Edited by Massimo Ferracci

What happens when foreign documents need to be analyzed (and subsequently validated) to complete the due diligence process?

The “PROVISIONS ON CUSTOMER DUE DILIGENCE TO COMBAT MONEY LAUNDERING AND TERRORISM FINANCING” issued by the Bank of Italy with a provision of 30 July 2019 indicate that supervised entities must proceed to “verify the identity of the customer, any executor and any beneficial owner on the basis of documents, data or information obtained from a reliable and independent source” (Section I/c, page 11).

Furthermore, the same provision specifies in note no. 14, page 14 that "when the original documents are in a foreign language, the recipients shall take the necessary measures to identify their content (including through a certified translation of the original, when deemed necessary)".

Therefore, for identification documents of individuals (legal representatives, beneficial owners, or executors), as well as for corporate documents (foreign Chamber of Commerce certificates, articles of association and bylaws, minutes of meetings, for example) of clients residing abroad (non-resident accounts), it is advisable for intermediaries to adopt an extremely prudent approach to avoid establishing business relationships that lack or lack the regularity and truthfulness of the underlying documents presented.

But how can we ensure the documents are in order?

There are only two official methods: legalization or apostille. They're often confused, so let's look at how they work in detail.

Legalization

In order to be valid in Italy, deeds and documents issued by foreign authorities must be legalised by Italian diplomatic and consular representations abroad.

Such deeds and documents, except those drawn up on multilingual forms required by international conventions, must also be translated into Italian.

Translations must bear the "certified translation" stamp. In countries where the legal status of an official translator exists, the translator's signature can certify the translation, and the translator's signature is then legalized by the consular office.

In countries where this role is not provided for by local law, it will be necessary to use the certification of conformity issued by the consular office.

To proceed to the legalization The applicant must present himself, by appointment, at the Consular Office with the document (original) to be legalized.

In order to obtain the certificate of conformity of the translation The applicant must present himself, by appointment, at the Consular Office with the original document in the foreign language and its translation.

The above acts are subject to the payment of fees as per the relevant consular fee currently in force.

The apostille
In the countries that have signed the Hague Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents, the need to legalise deeds and documents issued by foreign authorities is replaced by another formality: the affixing of the "postille" (or apostille).
Therefore, a person from a country that has signed this Convention does not need to go to a consular representation and request legalization, but can go to the competent internal authority designated by each state—and indicated for each country in the act of accession to the Convention itself (usually the Ministry of Foreign Affairs)—to have the document apostille affixed. Once this is done, the document is recognized in Italy.

The updated list of countries that have ratified the Hague Convention and of the authorities competent to affix the apostille for each of the States is available on the website of the Hague Conference on Private International Law (HCCH), www.hcch.net.

Currently, 89 foreign states and one regional body have signed the Hague Convention (as shown in the attached figure).