Vatican's Finance Watchdog Releases First Report

By Nicole Winfield
The Globe and Mail CANADA
May 22, 2013

http://www.theglobeandmail.com/report-on-business/international-business/european-business/vaticans-finance-watchdog-releases-first-report/article12057823/?cmpid=rss1


The Vatican’s new financial watchdog said on Wednesday it had detected six possible attempts to use the Holy See to launder money last year, citing this as proof of its commitment to transparency.

The head of the Vatican’s Financial Intelligence Authority (FIA), presenting its first annual report, also said it would soon have stronger supervisory powers over the Vatican’s scandal-plagued bank, the Institute for Works of Religion (IOR), dubbed the world’s most secretive bank by Forbes magazine.

The Vatican is trying to meet international standards to combat the financing of terrorism, money laundering and tax evasion, but the European anti-money laundering committee, Moneyval, said in July that the IOR still had some way to go. The FIA is due to report back in December.

Rene Bruelhart, the Swiss lawyer and anti-laundering expert who heads the FIA, said that of the six suspected cases of money laundering handled by his office in 2012, two were considered serious enough to be passed on to the Vatican’s prosecutor.

He gave no details of any of the cases but said it was possible that some of the other four could also be passed on for formal investigation.

The Vatican has been trying to shed its image as a murky financial centre since 1982, when Roberto Calvi, known as “God’s Banker,” was found hanging from London’s Blackfriars Bridge.

Calvi was head of Banco Ambrosiano, then Italy’s largest private bank, which was part-owned by the Vatican and collapsed in a fraudulent bankruptcy.

The IOR primarily handles funds for Vatican departments, Roman Catholic charities and orders of priests and nuns around the world, but has been abused by third parties in the past.

Bruelhart, formerly the top anti-money laundering expert in the tiny tax haven of Liechtenstein, held up the annual report and the press conference, both the first of their kind, as a sign that the Vatican was getting its house in order.

Conceding that “not everything is great and perfect,” he said the Vatican was committed to meeting Moneyval’s requirements, notably closer supervision, or “prudential vigilance,” over the IOR.

“Over the next weeks we will come up with a new law and that is going to be one of the key competences of the FIA,” he said.

He also said the FIA would put into place new procedures to screen account holders at the IOR.

In 2010, Rome magistrates froze 23 million euros ($33 million) held by the IOR in an Italian bank. The Vatican said its bank was merely transferring its own funds between its own accounts in Italy and Germany. The funds were released in 2011 but the money laundering investigation continues.