FATF status

Italy is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Italy was undertaken by the Financial Action Task Force (FATF) in 2019. According to that Evaluation, Italy was deemed Compliant for 18 and Largely Compliant for 20 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 8 of the Effectiveness & Technical Compliance ratings.

Corruption remains a significant challenge in Italy, particularly affecting micro, small, and medium-sized businesses, which are most vulnerable according to an OECD report. Despite legislative efforts to combat corruption, including the introduction of stricter laws and the establishment of an Inter-Departmental Working Group, Italy's score on Transparency International's Corruption Perception Index remains below the EU average. While the U.S. Embassy has not received specific complaints from American firms regarding corruption, issues related to transparency and bureaucracy in government procurement persist.

Italy's economy is the eighth largest globally and the third largest in the EU, excelling in sectors such as business services, agriculture, fashion, and tourism. Despite its resilience, GDP growth has slowed from 4.0% in 2022 to a projected 0.9% in 2023, influenced by inflation and reduced private consumption. The government is implementing the National Recovery and Resilience Plan to address long-standing economic challenges, supported by substantial EU funding.

Italy presents a favorable investment climate characterized by a large domestic market, a diversified economy, and a skilled workforce, making it an attractive destination for foreign investors. The government actively supports foreign direct investment (FDI) through various incentives and has implemented reforms to streamline bureaucracy and improve judicial efficiency, although challenges remain in administrative capacity and regulatory processes. Despite these hurdles, Italy's strategic location and access to the European Common Market continue to draw significant foreign investment, particularly in sectors like manufacturing, telecommunications, and pharmaceuticals.