Vatican Finances Receive Positive Progress Report From European Watchdog

The Holy See has addressed many of the deficiencies in its financial system, according to Moneyval.

(photo: Bohumil Petrik/CNA)

VATICAN CITY — The Council of Europe’s second progress report on the reform of Vatican finances, released Tuesday, found that the Holy See has addressed many of the deficiencies in its financial system. But  Moneyval, the Council of Europe’s anti-money laundering committee, continues to urge the Vatican to ramp up money-laundering prosecutions.

Moneyval issues peer-to-peer evaluations of member states as part of an ongoing process that is continually updated in order to maintain high standards for countering money-laundering and the financing of terrorism.

According to a Moneyval statement, the Holy See “has addressed most of the technical deficiencies in its legislation and regulations. However, there is a need now for an anti-money laundering and counter-terrorist financing system to deliver effective results, in terms of prosecutions, convictions and confiscation.”

Moneyval’s lengthy report notes that since the anti-money laundering system was set up, “29 money-laundering investigations have been undertaken in the Holy See / Vatican City State by prosecutorial law enforcement bodies,” but “no prosecutions have, as yet, been initiated.”

The report also highlights that more than 11 million euros ($12 million) are frozen in Vatican accounts.

The report says, “There still remains, however, a continued lack of indictments for money laundering or for related serious proceeds-generating offenses in the three years since (the 2012 report). This situation needs to be improved.”

Despite these criticisms, the report can be considered a step forward as the Vatican establishes a financial system in line with its uniqueness: a state where there are neither banks nor a market and which is at the same time compliant with current standards for countering money laundering and the financing of terrorism.

The report praises the remediation process of the accounts in the Institute for Works of Religion, otherwise known as the Vatican Bank. In 2013, the Vatican Bank updated its guidelines for categories of customers, restricting those with access to the institution.

The Moneyval report notes that these guidelines are being followed strictly and that the remediation process has led to the closing of some 4,600 accounts.

The report praised the Vatican’s Financial Intelligence Authority (FIA) for its oversight of the Vatican Bank and the continuity of FIA’s governance. It mentioned that FIA’s board “comprises more persons with professional and international AML/CFT experience and expertise, including the first lay president.”

In a Dec. 9 statement, Msgr. Antoine Camilleri, Vatican undersecretary for relations with states and head of the Holy See’s delegation at Moneyval, maintained that “the latest progress report confirms that the Holy See has established a functional, sustainable and effective system, aiming at preventing and fighting financial crimes.”