Inter-American Center of Tax Administrations Technical Conference 2015 Brig. Gen. Stefano Screpanti Head of III Department- Operations Guardia di Finanza General Headquarters 29th September th September 2015

ATTACKING THE ASSETS AND ILLEGALLY ACCUMULATED WEALTH OF ORGANIZED CRIME IMPORTANT LEVER FOR COMPREHENSIVE FISCAL CONTROL STRATEGIES Inter-American Center of Tax Administrations Technical Conference

AMOUNT OF THE FINANCIAL INTERESTS OF NATIONAL ORGANIZED CRIME ORGANIZED CRIME CAN FINANCE ITSELF WITH «ZERO COST» CAPITAL OR THROUGH REINVESTING ILLICIT PROCEEDS TRASCRIME DATA: MAFIA BUDGET RECORDS TOTAL REVENUES BETWEEN EUR 17.7 AND 33.7 BILLION UNDUE COMPETITIVE ADVANTAGE AND ALTERATION OF NATURAL OPERATING MECHANISMS OF THE MARKET AND FREE COMPETITION Inter-American Center of Tax Administrations Technical Conference

D.E.F – OFFICIAL GUIDELINES 2015 DOCUMENT FOR ECONOMIC AND FINANCIAL AFFAIRS 2014 Structural reforms and improving state budget programs are not interchangeable but complement each other Reform strategies are part of improving state budget programs: a highly indebted country such as Italy must aim at budget stability in order to start solid and long-term development. Such strategy demands contemporary and complementary actions: improving state budget and reducing public debt; giving new inputs to economic growth so to grant the sustainability of public finances; normalizing credit flows to enterprises and families, also by fostering credit systems other than bank and speeding up Public Administration debt payment; structural reforms aiming at re-launching productivity and reduce obstacles such as bureaucracy, inefficient justice, or mafia conditioning and corruption. PURPOSE DESCRIPTION ACTION PUBLIC SAFETY Restating budget and investing in new models in order to support the peculiarities and strategic role played by the whole safety/defence sector. Creating an efficient model to implement the right to safety. Impeding organized crime to affect legal economy. Supporting economic and social recovery by strengthening the fight against corruption and illegality, and defeating organized crime. D2. The Guardia di Finanza will contribute to strengthen the fight against tax evasion, tax avoidance and frauds, public spending related crimes and offences, crime group infiltration in legal economy, money laundering and gambling. The Corps will grant priority to such actions by implementing operative plans to be used as analysis and control tools; 3

EXTENTION OF MEASURES TO SO-CALLED « FISCALLY DANGEROUS» SUBJECTS EXTENTION OF MEASURES TO SO-CALLED « FISCALLY DANGEROUS» SUBJECTS TAXING ANY KIND OF WEALTH INCLUDING THAT RESULTING FROM ILLICIT ACTIVITIES RECUPERATING COSTS DEDUCTED FROM ENTREPRENEURIAL OR SELF- EMPLOYMENT INCOMES WHICH ARE DIRECTELY RELATED TO CRIME OFFENCES ATTACKING ILLICIT ACTIVITIES RELATED TO ILLICIT ASSETS WITHIN CRIMINAL POLICE INVESTIGATION YEAR INVESTIGATION DELEGATION ( COMPLETED) TAXATION OF ILLECIT PROCEEDS RECUPERATING COSTS USED TO COMMIT A CRIME USING ELEMENTS GATHERED IN CRIMINAL PROCEEDINGS FOR TAX CONTROL PURPOSES PREVENTIVE MEASURES INVOLVING PROPERTY Inter-American Center of Tax Administrations Technical Conference

TAXATION OF ILLECIT PROCEEDS INCOMES ASSESSED IN ACCORDANCE TO THE LAWS OF EACH DIFFERENT CATEGORY INCOMES ASSESSED IN ACCORDANCE TO THE LAWS OF EACH DIFFERENT CATEGORY THEY ARE CONSIDERED AS «OTHER INCOME» THEY ARE CONSIDERED AS «OTHER INCOME» IF ILLICIT INCOMES DO NOT FALL WITHIN ANY CATEGORY WEALTH RELATED TO FACTS, ACTS OR ACTIVITIES IDENTIFIED AS CIVIL, PENAL OR ADMINISTRATIVE OFFENCES REQUIREMENT: THEY MUST NOT HAVE ALREADY BEEN SEIZED NOR CONFISCATED AS A RESULT OF LEGAL PROCEEDINGS Inter-American Center of Tax Administrations Technical Conference

INDEDUCTIBILITY OF OFFENCE RELATED COSTS LAW MODIFICATION YEAR 2012 INDEDUCTIBILITY WORKS IF SPECIFIC CONDITIONS ARE MET AT THE SAME TIME VOLUNTARY CRIME COSTS NEED TO BE REFERRED TO GOODS AND SERIVICES DIRECTLY USED TO COMMIT CRIME COSTS NEED TO BE REFERRED TO GOODS AND SERIVICES DIRECTLY USED TO COMMIT CRIME SPECIFIC ALTERNATIVE LEGAL CONDITION SENTENCE NOT TO PROSECUTE DUE TO TIME-BARRED CRIME PROSECUTION COMMITTAL FOR TRIAL FOLLOWING PRELIMINARY HEARING COSTS OR EXPENCES RELATED TO FACTS, ACTS OR ACTIVITIES IDENTIFIED AS CRIMES CANNOT BE DEDUCTED, EXCEPT FOR CONSTITUTIONALLY GUARANTEED RIGHTS Inter-American Center of Tax Administrations Technical Conference

INDEDUCTABILITY CLAUSE REFERS TO COSTS OF ANY PRODUCTIVE FACTOR DIRECTELY RELATED TO CRIME NO COSTS CAN BE DEDUCTED Casestudy 1 Casestudy 2 PERFECT EXAMPLE OF EXPENSE AIMING AT PUBLIC OFFICER CORRUPTION IN ORDER TO WIN PUBLIC CONTRACTS PERFECT EXAMPLE OF EXPENSE AIMING AT PUBLIC OFFICER CORRUPTION IN ORDER TO WIN PUBLIC CONTRACTS ANY WASTE IS DISPOSED, INCLUDING NOT AUTHORIZED TRASH CATEGORIES THE ENTERPRISE INCURS COSTS DIRECTELY RELATED TO COMMITTED ENVIRONMENTAL CRIME VOLUNTARY CRIME THE ENTERPRISE INCURS COSTS RELATED TO THE COMMISSION OF A VOLUNTARY CRIME RECOVERY OF COSTS DIRECTELY RELATED TO ENVIRONMENTAL CRIME ORDINARY ENTERPRISE ACTIVITY ENTERPRISE AUTHORIZED TO WASTE DISPOSAL ORDINARY ENTERPRISE ACTIVITY Casestudy 3 OBJECTION AGAINST THE REPORTED AMOUNT OF NEGATIVE ITEMS RELATED TO ORDINARY ENTERPRISE ACTIVITY CONNECTION OF «INSTRUMENTALITY» WITH THE COMMISSION OF CRIME ALTHOUGH THE ENTERPRISE INCURS COSTS NOT EXCLUSIVELY RELATED TO IT CONNECTION OF «INSTRUMENTALITY» WITH THE COMMISSION OF CRIME ALTHOUGH THE ENTERPRISE INCURS COSTS NOT EXCLUSIVELY RELATED TO IT SO-CALLED «GENERAL COSTS» SO-CALLED «GENERAL COSTS» Inter-American Center of Tax Administrations Technical Conference

«ONCE OBTAINED AUTHORIZATION FROM JUDICIAL AUTHORITY THE GUARDIA DI FINANZA USES AND PROVIDES TAX OFFICES WITH ANY DOCUMENTATION, DATA AND NEWS GATHERED THROUGH ITS CRIMINAL INVESTIGATIONS OR FROM OTHER POLICE FORCES «ONCE OBTAINED AUTHORIZATION FROM JUDICIAL AUTHORITY THE GUARDIA DI FINANZA USES AND PROVIDES TAX OFFICES WITH ANY DOCUMENTATION, DATA AND NEWS GATHERED THROUGH ITS CRIMINAL INVESTIGATIONS OR FROM OTHER POLICE FORCES THE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE GUARDIA DI FINANZA AS «A BRIDGE« BETWEEN CRIMINAL INVESTIGATION AND INCOME TAX AND VAT DETECTION GUARDIA DI FINANZA AS «A BRIDGE« BETWEEN CRIMINAL INVESTIGATION AND INCOME TAX AND VAT DETECTION THE LINK BETWEEN CRIMINAL AND TAX INVESTIGATION IN PRELIMINARY HEARING Inter-American Center of Tax Administrations Technical Conference

THE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE DOCUMENTS AND THE MAIN SOURCE OF EVIDENCE IN DETECTION AND TAX PROCEDURE IN DETECTION AND TAX PROCEDURE DOCUMENTS AND THE MAIN SOURCE OF EVIDENCE IN DETECTION AND TAX PROCEDURE IN DETECTION AND TAX PROCEDURE ANY DOCUMENT COLLECTED WITHIN CRIMINAL INVESTIGATIONS CAN BE USED IN TAX PROCEDURE DOCUMENTS ARE LIKELY TO BE CONSIDERED AS PRODUCING DIFFERENT EVIDENTIARY EFFECTS ACCORDING TO CRIMINAL COURT JUDGE, FINANCIAL OFFICE JUDGE OR TAX COMMISSION JUDGE. DOCUMENTSDOCUMENTS Inter-American Center of Tax Administrations Technical Conference

STATEMENTS OBTAINED WITHIN CRIMINAL POLICE INVESTIGATIONS STATEMENTS OBTAINED WITHIN CRIMINAL POLICE INVESTIGATIONS IN THE FIELD OF TAXATION TREND TO CONSIDER STATEMENTS AS CONFESSIONS MADE BY THIRD PARTIES AND GATHERED THROUGH CRIMINAL POLICE INVESTIGATION LEGICTIMACY OF TAX ACTS BASED ON STATEMENTS MADE BY SUSPECT MADE BY THIRD PARTIES TAX JUDGES ARE FREE TO MAKE THEIR OWN ASSESSMENTS – THESE STATEMENTS CAN BE THE ONLY EVIDENCE PROVING OWN ASSESSMENTS – THESE STATEMENTS CAN BE THE ONLY EVIDENCE PROVING THE VALIDITY OF DETECTION TAX JUDGES ARE FREE TO MAKE THEIR OWN ASSESSMENTS – THESE STATEMENTS CAN BE THE ONLY EVIDENCE PROVING OWN ASSESSMENTS – THESE STATEMENTS CAN BE THE ONLY EVIDENCE PROVING THE VALIDITY OF DETECTION TAX JUDGES ARE FREE TO MAKE THEIR OWN ASSESSMENTS – CONSIDERING ALL EVIDENCE RESULTED FROM PROCEDURE TAX JUDGES ARE FREE TO MAKE THEIR OWN ASSESSMENTS – CONSIDERING ALL EVIDENCE RESULTED FROM PROCEDURE STATEMENTS MADE BY THIRD PARTIES WITHIN CRIMINAL POLICE INVESTIGATION CAN «ENTER» TAX PROCEDURE BUT THEY DO NOT, AS SUCH, JUSTIFY THE DECISIONS MADE. Inter-American Center of Tax Administrations Technical Conference 2015 THE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE 10

THE COLLECTION OF BANK AND FINANCIAL DOCUMENTS BY THE PROSECUTOR (ART. 248, PHAR. 2, C.P.P.) IN THE FIELD OF TAXATION: LEGAL PRESUMPTION RELATED TO EVIDENCE OBTAINED WITH THIS INVESTIGATION TOOL THE LEGICTIMACY OF POSSIBLE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE THE LEGICTIMACY OF POSSIBLE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE SHOULD FROM THE BANK DOCUMENTS OF THE ENTERPRISE RESULT NON ACCOUNTED FINANCIARY FLOWS THESE WILL BE ASSUMED AS TO BE TAXED UNTIL PROVEN OTHERWISE FROM TAX PAYER. SHOULD FROM THE BANK DOCUMENTS OF THE ENTERPRISE RESULT NON ACCOUNTED FINANCIARY FLOWS THESE WILL BE ASSUMED AS TO BE TAXED UNTIL PROVEN OTHERWISE FROM TAX PAYER. EVIDENTIARY EFFECTS Inter-American Center of Tax Administrations Technical Conference 2015 THE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE 11

INTERCEPTIONS OF COMMUNICATIONS AND CONVERSATIONS BY PHONE OR VIA WEB KEY INVESTIGATION TOOL F.I. WITHIN INVESTIGATION AGAINST FRAUDS, VAT AND SO-CALLED CAROUSEL FRAUD SINCE IT OUTLINES THE REAL CONNECTION AMONG ALL PEOPLE INVOLVED IN THE CRIMINAL NETWORK KEY INVESTIGATION TOOL F.I. WITHIN INVESTIGATION AGAINST FRAUDS, VAT AND SO-CALLED CAROUSEL FRAUD SINCE IT OUTLINES THE REAL CONNECTION AMONG ALL PEOPLE INVOLVED IN THE CRIMINAL NETWORK THE USE OF EVIDENCE IN THE FIELD OF TAXATION VERY INCISIVE INVESTIGATION TECNIQUE – ONE OF THE MOST EFFICIENT TOOL TO SEEK PROOF VERY INCISIVE INVESTIGATION TECNIQUE – ONE OF THE MOST EFFICIENT TOOL TO SEEK PROOF SOME OF THE SENTENCES ISSUED BY THE COURT OF APPEAL BETWEEN 2012 AND 2013 STATE THAT INTERCEPTIONS MADE WITHIN CRIMINAL POLICE INVESTIGATION CAN BE ALSO USED IN TAX PROCEDURE TAX PAYER HAS THE RIGHT TO CHALLENGE, DURING ADMINISTRATIVE PROCEEDINGS, THE INTERPRETATION OF INTERCEPTED STATEMENTS – THESE ARE CONSIDERED AS CLUES AND THE JUDGE IS ALWAYS FREE TO MAKE HIS OWN ASSESSMENTS Inter-American Center of Tax Administrations Technical Conference 2015 THE USE OF ELEMENTS RESULTING FROM CRIMINAL POLICE INVESTIGATIONS TO TAX PURPOSE 12

IMPLEMENTATION OF PREVENTIVE MEASURES AS LEGISLATED BY ANTIMAFIA LAW THROUGH DECREE NO. 159 DATING 6TH SEPTEMBER 2011 ( SO-CALLED«ANTIMAFIA CODE» ) «PREVENTION»«PREVENTION» DETERMINING THE «SOCIAL DANGEROUSNESS» OF THE SUBJECT, CONSISTING IN «SYMPTOMATIC BEHAVIOUR» OF DIFFERENT KIND WHICH, NOT BEING DEFINED INDIVIDUALLY BY LAW, MAKE BELIEVE THE SUBJECT IS LIKELY TO COMMIT CRIME EVIDENCE NOT AS STRONG AS THE PROBATORY BACKGROUND DEMANDED IN CRIMINAL PROCEDURE SINCE TAX PROCEDURE IS BASED ON GUILT CLUES AND THE ATTITUDE OF THE SUBJECT TO COMMIT CRIME. SOCIALLY DANGEROUS SUBJECTS» ARE EQUALLY CONSIDERED AS BEING «FISCALLY DANGEROUS», REFERRING TO THOSE WHO REGULARLY LIVE WITH WEALTH RELATED TO ECONOMICAL AND FINANCIAL ILLICIT ACTIVITIES «SOCIALLY DANGEROUS SUBJECTS» ARE EQUALLY CONSIDERED AS BEING «FISCALLY DANGEROUS», REFERRING TO THOSE WHO REGULARLY LIVE WITH WEALTH RELATED TO ECONOMICAL AND FINANCIAL ILLICIT ACTIVITIES Inter-American Center of Tax Administrations Technical Conference 2015 EXTENTION OF PREVENTIVE MEASURES TO «TAX DANGEROUS» SUBJECTS EXTENTION OF PREVENTIVE MEASURES TO «TAX DANGEROUS» SUBJECTS 13

EXTENTION OF PREVENTIVE MEASURES TO «TAX DANGEROUS» SUBJECTS EXTENTION OF PREVENTIVE MEASURES TO «TAX DANGEROUS» SUBJECTS INVESTIGATIONS ON WEALTH AND LAWS AGAINST MAFIA ORGANIZATIONS ( SO-CALLED «ANTIMAFIA CODE» ) INVESTIGATIONS ON WEALTH AND LAWS AGAINST MAFIA ORGANIZATIONS ( SO-CALLED «ANTIMAFIA CODE» ) INVESTIGATION ON CRIMINAL WEALTH6.150 INVESTIGATION ON CRIMINAL WEALTH SUBJECTS (NATURAL OR LEGAL PERSONS) SUBJECTS (NATURAL OR LEGAL PERSONS) 5.1 BILLION SEIZED, IN PARTICULAR:5.1 BILLION SEIZED, IN PARTICULAR: REAL ESTATE5.443 REAL ESTATE REGISTERED MOVABLE PROPERTY1.000 REGISTERED MOVABLE PROPERTY 844 ENTERPRISES844 ENTERPRISES 446 MILLION SHARES AND CORPORATE SECURITIES446 MILLION SHARES AND CORPORATE SECURITIES 234 MILLION FINANCIAL RESOURCES234 MILLION FINANCIAL RESOURCES 2015 (8 MONTHS) 3600 SUBJECTS VERIFIED3600 SUBJECTS VERIFIED AROUND 1.3 BILLION GOODS RECUPERATEDAROUND 1.3 BILLION GOODS RECUPERATED IN PARTICULAR, A TOTAL AMOUNT OF 140 INVESTIGATIONS ON CRIMINAL WEALTH INVOLVING 105 «TAX DANGEROUS» SUBJECTS, RESULTING IN DEMANDING SEIZURE OF OVER EUR 536 MILLION Inter-American Center of Tax Administrations Technical Conference

MAIN INTERNATIONAL INITIATIVES FOREIGN ACCOUNT TAX COMPLIANCE ACT (F.A.T.C.A.) INTERGOUVERNATIVE AGREEMENT DEFINED BY ITALY, FRANCE, GERMANY, UNITED KINGDOM, SPAIN AND UNITED STATED, BASED ON STRENGTHENING AUTHOMATIC INFORMATION EXCHANGE WITH REFERENCE TO BANK ACCOUNT NEWS AND DATA FOREIGN ACCOUNT TAX COMPLIANCE ACT (F.A.T.C.A.) INTERGOUVERNATIVE AGREEMENT DEFINED BY ITALY, FRANCE, GERMANY, UNITED KINGDOM, SPAIN AND UNITED STATED, BASED ON STRENGTHENING AUTHOMATIC INFORMATION EXCHANGE WITH REFERENCE TO BANK ACCOUNT NEWS AND DATA THE BERLIN AGREEMENT DATING 29° OCTOBER AT OECD GLOBAL FORUM, WHICH 51 NATIONS HAVE SIGNED, IS THE NEW AND ONLY GUIDELINE OF AUTHOMATIC INFORMATION EXCHANGE OF FINANCIAL INCOME. IS THE NEW AND ONLY GUIDELINE OF AUTHOMATIC INFORMATION EXCHANGE OF FINANCIAL INCOME. IT WILL COME INTO FORCE SINCE 2017 IT WILL COME INTO FORCE SINCE 2017 THE BERLIN AGREEMENT DATING 29° OCTOBER AT OECD GLOBAL FORUM, WHICH 51 NATIONS HAVE SIGNED, IS THE NEW AND ONLY GUIDELINE OF AUTHOMATIC INFORMATION EXCHANGE OF FINANCIAL INCOME. IS THE NEW AND ONLY GUIDELINE OF AUTHOMATIC INFORMATION EXCHANGE OF FINANCIAL INCOME. IT WILL COME INTO FORCE SINCE 2017 IT WILL COME INTO FORCE SINCE 2017 STRENGHTHENING FIGHTING STRATEGIES, ALSO IN THE FIELD OF TAXATION, AGAINST ILLICIT WEALTH, THUS MEANING WEALTH RESULTING FROM ILLICIT ACTIVITIES REMOVING BANKING SECRECY THE POSSIBILITY OF IDENTIFYING THE REAL OWNER OF ASSETS, FINANCIAL RESOURCES AND SOCIETIES FIRST ACTION SECOND ACTION AGREEMENTS BETWEEN ITALY AND SWITZERLAND, LIECHTENSTEIN, THE PRINCIPALITY OF MONACO AND THE VATICAN CITY TO ELIMINATE BANKING SECRECY AGREEMENTS BETWEEN ITALY AND SWITZERLAND, LIECHTENSTEIN, THE PRINCIPALITY OF MONACO AND THE VATICAN CITY TO ELIMINATE BANKING SECRECY Inter-American Center of Tax Administrations Technical Conference

GENERAL PRINCIPLES OF THE ANTI-MONEYLAUNDERING DIRECTIVE IV OF THE EUROPEAN PARLIAMENT AND THE COUNCIL, RECENTLY APPROVED IN REFERENCE TO «INFORMATIVE TRANSPARENCY» SECOND ACTION IDENTIFYING THE REAL BENEFICIARY OF OPERATIONS (I.E. «REAL OWNER») ESPECIALLY WHEN SUCH IDENTITY IS BEHIND HIGHLY STRUCTURATED SOCIETIES WHOSE CONTROL CHAIN IS ABROAD Inter-American Center of Tax Administrations Technical Conference 2015 MAIN INTERNATIONAL INITIATIVES 16

CONCLUSIONS CLOSE CONNECTION BETWEEN MONEY LAUNDERING, FRAUD/TAX EVASION AND CRIME CLOSE CONNECTION BETWEEN MONEY LAUNDERING, FRAUD/TAX EVASION AND CRIME SELF-MONEY LAUNDERING CRIME HAS RECENTLY BEEN INTRODUCED IN THE ITALIAN PENAL LAW PUNISHING THOSE WHO: «HAVING COMMITTED OR ACTED IN CONCERT TO COMMIT VOLUNTARY CRIME USE, SUBSTITUTE, TRANSFER IN ECONOMIC, FINANCIAL, ENTERPRENEURIAL OR SPECULATIVE ACTIVITIES, MONEY, GOODS OR OTHER ASSETS RESULTING FROM THE COMMISSION OF THE CRIME, SO TO CONCRETELY HIDE THEIR ILLICIT ORIGIN» ACTIONS «CONCRETELY» APT TO HIDE THE IDENTIFICATION OF THE ILLICIT ORIGIN OF WEALTH, INCLUDING THE AGRAVATING CIRCUMSTANCE SHOULD THE FACTS BE COMMITTED WHILE PURSUIING BANK, FINANCIAL OR OTHER JOB ACTIVITIES. IMPLEMENTATION IN LAST 7 MONTHS BY GUARDIA THE FINANZA DEPARTMENTS 42 ANTILAUNDERING INVESTIGATIONS, IN PARTICULAR:42 ANTILAUNDERING INVESTIGATIONS, IN PARTICULAR: 21 WITH TAX PREDICATE OFFENCE21 WITH TAX PREDICATE OFFENCE 73 SUBJECTS DENOUNCED73 SUBJECTS DENOUNCED EUR 8 MILLION SEIZEDEUR 8 MILLION SEIZED Inter-American Center of Tax Administrations Technical Conference

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