Moneyval Approves the Report on the Holy See's Progress in Combating Money-Laundering and the Financing of Terrorism, The Vatican Information Service, December 10, 2013

Moneyval Approves the Report on the Holy See's Progress in Combating Money-Laundering and the Financing of Terrorism

The Vatican Information Service
December 10, 2013

http://visnews-en.blogspot.com/2013/12/moneyval-approves-report-on-holy-sees.html

Vatican City, 10 December 2013 (VIS) - Today, the Plenary Meeting of MONEYVAL (the “Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism”, established by the Council of Europe) has approved the Progress Report of the Holy See/ Vatican City State. The Progress Report follows the adoption of the Mutual Evaluation Report on 4 July 2012 and is part of the ordinary process in compliance with to the Rules of Procedure of MONEYVAL, according to a press communique published in the evening of Monday, 9 December by the Holy See Press Office.

The progress report, submitted for review during the Plenary, confirms that significant progress has been made. Upon request by the Holy See and the Vatican City State the MONEYVAL Secretariat agreed to carry out a full progress review. Therefore, the report contains an analysis of progress against the core and key recommendations of the FATF (Financial Action Task Force), regarding international standards on combating money laundering and the financing of terrorism.

“The adoption of the Progress Report confirms the significant efforts undertaken by the Holy See and the Vatican City State to strengthen its legal and institutional framework”, said Monsignor Antoine Camilleri, Under Secretary for Relations with States, and Head of Delegation of the Holy See and Vatican City State to MONEYVAL. “The Holy See is fully committed to continuing to improve further the effective implementation of all necessary measures to build a well functioning and sustainable system aimed at preventing and fighting financial crimes.”

In accordance with the MONEYVAL Rules of Procedure, the Progress Report will be published in full by the MONEYVAL Secretariat on its website on Thursday.

At the legislative level, and among the principal results following the Mutual Evaluation report of 4 July 2012, Financial Intelligence Authority (AIF) has been strengthened by the amendment on 14 December 2012 of the Law on the Prevention and Countering of Laundering of Proceeds of Crimes and Financing of Terrorism. In addition to the Motu Proprio of Pope Francis on the Laws on Criminal Matters of 11 July 2013, the new laws cover all terrorist offences set forth in the Conventions annexed to the Terrorist Financing Convention as well as a new approach to the civil liability of legal persons arising from crime. In particular, a modern scheme on confiscation, freezing and seizure has been adopted. The Motu Proprio extended the jurisdiction of the Vatican Tribunal over criminal offences - including the financing of terrorism and money laundering - committed by public officials of the Holy See in the context of the exercise of their functions, even if outside Vatican territory.

A further step was the Motu Proprio of His Holiness, Pope Francis, of 8 August 2013 and the Decree of 8 August 2013 introducing norms relating to transparency, supervision and financial intelligence, confirmed by the Law of 8 October 2013 introducing norms relating to transparency, supervision and financial intelligence. This new Act of the Holy See and the Vatican City State introduces a comprehensive system in accordance with the international standards to fight money-laundering and financing of terrorism and is a further step towards strengthening the system to actively combat any potential misuse of financial activities within the Vatican City State. It deals with financial transparency, supervision and financial intelligence, clarifying and consolidating the functions, powers and responsibilities of the AIF.

The framework is completed by the Motu Proprio of 18 November 2013, by which Pope Francis, established a new organisational structure for the AIF.

In terms of operational achievements, important results have been achieved regarding international cooperation of financial supervisory organs. In July 2013, the AIF was admitted to the Egmont Group and over the last months has signed memoranda with Belgium, Spain, USA, Italy, Slovenia, the Netherlands and, most recently, Germany, and will continue to broaden its international network to fight money laundering and terrorism financing.

With regard to the procedures for review and remediation processes in institutions under supervision of AIF, the MONEYVAL analysis takes note of a preliminary review of the customer data base of the Istituto per le Opere di Religione (IOR) concluded at the end of 2012. It acknowledges an in-depth audit of customer records and remediation, including analysis of transactions, based on the findings of this first phase and under the supervision of AIF that was launched at the beginning of 2013. Furthermore it was noted that the IOR has redefined the categories of customers entitled to IOR services.

In relation to the functioning of the reporting system for the combating of money-laundering and financing of terrorism, since the adoption of the Mutual Evaluation Report, an ongoing trend may be observed towards increased reporting of suspicious activity from different reporting entities, with a significant growth in 2013. Investigations based on reports of suspicious transactions have been undertaken and freezing orders initiated. Due to the remediation process and improved transaction monitoring processes the AIF recorded a significant rise in suspicious transaction reports.