Thesis title: Alcuni indicatori di anomalia quantitativi per l’individuazione delle imprese cosiddette cartiere e filtro coinvolte in reati fiscali
So-called shell and buffer companies are two types of enterprises that pose a serious threat to the national system, as they are frequently involved in tax fraud and money laundering operations, such as trade-based money laundering. Financial intermediaries (FIs), who are required to comply with anti-money laundering (AML) regulations, must promptly identify these companies among their clients and report them to the Financial Intelligence Unit for Italy through a Suspicious Transaction Report (STR), in order to avoid sanctions and reputational damage.
In this context, this thesis brings together three published studies that propose quantitative indicators useful for the AML functions of Italian FIs to detect shell and buffer companies involved in tax crimes among their clients. The studies are based on original datasets built from Supreme Court rulings and STRs.
The first study, published in the academic journal Minerva Bancaria, analyzes the legal lifespan of shell companies from different points of view, highlighting, among other findings, that the first significant event (provincial transfer, liquidation, legal proceeding, strike off) occurs on average 4.9 years after the initial registration with the Chamber of Commerce. The second study, published in the Journal of Money Laundering Control, examines the turnover of shell companies, showing an average annual revenue growth of 131% until the peak turnover level is reached—typically in less than three years—while the operational lifespan of these companies is around four years. Additionally, both beta and sigma convergence in turnover levels are observed. These two studies fill a gap in the literature, as no known research has quantitatively analyzed these aspects of shell companies.
The third study, co-authored with Marco De Simoni and published as working paper in the Quaderni dell’Antiriciclaggio of the Financial Intelligence Unit for Italy – Bank of Italy, analyzes buffer companies, highlighting their “amphibious” nature. Buffer companies exhibit characteristics similar to both shell companies (low added value, fast working capital cycle) and real companies (access to bank credit), as well as higher productivity—measured as revenue in millions of euros per employee—compared to operational firms and shell companies. A composite indicator based on logistic regression is proposed to help identify buffer companies among FI clients. Again, no known studies in the literature address the quantitative identification of buffer companies.
The main limitations of the three studies concern the small sample size and the non-probabilistic selection of cases. Therefore, the creation of a permanent observatory on shell and buffer companies is recommended to strengthen the effectiveness of the proposed tools.