Vatican's Financial Authority records uptake in suspicious IOR transactions reports

Vatican Radio
May 19, 2014

http://en.radiovaticana.va/news/2014/05/19/vaticans_finanical_authority_records_uptake_in_suspicious_ior/en1-800399

(Vatican Radio) The Vatican ‘s Financial Intelligence Authority revealed on Monday that it has recorded an increased number of suspicious financial transactions being reported in its monitoring of financial activities of the IOR – the Istituto per le Opere di Religione, or Vatican Bank.

The so called “AIF” was releasing its annual report at a press conference in the Vatican.

Authority Director, René Bruelhart, said the report showed that there were 202 suspicious transactions reported to the Financial Information Authority in 2013 compared with only six a year earlier and just one in 2011.

Five of those were referred onto Vatican prosecutors for possible investigation.

Bruelhart explained that the increase in numbers of suspicious transactions doesn't mean that more illicit activity is taking place. He said it just means that new laws and procedures are being implemented and are working to flag potentially problematic transactions that may require further investigation.

Listen to an excerpt of Bruelhart's presentation at the press conference...


Please find below the full text of the communiqué presented during the briefing on the Annual Report of the Vatican’s Financial Intelligence Authority:

Legal framework and operational performance in monitoring financial activities
significantly improved in 2013 .– First on-site inspection of the Istituto per le Opere di Religione
(IOR) in early 2014.

The Autorità di Informazione Finanziaria (AIF) of the Holy See and the Vatican City State
has presented its Annual Report for 2013. The report reviews the activities and statistics of AIF
for the year 2013.

The year 2013 has seen a significant strengthening of the legal and institutional framework
of the Holy See and Vatican City State to effectively combat financial crime, an
institutionalization of international collaboration of the competent authority of the Holy See with
its foreign counterparts, and a massively improved performance in monitoring potential financial
wrongdoing.

“In 2013 we have taken further decisive steps to foster the legal framework, and, at the same
time, to make it work in practice,” said René Brülhart, Director of the AIF. He continued: “The
Evaluation conducted by Moneyval, the Committee of Experts on the Evaluation of Anti-Money
Laundering Measures and the Financing of Terrorism of the Council of Europe, in December
2013, and our statistics allow us to say that today we have a proper and equivalent system in
place to prevent and fight financial crime. A system that is well in line with international
standards.”

The AIF has recorded a notable uptake in suspicious transaction reports (STR) from 6 in
2012 to 202 in 2013. This increase reflects both the development of the legal framework and a
substantial improvement in the operational performance of the supervised entities with regard
to the prevention of financial crime. Five reports have been passed on to the Vatican Promoter
of Justice for further investigation by judicial authorities.

The number of requests from AIF submitted to foreign authorities has increased from 1 in
2012 to 28; the number of requests received by the AIF from foreign authorities has climbed
from 3 in 2012 to 53 in 2013. “This increase is also due to international cooperation fostered by
a series of bilateral agreements we have concluded,” said Brülhart. In 2013, AIF became a
member of the Egmont Group, the global network of Financial Intelligence Units, and signed
various bilateral agreements to institutionalize mutual collaboration in the area of anti-money
laundering and combating financing of terrorism. Memoranda of Understanding have been
signed with Germany, Italy, the Netherlands, Slovenia and the United States.

As already observed in 2012, the number of declarations of cash above the amount of EUR
10,000 has decreased again in 2013 to 1,557 declarations for outgoing cash (2012: 1,782) and
550 declarations for incoming cash (2012: 598). This is due to an increased monitoring by the
competent authorities and the introduction of reinforced procedures at the supervised entities.
By way of two Motu Proprio in July and August 2013, the Holy Father extended the
competencies of the Holy See authorities, particularly AIF, and aligned the legal framework with
international standards. By way of a third Motu Proprio in November 2013, the Holy Father
responded to the requirements set forth by the extension of responsibilities of the AIF by issuing
a new Statute for the AIF. In essence, the new Statute has built the AIF on two pillars,
supervision and financial intelligence, and has clarified some aspects with regard to the
governance, e.g. required professional and financial skills for key personnel of the AIF’s bodies.
In the initial trimester of 2014, AIF conducted the first ordinary on-site inspection of the
IOR to verify the implementation of the measures taken to prevent and counter money laundering
and the financing of terrorism pursuant to the Law XVIII of 8 October 2013.

The inspection has shown substantial progress made by the IOR over the past 12 months.
As a result of the inspection, AIF has developed an action plan for the full adaption of
procedures to the requirements of Law XVIII and the implementation of further organizational
and procedural improvements.

About AIF
The Financial Intelligence Authority is the competent authority of the Holy See/Vatican City
State for supervision and financial intelligence for the prevention and countering of moneylaundering and financing of terrorism.
Established by Pope Benedict XVI with the Apostolic Letter in form of Motu Proprio of 30
December 2010, AIF carries out its institutional activity according to the Statute attached to the
above mentioned Motu Proprio and the Law n. CXXVII of 30 December 2010, as subsequently
amended and integrated.
In July 2013, AIF became a member of the Egmont Group. Currently, AIF has signed
Memoranda of Understanding for the international exchange of information with financial
intelligence units of other states, such as Australia, Belgium, Cyprus, Germany, Italy, Monaco,
the Netherlands, Slovenia, Spain and the United States of America.