FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF MER Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Italy is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The latest follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Italy was undertaken by the Financial Action Task Force (FATF) in 2019. According to that Evaluation, Italy was deemed Compliant for 18 and Largely Compliant for 20 of the FATF 40 Recommendations.
US Department of State Money Laundering assessment (INCSR)
Italy is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
Italy’s economy is the ninth largest in the world and the third-largest in the Eurozone. Italy has a sophisticated AML regime and legal framework, but a continued risk of money laundering stems from activities of organized crime and the large, black market economy. According to the Italian National Statistics Institute, the black market economy accounts for 12.1 percent of GDP, or approximately $235 billion (€211 billion). Tax crimes also represent a significant risk and have been identified as accounting for 75 percent of all proceeds-generating crime in Italy.
While on the rise, CDD and suspicious transaction reporting remain weak among non-financial sectors, and regulations are inconsistent. In early 2019 the government published Regulation n. 44 to implement new provisions on AML/CFT organization, procedures, internal controls, and CDD. The new regulations align with EU efforts and require online entities to adopt controls and procedures.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 53
World Governance Indicator – Control of Corruption 62
Corruption is a major problem in Italy. The integrity of public officials is marred by their relationships with organised crime and businesses. Public procurement, particularly infrastructure, presents a very high risk of corruption, as it involves large resources and exposes companies to organised crime. Extortion, active and passive bribery, bribing a foreign public official, fraud and money laundering are criminalised under the Criminal Code of the Italian Republic. The anti-corruption laws broaden the scope and punishment of corruption offences, and are generally implemented effectively. Italy is a signatory to the OECD Convention and has rejected the exception for facilitation payments. For further information - GAN Integrity Business Anti-Corruption Portal
Italy has a diversified economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, highly subsidized, agricultural south, where unemployment is higher. The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family-owned. Italy also has a sizable underground economy, which by some estimates accounts for as much as 17% of GDP. These activities are most common within the agriculture, construction, and service sectors.
Italy is the third-largest economy in the euro zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets. Public debt has increased steadily since 2007, topping 135% of GDP in 2015, but investor concerns about Italy and the broader euro-zone crisis eased in 2013, bringing down Italy's borrowing costs on sovereign government debt from euro-era records. The government still faces pressure from investors and European partners to sustain its efforts to address Italy's longstanding structural impediments to growth, such as labour market inefficiencies and tax evasion. In 2014, economic growth and labour market conditions continued to deteriorate, with overall unemployment rising to 12.7% and youth unemployment around 40%, but Italy began to recover in 2015, with marginal growth and a slight reduction in unemployment.
Agriculture - products:
fruits, vegetables, grapes, potatoes, sugar beets, soybeans, grain, olives; beef, dairy products; fish
tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics
Exports - commodities:
engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals; foodstuffs, beverages, and tobacco; minerals, nonferrous metals
Exports - partners:
Germany 12.3%, France 10.3%, US 8.7%, UK 5.4%, Spain 4.8%, Switzerland 4.7% (2015)
Imports - commodities:
engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing; food, beverages, tobacco
Imports - partners:
Germany 15.4%, France 8.7%, China 7.7%, Netherlands 5.6%, Spain 5%, Belgium 4.7% (2015)
Investment Climate - US State Department
Italy’s economy, the eighth largest in the world, is fully diversified, but dominated by small and medium-sized firms (SMEs), which comprise 99.9 percent of Italian businesses. Italy is an original member of the 19-nation Eurozone. Germany, France, the United States, Spain, Switzerland, and the United Kingdom are Italy's most important trading partners, with China continuing to gain ground. Tourism is an important source of external revenue, as are exports of pharmaceutical products, furniture, industrial machinery and machine tools, electrical appliances, automobiles and auto parts, food and wine, as well as textiles/fashion. Italy continues to lag behind many industrialized nations as a recipient of foreign direct investment, and Italy does not have a bilateral investment treaty with the United States.
Italy’s relatively affluent domestic market, proximity to emerging economies in North Africa and the Middle East, and assorted centers of excellence in scientific and information technology research remain attractive to many investors. The government remains open to foreign investments in shares of Italian companies and continues to make information available online to prospective investors. The Italian government’s efforts to implement new investment promotion policies to position Italy as a desirable investment destination were undermined in part by Italy’s ongoing economic weakness and lack of consistent progress on structural reforms that could repair the lengthy and often inconsistent legal and regulatory systems, unpredictable tax structure and layered bureaucracy. However, Italy’s economy has emerged from its longest recession in recent memory and the current government is making progress on its efforts to improve Italy’s investment climate.
Other Useful Links