Pope Benedict XVI has appointed the president and staff for a new independent department responsible for overseeing the financial activities of Vatican agencies.
The move comes after an investigation by Italian bank authorities into money transfers by the Vatican bank.
Cardinal Attilio Nicora, currently president of the Administration of the Patrimony of the Holy See, will now also head the new "watchdog" agency called the Financial Information Authority, which the Pope established at the end of 2010.
Four members of the directing council will support Cardinal Nicora, who is charged with preventing money laundering, fraud and other possible abuses in Vatican agencies and their affiliates. He will also be responsible for maintaining relations with European Union financial oversight bodies.
The Jan. 19 action by Pope Benedict comes after an investigation this past September in which Italian authorities seized just over $30 million deposited by the Vatican's bank, known as the Institute for the Works of Religion, at the private Italian bank Credito Artigiano SpA.
Authorities said the Vatican's bank had not complied with Italian laws aimed at preventing money laundering by requiring the disclosure of information about account holders and beneficiaries.
The head of the Vatican bank, Ettore Gotti Tedeschi, maintained in court that no money laundering or fraud had occurred and pointed to internal transfer orders as the source of the problem.
Cardinal Nicora will be joined in his efforts by an all-Italian staff of experts. Claudio Bianchi, Marcello Condemi, Giuseppe Dalla Torre del Tempio di Sanguinetto, Cesare Testa, will form the council whose purpose is to carry out the administrative and monitoring work of the authority. If they see fit, they can also employ other individuals to carry out their task.
Their director will later be appointed by Cardinal Nicora himself.
The group of four includes law, accounting and economics professionals. Their first task will be to prepare the Vatican for April 1, when the Dec. 30 norms to guide financial activities will become effective.
The authority is unprecedented in that it has the power to oversee the activities of all Vatican departments and bodies that engage in any exchange of currency or goods.
It is independent of the other existing Vatican financial and economic bodies, including the Institute for Religious Works.
Among the new norms the Holy See seeks to enact are measures to prevent and combat illegal activities in financial and commercial sectors. It also aims to put an anti-money laundering protocol in place that will bring the Vatican up to the European standard.
With the measures, they aim to ensure that no money passing through the Vatican will finance criminal activity or terrorism.
Investigations by the new authority that result in evidence of impropriety will be taken up in the Vatican's court system, in association with the Italian penal system for crimes deserving of prison time.
The newly-appointed president, Cardinal Nicora, has extensive experience with Vatican finances, having headed the Administration of the Patrimony of the Holy See since 2002.
The APSA, as it is called, is responsible for administering property of the Holy See destined to finance the functions of the Roman Curia.