Italy's Central Bank Directs Financial Institutions to Review Sanctions Compliance
The Bank of Italy has issued a directive to financial institutions and crypto-asset service providers (CASPs) to verify their systems for detecting transactions related to sanctioned individuals. The move comes amid rising geopolitical tensions in the EU, which have led to increased economic sanctions.
The EU's Economic Sanctions Regulation requires financial institutions to identify and freeze assets belonging to sanctioned entities. CASPs are also subject to this regulation, as they provide services that involve financial transactions.
The Bank of Italy has directed PSPs (payment service providers) and CASPs to review their systems for identifying sanctioned individuals and implementing the EU's Economic Sanctions Regulation. The directive emphasizes the importance of accurate screening to prevent false positives while ensuring compliance with sanctions regulations.