Following the seizure of its deposits in Rome earlier this year, and just ahead of a European Union (EU) deadline, the Vatican has announced laws to prevent money laundering and to establish a financial regulatory body.
In September 2010, the Italian financial police seized EUR23m (USD30.4m) from an account of the Vatican’s bank, the Istituto per le Opere di Religione (IOR), with another commercial bank in Rome, and disclosed that they were investigating two of IOR’s top management. It was indicated that the IOR had failed to identify properly either the depositor or the recipient as is required under Italian Revenue Agency regulations.
The Vatican had already, in December 2009, signed a monetary agreement with the EU, undertaking to adopt all measures to implement the EU’s rules on the prevention of money laundering, prevention of fraud and counterfeiting of cash and non-cash means of payment, and statistical reporting requirements, by the end of 2010.
Therefore, on December 30, 2010, and following consultations with representatives of the European Commission, the European Central Bank and the Italian government, the Vatican has published new legislation; and, in particular, the "Law concerning the prevention and countering of the laundering of proceeds from criminal activities and of the financing of terrorism".
That Law specifies the criminal activities which comprise the laundering of money and the criminal activities which generate incomes, that are subsequently laundered, for which penal fines are foreseen; and the administrative activities related to international cooperation and prevention. The Law imposes the main obligations of "adequate verification" of the counterpart; the registration and conservation of data concerning ongoing relations and operations; and the reporting of suspicious transactions.
By means of the provisions concerning money-laundering, the controls on cash entering or leaving Vatican, the obligations regarding the transfer of funds, and the heavy administrative sanctions that are applicable, it is stated that the structure of the Law “conforms to the principles and rules in force throughout the EU and is therefore in conformity with the norms of other nations which have more developed rules in this regard.”
An Apostolic Letter, signed Pope Benedict XVI also establishes the Autorità di Informazione Finanziaria (AIF), an autonomous and independent watchdog with the specific task of implementing the anti-money laundering legislation, when it comes into force on April 1, 2011. The AIF will monitor all the financial and commercial relationships conducted by Vatican institutions, and will control and check any single transaction of over EUR15,000 involving the Holy See.
In September 2010, the Italian financial police seized EUR23m (USD30.4m) from an account of the Vatican’s bank, the Istituto per le Opere di Religione (IOR), with another commercial bank in Rome, and disclosed that they were investigating two of IOR’s top management. It was indicated that the IOR had failed to identify properly either the depositor or the recipient as is required under Italian Revenue Agency regulations.
The Vatican had already, in December 2009, signed a monetary agreement with the EU, undertaking to adopt all measures to implement the EU’s rules on the prevention of money laundering, prevention of fraud and counterfeiting of cash and non-cash means of payment, and statistical reporting requirements, by the end of 2010.
Therefore, on December 30, 2010, and following consultations with representatives of the European Commission, the European Central Bank and the Italian government, the Vatican has published new legislation; and, in particular, the "Law concerning the prevention and countering of the laundering of proceeds from criminal activities and of the financing of terrorism".
That Law specifies the criminal activities which comprise the laundering of money and the criminal activities which generate incomes, that are subsequently laundered, for which penal fines are foreseen; and the administrative activities related to international cooperation and prevention. The Law imposes the main obligations of "adequate verification" of the counterpart; the registration and conservation of data concerning ongoing relations and operations; and the reporting of suspicious transactions.
By means of the provisions concerning money-laundering, the controls on cash entering or leaving Vatican, the obligations regarding the transfer of funds, and the heavy administrative sanctions that are applicable, it is stated that the structure of the Law “conforms to the principles and rules in force throughout the EU and is therefore in conformity with the norms of other nations which have more developed rules in this regard.”
An Apostolic Letter, signed Pope Benedict XVI also establishes the Autorità di Informazione Finanziaria (AIF), an autonomous and independent watchdog with the specific task of implementing the anti-money laundering legislation, when it comes into force on April 1, 2011. The AIF will monitor all the financial and commercial relationships conducted by Vatican institutions, and will control and check any single transaction of over EUR15,000 involving the Holy See.
