Sunday, December 15, 2013

Vatican one step closer to white list of financially transparent countries

The Vatican bank's main officesThe Vatican has just jumped another or Moneyval’s hurdles.

The comments made during the Plenary Meeting of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, were promising. 

Moneyval is reviewing the progress the Holy See is making in “the right direction” in terms of meeting the goals set by the organisation’s inspectors. 

The Holy See is not quite there yet but “significant progress has been made” in reaching the goals set by Moneyval in January 2012. 

Moneyval measures the Holy See’s progress against “the core and, in addition, key recommendations of the FATF, the international standards on combating money laundering and the financing of terrorism,” a communiqué issued by the Holy See today reads.

The evaluation does not take into consideration all recommendations examined in the first report but only those considered to be “core”, in accordance with Moneyval’s rules of procedure, and a set of “key” recommendations requested by the Holy See. 

The positive result is partly thanks to the reforms to the Vatican’s financial structures which Francis has set in motion: he got rid of the Vatican bank’s old directors and top figures within the Administration of the Patrimony of the Apostolic See (APSA). He then created two commissions, one to report on the Vatican bank (IOR) and another on the Holy See’s Economic-Administrative Structure.

The Pope recently nominated his trusted secretary, Mgr. Alfred Xuereb, as head of both commissions; he has continued the process of bringing the Holy See in line with international anti-money laundering and financing of terrorism norms which the Council of Europe’s committee Moneyval is overseeing. Francis has also put Promontory Financial Group and Ernst&Young in charge of the IOR-APSA and Governorate’s accounts respectively. 

In recent days  the Financial Times published an an article on the results of an 11-month investigation it carried out, which attests the progress the Holy See has under Francis who “is bringing glasnost to the Vatican.” The Vatican has decided to reform the IOR after pressure from big global financial institutions like Deutsch Bank, JPMorgan and UniCredit. 

These institutions ended up in the spotlight of regulatory bodies as a result of their dealings with the Holy See. In its article titled “Call to account: FT probe of Vatican Bank”, the Financial Times writes: “The Vatican bank is closing hundreds of accounts after coming under pressure from the world’s biggest financial institutions to clean up its act.”
 
The City daily writes that it “interviewed two dozen bankers, lawyers, regulators and Catholic insiders over 11 months to understand how the murky operations of a bank with €5bn in assets, and which says its aim is to serve the global mission of the Catholic Church, had unnerved bankers, regulators and governments across Europe and the US.” 

“Correspondent banks moved as much as €2bn a year from the Vatican’s bank to other accounts across the globe,” a Vatican spokesman apparently told the Financial Times.

In Monday’s communiqué, the Holy See Press Office confirms that “Moneyval welcomes clarifications and improvements to the anti-money laundering and combating financing of terrorism (AML/CFT) legal structure of the Holy See and the Vatican City State and confirms that significant progress has been made.”