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A map of money laundering risk, with a few surprises

by Roberto Galullo

The southern Italian province of Reggio Calabria tops the tables for money laundering risk, while Trento in northern Italy comes in right at the bottom, a new study led by the Transcrime research institute of Milan's Cattolica university shows.

Looked at in this way, the rankings seem logical. The province on the Strait of Messina, which is followed in the first 10 positions by other Calabrian provinces and later by others in the South (in Campania and Sicily) is without a shadow of a doubt one of the global capitals for businesses that appear legitimate on the surface but in reality are polluted by continuous injections of money stemming from Mafia-related activities.

When you scroll along the rankings, however, you discover some provinces in the north-eastern region of Emilia Romagna, and Milan is in 104th place. This calls for more explanation and a reasoned reading.

The capital of the Lombardy region, with its hinterland, has for decades been a crossroads for all types of illegal trade, and a money laundering center for dirty money from all around the world.

That starts from the Calabrian ‘Ndrangheta criminal organization, which lays down the law in the North even to Sicily's Cosa Nostra Mafia. The same thing happens in Emilia-Romagna, where the Cutro families (Reggio Emilia) have the monopoly of entire sectors in regional economic life.

The study also involved the Universities of Amsterdam and Leicester, to be able to compare the Italian situation with that of the Netherlands and Britain, as well as the Italian Economy Ministry and the Bank of Italy's financial intelligence unit Uif.

Cues for reading it in more detail came from Michele Riccardi, who conducted the Italian analysis with Riccardo Milani and Diana Camerini, weighing up five factors.

“The parameters that we took into consideration are the infiltration of organized crime, the hidden economy and the use of cash, illegal markets, the opaqueness of company ownership, and finally, the transfer of money abroad,” said Riccardi. “For the first time, furthermore, a deep analysis was carried out, using many indicators, on the ownership structures of companies.” 

The province of Reggio Calabria is in first place for a territory controlled by the ‘Ndrangheta. It is in sixth place for the presence of illegal markets and trade, in 53rd for the opaqueness of ownership structure (always weighed up with the presence or not of multinational companies), 58th for remittances abroad and 81st for the intensity of cash circulation.

On the other hand, Milan is in 14th position for the risk connected to Mafia infiltration. That is therefore a position that shows how “the palm tree line” - the metaphor that Sicilian writer Leonardo Sciascia loved to use – has now definitively crept up and taken root in the North.

The confirmation is in the risk rankings linked to illegal markets, where the province of Milan is in seventh position. For the opaqueness of ownership structure (including the effect due to multinational companies) it is in 57th position, but it returns to sixth for the risk linked to transfers of money abroad, while it falls to last position for the use of cash.

It is worth saying that in Milan and its province, there is wide use of credit cards and other virtual systems of payment: not by chance the use of cash in Milan is lower than the average of EU countries.