The 2022 annual report traces the activities carried out by the ASIF over the past twelve months, and notes the contributions made "internally" and "externally", as well as the participation "without interruption or hesitation" in the programs of international fora such as Egmont and MONEYVAL.

The report opens with a letter from ASIF President Carmelo Barbagallo, who dwells on the "long and difficult" interlude of the pandemic.

"Many hoped that 2022 would be a breakthrough year," he said, "with decisive progress in limiting the spread of the virus and a strong recovery in the global economy."

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It also reported the risk of fraud is lower than ever.

ASIF said that in 2020 more financial transactions were flagged as suspicious by Vatican offices. Yet, after investigation, it did not have to suspend any transactions or freeze any accounts.

ASIF reported it received 89 suspicious activity reports in 2020, 85 of which came from the Institute for the Works of Religion (IOR), commonly called the Vatican bank. In 2019, 64 suspicious activity reports were filed.

After reviewing documents connected to the 89 transactions, the authority submitted 16 reports to the Office of the Promoter of Justice of Vatican City State for potential criminal investigation, the report said.

"Most potential financial crimes involve foreign entities or conduct undertaken in, or in connection with, foreign jurisdictions. The main potential predicate offences are international fraud and embezzlement," the annual report said.

Pope Benedict XVI established the authority in 2010 to bring the Vatican up to international standards in preventing and countering suspected money laundering and the financing of terrorism.

President Carmelo Barbagallo said 2020 has been a year "of important and profound changes" for ASIF.

The organisation had to rebuild after its director Tommaso Di Ruzza, and president René Brülhart were ousted at the end of 2019.

Both men will go on trial in connection with the London Affair, a real estate transaction. The trial starts July 27 in the Vatican.

The Vatican financial watchdog report emphasises that "the Holy See is strongly committed to ensuring international cooperation and the exchange of information for the purposes of preventing tax evasion and facilitating the fulfilment of fiscal requirements by foreign citizens and legal entities having relations with the IOR".

Sources

La Croix International

National Catholic Register

Under the pope's plan, the agency will be split into three parts, the Vatican said on Saturday. They are vigilance, rules and legal affairs, and financial information.

The Vatican's Financial Information Authority, known as AIF, will now be called the Supervisory and Financial Information Authority, or ASIF.

This reflects its regulatory function over other Vatican entities and departments.

The overhaul is part of reforms wanted by Francis to ensure "transparency and reinforce controls in the economic-financial sector," the agency's president Carmelo Barbagallo, previously at Italy's central bank, told Vatican media in an interview.

In late November, Francis told reporters aboard a papal flight that AIF had failed in "its duty of control."

Smoking out financial scandal has been a motif of Francis' papacy. One "opaque" investment deal in prime London real estate provoking a raid of the AIF offices in October 2019.

The Vatican suspended five employees after the raid, including the former director of the office, Italian layman Tommaso Di Ruzza.

The president of the anti-money-laundering authority, René Brülhart, resigned following the raids. Brülhart issued a strong defense of Di Ruzza and expressed dismay at his treatment by Vatican officials.

The deal-broker Gianluigi Torzi has been arrested and faces charges of extortion, embezzlement, aggravated fraud and money-laundering in the £160 million deal, which was paid for with money donated by ordinary churchgoers.

The scandal also saw the resignation of ex-cardinal Angelo Becciu. Becciu resigned following allegations he had sent €100,000 in Holy See funds to a charity controlled by his brother.

Shortly after the upheaval, the Egmont Group, a global network of financial intelligence authorities, suspended the AIF.

Beyond countering corruption and the financing of terrorism, ASIF will also be responsible for the "prudential supervision" and regulation of any Vatican office that handles investments or financial transactions. It is also tasked with carrying out financial investigations.

The new Vatican statute states that the new financial watchdog will "have access to documents and data, even of a confidential nature, and exchange information at domestic and international level."

Sources

• Religion News
• Bloomberg
• Morning Star