Print friendly
Starting April 1, the Vatican’s penalty for money laundering and financing terrorism is prison.
Having disappeared from canon law some time back, the penalty of prison was reintroduced last December 30. It will come into effect on April 1.
Along with the prison sentence, there are a raft of new regulations to govern the Vatican Bank, formerly known as the Institute for Works of Religion (IOR). These regulations along with the Vatican’s new Financial Information Authority watchdog will drive the move to ensure the Vatican complies with new European banking standards.
Previously the IOR enjoyed broad autonomy of action and worked outside the international norms that regulate, standardise and supervise the activities of banks in various countries. There was even a suggestion the Vatican bank had been involved in money laundering.
Dioceses and religious institutes viewed the autonomy of the IOR as helpful, the procedures for depositing and managing money were very simple and confidential; like a family.
Secrecy too was guaranteed and interest rates were reportedly higher than in other financial institutions.
However the absence of external supervision enjoyed by the IOR was also allegedly attractive to the Vatican’s less virtuous subjects who may have been tempted to use religion as and the Vatican bank for illicit operations.
After receiving a tip-off about possibly money laundering in September last year, Rome prosecutors put the chairman of the Vatican bank and well-respected banker, Ettorie Gotti Tedeschi and its director general, Paolo Cipriani under formal criminal investigation. The Italian judiciary also seized 23 million Euro allegedly deposited without properly identifying either the depositor or the recipient.
The Vatican has repeatedly expressed “perplexity and surprise” that Tedeschi and Cipriani were being investigated as it had the “greatest trust” in them. The Vatican said the bank had been working for greater transparency in its finances and claimed a “misunderstanding” had arisen over the suspect transaction. It maintained there had been no wrongdoing by its bank or its employees.
Pope Benedict approved the new law on December 30, 2010 to bring the Vatican banking regulations into line with international efforts to combat money laundering and the financing of terrorism.
Sources:
Related Posts:
News category: World.
