Identifier
Created
Classification
Origin
04ROME978
2004-03-12 09:39:00
UNCLASSIFIED
Embassy Rome
Cable title:  

ITALY UPGRADES ANTI-MONEY LAUNDERING MEASURES AND

Tags:  ECON EFIN ETRD IT ITALIAN POLITICS 
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UNCLAS ROME 000978 

SIPDIS


DEPT FOR EUR/WE, EUR/ERA, EB/IFD/OMA
TREAS FOR OASIA HARLOW, STUART
FRANKFURT FOR WALLAR

E.O. 12958: N/A
TAGS: ECON EFIN ETRD IT ITALIAN POLITICS
SUBJECT: ITALY UPGRADES ANTI-MONEY LAUNDERING MEASURES AND
SANCTIONS


UNCLAS ROME 000978

SIPDIS


DEPT FOR EUR/WE, EUR/ERA, EB/IFD/OMA
TREAS FOR OASIA HARLOW, STUART
FRANKFURT FOR WALLAR

E.O. 12958: N/A
TAGS: ECON EFIN ETRD IT ITALIAN POLITICS
SUBJECT: ITALY UPGRADES ANTI-MONEY LAUNDERING MEASURES AND
SANCTIONS



1. The GOI approved February 13 a legislative decree
implementing the EU's Anti-Money Laundering Directive
(2001/97/CE). The legislative decree requires notaries,
lawyers, auditors, certified public accountants,
accountants, and labor advisers to report suspicious
financial activity to the Ufficio Italiano dei Cambi
(UIC),Italy's financial intelligence unit. Previously,
only banks, debt collectors, exchange houses, insurance
companies, real estate agents, brokerage firms, gold
dealers, and valuables dealers were required to report
suspicious activity to the UIC.


2. Italy's Minister for EU Integration Rocco Buttiglione
called the legislative decree "a delicate balance between
fighting terrorism and preserving freedom." Professional
associations representing certified public accountants
and legal advisors reacted positively to the new
reporting rules.


3. Although the GOI adopted the Directive's guidelines,
Italy opted out from adopting the strictest
interpretation of the EU Directive in a few cases. For
example, although the EU Directive states that "all
casino customers shall be identified if they purchase or
sell gambling chips with a value of euro 1,000 or more,"
Italy set the limit at euro 1,500.

Sanctions
--------------


4. The legislative decree just passed reinforces an
existing legal prohibition against all cash and bond
transactions of euro 12,500 or more. Under current
Italian lawNow, if such a transaction comes to the
attention of institutions or professionals mentioned in
paragraph one above, that party must report the
transaction to the UIC. The current penalty now for a
person engaging in a cash or bond transaction in excess
of euro 12,500 is a fine ranging from one percent to 40
percent of the amount transferred.


5. The new category of professionals required to report
(see para 1 above) transfers of cash and bearer
instruments exceeding euro 12,500 faces stiff penalties
(3 percent to 30 percent of the value of the
transactions) if they do not report the transaction
within 30 days. Moreover, such persons and institutions
are also subject to further fines (5 percent to 50
percent of the value of the transaction) if the person or
institution does not report a "suspect financial
transaction" as defined by art 3 of the current Anti
Money Laundering law (i.e., cases of unusual financial
activity, such as multiple transactions over a limited
period of time or evidence of a transaction deriving from
crime).


6. Comment: The increased fines are expected to deter
some money-laundering activity. However, it is unclear
from the legislative decree whether a court order would
be required to impose the fine, and what institution - a
financial institution, the Ministry of Finance, or the
UIC - would collect the fine. End Comment.


7. The legislative decree also imposes new limits on
bank deposit books. Under this legislative decree, the
balance of postal and savings bank deposit books cannot
exceed 12,500 euros. Accounts with balances exceeding
this limit must be closed by January 31, 2005. (Note:
Banking regulators suspect that postal and bank deposit
books are frequently used by money-launderers because of
the ease of "portability." Anyone who brings a bank
deposit book into a bank can deposit, or withdraw, money
from the account, even if that person's name is not on
the account. End Note.) If accounts remain open, and
have a balance up to euro 250,000, a fine would be levied
- either on the client, the bank, or on both - up to 20
percent of the balance. If account balances exceed euro
250,000, the fine would range from 20 percent to 40
percent of the balance.


8. The legislative decree takes effect when the Ministry
of Economy and Finance issues administrative regulations
by decree, which must be done within 240 days.


Sembler


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2004ROME00978 - Classification: UNCLASSIFIED