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Italian government turns spotlight on Chinese underground banks

Giorgia Meloni’s government has requested the anti-mafia commission to investigate the narcotics groups’ increasing reliance on covert Chinese money brokers. The phenomenon, closely watched by the United States, is extending to Europe – and Italy is at the forefront of new probes

Italian drug cartels leverage Chinese shadow banks. Authorities have announced at least six investigations involving drug gangs and covert Chinese payment networks since the issue first publicly came to light about five years ago, writes Reuters. For the first time ever, Giorgia Meloni’s government has asked the country’s anti-mafia commission to probe “the Chinese infiltration in Italian society.”

The latest. As reported by Reuters, citing seven Italian judicial and law enforcement authorities, narcotics groups operating in Italy are “increasingly using shadow networks of unlicensed Chinese money brokers to conceal cross-border payments.”

  • Authorities are noticing an increased use of these illicit money transfer networks, which facilitate rapid and hard-to-trace payments.
  • The money is transferred through a trusted network of transfer agents. Customers deposit a sum with a money broker in one country, and someone else in the network elsewhere in the world pays the equivalent amount to the intended recipient – a system the Chinese term fei qian (flying money).

A growing phenomenon. This shadow banking system reflects those used by Latin American drug cartels and fought by United States authorities, who now see Chinese money brokers as “one of the most worrisome new threats in their war on drugs.” The Italian shadow banks are a further demonstration of the practice taking root in Europe.

Go deeperDecode39 has reported on what Italian financial police call “China underground bank.” In March, they arrested two Chinese citizens in connection to hidden money transfers. The suspects shielded the operation with fronts such as electronics shops.

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