The global nature of action to prevent money-laundering requires that special attention be paid to activity involving intermediaries established in countries with a low degree of regulation, ineffective controls and strong safeguards for confidentiality together with low taxation. The need for a joint response at international level has persuaded the FATF to identify countries that do not cooperate adequately in the effort to combat money-laundering.1
Italian legislation for the prevention of money-laundering is centred on Law 197 of 5 July 1991, which seeks to prevent money-laundering by prohibiting transactions of significant amount using bearer instruments and by ensuring the possibility of reconstructing transactions through customer identification and the registration of the transaction data in special databases.
The obligation for intermediaries to report transactions that raise suspicions as to the legality of the provenance of the funds transferred introduced the principle of “active cooperation”, which requires a concrete, constant commitment to staff training and adaptation of organizational structures. Experience shows that such a commitment results in a better knowledge of customers and less risk of the intermediary’s involvement in illegal transactions, which have serious repercussions on the intermediary’s regular operation as well as on its reputation.
The newness of the requirement gave rise to some difficulties of implementation. These were overcome with the extension of money-laundering predicate offences to all crimes not of negligence, pursuant to Law 328 of 9 August 1993, and the introduction of measures to safeguard the confidentiality of the source and the elimination of direct reporting by the intermediary to the investigative bodies, pursuant to Legislative Decree 153 of 26 May 1997.
Reports of suspicious transactions are now sent to the UIC following internal evaluation by the intermediary. The UIC examines reports taking account of the possible underlying economic reasons; in this connection, the UIC acquires further data and information from intermediaries, uses the results of the analyses of financial flows, and exchanges information with the national supervisory authorities and the corresponding foreign authorities. When the examination is complete the reports, accompanied by a technical report, are transmitted to the special foreign exchange unit of the Finance Police and the Bureau of Antimafia Investigation, which are responsible for carrying out any investigative verification. The procedure therefore represents an appropriate “filter”, helping to accentuate the objective nature of the suspicious-transaction report and allowing the opportunities offered by financial analysis to be fully exploited.
To ensure compliance with the suspicious-transaction reporting requirement, the anonymity of the person making the report must be ensured as a safeguard both for the reputation of the intermediary and against possible reprisals against staff.
This purpose is pursued by Legislative Decree 153/1997. The interposition of the UIC helps to blur the link between the report and its source. Intermediaries are required to take steps to ensure the utmost confidentiality of the identity of the persons making reports. In any report that they ultimately transmit to the judicial authorities, the investigative bodies are required to omit every indication of the identity of the persons and of the intermediary that sent the suspicious-transaction report. In this way the source of such reports will not have to appear in the judicial records.
1In June 2000 the FATF identified that following “non-cooperative countries and territories”: Bahamas, Cayman Islands, Cook Islands, Dominica, Israel, Lebanon, Liechtenstein. Marshall Islands, Nauru, Niue, Panama, Philippines, Russia, St. Kitts and Nevis, St. Vincent and the Grenadines. The FATF has pledged to assess the steps taken by these countries and territories to correct the shortcomings and to examine other jurisdictions. The evaluations of the FATF will be adequately disseminated by the national authorities.