Obliged Entities under L.4557/2018: Which Professionals Are Covered by AML Law
L.4557/2018 explicitly names which professionals are considered 'obliged entities' and subject to KYC/AML obligations. If you are an accountant, lawyer or consultant, the law applies to you — directly.
What Does 'Obliged Entity' Mean in AML Law?
The term "obliged entity" refers to natural or legal persons who, due to their professional activity, are exposed to the risk of money laundering and have heightened prevention obligations under L.4557/2018. Obliged entities are not only liable if they themselves engage in illegal activity — they are also liable if they fail to take appropriate measures to prevent their services from being used by third parties laundering money. This distinction is crucial: you do not need to have known about the laundering — it is sufficient to have failed to apply the CDD procedures that would have revealed it.
Full List of Obliged Entities (Article 5 L.4557/2018)
The law classifies obliged entities into two categories: FINANCIAL ENTITIES: • Banks and credit institutions • Investment firms (AEPEY) • Insurance companies (life insurance) • Currency exchange offices • Crypto-asset service providers NON-FINANCIAL ENTITIES (Professionals): • Accountants and tax advisers (OEE/SELK members) • Lawyers (for specific activities) • Notaries • Chartered auditors (SOEL) • Business consultants (for M&A, corporate restructurings) • Estate agents (for transactions >€10,000) • Trust and company service providers • Casinos
Accountants: When Do Obligations Apply?
Accountants and tax advisers are subject to the law when providing: ✓ Tax advice and services ✓ Accounting services and bookkeeping ✓ Payroll management ✓ Incorporation or management of companies ✓ Real estate transactions (as advisers) ✓ Asset management NOTE: The obligation applies regardless of the size of the firm. A self-employed accountant with 5 clients is subject to the same requirements as a large accounting firm.
Lawyers: When Does the Law Apply?
For lawyers, the law applies only to specific activities — not to general legal representation: ✓ Real estate transactions ✓ Management of funds, portfolios or other assets ✓ Incorporation, operation or management of companies and trusts ✓ Representing clients in financial transactions ✗ DOES NOT apply to: court representation, general legal advice, employment matters However, many law firms choose to apply CDD to a broader range of work as best practice.
Business Consultants: When Does the Law Apply?
Business consultants are subject to the law when assisting clients with: ✓ Mergers and acquisitions (M&A) ✓ Corporate restructurings ✓ Incorporation or dissolution of companies ✓ Sale and purchase of businesses ✓ Due diligence for investments Marketing advice, HR or general strategy is usually excluded — but it is always good practice to apply CDD for significant engagements.
Sanctions for Non-Compliance
The sanctions provided by L.4557/2018 are substantial: Administrative sanctions (Article 46): • Fine of up to €5,000,000 or 10% of turnover • Suspension of professional licence • Public announcement of the breach ("naming and shaming") • Removal of senior managers Criminal sanctions (for intentional breach): • Imprisonment of up to 10 years • Financial penalty of up to €1,000,000 • Concurrent prosecution for money laundering (felony charge) A practical example: An accountant who took on a client without conducting CDD, and the client turned out to be laundering money, may face a fine and criminal prosecution — even if they were unaware.