Financial crimes in Italy

Italy’s economy is the eighth-largest in the world and the third-largest in the Eurozone. Its financial and industrial sectors are diversified. The proceeds of domestic organized crime groups, especially the Camorra, the ‘Ndrangheta, and the Cosa Nostra, compose the main source of laundered funds. Numerous reports by Italian non-governmental organizations identify domestic organized crime as Italy’s largest enterprise.

In 2015, the Bank of Italy (BOI) said that suspicious bank transactions increased 10 percent to a record high as the pervasive problems of organized crime, corruption, and tax evasion were exacerbated by a three-year economic slump. The financial downturn has given cash-rich mafia groups the opportunity to tighten their grip on the economy. As banks reduce lending, the criminal networks simultaneously boost their investments into various economic sectors.

Drug trafficking is a primary source of income for Italy’s organized crime groups, which benefit from Italy’s geographic position and links to foreign criminal organizations in Eastern Europe, China, South America, and Africa. Other major sources of laundered money are proceeds from tax evasion and value-added tax fraud, smuggling and sale of counterfeit goods, extortion, corruption, illegal gambling, and loan sharking. Based on limited evidence, the major sources of money for financing terrorism seem to be narcotics trafficking, petty crime, document counterfeiting, and smuggling and sale of legal and contraband goods. According to the most recent official estimate (2014), the total size of Italy’s black market is estimated to be 12.4 percent of GDP (approximately €210 billion or $229 billion). The actual share may be larger. A sizeable portion of this black market is for smuggled goods, with smuggled tobacco a major component. However, the largest use of the black market is for tax evasion by otherwise legitimate commerce. Money laundering and terrorism financing in Italy occur in both the formal and the informal financial systems, as well as offshore.

Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.:NO

Criminalization of money laundering:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Are legal persons covered: criminally: YES civilly: YES

Know-your-customer (KYC) rules:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks; the post office; electronic money transfer institutions; agents in financial instruments and services; investment firms; asset management companies; insurance companies and intermediaries; agencies providing tax collection services; stock brokers; financial intermediaries; lawyers; notaries; accountants; auditors; loan brokers and collection agents; commercial advisors; trusts and company service providers; real estate brokers; entities that transport cash, securities, or valuables; entities that offer games and betting with cash prizes; and casinos

 

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