The move comes after Moneyval offered a broadly positive assessment of financial security progress made at the Vatican over the last 12 years.

In 2009 The Holy See signed up to the European Monetary Convention, aiming to bring its financial institutions in line with international standards after years of financial scandals and for the last decade the Vatican has been working towards financial reform.

The last scheduled on-site inspections came in October 202 and Moneyval's latest report.

The newest report, released this month, emphasized, "the Holy See (including the Vatican City State) will be subject to MONEYVAL's regular follow-up reporting process as a result of the positive report."

"With regard to preventative measures, Moneyval underlines that the sole authorised institution [the Vatican Bank or IOR] has a sound understanding of its money laundering and financing of terrorism risks," the watchdog said.

However, the Moneyval annual report also flagged concerns about staffing and funding for financial security operations which it said delays Vatican money laundering investigations. Read More

Torzi, who was arrested after questioning by Vatican magistrates, was accused of extortion, embezzlement, aggravated fraud and money laundering, the Vatican press office said in a statement. Torzi is the first person to be arrested in connection with the deal.

The investigation had led to the suspension last year of five Vatican employees, the resignation of the Vatican's police chief and the departure of the former head of the Vatican's Financial Information Authority (AIF). Read more

A new report by the New Zealand Police Financial Intelligence Unit (FIU) estimates domestic criminal activity is generating $1.35 billion for money laundering each year.

Most of it comes from drug offending ($750m), fraud ($500m) and other offences such as burglary ($100m).

But the estimates exclude tax offending or laundering of money from overseas criminal activity. And the actual amount laundered domestically is likely to be much higher once it's been washed through multiple transactions to hide its source and provide legitimacy. Continue reading

The Vatican says the bank's former president, Angelo Caloia, is the highest-ranking Holy See financial official to be indicted on such charges.

Seventy-eight year-old Coloia, along with his lawyer, 94 year-old Gabriele Liuzzo, denied any wrongdoing.

A third person who was under investigation, former director general Lelio Scaletti, died several years ago.

The bank (officially known as the Institute for Works of Religion) alleges "unlawful conduct" by the three occurred from 2001 to 2008. This period involved "the disposal of a considerable part of the institute's real estate assets."

In December 2014, Reuters reported the Vatican's top prosecutor, Gian Piero Milano, had frozen millions of dollars in accounts held by the three men.

Milano says the men regularly under-represented the proceeds from real estate sales in the Vatican bank's official books.

They allegedly received the difference between the real sale prices and the amount officially recorded separately.

Milano's order which froze the assets says the trio often received the money from the real estate sales in cash.

He claims some of the proceeds were deposited in a Rome bank account that was not registered on the IOR's balance sheet.

The bank's internal investigation into the alleged scam begun in 2013 by then-president Ernst von Freyberg, a German businessman.

Freyberg, who was president until 2014, commissioned an independent audit of the sale of properties formerly owned by the bank.

His misgivings were aroused after noting suspicious accounting procedures under the Coloia and Scaletti administrations.

Freyberg then began an overhaul of the bank, which had been implicated in numerous financial scandals.

Thousands of accounts were closed.

Last year Italy put the Vatican on its"white list" of states with cooperative financial institutions.

This ended years of mistrust, providing an endorsement of Pope Francis's efforts to clean up finances.

Moneyval, the Council of Europe's monitoring body, has said in several evaluations the Vatican has made great strides in cleaning up the IOR and other financial departments.

At the same time, Moneyval says the Vatican still needs to be more aggressive in bringing cases to trial.

Source

• Reuters
• CruxNow
• New York Times
• Image: Speigel Online

Moneyval, which is the Council of Europe's monitoring body, also says the prosecutor should be more "proactive" in other financial crimes.

These include corruption, embezzlement and abuse of office.

Furthermore, Moneyval says the prosecutor should "actively consider appealing sentences which he considers unduly lenient".

Moneyval's mixed bag of comments in its current periodic report also praise the Vatican's efficiency in flagging suspicious transactions.

However, as was the case in 2015, Moneyval said although the Vatican freezes assets if it identifies suspicious transactions, it isn't doing enough to prosecute offenders.

Of the 69 possibly problematic transactions the Vatican's Financial Information Authority has flagged in the past four years, criminal investigations have begun in 27 of them.

Eight of the investigations were closed without charges and six ended without indictment.

The Moneyval report expresses surprise that "no prosecution or indictment has ... been brought before the [Vatican] tribunal which involves a count of money laundering".

The report goes on to say the success rate of the prosecutor before the Tribunal "is so far not encouraging".

One major case the Vatican did prosecute was in relation to the former president and treasurer of the Vatican's pediatric hospital.

They were put on trial earlier this year facing embezzlement charges for allegedly diverting donations to renovate a cardinal's apartment.

The former president was convicted of the lesser offense of abuse of office and given a suspended one-year sentence.

The former treasurer was absolved.

The Vatican has released a statement following Moneyval's report acknowledging "there are still areas for further improvement, in particular as regards law enforcement and the judicial side".

Source

• Reuters
• Crux
• Image: Global Witness

Its aim was to prevent the Vatican state being used as a cover for corruption and money laundering.

The Vatican has enacted a number of provisions to clean up its finances and make them more transparent in recent years.

This has been especially the case since Pope Francis was elected in 2013.

He has given the Vatican Financial Intelligence Authority additional resources to track down on money laundering.

Gian Pietro Milano, who is the Vatican's Promoter of Justice, said about 13 million euros have been frozen since 2013.

Moneyval, the financial monitoring body of the Council of Europe, said in its December 2015 review that the Vatican had made great strides in cleaning up its scandal-plagued bank and other financial departments.

Moneyval evaluates how a country's financial legislation and practices comply with international standards, said the Vatican had addressed many previous deficiencies.

But it said the Vatican should be much more aggressive with prosecutions and indictments.

Source

• The Sydney Morning Herald
• Premier
• Reuters
• Images: Above the Fray

After blocking the funds in a 2010 money laundering investigation, an Italian bank returned the money last week.

The Vatican Bank, whose official name is "Institute for Works of Religion" (IOR), said in a statement, the return of the money was "a consequence of the introduction of a fully-fledged anti-money laundering and supervisory system".

As part of the 2010 global effort to halt illicit financing, the Bank of Italy ordered Italian banks to improve their anti-money laundering efforts.

In response Italian financial institutions curtailed, in part, their dealings with the IOR, waiting for it to improve standards and the Public Prosecutor of Rome made a preventive seizure of €23m transferred by the Vatican Bank from an account it held in the Italian bank Credito Artigiano, (now Credito Valtellinese).

Since then, the Vatican has worked to make its bank compliant with international financing norms.

Meanwhile the funds remained frozen in Italy for almost four years.

Moneyval, the Committee of experts on the evaluation of anti-money laundering measure and the financing of terrorism, acknowledged, December 2013, the Vatican Bank had introduced a solid system of prevention and countering of money laundering.

In January of this year, the IOR said in its financial statement that its reforms merited "a resumption of full interaction with Italian financial institutions".

Despite the return of funds, the prosecution against the IOR's management remains open.

Sources

• Reuters
• CNA
• Image: Reuters

At the time, Bertone was the Vatican's Secretary of State, having traveled to a village in northern Patagonia "in the name of His Holiness Benedict XVI" to preside over the beatification of a turn-of-the-century religious student.

Bertone's wooden armchair sits on a dais that puts him a good six inches higher than Bergoglio, the Archbishop of Buenos Aires, who perches uncomfortably on his metal-and-plastic seat, and the man known to many as the "vice-pope" occupies his virtual throne with kingly complacency, clad in yards of fine Italian filetto lace beneath his golden chasuble, with a sporty pair of aviator sunglasses to complement his gold-embroidered miter (and is that a Rolex on his wrist?).

Next to him, in Jesuit black under plain white robes, Cardinal Bergoglio, with his iron cross and his horn-rimmed spectacles, looks open-mouthed upon the radiant spectacle, his famously mobile face providing the perfect caption to the picture.

Six years later, Bergoglio became Pope Francis, and things have not been the same since.

On May 19, the glossy, gossipy German newspaper Bild Zeitung printed a report that made immediate headlines in Italy: Vatican prosecutors had begun to investigate allegations that Cardinal Bertone, as the Holy See's Number Two from 2006 to 2013, had embezzled 15 million euros ($20 million) from Vatican accounts, apparently to benefit an Italian television producer, a former director of the state broadcaster RAI named Ettore Bernabei, with deep connections to Italy's conservative establishment and a longtime membership in the powerful Catholic organisation Opus Dei.

The transfer of these funds allegedly occurred in December 2012. The Vatican press corps swiftly denied that a "criminal investigation" was underway, and Bertone himself insisted that the deal had followed "all the rules." Continue reading.

Source: New York Review of Books

Image: Agencis Rio Negro

The Holy See Press Office said the new norm, Law XVIII, "strengthens the current internal system for the prevention and countering of money laundering and the financing of terrorism, in conformity with international guidelines".

It marks the latest development in efforts by both Pope Francis and, up until his retirement, Benedict XVI, to reform the financial system of Vatican City and the Holy See.

Law XVIII implements Pope Francis's motu proprio of August 8, which called for a broadening of existing Vatican laws on financial supervision.

Archbishop Dominique Mamberti, secretary for relations with states, said that "special attention" will now be dedicated to giving information on "suspicious activities", which will be carried out under the auspices of the Financial Information Authority.

If a "valid reason" to suspect activities of money laundering or financing of terrorism should occur, the FIA will send a "detailed report" to the Vatican's promoter of justice, and transactions and operations under suspicion may be suspended "for up to five working days", the archbishop explained.

He added that the FIA has powers of "general supervision" to ensure prescribed measures are taken by "obligated subjects" against money laundering and the financing of terrorism.

He also said that "administrative sanctions" can be applied by the FIA, or, in the most serious cases, by the president of Vatican City, upon suggestion by the FIA.

The Vatican diplomat further stated that individuals who threaten peace and international security will be automatically denied the ability to trade or make financial transactions with the Vatican.

He said the FIA may immediately place "a preventative block" on their goods and resources and financial transactions.

The new law also regulates the "cross-border transportation" of cash amounting to more than 10,000 euros, in co-operation with other states and "on the basis of agreement protocols", Archbishop Mamberti said.

Sources:

National Catholic Register

Vatican Information Service

Vatican Information Service

Image: The Hindu

The pope issued a decree expanding the role and the reach of the Vatican's Financial Intelligence Authority "in response to a recommendation" of the European watchdog Moneyval Committee.

"[The move] is a means of ensuring the road (towards transparency) continues," said Vatican spokesman Federico Lombardi.

"In today's world, it is all about resisting increasingly insidious forms of financial criminality. We have to be equal to the challenges in order to protect legality, and not be left behind," he said.

The Catholic News Service noted that the latest move of the pope was made less than a month after he updated the Vatican's criminal code to include all Vatican employees around the world and not just those working in Vatican City.

The rules also apply to the non-profit organizations operating out of the Vatican, including Caritas Internationalis and Aid to the Church in Need.

The Vatican Financial Intelligence Authority, which was instituted by Pope Benedict XVI in 2011 to investigate suspicious financial transactions, will now "evaluate and approve the financial activities and the services offered" by the Institute for the Works of Religion (the Vatican bank) and the Administration of the Patrimony of the Holy See, the office that handles Vatican property and investments, said Lombardi.

Sources

AFP/The Raw Story

Catholic News Service

Image: The Raw Story

Key details missing on requested transfers included the identity of the owners of the funds and the reason for transfer, according to a Reuters report.

While the prosecutors stopped short of accusing the two recently-resigned officials of money-laundering, they said confusion over the handling of accounts at the bank had created the conditions where it could take place.

Continue reading

Two of those cases were forwarded to Vatican prosecutors for further investigation, and the other four may still warrant more formal probes, the Financial Information Agency said in its first annual report.

In the previous year only one suspicious transaction was reported, which FIA director Rene Brulhart said proves that his department and its system, which became operational in April 2011, are working well.

Brulhart said the six suspicious transactions involved sums of money greater than 10,000 Euros ($NZ15,775) but would not provide additional details.

"I'm not saying that everything is great and perfect, but that a lot of progress has been made in the last two years," said Brulhart, a Swiss lawyer and anti-laundering expert.

"It's important that we're setting a system here to protect the Holy See," he added.

He pointed to co-operation with Vatican police and Italian forces, thorough screening of financial transfers, and the signing of co-operative agreements with European countries to govern banking and financial transactions.

The FIA was established in 2010 to tighten controls on Vatican financial transactions, in response to complaints that the Vatican — and especially the Vatican Bank — could be vulnerable to exploitation by money-laundering operations.

Brulhart said the FIA would soon put into place new procedures to screen account holders at the Vatican Bank, officially known as the Institute for Works of Religion or IOR.

As he presented the FIA report, Brulhart reminded journalists that the IOR is not an ordinary bank.

"The IOR is not a commercial bank, and the Vatican is not a tax haven," he said. "The Holy See is a reliable partner in the international fight against money laundering."

Sources:

Catholic News Agency

Reuters

Vatican Radio

Image: Catholic News Agency

The establishment of the commission coincides with the Vatican's launch of an internal criminal investigation into leaked personal confidential and financial documents which have exposed power stuggles inside the organisation.

Monsignor Angelo Becciu, undersecretary in the Vatican's Secretariat of State, told the Vatican newspaper L'Osservatore Romano that those "disloyal" and "cowardly" officials who leaked the documents would face penal and administrative sanctions.

Telling the media, those involved were guilty of "cowardice" and "slander", Becciu described the investigation as a full-scale internal investigation across all levels and departments of the Holy See that will be headed by the Vatican prosecutor, who will head up the criminal probe. The Secretariat of State will handle the administrative sanctions.

"The hope is to be able to reconstruct the basis of our work: reciprocal trust," he said.

The Vatican's sostituto-the deputy secretary of state who supervises the flow of paperwork within the Roman Curia-said that those who have leaked Vatican documents to the media are guilty of "cowardice" and "slander."

The Pope's commission and Vatican investigation come at a time when the Vatican is keen to put an end to the leaks, dispel suggestions of money laundering and win European approval for its financial management.

They follow on from a three-day visit to the Holy See of a team of inspectors from the Council of Europe.

The inspectors were reviewing the Vatican's processes to ensure they were in line with those required by the Financial Action Taskforce (FATF) and their anti-money laundering and anti-terror financing procedures.

Associated Press reports that amid reports in the Italian media FATF had been delayed by the complete rewriting of the Vatican's anti-money laundering law after the first FATF evaluation round in November, and the eruption of the "Vati-leaks" scandal, the Vatican maintains the FATF evaluation process remains on track.

The Holy See will learn whether it complies with the FATF's 49 recommendations in early July.

Sources:

• Associated Press
• BBC
• Vatican Insider
• Image: Times of Malta

The U.S. State Department this week released its International Narcotics Control Strategy Report, which identified the Holy See as one of 68 countries or jurisdictions "of concern" for money laundering or other financial crimes.

Vatican spokesman the Rev. Federico Lombardi noted Friday that all the world's major economies — the U.S., Japan and even Italy — are identified as countries of "primary concern" for money laundering. That more serious designation is because of the sheer size of their economies.

Lombardi said it wasn't surprising that the Vatican was placed on the list of jurisdictions "of concern" since it joined a European evaluation process in 2011 to try to conform to international anti-money laundering standards.

The 2012 International Narcotics Control Strategy Report was made public on Wednesday and Washington's list of 190 countries classifies them in three categories: of primary concern, of concern and monitored.

The Vatican is in the second category, grouped with 67 other nations including Poland, Egypt, Ireland, Hungary and Chile.

It was added to the list because it was considered vulnerable to money-laundering and had recently established programmes to prevent it, a State Department official said.

"To be considered a jurisdiction of concern merely indicates that there is a vulnerability to a financial system by money launderers. With the large volumes of international currency that goes through the Holy See, it is a system that makes it vulnerable as a potential money-laundering center," Susan Pittman of the State Department's Bureau of International Narcotics and Law Enforcement, told Reuters.

The Vatican welcomed the move and said the funds were ordered returned after the Holy See issued new anti-money laundering and anti-terror financing laws to conform with EU and international norms, the Washington Post reports.

Italian financial police seized the money in September 2010 as a precaution and placed the bank's top two officials under investigation, alleging the bank broke the law by trying to transfer money without identifying the sender or recipient.

The Vatican denied wrongdoing and said the investigation of the bank, known as the Institute for Religious Works or IOR, resulted from a misunderstanding. The officials have not been charged.

The Vatican newspaper L'Osservatore Romano quoted prosecutors Nello Rossi and Stefano Fava as saying that they had been able to verify "relevant" changes in the Holy See's institutional norms that had responded to the problems requiring the seizure in the first place.

Vatican spokesman Father Federico Lombardi said the Holy See appreciated the move, saying it "confirms the correctness with which the IOR seeks to operate and the Holy See's serious commitment to comply fully with international standards to prevent illegality in the financial sphere."

The bank was created to manage assets placed in its care that are destined for the pope's religious or charitable works. It also manages ATMs inside Vatican City and the pension system for the Vatican's thousands of employees. It is not open to the general public, with some 40,000-45,000 accountholders belonging to religious congregations, clergy, Vatican officials and lay people with Vatican connections.

Source

• CathNews USA
• Image: Reuters

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:

• CathNews USA
• Adnkronos International
• Image: Washington Times