Italy has a strong case to be awarded the European Anti-Money Laundering Authority (AMLA), but it will have to do more than tackle financial crime to convince its European peers, writes Maria Nizzero.
Maria Nizzero is a research fellow at the Royal United Services Institute.
The race to host the European Anti-Money Laundering Authority (AMLA) is on. Last September, the Commission issued a call for applications to member states to host the newest EU decentralised agency which will act “as a supervisor at the centre of an EU integrated supervisory system and enhance cooperation among financial intelligence units in relation to illicit flows”. The closing date for submissions was 10 November.
A few criteria will be taken into consideration when selecting the location, including the capacity of recruitment, the date on which AMLA can become operational, accessibility, training opportunities and, more importantly, whether money laundering/terrorist financing risks are “adequately addressed in the member state”.
At least 10 cities have thrown their hats into the ring.
Italy also started its campaign for Rome to host the authority, with an official website launched on 19 October showcasing why “Rome is ready to host AMLA”.
Located in the eternal city’s EUR district, the Italian AMLA headquarters are promised to be available and operational from day one, with a state-of-the-art cybersecurity system and the latest energy-saving technologies, and space for up to 450 employees.
There is indeed an incredibly strong case for Italy to spearhead European efforts to tackle money laundering. Italy’s strong legacy in fighting financial crime, hardened by years of countering mafias and terrorist groups, is well-known.
Among EU member states, Italy is one of the countries with the most “mature and sophisticated AML/CTF regime” and a “well-developed legal and institutional framework”, as reported in the Financial Action Task Force’s (FATF) latest Mutual Evaluation Report from 2016.
Beyond their domestic endeavours, Italian authorities also have a long history of improving the global fight against financial crime and increasing international cooperation. For example, building on its experience at home, Italian authorities have spearheaded the FATF’s efforts to improve asset recovery standards.
There are also multiple capacity-building and training initiatives undertaken by the Guardia di Finanza alongside European and international organisations.
As the Italian candidacy brochure aptly reminds us, the “follow the money” approach was introduced by Italian prosecutors to dismantle criminal networks and is now a global standard for tackling money laundering.
If capacity to fight financial crime was the only requirement, Italy would be the clear winner.
However, running the European machine requires money, intent, and organisation. To ensure that AMLA reaches its full potential, Italian authorities will need to do more than just be great at following the money and recovering assets.
First, it is important that the project runs smoothly and with no delay: Europe needs a central authority to tackle money laundering now, not later. Italy will need to prove that this time it means business and money will not be squandered.
Second, a key criterion for the location is that it ensures that there are job opportunities for the families of AMLA employees and that infrastructure, healthcare and education services are functioning.
Years of mismanagement have left Rome in a chaotic state. While it is slowly getting a grip, it will need a lot of support from the Italian government to compete with other European capitals.
Perhaps also counting against Rome is that it is not a financial centre like Frankfurt. But Italy scored highly on its FATF Mutual Evaluation Report, unlike Germany whose troubles at home might offset any benefit it might gain from being a leading EU financial centre.
One could argue that, to ensure geographical balance and proximity to financial institutions, proposing Milan or Turin would have been better. But nothing beats being close to the expertise of the Guardia di Finanza’s School of Economic and Financial Police, the Antimafia Investigative Directorate or the National Anti-Corruption Authority. Being in one of the most attractive cities in the world also does not hurt.
Having AMLA in Rome would significantly improve Europe’s capacity to go after the money, as it would benefit from Italian authorities’ expertise in detecting suspicious transactions, investigating financial crime, and recovering illicit proceeds. It would benefit Italy as well, as it would reassure Italian eurosceptics about Italy’s role in the EU and that not everything is run in Brussels, Berlin, or Paris.
There is no doubt that the EU will benefit from having Italians running the AML/CTF show. In its bid to host AMLA, however, Italy will have to make a strong commitment to be its best, most transparent and organised self to convince its European peers.
