The Vatican is stepping up its fight against money laundering



It is a text apparently technical but of major importance, made public Saturday, October 10 by the Vatican. By a decree of 32 articles, the president of the governorate of Vatican City, Cardinal Giuseppe Bertello, strengthens and expands anti-money laundering measures in the smallest state in the world. Concretely, the decree modifies a law passed in 2013, and which already increased the powers of the Financial Intelligence Authority (AIF), a sort of financial police of the Vatican.

This new text, for example, extends the AIF’s control capacities to new structures, such as trusts, credit institutions and subsidiaries of international groups. The Vatican gives the possibility to this authority to take into account, in its valuations, all the assets of those it controls, including real estate or stock market shares, “And whatever their mode of acquisition and their value”, can we read in the decree.

Investigation powers

But above all, it increases the powers of the promoter of justice at the Vatican Tribunal – the equivalent of the prosecutor in the French judicial system -, who can now “Coordinate investigations in the field of preventing and combating money laundering and the financing of terrorism”, And this “By carrying out an investigative activity”.

The Vatican also allows the AIF to impose much stronger penalties on fraudsters. Thus, the fine must now be “At least equal to twice the amount of the profits derived from the infringement, when this amount can be determined, or at least to 1,000,000 euros”. This new provision thus eliminates the maximum amount of a fine (5 million euros for natural persons and 10% of the annual revenue of the previous year for legal persons) which was until now in force. Another innovation in transparency: these sanctions will be made public “For at least 10 years” on the AIF website.

Central file

Finally, the AIF is authorized to create a central file, which will list, in particular, the names of the persons holding accounts and safes at the Vatican Bank, the data of which may be consulted by the financial authorities of other countries. Here again, this is a very important development, whereas a few years ago, no one was able to determine the number of accounts which were open there, sometimes in the most total opacity.

These changes aim “To make the management of the Vatican’s finances more and more transparent, within the framework of intense and coordinated controls”, explains Carmelo Barbagallo, head of the AIF since November 2019, in a statement released by the Vatican. “Prudent management and effective control are not only legal but also moral duties”, he continues. After explaining that Vatican law tends to be aligned “On the best international standards”, and in particular the latest European directive in this area, adopted by the EU in 2018.

In a few days, the measures in this matter, of various kinds, seem to multiply at a high rate. First there was the unexpected and sudden ousting of Cardinal Angelo Becciu, the former Substitute accused of favoritism and hazardous investments. Then, in a few days, came the appointment of a new judge specializing in commercial law at the Vatican Tribunal and the creation of a new control committee for public contracts. All this while the anti-money laundering inspectors of the Council of Europe (Moneyval), received by the Pope on October 8, are on an inspection tour in the Vatican, reviewing all the structures of the smallest state in the world, from the Secretariat of State to the dicasteries, via the Pontifical Academies or Caritas internationalis.

More than budgets, experts examine compliance with internal anti-money laundering standards, such as the number of reports of suspected cases as well as penalties. It was similar work by Moneyval that pushed the Vatican to adopt the 2013 law, which is now strengthened. But four years later, in 2017, Council of Europe inspectors estimated that despite some progress, Vatican staff were ” not yet fully up to the task », And deplored that no criminal case had then resulted in a confiscation of capital, or even a trial in the Vatican court.

Anti-money laundering experts in the Vatican

In addition, all these initiatives coincide with another capital element, also made public in recent days: the reshuffle of the “Commission of cardinals” of the Institute for Works of Religion (IOR). However, for the first time, this central body of the “Vatican bank” no longer includes any representative of the Secretariat of State, which manages, with 43 million euros annually, one of the most important budgets of the Vatican.

Concretely, this important change, decided on September 21, that is to say before the Becciu affair broke out, could mean the marginalization of the Secretariat of State in the management of the finances of the Holy See. And this, while the latter should gradually see the autonomous management of its funds withdrawn: like the other dicasteries, it will soon have to have its annual budgets validated by the Council for the Economy, created in 2014 by Pope Francis.

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