VATICAN CITY — The Authority for Financial Information’s second annual report presents an increasing number of suspicious transactions reported — a reflection of stronger oversight of Vatican finances.

"In 2013, we had taken further decisive steps to foster the legal framework and, at the same time, to make it work in practice," said Rene Brülhart, director of the AIF, at a May 19 presentation of the report at the Holy See Press Office.

"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 annual report is divided into three parts: The first presents the legal, institutional and international framework in which the authority operates and its internal organization; the second deals with data; and the third demonstrates the legal changes that have strengthened its oversight of Vatican finances.

The AIF was established by Benedict XVI in 2010 to oversee the Vatican’s monetary and commercial agencies, including the Institutes for the Works of Religion or Vatican Bank.

In 2013, Pope Francis issued three motu proprio extending the AIF’s authority, giving it new statutes and aligning Vatican financial law with international standards.

"The new statutes have built the AIF on two pillars, supervision and financial intelligence, and have clarified some aspects with regard to governance," Brülhart commented.

The AIF recorded a notable uptick in suspicious transaction reports — from one in 2011 to six in 2012 and 202 in 2013.

"It is a significant increase, but a suspicious transaction report is not evidence that something went wrong," Brülhart commented.

Rather, the uptick "means the reporting system works."

Of the 202 reports made last year, five were forwarded to the Vatican’s promoter of justice to be further investigated by judicial authorities.

The report also showed that the AIF made an increasing number of requests of foreign authorities — one in 2012 and 23 in 2013. Conversely, the Vatican received information requests from foreign authorities thrice in 2012 and 53 times in 2013.

This increasing international cooperation has been fostered by the AIF’s signing of memoranda of understanding with its counterparts in the U.S., Italy, Germany, Slovenia and the Netherlands. Brülhart added that such agreements would be signed in the future.

Brülhart also underscored that the AIF became in July 2013 a member of the Egmont Group, which gathers information from most national financial intelligence groups, and that "being a member of the Egmont Group is a clear signal of a strong commitment by the Holy See" to combating money laundering and the financing of terrorism.

The AIF also conducted its first ordinary on-site inspection of the Vatican Bank at the beginning of 2014, which showed "substantial progress" made throughout the last year.

The inspection also led the AIF to develop a plan of action to fully implement the Vatican’s new financial laws and to otherwise improve its oversight of Vatican finances.

Andrea Gagliarducci is Catholic News Agency’s Vatican observer.