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This paper aims to address the money laundering risk posed by politically exposed person’s (PEP’s) controlled legal entities. International standards and national legislation require enhanced due diligence of political office holders but no specific requirements exist on entities controlled by PEPs. While regulators expect the stringent AML risk mitigation regarding this type of entities, financial institutions have no guidelines to follow. This gap produces inconsistent due diligence measures applied to entities with significant PEPs’ connection.

The paper uses comparative analysis to identify discrepancies between legal requirements and their interpretation. Moreover, an empirical approach results in a standardised solution to address these discrepancies.

The paper defines the concept of politically exposed entities and the applicable due diligence framework. Anticipating legislative measures, it proposes to introduce this concept via best practices of financial institutions and private banking initiatives such as the Wolfsberg Group.

The research addresses the topic from a legal point of view. However, the implementation of proposed ideas depends on decisions which are political by nature and are not within the scope of this paper.

The paper aims at stimulating a debate in both the private and public sector to form a consistent approach to AML due diligence of legal entities associated to PEPs.

This paper responds to an identified need to study how legal entities connected to PEPs should be defined and monitored.

The purpose of this paper is to compare a new anti-corruption law approved by the Italian Parliament in November 2012 with Italian treaty obligations, the international evaluation reports on the Italian anti-corruption regime elaborated by the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe, the best practice guidelines and other European models. The year 2012 has marked a turning point in Italian anti-corruption policy. In response to the low ranking that Italy has in all international anti-corruption indices, the critiques expressed in international reports on its anti-corruption regime, and the increasing pressure of public opinion, the Italian parliament approved the new anti-corruption law.

The Law was preceded by critiques in the mass media and has been labelled as a token act. To evaluate the effectiveness of the steps undertaken by the Italian Parliament, this paper compares the new law with Italian treaty obligations, the international evaluation reports on the Italian anti-corruption regime elaborated by the OECD and the Council of Europe, the best practice guidelines and other European models (i.e. the UK Bribery Act).

This comparison gives the author the opportunity not only to identify the strengths and weaknesses of the law but also to suggest efficient solutions that the Italian legislator could have adopted.

So far, this is the only analysis in English of the changes introduced in the Italian anti-corruption regime in 2012. Several international colleagues and practitioners have asked the author about the new regime and it was therefore deemed appropriate to address the issue in an academic article.