The Role of the Financial Intelligence Unit (FIU)

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The Financial Intelligence Unit for Italy (UIF - Unità di Informazione Finaziaria) is an independent and autonomous body set up within the Bank of Italy pursuant to Legislative Decree 231/2007. It became operational on 1 January 2008, replacing the Italian Foreign Exchange Office (UIC) as the central body charged with combating money laundering. Its structure is in compliance with the international standards applying to all financial intelligence units (FIUs): they should be operationally autonomous and independently run; they should be the only unit of the kind in the country; they should possess expertise in financial analysis; and they should be able to exchange information directly and independently.

The Unit opted for the administrative model in order to keep the task of financial analysis separate from that of investigative analysis, emphasizing the independent role of prevention and the UIF’s function as a ‘buffer’ designed to /safeguard a sound economic and financial system. The legal status of the UIF, which is not a separate entity, stems from its institutional function as a centre for collecting, coordinating and channelling data and information of significant public interest.

The structure and functioning of the UIF are governed by a specific Regulation of the Governor of the Bank of Italy, first issued on 21 December 2007 (Gazzetta Ufficiale No. 7, 9 January 2008) and renewed after the Unit was reorganized on 29 January 2019 (G.U. No. 123, 28 May 2019). The Director, who is autonomously responsible for managing the Unit, is appointed through a measure approved by the Bank of Italy’s Governing Board, on a proposal of the Governor, from among persons meeting suitable standards of integrity, experience and knowledge of the financial system. The Bank of Italy provides financial resources, as well as premises, equipment, personnel and technical resources so that the Unit can effectively carry out its institutional tasks as envisaged by law. A Committee of Experts, composed of the Director and four members appointed by the Ministry of Economy and Finance after consulting the Governor of the Bank of Italy, acts in an advisory capacity.

The UIF produces an Annual Report on its activity, which the Director sends - through the Financial Security Committee - to the Ministry of Economy and Finance by 30 May, together with a report by the Bank of Italy on the funds and resources allocated to the Unit. It is then attached to the report on AML/CFT actions that is forwarded annually by the MEF to the Italian Parliament.

The UIF collects information on potential cases of money laundering and financing of terrorism, carries out financial analyses and decides whether the information should be passed on to the investigative authorities (the Special Foreign Exchange Unit of the Finance Police and the Anti-Mafia Investigation Department) or if it can be useful for the cooperation with the judicial authorities. The UIF also provides information to the National Anti-Mafia Directorate and it carries out the analyses requested.

In particular, the Unit receives and analyses the suspicious transaction reports (STRs) filed by obliged entities, as well as the threshold-based communications linked to money laundering or terrorist financing risks, identified by ad hoc instructions on the basis of objective criteria; it also receives the monthly aggregate reports transmitted by financial intermediaries.

The UIF may request additional information from obliged entities, consult files to which it has access by law or by agreements with other authorities or national bodies, and exchange information with foreign counterparts (FIUs). In this context, the Unit can also inspect entities subject to anti-money-laundering obligations, specifically with the aim of verifying compliance with STR and threshold-based communications obligations, as well as of acquiring data and information from obliged entities.

The UIF can suspend suspicious transactions for up to five working days at the request of the investigative bodies (the Special Foreign Exchange Unit of the Finance Police and the Anti-Mafia Investigation Department), the judicial authorities, a foreign FIU or on its own initiative, provided that this does not interfere with any investigations under way. Suspension orders are issued in close cooperation with the investigative authorities.

After consultation with the Financial Security Committee, the UIF sets out the criteria for in-depth analysis of STRs. Depending on the outcome of its analysis, the Unit forwards STRs that require further investigation to the Special Foreign Exchange Unit of the Finance Police and the Anti-Mafia Investigation Department, it ensures a prompt transmission of STR data, information and analyses to the National Anti-Mafia Directorate, in order to verify possible links with ongoing or relevant judicial proceedings and it notifies the judicial authorities of potential criminal offences; the Unit stores all reports classified as requiring no further action.

The UIF draws on its databases to conduct strategic analyses aimed at identifying and assessing the phenomena, trends, practices and weaknesses of the system. It analyses single irregularities, economic sectors at risk, categories of payment instruments, and local economies. An outline of the results of these studies is transmitted to the other authorities.

The Unit draws up and issues regulations on the suspicious transaction reports filed by obliged entities, the transmission of aggregate data by financial intermediaries, threshold-based communications and the transmission of communications concerning suspicious transactions on the part of General Government offices. In order to promote active cooperation on the part of the obliged entities, the Unit draws up and updates anomaly indicators, economic and financial anomalous behaviour models and patterns and it then provides feedback on the outcome of the reports, also based on the information received from the Special Foreign Exchange Unit of the Finance Police and from the Anti-Mafia Investigation Department.

The UIF relies on cooperation and information exchange at national and international level to perform its duties effectively, and more generally to ensure the efficiency and efficacy of the anti-money-laundering system as a whole.

Cooperation may take different forms: supervisory authorities may waive the rule of professional secrecy when working together and with the UIF, the Special Foreign Exchange Unit of the Finance Police and the Anti-Mafia Investigation Department, in order to facilitate their respective functions. Supervisory authorities (as well as government departments and professional associations) may be required to provide the UIF with information; the UIF and the investigative and judicial authorities may collaborate in numerous areas to identify and examine anomalous financial flows and transactions.

Under the international and national anti-money laundering legislation, the FIUs are given centralized responsibility for the tasks connected with receiving and analysing suspicious transaction reports and the related exchange of information with their foreign counterparties. The latter function is essential for analysing financial flows that increasingly go beyond national borders, and are therefore of interest to several jurisdictions.

At international level, the FIUs’ capacity to exchange information is autonomous and direct, with no need for international treaties between governments. Memoranda of Understanding must be promptly negotiated and signed whenever they are required for cooperation by another FIU’s national law.

FIUs have established a widespread cooperation network, developing fast and secure electronic communication systems. Cooperation between FIUs is governed at global level by the principles of the Egmont Group, within the framework of the FATF's Recommendations. International standards require that FIUs provide, either spontaneously or on request, and in a timely, constructive and effective manner, the utmost cooperation at international level in the field of money laundering, associated predicate offences and the financing of terrorism.

Information exchanges between FIUs take place via fast and protected electronic channels. At international level, the Egmont Group manages and updates the Egmont Secure Web, an encrypted platform for the exchange of information between FIUs.

At European level, a decentralized communication infrastructure called FIU.NET has been set up, which enables a structured, bilateral or multilateral exchange of information and at the same time offers standardization, immediacy and secure data exchange.

Information on suspicious transactions may therefore be exchanged with foreign FIUs, including under memorandums of understanding; to this end/for this purpose, the Unit obtains the necessary investigative information from the Special Foreign Exchange Unit of the Finance Police and the Anti-Mafia Investigation Department (Article 13-bis).

The UIF is also entrusted with receiving mandatory gold trade declarations regarding transactions referring to investment in gold or gold materials, mainly for industrial use, for a value of €12,500 and over, in compliance with Law 7/2000 relating to the gold market.

The UIF is also engaged in the fight against the sexual exploitation of children and child pornography, including online (Law 38/2006).