The Italian requirement for virtual asset service providers (VASPs) and e-wallet providers to register with the Italian authority overseeing financial agents and credit mediators (OAM, Organismo Agenti e Mediatori) for anti-money laundering purposes entered into force on 16 May. Given that registration is a prerequisite to providing the relevant services in Italy, this has important consequences, in particular for foreign service providers.
Providers established in another EU/EEA country will still be able to provide such services, but only through a “permanent establishment” (which should mean broadly the same as a “branch” under Italian civil law, meaning a presence without separate legal personality) registered with the OAM. This creates certain tax risks which I discuss separately on the European Tax Blog.
Providers established outside the EU/EEA cannot register and will therefore be unable to provide the relevant services in Italy unless they establish a subsidiary in Italy (or a subsidiary in another EU/EEA country with a permanent establishment in Italy) that can meet the registration requirement.
Art. 17-bis of Legislative Decree No. 141 of 13 August 2010 (Art. 17-bis) extends anti-money laundering reporting obligations to VASPs and e-wallet providers, as defined by Art. 1, para. 2, points ff) and ff)-bis, of Legislative Decree 231/2007.
Italian Ministry of Economy and Finance Decree of 13 January 2022 (the Decree), which implements Art. 17-bis, sets out the procedures and timeframe according to which VASPs and e-wallet providers must notify the OAM of operations in Italy and introduces further obligations for VASPs and e-wallet providers.
Who is subject to the new rules?
Art. 17-bis applies to VASPs and e-wallet providers that have their registered office or central administration in Italy, or their registered office in another EU/EEA country, but operate in Italy through a permanent establishment. As I said before, service providers established outside the EU/EEA will not be able to register and will consequently be unable to provide the relevant services (unless they restructure so as to be able to register).
VASPs are defined as providers of services related to the use of digital currency, i.e., individuals and legal entities that provide to third parties, online and on a professional basis, services concerning digital currencies. This includes the use, exchange or custody of digital currencies or their conversion into fiat currencies or other digital representations of value, including those convertible into other digital currencies. It also includes the issuance, offer, transfer and offsetting, or any other service useful for the purchase, trade or brokerage of digital currencies.
E-wallet providers are individuals and legal entities that provide to third parties, online and on a professional basis, services concerning the safeguarding of private cryptographic keys in order to own, store and transfer digital currencies.
The requirement that the service provision must be on a professional basis is essential for the obligations under Art. 17-bis to apply. Individuals and legal entities that carry on these businesses on their own and not on a professional basis are therefore exempt.
Registration and operating requirement
The Decree introduces the obligation for VASPs and e-wallet providers to request enrolment in the register by sending the OAM a specific notice that includes, among other things:
- the VASP’s or e-wallet provider’s details
- the address of the Italian permanent establishment (if the VASP or e-wallet provider is incorporated in another EU/EEA country)
- a certified email address to facilitate correspondence between the OAM and the VASP or e-wallet provider
- details of the services provided and methods of provision.
Enrolment in the register is an essential requirement for VASPs and e-wallet providers to lawfully carry on their business meaning that unregistered providers (including non-EU/EEA providers ineligible to be registered) will no longer be able to provide the relevant services.
The register became operational on 16 May. All VASPs and e-wallet providers already operating in Italy on that date and to which the registration requirement applies have 60 days to notify the OAM of their operations in Italy. VASPs and e-wallet providers that fail to comply with the deadline or whose registration request is rejected by the OAM must cease operations. Otherwise, they will be considered abusive and may face penalties up to EUR 10,329 and/or investigation if they continue to operate without registration.
VASPs and e-wallet providers, once enrolled in the register, will have to submit data to the OAM every quarter (i.e., before the 15th day of the month following the end of each quarter) regarding transactions carried out in Italy.