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 at risk according to an OECD report. Despite legislative efforts, including the introduction of anti-corruption measures and the establishment of a working group for risk assessment, Italy's score on Transparency International's Corruption Perception Index remains below the EU average. While the U.S. Embassy has not received specific corruption complaints from American firms, concerns about 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 a decline in GDP growth from 4.0% in 2022 to 0.9% in 2023, the economy has shown resilience, supported by a robust construction sector and a rebound in tourism. The public debt-to-GDP ratio was 141.7% in 2022, indicating a downward trend from previous years, while the government is focused on reforms to enhance growth and attract foreign investment.

Italy presents a favorable investment climate characterized by a large, diversified economy and a skilled workforce, making it an attractive destination for foreign investment. The country benefits from its position as a significant market within the EU, with a strong emphasis on small and medium-sized enterprises (SMEs), which represent 99.9% of Italian businesses. However, challenges such as bureaucratic inefficiencies and the need for judicial reforms persist, which could enhance the investment environment for U.S. investors.