Crimes such as money laundering and terrorist financing have significant economic and political consequences. The laundering of crime revenues causes the crime elements not to be punished. Criminal organizations that cannot be punished commit a larger variety of crimes by growing criminal syndicates. Fraud, drug and human trafficking, and terrorist financing are among the major crimes committed by these criminal organizations. Just by looking at these offenses, we can detect that money laundering is a serious financial crime that paves the way for other crimes.
The Italian Measures for AML
Italy is among the countries that worry about money laundering and take measures against it. Italy, which is under various risk threats due to its geographical location, has taken various measures in the past. Combating various crime elements, Italy is conscious of the need to detect financial crimes to increase the effectiveness of the fight. In this respect, Italy has defined money laundering crime and created relevant legislation and regulations. While Italy set anti-money laundering (AML) regulations and legislations, they were widely based on the Financial Action Task Force (FATF) Recommendations and the European Union (EU) legislation and regulations. Thus, Italy continues its struggle with laws, regulators, and the support of law enforcement agencies to prevent financial crimes.
The History of AML
Italy’s first major measure against money laundering came in 1991, with the decrement of Law No. 143 and 197. The decrees focused on the implementation of urgent measures to limit the use of cash and bearer bonds in transactions and prevent the use of the financial system for money laundering purposes.
Throughout later years, Italy has worked closely with the FATF and the EU for the enactment of more effective AML laws and regulations. To bolster the effect of the EU’s regulations, Italy enacted Legislative Decree No. 231/2007, which was used to implement the Third EU Anti-Money Laundering Directive (3AMLD) into Italian law. The same methodology was included in the implementation of the Fourth EU Anti-Money Laundering Directive (4AMLD), with the enactment of Legislative Decree No. 90/2017.
In 2019, the FATF conducted its most recent review of Italy's efforts to adhere to the AML standards. The evaluation showed that Italy was found to be compliant with 18 of the FATF’s 40 Recommendations, and it was considered to be largely compliant with 20 of these recommendations.
AML Requirements and Penalties
The organizations operating in Italy have to meet certain AML requirements when performing their services. Organizations have to commit to the fight against financial crimes by taking the necessary measures in line with the Italian national AML regulations, the FATF recommendations, and the EU directives. Financial institutions that do not meet AML obligations face various regulatory penalties. These penalties create a loss of trust and loyalty among the customers toward the organization.
The money laundering penalties in Italy include imprisonment for four to twelve years and fines of up to €25,000. To avoid these repercussions, there are certain advantages to include in an AML program.
The customer onboarding process involves the customer's account opening process for companies. The company asks for some documents and information from the customer to open the account. The company's AML compliance officer first checks the accuracy of customer information. This is also called the Know Your Customer (KYC) process.
Moreover, companies have to determine the customer's risk level. The companies scan the customer in various sanction and PEPs (politically exposed persons) lists while determining the customer risk level. This is also called the Customer Due Diligence (CDD) process. If the company does not encounter a problem, the customer is allowed to access the account.
How Does the Sanction Scanner Help
Sanction Scanner offers financial crime prevention solutions to organizations and institutions worldwide. Financial institutions can protect themselves against financial crime and ensure AML compliance with Sanction Scanner. Sanction Scanner collects sanction and PEP list data from more than two hundred countries and updates it at fifteen-minute intervals. Financial institutions can scan their customer's current AML data and protect themselves from various risks. The AML solutions that Sanction Scanner develops with artificial intelligence reduce the workload of financial institutions in AML compliance processes. Financial institutions located in Italy can contact us or request a demo to ensure AML compliance.