Curated by Giuseppe Miceli

UIF Report 2020: Results and Prospects for Combating Money Laundering
Over 113 SOS and objective communications for 215 billion euros 

The Italian Financial Intelligence Unit (FIU) has presented its 2020 Annual Report on its activities to prevent and combat money laundering. The 144-page document, No. 13 of 2021, was presented in key sections by the FIU President, Dr. Claudio Clemente.

The UIF's overall operations were impacted by the pandemic that began at the beginning of 2020. This was a constantly evolving, "liquid" scenario, as Dr. Clemente described it.

In this context, criminal organizations have managed to adapt, conquering those "new spaces" where new illicit behaviors can thrive, exploiting the epiphenomena of the pandemic emergency, such as social distancing and the widespread need for economic and financial availability.

The money laundering prevention system has demonstrated an equally rapid – and effective – capacity for reaction and organizational and operational flexibility.

This response has achieved the highest levels of effectiveness, thanks in part to the fruitful interaction between the private and public sectors of the system. The synergistic action between the FIU and other competent authorities has even increased, positively impacting the results of the anti-money laundering effort.

The results, in fact, are all positive: the number of Suspicious Transaction Reports (STRs) has increased (exceeding the 113 threshold, of which nearly 2.300 relate to risk situations linked to the health emergency), which indicates an increased commitment from those required to submit STAR data.

In 2020, objective reports were received relating to 41 million transactions totaling €215 billion in significant cash deposits and withdrawals. This represents a reduction in the average monthly figure compared to 2019, attributable to the pandemic's impact on behavior and economic dynamics.

The greatest contribution to the growth of the trade unions came – as highlighted by the UIF Report – from banking and financial intermediaries, more structured entities whose operations were less affected by the decline in economic activity and operational difficulties. Most categories of professionals and non-financial operators, however, submitted fewer reports, despite the increase in registrations in the suspicious transaction reporting system.

The positive results recorded in 2020, confirmed by the data for the first quarter of 2021, also arose from the operational implementation of the two Communications with which the FIU drew reporting entities' attention to the main risk areas and specific anomalies. Likewise, significantly strengthened contacts with public administrations, seeking synergies that allow analysis to benefit from the information provided by this sector, particularly important during the current emergency period given the risks associated with measures to support the economy, have played a positive role.

Particularly significant has been the collaboration between the FIU and the National Anti-Mafia Investigation Department (NADA), as well as with the Guardia di Finanza and the Anti-Mafia Investigation Department (DIA), which was conceived on the basis of weekly exchanges regarding financial operations related to the Covid-19 emergency, as reported in reports and information from foreign FIUs. In early 2021, a new protocol was signed with the National Anti-Mafia Investigation Department (NADA), consolidating the already fruitful collaboration and information exchange relationship, improving and automating the sharing processes, which are thus much more frequent.

A positive trend was also observed in collaboration with the judicial authorities: requests increased by over 40% compared to 2019. The strategic analysis, already aimed at developing indicators of the risk of infiltration of businesses by organized crime, was also aimed at identifying the symptoms of the evolution of the phenomenon encouraged by the pandemic.

At the international level, there has been an increase in the frequency of collaborative relationships that allow foreign FIUs to acquire relevant information for investigations into suspicious transnational financial flows. As the FIU president for Italy stated, Collaboration with other FIUs has also allowed us to identify suspicious cross-border transactions carried out to take advantage of the health emergency and the support measures. Information exchanges on online scams have increased, fueled by the increased use of the internet during this period. Collaboration has allowed us to reconstruct the trail of fraudulent transfers and, in some cases, quickly freeze the identified assets to facilitate their recovery.

What has emerged, due to the Covid-19 emergency, is the need to strengthen the reform program for the overhaul of the European anti-money laundering system. The European Commission's Action Plan for an integrated policy to prevent money laundering and terrorist financing has confirmed the need for a supranational mechanism to support and coordinate FIUs. Based on the work developed by the FIU in agreement with the Ministry of Economy and Finance,

In addition, Italy has promoted a Common Position among Member States on the tasks and characteristics of the future Mechanism, inspired by a logic of subsidiarity and focusing on working methods and practices, international collaboration, and analytical activities that cannot be effectively carried out at the national level alone. The timing of a recovery in economic activity, once the emergency is over, appears uncertain. Efforts will need to be redoubled to address the fragilities that have pervaded the market and society.

These dynamics could be implemented without delay, especially if—as Dr. Clemente also hopes—the decision were made to assign the headquarters of the new European Anti-Money Laundering Authority to Italy.

Concluding this positive assessment, the UIF President for Italy stated: "The challenges posed by this difficult historical period require more intense and coordinated action. In anti-money laundering, too, maximum exploitation of the collaborative network is necessary to strengthen prevention and counteract newly emerged risks. The UIF is ready to contribute, deploying the resources of its expertise, public service spirit, and the flexibility of its staff."

UIF Annual Report