Vatican implements state of the art financial transparency efforts

Vatican City, Oct 15, 2013 / 14:33 pm

The Holy See's new anti-money laundering law signals that the Vatican is clearly taking the path to full financial transparency, according to the director of the state's Financial Information Authority.

René Bruelhart told CNA Oct. 9 that "with the new AML/CFT Act the Holy See and the Vatican City State introduced a comprehensive system in accordance with the international standards to fight money-laundering and financing of terrorism."

"It is a further step to strengthen its system to actively combat any potential misuse of financial activities within the Vatican City State."

The act was confirmed as law Oct. 8, but had already come into effect Aug. 8 via a decree of Cardinal Giuseppe Bertello, president of Vatican City's government.

Known as Law XVIII, the act regards financial transparency, supervision, and information, clarifying and consolidating the functions, powers and responsibilities of the Financial Information Authority.

It is part of the implementation of an Aug. 8 motu proprio from Pope Francis which strengthened the Financial Information Authority.

Law XVIII also charges the Financial Information Authority with "prudential supervision" functions. A lack of prudential supervision had criticized by Moneyval auditors in a July report.

Prudential supervision allows the Financial Information Authority to evaluate if an investment by a Holy See institution is prudent, or if it risks leading the institution to insolvency.

Law XVIII is another Vatican step to improve its own anti-money laundering legislation. It follows upon an earlier Vatican anti-money laundering law, issued at the end of 2010 and which came into effect in March 2011.

Following an on-site visit of the evaluators of Moneyval – the Council of Europe committee that evaluates member states' adherence to the anti-money laundering standards – the Holy See improved and perfected its anti-money laundering law with a 2012 decree.

The decree was met favorably by the Moneyval committee, which issued a generally positive report on Vatican City in July 2012.

The Moneyval report underlined that the Holy See has "come a long way in a very short period of time." It gave a positive evaluation on nine out of 16 "key and core" anti-money laundering recommendations.

Like all member states, Vatican City must now issue a progress report at the next Moneyval plenary assembly, to be held on Dec. 9-13. The progress report focuses on the improvements of Vatican legislation regarding the committee's "key and core" recommendations.

It comes as part of a long-term strategy to meet international standards, and several improvements to the anti-money laundering law witness to Vatican City's strong commitment to financial transparency.

In December 2012, the anti-money laundering law was subjected to two modifications in order to improve international cooperation.

The modifications gave the Financial Information Authority the possibility to sign memoranda of understanding with peer authorities without oversight from the Vatican's secretariat of state.