bancoposta” [available only in Italian] - 2003 - 15. Draft legislation No 2351 of 26 June 2003 for the ratification of the UN Convention and Protocols against transnational organized crime, Ratifica ed esecizione della Convenzione e dei Protocolli delle Nazione Unite contro il crimine organizzato trasnazionale, addottati dall’Assemblea generale il 15 novembre 2000 ed il 31 maggio 2001 [available only in Italian] - 16. Operating guidelines of the Bank of Italy regarding non-profit organisations (July 2003) - 17. Guidelines of the Ufficio Italiano Cambi for Reporting Suspicious Money Transfer Transactions, 10 December 2003 - 2002 - 18. Guidelines of the Ufficio Italiano Cambi on Identifying subjects to whom to apply freezing and reporting measures (16 January 2002) - 19. Internal Regulations, The Committee on Financial Security; Provisions for the creation of a list of subjects to submit to freezing measures adopted by the EU to combat terrorism and for release of authorisations for derogation of freezing costraints, 14 February 2002 - 20. Article 3-ter of Law No.73 of 23 April 2002 - 21. Note from the UIC dated 11 July 2002, Provvedimento, Disciplina dell’elenco degli agenti in attività finanziaria previsto dall’articolo 3 Decreto Legislativo 25 settembre 1999, No. 374 - 22. Decree of 17 October 2002. Elevazione della soglia di esenzione in materia di adempimenti antiriciclaggio, di rilevazione ai fini fiscali di taluni trasferimenti da e per l’estero di denaro, titoli ed in materia di commercio di oro. [available only in Italian] - 2001 - 23. Operating Instructions of the Bank of Italy for identifying suspicious transactions (“Decalogo”, January 2001) - 24. ISVAP Circular 436/D/2001 of 20 February 2001 - 25. Decree of the President of the Republic No 144 of 14 March 2001, Regolamento recante norme sui servizi di Bancoposta [available only in Italian] - 26. Regulation on the Agency for ONLUS of 21 March 2001 No 329, Regolamento recante norme per l’Agenzia per le ONLUS [available only in Italian] - 27. Legislative Decree of 8 June 2001, No. 231, Administrative responsibility of legal persons [available only in Italian] - 28. Inspection Manual of the Guardia di Finanza (1st August 2001) - 29. Circular of the Bank of Italy No 215331, of 24th September 2001 - 30. Circular of the Bank of Italy No 220507, of 2nd October 2001 - 31. Circular of the Bank of Italy No 220508, of 2nd October 2001 - 32. Law of 5 October 2001 No 367, Ratifica ed esecuzione dell’Accordo tra l’Italia e la Svizzera che compieta la Convenzione europea di assistenza giuridiziaria in materia penale del 20 aprile 1959 e ne agevola l’applicazione, fatto a Roma il 10 settembre 1998, nonché conseguenti modifiche al codice penale ed al codice di procedura penale [available only in Italian] - 33. Agreement between Italy and Switzerland mentioned above (published by the Ministry of Foreign Affairs on 11 October 2001) [available only in Italian] - 34. Decree Law of 12 October 2001, No. 369 Urgent provisions to combat the financing of international terrorism, converted in Law 431 of 14 December 2001 - 35. Decree Law of 18 October 2001, No. 374 Urgent provisions to combat the financing of international terrorism, converted in Law 15 December 2001 No. 438 - 36. Provisions of the Ufficio Italiano Cambi of 9 November 2001, Instructions on the subject of combating terrorist financing - 37. Law of 27 November 2001 No. 415 on Disciplinary sanctions for violations of measures adopted against the Afghan faction of the Taliban - 38. Decree of 13 Decembre 2001, No 485, Regolamento emanato ai sensi dell’articolo 3 del D. Lgs. 25 settembre 1999, No. 374, in materia di agenzia in attività finanziaria [available only in Italian] - 39. Law 431 of 14 December 2001, Urgent measures to counter and suppress the financing of international terrorism. The text of the Law Decree No. 369 of 2001 coordinated with the law enacting it. - 40. Law of 15 December 2001 No. 438, containing urgent provisions for combating international terrorism - 2000 - 41. Law No.7 of 17 January 2000, New rules governing the gold market - 42. ISVAP Circular 393/D/2000 of 17 January 2000 - 43. ISVAP Circular 394/D/2000 of 18 January 2000 - 44. Note from the Ufficio Italiano dei Cambi, Identificazione a distanza [available only in Italian] (31 January 2000) - 45. Circulars of the Bank of Italy of 13 and 20 July and 2000 - 46. ISVAP Circular 415/D/2000 of 8 August 2000 - 47. Art.150 and 151 of Law 388 of 23 December 2000 Provisions on the formation of the annual and multi-annual budget of the State - 48. Art. 4 of Decree of the Ministry of Treasury No. 269/2000 - 1999 - 44 bis. ISVAP Circular No. 361 of 27 January 1999 - 49. Instructions of the Bank of Italy on non-EC bank of April 1999 - 50. Decree of the Minister of the Treasury, No. 219 of 13 May 1999, Regulation governing wholesale markets in government securities - 51. Legislative Decree No. 374 of 25 September 1999, extending the provisions on money laundering to financial activities especially susceptible to use for money laundering purposes - 1998 - 52. Legislative Decree of 24 February 1998, No 58, Testo unico delle disposizioni in materia di intermediazione finanziaria, ai sensi degli articoli 8 e 21 della legge 6 febbraio 1996, n. 52 – The Consolidated Law - 53. Legislative Decree of 24 June 1998 No. 213, Disposizioni per I’introduzione dell’EURO nell’ordinamento nazionale, a norma dell’articolo 1, comma 1, della L. 17 dicembre 1997, No. 433 [available only in Italian] - 54. Legislative Decree No.319 of 26 August 1998, Reorganization of the Ufficio Italiano Cambi in Accordance with Art.1, par.1 of Law 433 of 17 November 1997 [available only in Italian] - 55. Decree of the Ministry of Treasury No 516 of 30 December 1998, Regolamento recante norme per la determinazione dei requisti di professionalità e di onorabilità dei soggetti che svolgono funzioni di amministrazione, direzione e controllo presso gli intermediari finanziari, ai sensi dell’articolo 109 del decreto legislativo del 1 settembre 1993 No 385 [available only in Italian] - 1997 - 56. Legislative Decree No. 125 of 30 April 1997, Provisions concerning cross border capital movements implementing Directive 91/308 - 57. Legislative Decree of 26 May 1997 No 153, Integrazione dell'attuazione della direttiva 91/308/CEE in materia di riciclaggio dei capitali di provenienza illecita [available only in Italian] - 58. Note from the Ministry of Finance dated June 1997, Comunicato Stampa su “Identificazione” [available only in Italian] - 59. Circular of 22 August 1997, Instructions for producing transaction reports by credit and financial intermediaries pursuant to Art. 33 et seq. of Decree Law 143 of 3 May 1991 - 60. Note from AML Committee dated 11 November 1997, No. 65, Normative antiriclaggio; documenti idonei ai fini della identificazione ex art. 2 della legge 5 luglio 1991, No. 197 [available only in Italian] - 61. Legislative Decree of 4 December 1997 No. 460 on NPOs, Riordino della disciplina tributaria degli enti non commerciali e delle organizzazioni non lucrative di utilità sociale [available only in Italian] - 1996 - 62. Agreement signed between the Bank of Italy and the Ufficio Italiano dei Cambi on 16 May 1996 [available only in Italian] - 63. Art. 3 of Law No 662 of 23 December 1996, Misure di razionalizzazione della finanza pubblica [available only in Italian] - 64. Legge 31 dicembre 1996, No. 675, Tutela delle persone e di altri soggetti rispetto al trattamento dei dati personali [available only in Italian] - 1995 - 65. ISVAP Circular 257/1995 of 5 October 1995 - 1994 - 66. Decree of the Ministry of Treasury dated 6 July 1994 - 67. Decree of the Ministry of Treasury of 28 July 1994, Specification, pursuant to Article 113.1 of Legislative Decree 385 of 1 September 1993, of the criteria for determining whether engagement, on a non public basis, in the financial activities referred to in Article 106.1 is primary - 1993 - 68. ISVAP Circular 198/1993 of 4 March 1993 - 69. Agreement signed between the Bank of Italy and the Ufficio Italiano dei Cambi on 3 March 1993 [available only in Italian] - 70. Legislative Decree 385 of 1 September 1993—The Banking Law - 71. Decreto del Ministro del Tesoro 29 octobre 93, Integrazione al decreto ministeriale 19 dicembre 1991 relativo alle modalità di attuazione delle disposizioni di cui all’art. 2 del decreto-legge 3 maggio 1991, No. 143, convertito, con modificazioni ed integrazioni, dalla legge 5 luglio 1991, No. 197, recante: “Provvedimenti urgenti per limitare l’uso del contante e dei titoli al portatore nelle transazioni e prevenire l’utilizzazione del sistema finaziario a scopo di riciclaggio” [available only in Italian] - 72. Law of 12 August 1993 No 310- Norme per la trasparenza nella cessione di partecipazione e nella composizione della base sociale della società di capitali, nonché nella cessione di esercizi commerciali e nei trasferimenti di proprietà dei suoli [available only in Italian] - 1992 - 73. Legislative Decree of 6 June 1992 No 306 (Art. 12quater-12sexies, 21 sexies, 25bis and ter), Modifiche urgenti al nuovo codice di procedura penale e provvedimenti di contrasto alla criminalità mafiosa [available only in Italian] - 74. ISVAP Circular 182/1992 (31 July 1992) - 1991 - 75. Decree Law 143 of 3 May 1991, ratified with amendments by Law 197 of 5 July 1991. Usually referred to as Law 197/1991. Urgent provisions to limit the use of cash and bearer instruments in transactions and prevent the use of the financial system for purposes of money laundering - 76. Legislative Decree of 12 July 1991 No. 212, Regulations for ways for public administration accessing the data system of the Inland Revenue personal data files - 77. Legislative Decree of 29 October 1991 No 345, Disposizioni urgenti per il coorindamento delle attività informative e investigative nella lotta contro la criminalità organizzata [available only in Italian] - 78. Ministerial Decree of 19 December 1991, Ways for implementing the provisions in Article 2 of Decree Law 143/1991 - 79. Art. 10 of Legislative Decree of 31 December 1991 No 419, Istituzione del Fondo di sostegno per le vittime di richieste estorsive [available only in Italian] - 75 bis. Law of 11 August 1991, No. 266 Legge quadro sul volontariato [available only in Italian] - 1984 - 80. Law of 28 November 1984 No 792, Istituzione e funzionamento dell’albo dei mediatori di assicurazione [available only in Italian] - 1981 - 81. Law of 24 November 1981 No 689, Modifiche al sistema penale [available only in Italian] - 1979 - 82. Law of 7 February 1979 No 48, Istituzione e funzionamento dell’albo degli agenti di assicurazione [available only in Italian] - 83. Decree Law of 15 December 1979 No 625 (extracts), Misure urgenti per la tutela dell’ordine democratico e della sicurezza pubblica [available only in Italian] - 1965 - 84. Law No 575 of 31 May 1965, Disposizioni contro la Mafia [available only in Italian] - 1956 - 85. Law of 27 December 1956, No. 1423, Provisions against the Mafia, art. 2bis and 2ter [available only in Italian] *IMF staff report content (appendix excerpts) contained in the provided PDF.* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2006/_cr0684.pdf_