Pope Weighs in on Money Laundering

Image: Pope Weighs in on Money Laundering Pope Francis greets Vatican workers on Friday. (Getty Images)

Friday, 09 Aug 2013 03:48 PM

By Edward Pentin

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Pope Francis issued a decree this week aimed at further tightening Vatican safeguards on money laundering and ensuring all its financial activities meet international standards.

The Pope’s latest ‘motu proprio’ — a decree taken on his own initiative — strengthens the supervisory powers of the Holy See “in response to a recommendation of the Moneyval Committee,” the Vatican said.

Moneyval is a European watchdog which carried out a review of the Institute of Works of Religion — better known as the Vatican Bank — last year.

“[The new decree] is a means of ensuring the road (towards transparency) continues,” Vatican spokesman Fr. Federico Lombardi said. “In today’s world, it is all about resisting increasingly insidious forms of financial criminality. We have to be equal to the challenges in order to protect legality, and not be left behind,” he said.

He stressed that the aim isn't to win Moneyval's approval, but that the European watchdog “is the instrument we are using to determine whether we are up to international standards."

The new decree aims to prevent and counter not only money laundering but also cites its associated crimes of financing terrorism and the proliferation of weapons of mass destruction. Lombardi said the Vatican “has a responsibility to the international community” to ensure that all Vatican activities measure up to international efforts to prevent the financing of terrorism.

The new decree “broadens” the application of existing Vatican laws to include all Vatican offices and other institutes and entities dependent on the Holy See, as well as “non-profit organizations” that fall under the jurisdiction of Vatican City State and make financial transfers.

Speaking to Vatican Radio, Lombardi said the decree was a kind of “tool box” through which individual laws and regulations can be applied to all these institutions. Previously, under a similar decree of Benedict XVI in 2010, the rules only applied to Vatican institutions that oversaw or managed large financial transfers

This motu proprio also establishes a Financial Security Committee whose primary task is to coordinate these new controls, Lombardi said. The new body will be chaired by Msgr. Peter Wells, an American who is the Vatican’s closest equivalent to a Chief of Staff. Its other members include senior Vatican officials within the Holy See’s finance departments, Vatican City State and the Vatican’s judiciary.

Lombardi said “the main novelty” of the motu proprio “is the strengthening and extension of the powers of the Financial Information Authority” whose task will now be to carry out “prudential supervision” of those institutions that carry out “professional activity of a financial nature.”

Benedict XVI set up the Financial Information Authority in 2010, appointing Italian Cardinal Attilio Nicora as its head. The current director of the FIA is Rene Bruelhart, a Swiss layman who was brought in by the Vatican to help improve financial supervision.

The FIA is not a Vatican central bank, but shares some similar characteristics as it is charged with supervising financial transactions to prevent money laundering, as well as monitoring the circulation of money in Vatican City State. Last month, it became a full member of Egmont Group, an international network of Financial Intelligence Units.

The move also comes after recent reports in Italian media about organized crime figures and fraudsters using anonymous Vatican accounts.

It also follows the arrest of Msgr. Nunzio Scarano, a Vatican official suspected of smuggling 20 million euros into Italy from Switzerland. Msgr. Scarano protests his innocence, and accuses lay bosses in the Vatican’s asset management arm of abusive activities which he claims some cardinals had covered up.

Usually much of the Vatican is closed for summer vacations at this time of year, but this latest decree shows that Pope Francis continues to work.

Asked about whether the Pope is on vacation, Lombardi told Vatican Radio: “No, certainly. This is an aspect of his great activity.” But he added that certain steps need to be taken “resolutely and promptly, without delay,” so that stated requirements can be met.

He further noted that when Moneyval had made his first systematic assessment, it had noticed how the Holy See and Vatican City State were “quick to move.” Such a prompt response is “continuing,” he said, so that all these international standards can be met and “peace” can be restored “in the field of economic and financial activity.”

Edward Pentin began reporting on the Vatican as a correspondent with Vatican Radio in 2002. He has covered the Pope and the Holy See for a number of publications, including Newsweek, and The Sunday Times. Read more reports from Edward Pentin — Click Here Now.

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