Banca d’Italia has instructed payment service providers and crypto-asset service providers to keep screening financial transfers under travel rule-related procedures, making clear that no transaction is too small to fall outside the checks.
The communication calls for sanctions controls at onboarding and throughout the customer relationship, with firms expected to verify both the originator and the beneficiary against designated lists. The guidance is part of a broader effort to curb sanctions evasion, including by Russian actors, even if tighter controls slow some transfers.
No minimum threshold for checks
The central bank’s message to PSPs and CASPs stresses that sanctions screening must apply across all financial transactions, without a minimum amount that would exempt a transfer from review. In practice, that means providers are expected to continue using travel rule-related procedures to examine transfers regardless of size.
The guidance underlines that firms should not rely on value thresholds to decide when scrutiny begins. Instead, screening is expected to be embedded as a standard control covering the parties involved in a payment or crypto transfer.
Onboarding and ongoing monitoring
Banca d’Italia says the controls should start when a customer is taken on and continue afterward through ongoing monitoring. Providers are expected to verify both the sender and the recipient, or originator and beneficiary, against designated lists as part of those checks.
At the same time, the bank says screening systems should be calibrated carefully. The aim is to limit false positives without weakening the ability to identify designated subjects, a balance that can be difficult when firms are reviewing large volumes of transactions.
Focus on sanctions evasion risk
The communication links the tougher approach to the risk of sanctions evasion. According to the guidance, stricter controls are meant to block illicit financial flows and reduce opportunities for restricted parties to move funds through payment and crypto channels.
The bank specifically points to the need to prevent evasion by Russian actors. It also warns that breaking up funds into smaller transfers to avoid detection is a known tactic, reinforcing the decision not to apply a minimum threshold for screening.
Operational impact and next step
Banca d’Italia acknowledges that stronger controls may lead to delays in some transfers, but indicates that this is an acceptable consequence of tighter sanctions enforcement. The guidance also warns firms to remain alert to sanctions circumvention that could result from poorly configured monitoring systems.
For PSPs and CASPs, the confirmed next step is operational rather than legislative: ensuring that onboarding checks, transaction screening, and ongoing monitoring are set up to review all transfers and both parties involved, while maintaining systems capable of catching designated subjects without generating avoidable errors.
Source: news.bitcoin.com