BANK OF ITALY IDENTIFIES POSSIBLE ILLEGAL TRANSACTIONS TO RUSSIA

Financial Intelligence Unit Announces 150,000 Illegal Transactions in 2023 Annual Report

By Kaila Hall

On June 26, 2024, the Bank of Italy announced¹ the Financial Intelligence Unit’s (FIU) 2023 Annual Report, identifying over 150,000 illegal transactions, some of which had possible links to Russia. The Annual Report compiles information² regarding money laundering and the financing of terrorism to be sent to an investigative agency for further investigation. During the presentation of the 2023 Annual Report, Enzo Serata, the Director of the Financial Information Unit of the Bank of Italy, noted that the Aggregate Anti-Money Laundering Reports (SARA) data identified “some anomalous flows,”³ which were then alerted to AML investigative agencies. SARA reports detected foreign transfers that passed through third countries and ultimately ended up in Russia. Consequently, the Financial Action Task Force (FATF) will soon launch⁴ a Mutual Evaluation of the Italian anti-money laundering system. FATF⁵ is expected to evaluate the effectiveness of the preventive AML measures and assess technical compliance. The Bank of Italy believes these transfers were carried out to evade European sanctions on Russia.

The Annual Report was released amid the European Union’s release of its fourteenth package⁶ of economic sanctions on Russia since its invasion of Ukraine in February 2022. Sanctions target Russia’s financial, trade, energy, transport, technology and defense sectors. Specifically, the EU has implemented new restrictions on Russian imports and exports, such as natural gas and coal. European Commission President Ursula von der Leyen stated⁷ that the sanctions will “further deny Russia access to key technologies,” “strip Russia of further energy revenues,” and “tackle Putin’s shadow fleet and shadow banking network abroad.” The European Council estimates⁸ it has blocked 210 billion euros of assets from the Central Bank of Russia and has frozen 24.9 billion euros of private Russian assets.

Earlier last month, the EU also passed three new anti-money laundering (AML) laws. The AML package established⁹ the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) to bolster surveillance mechanisms, enhance coordination among FIUs, and ensure the consistent application of EU rules. Alongside the sixth anti-money laundering directive, the AML package has also included a rulebook of preventative measures to block money laundering and terrorist financing through the financial system.

 

Kaila Hall is an intern at IELR. She is a rising senior at Cornell University.

[1] Piccioli, Matteo. “Bank of Italy Reports Possible Illegal Transactions to Russia.” JURIST, 27 June 2024, www.jurist.org/news/2024/06/bank-of-italy-reports-possible-illegal-transactions-to-russia/.

[2] Rossi, Sara. “Bank of Italy Signals Potentially Illegal Transfers from Italian Accounts to Russia in 2023.” Yahoo Reuters, 26 June 2024, uk.news.yahoo.com/news/bank-italy-signals-potentially-illegal-113442156.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAM3fIbpQzuuqwk-9E_lLQoc2Ab94yAROrBYivimjCqifDAxjTF9apY-lHox9WpdssgAV3ZX6QpzDi7Lt2q6ZRCkcQUiohCrbdWuMYLHxy73bG81ao8293bZxJC3p0n1aZvx8bUrfT-A-5ukazo8G4Tt_1HGvvmtKA3EMN2hJCedN&guccounter=2.

[3] Goria, Fabrizio. “L’allarme Di Banca d’Italia: Soldi in Russia Aggirando I Divieti.” La Stampa, 26 June 2024, www.lastampa.it/economia/2024/06/26/news/banca_ditalia_flussi_russia_italia_sanzioni-14425515/?ref=ST-LA-1.

[4] d’Italia, Banca. “UIF – Rapporto Annuale per Il 2023, N. 16 – 2024.” Uif.bancaditalia.it, uif.bancaditalia.it/pubblicazioni/rapporto-annuale/2024/index.html?dotcache=refresh.

[5] ‌“Mutual Evaluations.” Www.fatf-Gafi.org, www.fatf-gafi.org/en/publications/Mutualevaluations/More-about-mutual-evaluations.html.

‌[6] Piccioli, Matteo. “EU Confirms New Package of Sanctions against Russia.” Www.jurist.org, 20 June 2024, www.jurist.org/news/2024/06/eu-confirms-new-package-of-sanctions-against-russia/.

[7] von der Leyen, Ursula. “X.com.” X (Formerly Twitter), 2 June 2024,  x.com/vonderleyen/status/1803706357146619959..

[8] “EU Sanctions against Russia Explained.” European Council, www.consilium.europa.eu/en/policies/sanctions-against-russia/sanctions-against-russia-explained/.

‌[9] “About AMLA – European Commission.” Finance.ec.europa.eu, finance.ec.europa.eu/financial-crime/amla/about-amla_en.