Guardians of the (galac)sea

A conversation between Windward CEO Ami Daniel and General Riccardo Rapanotti of the Italian Guardia di Finanza (GDF). 

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Global trends impact nearly every aspect of daily life, including crime. It is the role of government and law enforcement agencies to minimize the rise of crime and ensure citizens’ safety. The recent pandemic has challenged how crime is managed, driving organizations to increase their reliance on innovative technology to prevent and catch crimes.   

Windward CEO Ami Daniel sat down (virtually) with General Riccardo Rapanotti from the Italian GDF to discuss the impact global trends have on criminal activity, the role technology has on preventing money laundering, and the direction the GDF will take in the future. 

Below are our top takeaways:  

1. Keep it simple

While technology has tremendous value for government agencies, it is crucial to work with technology that is simple to use and understand. Relying on overly complex technologies may lead agencies to suffer from an illusion of knowledge from which clarity cannot be gained. 

2. Analyze what is relevant 

In an age where data is abundant, organizations must be able to prioritize data in real-time and easily identify information pertaining to potential risks. Doing so is key to keeping the business ready, optimizing operations, and achieving goals. 

3. Keep your eyes on the ball

Global events, such as the recent pandemic, often dominate the spotlight. However, it is vital to remain focused on your mission. Failure to do so, especially for law enforcement agencies, could create additional opportunities for criminals.   

4. See what lies beneath

Criminals rarely rely on official channels to orchestrate crime. By collaborating and sharing information between industry and government, agencies can get a clearer picture of criminals’ operations and identify potential criminal activity that would not have been visible otherwise.  

5. Hello hybrid

 To create a comprehensive solution that meets an organization’s specific needs, building a strong foundation with extensive infrastructure is essential. This will enable the integration of external data from specialized verticals and aid in creating robust hybrid solutions. 

Want more than our top takeaways? Read an edited version of the full conversation transcript below:

Ami Daniel: Hi everyone, and welcome back to Beyond Borders. Today we’re with General Riccardo Rapanotti from Guardia di Finanza. General, thank you for joining us. Can you introduce yourself? And what is Guardia di Finanza to our listeners, please?

General Riccardo Rapanotti: Yes. Sure. Okay, as you said, I’m General Riccardo Rapanotti. I belong to Guardia di Finanza. Guardia di Finanza is a military police force reporting directly to the minister of economy and finance with general economic and financial crime-fighting competences. In this context, the corps has an institutional Mission with the indication of the government Authority is based on three strategic objectives in relation to the country of tax dodging and fraud, including inspection, criminal police investigation, and supervision of the various tax sectors and economic control of the territory. Then we deal with offenses in relation to public spending, including all the interventions, criminal police investigations, and all other assessments, and to preventing and repressing every undue collection and embezzlement in relation to local, national, and EU balance sheet outgoings. The third task is regarding the economic and financial unlawful deeds in general, including investigation against organized crime, financial assessment, prevention activities as per the anti-mafia regulations, and money laundering controls and inspections. This is, in general, what we deal with. At the moment, almost 58,000 people are working in GDF.

Ami Daniel: Okay, and you lead the Sicily region? 

General Riccardo Rapanotti: Yes, at the moment I am responsible for Sicily, which is a very important region for us, not only because of the organized crime, but because it is in the middle of the South Mediterranean Sea, so it’s the southern boundary of Europe. So we also deal with all the problems in connection to illegal immigration from the coast of North Africa. And, as you probably know, it is a very serious problem.  

Ami Daniel: In your capacity as the leader of the region, do you see any connection between the current financial crisis because of Covid and criminal activity? Do you see a spike in people trying to get into Europe, to smuggle? We spoke to the executive director of MAOC(N) here a few weeks ago, and he said that they see the criminals trying to smuggle much bigger shipments into Europe. Do you see all that or some of that?

General Riccardo Rapanotti: Yes, okay. Yeah, I would like to start with a study from Europe regarding the assessment of the impact of the Covid pandemic on serious and organized crime. According to this study, what happened [in] the current crisis has had an impact on serious organized crime. From what I can see and we can see here in Italy, according to another study at least 60% of firms have had economic difficulties due to the lockdown, and 30% of them have had problems related to bureaucratic costs. For example, for sanitization of the products, or the implementation of safety protocols. But other firms point to criminality as a major obstacle to their economic activities. In many cases, entrepreneurs were approached by people who proposed quick loans but with huge interest rates. This happens out of the official channels as sometimes official banking procedures are not simple. In addition to this problem, the problem of huge rates, there is also an attempt to take over firms with off-the-market offers to exploit the economic difficulties. And of course, people that can offer financial liquidity belong to criminal organizations that have a lot of cash to invest, maybe without appearing in the firms that they are going to buy. So this is a very important problem we are monitoring now in Italy.

Ami Daniel:  Is there more smuggling into Italy? What are you guys seeing in reality?

General Riccardo Rapanotti: Well, let’s say that investigations regarding smuggling, for example, or oil products or tobacco products are always on. Of course, in this period, what is more important to check is the use of cash for trying to take over firms. This is a problem we are facing because if we do not take care of this problem, there could be a really bad effect in further years. So, I think this is the main impact that Covid will have. The economic crisis leads people to sell activities, even out of desperation, especially very small activities that can be taken over by criminals because they can then be used to reinvest capital or to cover their illegal activities. So, of course, this will have an impact and an effect on the economic Society of Italy, especially in the South, where we have a lot of little firms that are suffering a lot because of this crisis and the lockdown.

Ami Daniel: We [both] work with governments, with banks, with Traders, and with insurance companies, and in Italy there is quite a community of anti-money laundering and financial crime practitioners to work together, maybe even more so than other places. So (A), what makes Italy special for people to work as a community? And (B), how do you see the relationship between US government officials and people like UniCredit, Generali, SIAT, ENI, or Intesa Sanpaolo to the big institutions that move a lot of money?

General Riccardo Rapanotti: Well, the anti-money laundering legislation in Italy is very advanced, so our system is very powerful. However, the point is that it can happen that many of the financial operations are done outside the official channels. So the cooperation with banks, for example, is quite good. Not totally good, but is quite good. We have a lot of information coming from the banking system. But as I said before, sometimes it happens that for smaller operations that are big in numbers, sometimes organized crime doesn’t use the official channels; So some of them escape our audit. This is the main problem.

Ami Daniel: Where does technology come in? So, obviously Italy is one of the leading countries in this aspect, and GDF, I think, is a name that creates a lot of respect among law enforcement professionals, and you guys have a great reputation. But now we’re in the 21st century. It’s 2020; things are changing. So what is your perspective as a leader about using technology to take your organization to the next level? And what have you seen about how these big institutions that have been successful for hundreds of years, how they adopt acknowledge if at all?

General Riccardo Rapanotti: Well, I think that technology is very useful to conduct risk analysis. When you talk about a big amount of data, what is important is to have a platform that allows you to [better] analyze all the data you have. This is very important. Just think about all the containers in a port. How can you inspect everything? It’s simply not possible. So we have to have an analysis system in connection with the investigation skills that allow us to check only what is at risk. We tried to have platforms analyze big amounts of data. In my experience, sometimes we’ve had some products that were a little bit too complicated to be used. For example, we were offered a platform regarding the identification of people around the world that could scan all the social networks around the world to check people who had connections with, for example, terrorist cells. And we were offered the possibility to have a, let’s say an avatar, to enter inside the social network. But it was too complicated, too difficult to be used, and too expensive. 

Ami Daniel: It’s interesting, because  I’m hearing in different conversations that the lines are becoming blurry. People are used to thinking about shipping or trade or financial crime or AML, or any of these separately, and we’re learning that the lines are being blurred and people need platforms to help them cross these lines. What’s the role of leaders in this? How do you see this as a General with 20 years in service? What’s your role in helping create the right culture of innovation, the right openness, the right talent? Sometimes just as an organization, really as the head of a region, and one of the most appreciated professionals I’ve seen in this space.

General Riccardo Rapanotti: Well, okay. First of all, I joined GDF 37 years ago, not 20 years ago. 37 years ago, we didn’t have the internet, we didn’t have cell phones, we didn’t have smartphones. So, If I look back to what Guardia di Finanza was at that time, it is really just like talking about a prehistoric era, of course. So now, almost everybody, especially the new generation, can use more than correctly all the technologies we have. And for example, we always, every day we talk about for example, open-source data, Deep Web or dark web data, and so on. So we are trying to get more and more specialized and ready to analyze all the web can give us. The main problem we have as a public administration sometimes is the possibility of spending money. As I said before, I’ve met, especially in my recent careers, many offers, many platforms that we’re extremely good and [well] performing. However, sometimes [they are] a little bit too expensive. So we even have to consider this. This is why we have been developing for years, for more than 20 years, our technology inside Guardia di Finanza. So we have many different databases we can cross and match with all the information we gather every year. So, I mean the millions of information points we gather every year from the intelligence, from the cooperation with police forces, even abroad with the memorandum of understanding, with our investigations. All this data must be automated. So, of course, it is computer-based, and we match all the information we get with all the databases we can use, and we have more than 140 different databases regarding people or firms. So we have developed quite a good system in-house. Of course, there are some other systems that should be integrated with ours, and the more powerful they are, and the more specific they are regarding the investigation, and the more useful they could be for us. But another point, as I said before, is the cost of the platforms. We have to pay attention because we cannot spend an unlimited amount of money. This is another point, unfortunately.

Ami Daniel: So maybe some parting thoughts? Who do you look up to learn? So obviously when you joined GDF, there were no phones. There was no internet. You called it a ‘prehistoric period’. Now you are at the forefront of technology and financial crimes enforcement. When you need to learn, when you need to improve, when you need to take example, who are your role models? Can you give me any information about a role model, about a good book, a good article?

General Riccardo Rapanotti: Yes, okay. Well, first of all just think that we spend a lot of energy and money on studying. We have schools. We have basic schools to become Guardia di Finanza guys. We have an Academy, we have other schools for all the other ranks of our Administration, then we have another school which is in Ostia near Rome, which is an international school. For example, we are the only partners for the OECD and we are the only partner for the tax crime investigations, and we are the only partners for the United Nations regarding the counterfeiting of terrorism. Usually the exchange of experiences and best practices is with other Administrations that deal with the same problems we deal with, but in public administrations.

Ami Daniel: Understood. Okay, so, General Rapanotti, I would like to thank you very much for finding time to speak with us and sharing with us how you lead in the GDF, what the GDF is all about, and how you’re taking [the GDF] into the 21st century and keeping the best organization in the world. I think I learned a lot in this conversation, and I hope we meet in person after all this COVID thing goes away.

General Riccardo Rapanotti: Thank you so much.