Italy: Suspicious Transaction Reporting: Recent Developments in Legislation
| Pages | 181-185 |
| Date | 01 April 1998 |
| Published date | 01 April 1998 |
| DOI | https://doi.org/10.1108/eb027185 |
| Author | Carlo Zaccagnini |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control —
Vol.
2 No. 2
Italy: Suspicious Transaction Reporting: Recent
Developments in Legislation
Carlo Zaccagnini
INTRODUCTION
Considered from an international and comparative
perspective Italian anti-money laundering legisla-
tion appears rigorous and comprehensive. It
includes general norms and aggravating circum-
stances for conspiracy to engage in organised and
economic crime; rules which oblige the financial
sector to identify and report currency transactions
in excess of 20 million lire (approximately £6,600;
and hereinafter called 'large currency trans-
actions'); provisions punishing money laundering
as a crime; norms which sanction the failure to
report suspicious transactions by financial inter-
mediaries; provisions prohibiting
'tipping-off'
and
rules which provide for the confiscation and freez-
ing of the proceeds of crime, which shift the
burden of proof in cases where the accused fails to
demonstrate the origin of the suspicious assets.
The legislative structure provides, likewise, norms
on 'sting operations', establishing an express
immunity clause for 'undercover agents'. Lastly,
the legislation further defines the parameters of
international judicial assistance.
The approach to money laundering prevention
and detection remains, however, two-pronged: on
the one hand the Italian Penal Code defines all the
offences which are criminally punishable, includ-
ing money laundering offences; on the other hand,
enactment 197/19911 ('anti-money laundering
law') is a law largely regulatory and civil in nature,
even though it provides a list of sanctions, both
administrative and criminal, for non-compliance.2
Essentially, the anti-money laundering law con-
tains three basic principles: the currency trans-
action report; the customer identification
procedures; and suspicious transactions reporting.
The first prohibits the use of cash or any bearer
instruments for any large financial transaction.3
This law also operates to channel financial opera-
tions and payments towards specifically approved
intermediaries. The transfer of cash or bearer
instruments for aggregate values in excess of 20
million lire (or the equivalent foreign exchange
amount) must be exclusively carried out by: Italian
and EU credit institutions and other depository
institutions controlled by them; securities broker-
age firms; post offices; trust companies; companies
admitted to trading on a stock exchange; stock-
brokers; insurance companies and securities invest-
ments fund management companies.
The second guideline, defining customer identi-
fication procedures, requires financial institutions
to acquire the details of the person involved in
large currency transactions or movements of bank
accounts in excess of 20 million lire, including
'structured transactions'.4 The same obligation of
identification applies if the transaction is carried
out on behalf of another person where full verifi-
cation of the principal's identity is required. These
cash operations are monitored, moreover, both
through the use of a special code used by institu-
tions and through the acquisition of the National
Insurance Number.
The third guideline of the Italian anti-money
laundering legislation is the reporting of suspicious
transactions:5 the remainder of this article discusses
in detail this third component.
An Achilles heel
Suspicious transaction reporting is the Achilles
heel of the Italian money laundering compliance
system. The system of suspicious transactions
reporting was included in the 1991 text of s. 3 of
the anti-money laundering law. The section intro-
duced the duty of all intermediaries to report sus-
picious transactions to the local Head of Police
(Questore) which subsequently transmitted the
reports to the Special Unit of Currency Police
within the Tax Police (Guardia di Finanza).
The results of this obligation from implementa-
tion in 1991 to March 1996 have been qualitatively
and quantitatively disappointing. From the results
of the Ministry of Treasury report to the Parlia-
ment of 1993, during the first two years of the
enactment of the law, the Head of Police received
Page 181
To continue reading
Request your trial