Anti Money Laundering (AML) in Italy
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|Money laundering in Italy is a growing problem, despite that fact that the country is not a major regional or offshore financial center. Laundering funds is a concern because of the prevalence of homegrown organized crime groups and the recent influx of criminal organizations from abroad. Counternarcotics efforts are complicated by the heavy involvement in international narcotics trafficking of domestic and Italian-based foreign organized crime groups. Financial crimes not directly linked to money laundering, such as credit card and Internet fraud, are increasing.
Money laundering occurs both in the regular banking sector and, more frequently, in the non-bank financial system, i.e., casinos, money transfer houses and the gold market. Money launderers predominantly use non-bank financial institutions for the illicit export of currency – primarily U.S. dollars and Euros – to be laundered in offshore companies. There is a substantial black market for smuggled goods in the country, but it is not funded significantly by narcotics proceeds.
Law 197/31 defined money laundering as a criminal offense when it relates to a separate, intentional felony offense. Italy has strict laws on the control of currency deposits in banks. Banks must identify their customers and record and report to Italy’s Financial Intelligence Unit (FIU), Italian Exchange Office (UIC), any cash transaction that exceeds approximately $15,000. The Bank of Italy’s mandatory guidelines require the reporting of all suspicious cash transactions and other activity, such as a third-party payment on an international transaction, on a case-by-case basis. Italian law prohibits the use of cash or negotiable bearer instruments for transferring money in amounts in excess of $15,000, except through authorized intermediaries or brokers.
Banks and other financial institutions are required to maintain records necessary to reconstruct significant transactions for ten years, including information about the point of origin of funds transfers and related messages sent to or from Italy. Banks operating in Italy must remit account data to a central archive controlled by the Bank of Italy. This archive was established for recordkeeping and financial oversight purposes, but has proven useful for tracking money laundering. A "banker negligence" law makes individual bankers responsible if their institutions launder money. The law protects bankers and others with respect to their cooperation with law enforcement.
AML Training in Italy
Italy’s Operating Instructions for Identifying Suspicious Transactions requires financial intermediaries to provide their employees with AML training. Reports on training must be submitted annually to the intermediary’s Board of Directors.
The Economy of Italy
Italy has a diversified industrial economy with roughly the same total and per capita output as France and the UK. This capitalistic economy remains divided into a developed industrial north, dominated by private companies, and a less-developed, welfare-dependent, agricultural south. Most raw materials needed by industry and more than 75% of energy requirements are imported.
The strength in the Italian economy stems from the processing and manufacturing of goods, mostly by medium-sized and family-owned firms.
Banking in Italy
Banca d’Italia is a member of the European Central Bank (ECB). The ECB is the central bank of Europe’s main currency, the Euro. The ECB’s primary responsibility is to maintain the purchasing power of the Euro.
The main functions of Italy’s Central Bank are to promote financial stability in the country and monitor banking and financial policies.
The monetary functions of the ECB include: the opening of accounts for credit institutions, public entities and other market entities; the opening of market and credit operations; requiring credit institutions to hold minimum reserves, regulating to create an efficient and sound clearing and payments system; and cooperating with third country central banks, credit institutions and international organizations.
The ECB has the exclusive right to set interest rates for the Eurozone.
The currency in Italy is the Euro, which serves as the currency of the 15 members of the European Central Bank. The states that have adopted the Euro as currency make up the Eurozone. These countries are Austria, Belgium, Cyprus, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain. The Euro is the single currency for more than 320 million Europeans.
The Euro was first phased into the global economy in 1999. In the beginning, participating countries had to combat the use of both Euros and former national currencies. Beginning in 2002, national currencies were withdrawn.
The Euro comes in both banknotes and coins. Banknotes are available in 5, 10, 20, 50, 100, 200 and 500 denominations. Coins are available in 1, 2, 5, 10, 20, 50 cent pieces, and 1 and 2 Euro coins.
Other Key Statistics of Italy
Time Zone: UTC+1 (6 hours ahead of Washington, DC during Standard Time).
Daylight Savings Time: +1hr, begins last Sunday in March; ends last Sunday in October.
Location: Southern Europe, a peninsula extending into the central Mediterranean Sea, northeast of Tunisia.
Population: 60,396,852 (June 2015 est.).
Labor Force: Approximately 5% works in agriculture, 32% in industry and 63% in services industries. The unemployment rate is 6.2%.
Languages Spoken: Italian (official), German, French and Slovene.
Trade Organizations: Italy is a member of the World Trade Organization (WTO).