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PREMISE

With this measure the Bank of Italy, after consulting the UIC, in agreement with Isvap and Consob, issues instructions — pursuant to Article 3-bis, paragraph 4, of Law 197 of 5 July 1991 as amended by Legislative Decree 153 of 26 May 1997 and by Law 388 of 23 December 2000 — to all the operators of the banking, financial and insurance sectors required to report suspected money-laundering transactions.

The measure updates the guidelines distributed from February 1993 onwards in the light of the intervening changes in national and international regulations and in the operations of banking and financial intermediaries. It also incorporates the guidelines specifically addressed to the insurance sector in January 1999.

The Instructions contain operating rules designed to reduce the margins of uncertainty connected with subjective evaluations or discretionary behaviour, to help limit the costs of compliance and to ensure full cooperation with the authorities responsible for preventing money-laundering. The establishment of uniform rules for all intermediaries is intended to avoid forms of regulatory arbitrage aimed at circumventing the requirements of law.

The document consists of an introduction describing the obligation to report suspicious transactions and specifying the addressees of the provisions, and a compendium of operating instructions divided into two parts. The first part establishes rules and guidelines of conduct for the decision-making bodies and control structures within each intermediary and indicates the reporting procedures, stressing the importance of knowing the customer and the necessity of having appropriate organizational tools and verification procedures. The second part contains a catalogue of examples of anomaly indicators in whose presence the intermediary must pay special attention to the transaction and evaluate whether to report it.

INTRODUCTION

1. Reporting suspicious transactions

The laundering of money obtained from illegal activity constitutes one of the most serious criminal phenomena in the financial market and is a sector of specific interest for organized crime. Money-laundering is a major factor of contamination for the entire economy: the reinvestment of illegal proceeds in legal activities and the presence of economic agents and organizations in collusion with organized crime radically alter the workings of the market, undermine the efficiency and correctness of financial activity, and weaken the economy itself.

The globalization of financial activity and the rapid development of information technologies create new operating opportunities and scope for economic growth, but at the same time they increase the risks of contamination connected with the laundering of illegal funds.

Intermediaries must respond responsibly to the complexity and danger of the phenomenon, dedicating more attention to the tools for countering it, in an awareness that the search for profitability

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