Edited by Massimo Ferracci
University Professor of Advanced Corporate Finance
Customer & Business Assessment AML/CFT – Due Use Export Controls – OFAC Regulations
Of Counsel Vallefuoco & Associates Law Firm Stp

How is the anti-money laundering risk assessment for supervised entities progressing following the publication of the Bank of Italy's Provisions on Organization, Procedures, and Internal Controls in Anti-Money Laundering, a Provision of March 26, 2019?
The Anti-Money Laundering Risk Assessment aims to analyze the activities implemented by the Anti-Money Laundering Function to prevent money laundering risks and counter the financing of international terrorism.
The assessment allows us to verify the timely applicability of all relevant primary and secondary regulations, the mandatory requirements to be fulfilled, the control process, the information system procedures, the operational profiles of the due diligence in every aspect and the risk measurement model implemented to protect and safeguard the Bank from money laundering risk, thus providing an absolutely reliable assessment of the adequacy of the entire anti-money laundering system.
Below is a checklist of the interventions to be activated during the assessment:

STRUCTURE AND RESPONSIBILITY
– LIST OF FUNCTIONS AND ROLES INVOLVED

1. DUTY OF CUSTOMER DUE DILIGENCE
   – DUE DILIGENCE – GENERAL PRINCIPLES
   – CONTENT OF THE DUE DILIGENCE OBLIGATIONS:
   1 Identification of the client and the performer
   2 Identification of the Beneficial Owner
   3 Verification of the identity of the customer/executor/beneficial owner
   4 Acquisition of information on the purpose and nature
   5 Constant monitoring during the ongoing relationship
   6 Customer Obligations
   7 Retention obligations
   8 Obligation to abstain and suspend
   9 Return of any available assets

RISK-BASED APPROACH
– EVALUATION CRITERIA CONCERNING THE CLIENT
– EVALUATION CRITERIA CONCERNING CONTINUOUS RELATIONSHIPS AND OCCASIONAL TRANSACTIONS
– CUSTOMER PROFILING
– CONTROL THROUGH INDEPENDENT EXTERNAL LISTS

STRENGTHENED DUE DILIGENCE OBLIGATIONS
– REMOTE OPERATION
– OPERATIONS AND CONTINUOUS RELATIONSHIPS WITH POLITICALLY EXPOSED PERSONS (PEPS)
– OPERATIONS AND CONTINUOUS RELATIONSHIPS WITH COUNTRIES AT HIGH RISK OF MONEY LAUNDERING
– ESTABLISHMENT OF CORRESPONDENT ACCOUNTS WITH CORRESPONDENT INSTITUTIONS IN NON-EQUIVALENT COUNTRIES
– PAYMENT OPERATION OR VALUES COMING FROM OTHER STATES
– OPERATIONS INVOLVING THE USE OF LARGE DENOMINATION BANKNOTES
– RELATIONSHIPS WITH NON-PROFIT ORGANIZATIONS
– RELATIONSHIPS WITH TRUSTS
– CONTRAST IN THE FINANCING OF PROGRAMS FOR THE DEVELOPMENT OF WEAPONS OF MASS DESTRUCTION

DUE DILIGENCE – OPERATIONAL COMPLIANCE
- RESPONSIBILITY
– REGISTRY APPLICATION AND KYC VERIFICATION ACTIVATION
– OPERATIONAL PROCESSES PRESIDED BY THE KYC APPLICATION
– COMPLETION OF THE AML QUESTIONNAIRE
– CALCULATION OF THE EXTEMPORANEOUS RISK PROFILE
– DECLARATION PURSUANT TO ART. 21 OF LEGISLATIVE DECREE 231/07
– MANAGEMENT, STORAGE AND QUERY
– PERIODIC PROCESS OF DUE DILIGENCE OF EXISTING CUSTOMER BASE
– MONTHLY RISK PROFILE CALCULATION – THE GIANOS 3D/GPR APPLICATION

DUE DILIGENCE – CUSTOMERS AND SPECIAL SITUATIONS
– CHECKS TO COMBAT TERRORISM
– CUSTOMER NOT “PHYSICALLY” PRESENT
– POLITICALLY EXPOSED PERSONS (PEPS)
– ESTABLISHMENT OF RELATIONSHIPS WITH NUMEROUS OPERATIONAL DELEGATIONS
– TRUST COMPANIES POSSIBLY PRESENT IN THE CLIENTS' CONTROL CHAIN
– INFORMATION REQUEST FROM FOREIGN BANKS
– LISTED COMPANIES
– FUNDS (MUTUAL INVESTMENTS, REAL ESTATE, PRIVATE EQUITY)
– OPERATIONAL REQUIREMENTS CONNECTED WITH THE RETURN OF FINANCIAL AVAILABILITIES

STORAGE OBLIGATIONS

SUSPICIOUS TRANSACTION REPORTS
– MANDATORY NATURE OF SUSPICIOUS REPORTING
– OPERATING INSTRUCTIONS

STAFF TRAINING
AUTOMATED ANTI-MONEY LAUNDERING CONTROLS
DRAFTING OF INTERNAL OPERATIONS MANUAL
The various bank representatives confirm that the assessment process has yet to be completed in many cases. The secondary regulations issued by the Bank of Italy are, however, extremely pervasive on this issue.
It is essential to intervene promptly through a thorough, precise, and critical examination of one's anti-money laundering measures and the entire control system.
The risk of money laundering has now become a corporate risk (and no longer systemic) based on the risk approach that each bank identifies.
From now on, therefore, the risk of money laundering and terrorist financing must be managed differently since it has a significant impact on the bank's continuity and the adequacy of its capital.