By Igor Rucci, President of SGR Consulting

Anti-money laundering is a topic that has grown exponentially in relevance over the past decade. On the one hand, the fight against tax evasion, with the resulting domino effect of various tax havens, has led the governments of major economies to develop increasingly stringent regulations impacting financial operators. On the other, the rising risk of terrorism has raised the need to protect themselves by tackling the phenomenon at its root, namely by combating the financing of subversive groups.

The Fourth Directive builds on the objective of the Third, namely to establish a certain level of uniformity in anti-money laundering matters across Europe. This is one of the positive aspects that allows member states to all pull in the same direction. Among the noteworthy innovations is certainly the stricter procedures for complying with customer due diligence, and therefore with know-your-customer processes, especially in identifying the so-called beneficial owner and complex structures such as trusts. With the implementation of the European directive, Italy has finally introduced the requirement for registration in the Company Register. Another aspect not to be overlooked is the desire, highlighted by Brussels, to adopt measures to incentivize the whistleblowing. Without forgetting the growing attention towards Politically Exposed Persons (PEPs), from whom transparency is expected.

Although pioneering, the Fourth Directive still has room for improvement: the sanctions system is not as clear as it should be, leaving obligated entities open to interpretation. Unclear aspects regarding sanctions include, for example, "serious and repeated violations" or "late reporting," which are still under discussion. For the mechanism to function properly and be well-oiled, obligated entities must implement unequivocal dictates and rules. Furthermore, the role of public administrations in preventing the reinvestment of illicit capital is still unclear. The new regulation appears to relegate public administrations to a role of mere "cooperation" rather than that of obligated entity. This would mean that public bodies would no longer be required to submit SOS to the FIU: if this were the case, it would be a major defeat for the fight against corruption within the Italian public sphere.

The tightening of regulations and sanctions has had its effects. According to data released by the Bank of Italy, in 2016 there were 101.065 STRs, an eightfold increase in ten years, amounting to €88 billion. Even more significant is that a full 70% of the reports forwarded by the UIF to the Special Unit of the Foreign Exchange Police were deemed relevant for investigation purposes. The two voluntary disclosures also provided further impetus to reporting to the UIF, along with the commitment to combating terrorism, which requires a heightened state of alert.

Compliance officers are certainly increasingly prepared and aware, but at the same time, they're also "scared." Navigating the jumble of legal frameworks isn't a given, and paying dearly for a mistake, perhaps made in good faith, can be career-threatening. Therefore, in addition to competence, the caution that characterizes the actions of anti-money laundering officers also plays a significant role.

However, some sectors remain in the shadows, such as gold buying, money transfers, and the art market. But the real challenge to anti-money laundering is the cryptocurrency sector, whose main feature, anonymity, allows shady transactions to be carried out without leaving a trace.

The extreme relevance of a topic like anti-money laundering and its myriad nuances has led to a strong need for discussion and updating. It is to meet this need that the idea of ​​the Anti-Money Laundering Fair was born: on this occasion, leading experts in the field can bring their expertise. know-how and exchange opinions, as well as clarify doubts and open questions for those required to perform due diligence. Without forgetting that money laundering prevention must be understood as a mission and a practice that must be embedded in the DNA of ethical and forward-looking finance; creating a regular event to discuss it and disseminate its culture was almost a must.

Specialized training plays an important role in this scenario. Proper preparation of professionals is essential: adequate training allows professionals to identify their specific responsibilities and duties in the anti-money laundering field. This is also why the Anti-Money Laundering Exhibition relies on the technical partnership of the Anti-Money Laundering Diploma from the European School of Banking Management, a recognized executive training program in Italy that officially certifies the possession of these skills upon graduation.

However, theory alone isn't enough, and to perform due diligence flawlessly, it's essential to equip the required entities with efficient and effective tools, such as databases, lists, and other consultation tools. Experience and a solid toolkit create a winning combination to tackle the challenging task of anti-money laundering compliance.