US embassy cable - 04ROME978

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