CATHOLIC NEWS OF THE WEEK . Saturday, 25 May 2019

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Vatican finance watchdog notes jump in reports of suspicious activity

VATICAN (CNS): The Vatican’s Financial Intelligence Authority, which monitors Vatican financial operations to ensure they meet international norms, reported a huge jump in the number of financial transactions flagged as suspicious and in the value of assets it has blocked or frozen.

Its annual report, released on April 28, it noted that during 2015, the authority “received 544 reports of suspicious activities—almost three times as many as 2014.” Reports of suspicious activities totalled 202 in 2013.

The report noted that the jump in numbers not due to a higher crime rate, but because policies were being implemented, procedures for reporting had been strengthened and Vatican personnel were more aware of their duty to report questionable activity.

The financial authority also suspended eight transactions in 2015, totalling more than $72.1 million (US$9.3 million) and froze four accounts or assets totalling more than $66.7 million (US$8.6 million). IN 2014, it blocked just three operations for a total of $4.9 million ($637,000).

Rene Brulhart, president of the Financial Intelligence Authority, and Tommaso Di Ruzza, its director, presented the agency’s annual report for the fourth time since it was established by Pope Benedict XVI in 2010. 

The 27-page report said that 2015 marked a turning point in that the agency helped the Vatican transition from setting up a structural and legal framework to bringing about “its effective functioning” and implementation.

It said that complex processes, including a complete review of all Vatican bank accounts, were finally wrapped up resulting in a total of 4,800 accounts being closed, following stricter guidelines for identifying and verifying customers entitled to hold accounts there.

Di Ruzza told reporters that once cases are flagged, the authority filters out which ones merit investigation and passes the report on to the Vatican’s judicial system.

In 2015, just 17 reports of suspicious activity out of the 544 received were handed over to judicial authorities. Vatican judges received only seven and eight reports in 2014 and 2013.

European experts on preventing financial crimes said last year that the Vatican’s lack of indictments and prosecutions for financial crimes needed improvement.

In its report released in December 2015, Moneyval—the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism—praised the Vatican for making significant steps in establishing laws and procedures in line with international protocols, but called for real results in cracking down on infractions.

Moneyval noted that Vatican prosecutors had received 30 reports for investigation, frozen millions of Euros and launched 29 money-laundering investigations, “however, no indictments or prosecutions have, as yet, been brought in money-laundering cases.”

The Financial Intelligence Authority also said in its report that it no longer has oversight of the Administration of the Patrimony of the Holy See—or APSA.

It explained that “APSA stopped being a part of (the financial intelligence authority’s) jurisdiction at the end of 2015,” the same year the authority filed a report with the Vatican judicial authorities asking they investigate allegations that APSA accounts had been used for money laundering, insider trading and market manipulation.

Di Ruzza told reporters that a three-year long study and inspection of APSA showed its financial activities were no longer “on a professional basis,” meaning the assets it manages are owned by the Holy See and are used only to fund activities of the Roman Curia—basically serving as the Vatican procurement agency.

In addition, Di Ruzza explained that with the setting up of the Council and Secretariat for the Economy by Pope Francis in 2014, APSA now fell under secretariat’s supervision. 

The secretariat, currently headed by Australian Cardinal George Pell, is in charge of supervising all administrative and financial activities at the Vatican and implementing the norms made by the Council for the Economy. 

An auditor’s office also investigates any signs of corruption, fraud and anomalous activity or irregularities concerning financial activities, budgeting, bookkeeping and the offering of outside contracts or services.

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