The Bank of Italy requires payment service providers and crypto asset service providers to review and improve the implementation mechanisms for EU and domestic sanctions, reiterating that there should be no minimum amount threshold for sanction screening of crypto asset transfers.

In a notice dated September 7, intermediaries are required to identify business related to sanctioned entities, enforce asset freezes, and report information. Violations can face both administrative and criminal penalties under domestic law. According to the revised funds transfer regulations and the European Banking Authority EBA/GL/2024/15 guidelines, institutions must establish internal policies and automated screening systems to check whether the payer and payee are on the sanctions list before executing funds or crypto asset transfers. The guidelines will apply in Italy from December 30, 2025. The central bank explicitly requires that there be no minimum amount threshold limiting the scope of screening, and third-party vendor systems must also not overlook any thresholds.

Instant transfers have special arrangements for payment service providers under EU rules: they are not allowed to conduct pre-transaction screening for both parties in an instant payment, but must verify all customers at least daily and recheck after new restrictions come into effect. Domestic fund transfers within Italy can be subject to similar arrangements at the discretion of payment service providers. Crypto asset service providers are not subject to the above exemptions and must conduct complete screenings for each crypto asset transfer according to guidelines 19 and 20. Customer screening must also occur at the time of establishing relationships and updating lists. Automated systems must balance reducing false positives with identifying sanctioned entities. Institutions must report to the Bank of Italy according to guideline 4.3.3.

The buy-side aims to push all sanction list verifications down to the transaction level for regulatory authorities, while the sell-side has previously used low thresholds or instant payment exemptions to reduce friction. The flow of funds remains unchanged; what changes is whether each transaction can be released before verification is completed. The beneficiaries are the enforcement density of the sanction list; the pressure is on the automated screening costs and false positive handling for crypto asset service providers—instant euro payments can be exempted based on daily customer checks, while on-chain transfers are written as having no equivalent exit.

Source: Public Information