Vatican Hires Swiss Anti-Money Laundering Expert to Boost Efforts to Fight Financial Crimes

By Nicole Winfield
Daily Reporter
September 11, 2012

http://www.greenfieldreporter.com/view/story/94f0397b629c45aa9a9238457af72306/EU--Vatican-Bank

VATICAN CITY — The Vatican has hired a Swiss anti-money-laundering expert to advise it as it moves into a new phase of trying to combat money laundering and terrorist financing.

The announcement Tuesday came two months after the Holy See passed a key European financial transparency test, but received failing grades for its financial watchdog agency and its bank, long the source of some of the Vatican's more storied scandals.

The Vatican said attorney Rene Bruelhart, 40, would help strengthen the Vatican's regulatory framework as it moves to implement the recommendations from the Council of Europe's Moneyval committee, which evaluated the Holy See's financial trustworthiness.

For eight years Bruelhart was head of Liechtenstein's financial intelligence unit — the national agency that analyzes information about suspect financial transactions. In 2010, he was also named head of the Egmont Group, the informal group of about 130 countries' financial units aimed at sharing information.

In his new role, Bruelhart will have to tackle some of the serious problems singled out by the Moneyval inspectors concerning the Vatican bank and its financial oversight agency, created amid much fanfare in 2010 to try to respond for international demands for greater transparency.

The bank, or the Institute for Religious Works, isn't a traditional bank per se but rather a private financial institution created in 1942 to manage the pope's assets destined for religious or charitable works. Today it has about €6 billion ($7.7 billion) in assets, which it invests primarily in bonds and the stock market, and its 35,000 accounts belong primarily to Vatican employees and religious orders.

The institute, known by its Italian acronym IOR, has long been the subject of rumor and scandal, earned in part because of its role two decades ago in one of the most spectacular banking collapses in Italy, and ongoing suspicions by Italian investigators — which the Vatican denies — that it hasn't abided by anti-money-laundering norms.

The Vatican subjected itself to the Moneyval evaluation in a bid to move beyond the IOR's tainted past and get onto the so-called "white list" of countries that share financial information.

One of the areas where Bruelhart will have to focus his attention is the Vatican's new Financial Intelligence Authority, which received a failing grade. Moneyval said its role, authority and independence was unclear. Moneyval also said the IOR's rules for customer due diligence, wire transfers and suspicious transaction reporting were insufficient.