Anti-money laundering: the new provisions | Lawyer Media

The current regulations concerning anti-money laundering obligations have recently undergone an important change following the publication in the Official Journal, on October 26, 2019, of Legislative Decree October 4, 2019, n. 125 (text below). Indeed, in compliance with the duty of transposing the Italy of Directive (EU) 2018/843, c.d. V Directive, the previous system was deeply reshaped Legislative Decree 231/2007 and of Legislative Decree 90/2017.

Summary

1. The new V European Union Directive

2. Legislative Decree 125/2019 transposing Directive (EU) 2018/843

3. The new adequate verification of customers

4. The other changes: anonymous electronic money, sanctions and final rules

1. The new V European Union Directive

The main goal of the Euro-EU Legislator is to trace with a large degree of certainty the financial flows in view of the action to combat the money laundering of illicit provenance and financing of terrorism.

In the first Recital, Directive 843 recalled how the previous IV Directive (2015/859) is the main legal instrument aimed at preventing abuses of the Union's financial system for money laundering purposes. Despite this, the system has been innovated with a view to strengthening certain requirements aimed at broadening the application area.

the last Directive, has set itself the objective of hindering criminal activities without limiting, however, the normal functioning of payment systems. New features include easier access to information on beneficial owners, in order to make companies and trust, attention to the risks inherent in prepaid cards and cryptocurrencies, cooperation between the various Financial Intelligence Units (FIUs) and the strengthening of controls with respect to operations that involve third countries in the EU high risk profiles. The subjects subject to the anti-money laundering legislation include the providers of exchange services between virtual currencies and legal currencies, the providers of digital wallet services, and the merchants and intermediaries of the art world in the event that the transaction, placed existing at a single point in time or broken down at different times has a value equal to or greater than 10,000 euros.

Also with reference to politically exposed people, there is something new: Member States are obliged to publish and update a list in which to indicate precisely the functions that must be considered for the purpose of identifying subjects falling into the category of politically exposed persons

2. Legislative Decree 125/2019 transposing Directive (EU) 2018/843

Legislative Decree 125/2019 is implemented pursuant to art. 5 of the European delegation law 2015 (26 August 2016, n. 160) with which the IV anti-money laundering Directive was implemented. Indeed, starting from this Delegation Law, the Government issued the Legislative Decree 90/2017, which today changes pursuant to art. 31, paragraph 5, Law of 24 December 2012, n. 234.

Legislative Decree 125/2019 (hereinafter, breviter, "Decree") consists of six articles. The first intervenes on inspection and control powers of the Supervisory Authorities redefining the provisions on internal and international cooperation. The letter b) defines the administrations and organizations concerned: those which, including tax agencies, possess powers of control or grant authorizations, concessions, licenses, and any other title to the recipients of the obligations identified by the Legislative Decree 231/2007.

With reference to link between politically exposed persons and other subjects, the Italian Legislator has defined that it must here and there to include every natural person who holds, jointly with the politically exposed person, the effective ownership of legal entities, trust and related institutions or companies that do business with him.

Important innovations are also planned with reference to “service providers related to the use of virtual currency”Which, in addition to what emerged in the standard FATF (¹), are defined as individuals who, on a professional basis also online, provide third-party services for the use, exchange, storage and conversion of cryptocurrencies. Together with the conversion into current legal tender currencies, the Legislator also provides for the conversion into digital representations of value, including those that can be converted into others of a virtual type, as well as the services of issue, offer, transfer and compensation and any other functional service to the acquisition, trading or brokerage in the exchange of the same currencies. The virtual currency is therefore defined by the Euro-regional legislature as a representation of a digital value which, although it is neither issued nor guaranteed by a central bank or a public body, is not necessarily linked to a currency with current legal tender, and does not have the status legal currency or currency, is accepted by physical and legal persons, as a medium of exchange and that can be transferred, stored and exchanged by electronic means.

The letter g) then defines i digital portfolio lenders: physical or juridical subjects that professionally, and also online, provide to third parties services of safeguarding private cryptographic keys on behalf of their customers useful to hold and transfer cryptocurrencies. These parties are recipients of active collaboration obligations, indeed Legislative Decree 90/2017 (Article 1, paragraph 1, letter n), n. 4) included them among the obliged subjects, albeit in a circumscribed way to the conversion of virtual currencies or to forced exchange. In this context, therefore, the letter h) finds a natural space, updating it definition of virtual currency specifying that it concerns the digital representation of a value, which is neither issued nor guaranteed by a public authority, and which can be aimed at the exchange of goods or for investment purposes.

News also in the framework of obliged subjects. Insurance companies are eliminated, withholdings included between the banking and financial intermediaries, and the persons in charge of collecting the transferred credits and cash and payment services, with reference to the credit securitization transactions. Instead they enter the traders or intermediaries in the world of art and antiques, real estate brokers who act as intermediaries for a real estate lease (limited to transactions involving a monthly fee equal to or greater than 10,000 euros), and digital wallet service providers.

Also the paragraph of art. 1 of Decree 125/2019, which is of less direct concern to the public, intervenes on Decree 231 by taking on the tasks, powers and actions of the Authorities, administrations and bodies concerned and the subjects involved in the activities of supervision, control and surveillance. There are changes in the subject's exemption from the obligations concerning anti-money laundering, conditioned by the fact that the financial activity carried out is not principal, and in any case does not exceed 5% of the total turnover; about the obligations of the Financial Information Unit (FIU); the elimination of the reserved access for the section of the register of companies relating to the information on the beneficial owner of legal persons e trust expressed; and the precise definition of the tasks and attributions of the Guardia di Finanza special currency police unit and the Anti-Mafia Investigation Directorate.

There national and international cooperation is dealt with in paragraph 3 of the Decree that, identifying the national Authorities in the Ministry of the Economy, in the UIF, in the Anti-Mafia Investigation Directorate and in the Guardia di Finanza, provides for the possibility of waiving the obligation of professional secrecy for collaboration , the exemption from the obligation to transmit information useful to her to the FIU in the event of an ongoing police investigation and the prosecutor has not yet decided whether or not to prosecute, and the possibility for the judicial authorities to request the police authorities to communicate the results of the investigations carried out on the reporting of suspicious transactions.

International cooperation is pursued by strengthening cooperation between the national supervisory authorities and the competent foreign Authorities in order to finalize the objective of exchanging information and assistance necessary for preventing and combating the use of the economic and financial system for purpose of money laundering and terrorist financing. It therefore opens up the possibility of entering into memoranda of understanding aimed at regulating the process of sharing information but not only: on the one hand, the Nucleus and the Anti-Mafia Investigation Directorate can exchange directly with the authority foreign, under conditions of reciprocity and in derogation to the obligation of professional secrecy, police data and information; on the other hand, the cooperation between the Italian FIU and the Financial Intelligence Units (FIU) of the Member States is strengthened, on condition of reciprocity, allowing the direct exchange and processing of data found by the different units.

Finally, the last one paragraph 4 of the art. 1 of the Decree modifies the art. 16 of Decree 231 under risk mitigation procedures, providing that in the case of groups, the parent company adopts a global approach to the risk of money laundering and terrorist financing, in compliance with the provisions of the sector supervisory authority.

3. The new adequate verification of customers

Even the adequate verification has been modified (Article 2 of the Decree in question), providing, first of all, that theexercise of obligations must be made to those who are already clients of the obliged, not only in the event that there is a change in the level of risk attributed to the client, but also in the hypothesis of expansion of the obligations that have arisen, set by rules issued after the time in which the customer was acquired.

The compliance procedures are amended by art. 19 of Decree 231 providing that digital identities and certificates for the generation of digital signatures issued in compliance with Regulation (EU) 910/2014, can only be accepted if characterized by a maximum level of security.

Particular innovation concerns the articles 21 and 22 of Decree 231, with reference to the regulations concerning communication and access to information on beneficial ownership of legal entities e trust, as well as the client's obligations. The new Directive has in fact provided that specific types of information should be accessible to the public, also with reference to the trust to related legal institutions, it being understood that the data that can be disseminated are: name, surname, month and year of birth, country of residence, citizenship of the beneficial owner and conditions on the basis of which the subject qualifies as the beneficial owner. Access can however be excluded, again in strict terms, in the event that the information concerns incapacitated or minor subjects, or in the event that disclosure of the data is a harbinger of exposing the beneficial owner to the risk of serious crimes against the person and heritage.

Obviously, changes have also been made to the plan reinforced verification where, in art. 24 of Decree 231, the new risk factor relating to products, services, operations or distribution channels, transactions relating to oil, arms, precious metals, tobacco, cultural artifacts and other movable items of historical, archaeological and cultural importance has been included or religious or of rare scientific value, as well as ivory and protected species. The scope of the reinforced checks was then limited to the correspondence relationships that involve the execution of payments, and they were envisaged, with reference to the new paragraph 4-BIS art. 25, the measures to be adopted for customers operating in high-risk countries: the acquisition of additional information relating to the purpose and nature of the professional relationship, the acquisition of information regarding the origin of the funds and the economic-financial situation of the customer and beneficial owner, the acquisition of the reasons referring to the operations foreseen or performed, the acquisition of the necessary authorizations for the subjects holding administrative or management powers, and the assurance of constant monitoring.

4. The other changes: anonymous electronic money, sanctions and final rules

A big news of the Decree is represented by the prohibition of issuing and using anonymous electronic money products. In fact, it is known that anonymous prepaid cards can easily be used for the commission of serious crimes, so it has seemed essential to reduce the maximum limits and limits, below which the obliged subjects are authorized not to apply certain measures, adequate customer verification fixing this threshold in euro 50. The novella has modified art. 50 of Decree 231 starting from its heading, setting the effective date of the new provision on 10 June 2020.

The administrative sanctions provided for in art. 58 for the omission they become applicable, as well as towards the personnel of the subjects obliged to report (ie staff of banking and financial intermediaries and trust companies), also to the auditors responsible for auditing appointments of the legal auditing companies which, pursuant to art. 37, paragraph 3, of Decree 231 are subject to the obligation to transmit the report to the holder of the competent function.

It is then clarified that the Bank of Italy and Ivass may impose sanctions also on subjects who perform administration, control and management functions of the supervised intermediary, assigning the Bank of Italy the right to impose a pecuniary administrative sanction from 2,500 to 350,000 euro in the event of non-compliance with the procedural rules of organization and internal control adopted in respect of supervised non-financial operators, that is to say the subjects who exercise the activity of custody and transport of cash and securities or securities by means of particular security guards. For cases of serious, systematic or repeated violations, the Legislator has provided for the possibility of increasing the sanction up to three times the maximum edictial or up to double the amount of profits derived from the violations ascertained in the event that the amount can be determined .

Consob's action is also strengthened by being able to impose sanctions not only on the statutory auditors of auditing companies with auditing appointments on bodies of public interest or on entities subject to interim regime, but also to holders of administration, management and control.

The same sanctioning procedure pursuant to art. 65 of Decree 231 has undergone changes: it is specified that the sanctions for the omission of the reporting of suspicious transactions are imposed by the Ministry of the Economy and Finance, without prejudice to the powers of the Bank of Italy and Ivass in the case of major violations; the imposition of sanctions is also envisaged on the subjects responsible for auditing tasks (according to how much ut supra specified), except for the jurisdiction of Consob for violations of a higher entity; a closure provision is introduced which attributes to the Ministry of Economy and Finance the task of imposing any other administrative pecuniary sanction not expressly attributed to another Authority or Body.

Finally the art. 5 of the Decree intervenes, with five paragraphs, a modify the system of:

(the) Legislative Decree 141/2010 in the part in which it governs (i) credit agreements for consumers and subjects operating in the financial sector, (ii) agents in financial activities and (iii) credit brokers. The rules are therefore adapted in anticipation of the obligation of registration in the register of agents in financial activities and credit mediators also for the providers of digital wallet services which, as we have seen above, become recipients of the obligations provided for by the new anti-money laundering legislation;

(Ii) Legislative Decree 90/2017 providing for the extension of twenty-four months for the adoption of ministerial decrees for the implementation of the communication and access to information on the effective ownership of legal persons and trust and for the adoption of the provision that defines the methods for feeding and consulting the register of affiliated subjects and agents of payment service providers and electronic money issuing institutions;

(Iii) Legislative Decree 92/2017 integrating, in the context of the c.d. "I buy gold", art. 11, paragraph 1 and assigning to the offices of the territorial State Accounting offices also the competence to the sanctioning procedure for the non-observance of the provision.

(1) I.e. Financial Action Task Force, An independent intergovernmental body that develops and promotes policies aimed at protecting the financial system from the risks associated with money laundering, financing of terrorism and the spread of weapons of mass destruction. He is also known as FATF, Financial Action Group. For further questions, see the website fatf-gafi.org.

LEGISLATIVE DECREE NO. OCTOBER 4, 2019, No. 125 >> DOWNLOAD PDF TEXT