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Vatican financial body finds possible money laundering

Vatican financial body finds possible money laundering
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The scandal plagued Vatican Bank has published the first annual report from its newly formed financial watchdog agency revealing that it had detected six possible attempts to use the Holy See to launder money last year.

As part of efforts to increase transparency it said it is now screening account-holders.

It also plans to beef up regulations and has enlisted an international agency to certify the bank’s compliance with anti-money laundering and anti-terror financing measures.

The Autorità Informazione Finanziaria issued a 10-page report, that contained little detail on any supervisory operations.

However the agency’s director Rene Bruelhart told reporters he had proof it is committed to doing a good job: “In 2012 we had six suspicious transaction reports, in comparison to 2011 when we had one suspicious transaction report, so this is a clear sign that the reporting system is starting to work.”

Bruelhart – who is a Swiss lawyer and anti-laundering expert – said two of the suspected cases of money laundering were serious enough to be passed on to Vatican prosecutors for investigation.

The Roman Catholic church created the agency in 2010 after the Moneyval European anti-money laundering committee said the bank was not meeting standards on fighting money laundering, tax evasion and other financial crimes.

The bank – officially known as the Institute for Works of Religion (IOR) – will be reviewed again by Moneyval in July.

The financial watchdog was set up in a bid to shed the Vatican Bank’s image as a secretive tax haven and to improve its reputation in global financial circles.

That followed a series of scandals at its bank and a money laundering investigation launched by Rome prosecutors in 2010.

Murky past

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.