Benedict's predecessor, Pope John Paul II, named Law as archpriest of St. Mary Major Basilica after his 2002 resignation as Boston archbishop.
Law quit to quell an outcry over handling of sex abuse cases in his diocese, becoming the highest-ranking U.S. church official to fall in the scandal that rocked the American church.
The traditional ceremony Thursday includes the release of white petals from the basilica's ceiling to recall a legendary August snowfall in Rome in 352.
Kristine Ward of the National Survivors Advocates Coalition called the ceremony a "bread and circuses" approach in the church at a time of crisis over sex abuse.
Since the U.S. crisis, the clergy abuse scandal has spread across Europe, with new accusations this year hitting the church in Germany, Italy, Belgium and elsewhere.
Victims groups have been lobbying for years to get Law removed, accusing the Vatican of giving a major culprit in the crisis a soft landing.
The 78-year-old prelate also sits on a number of Vatican congregations and councils.
Law did not return a phone call seeking comment.
Terence McKiernan of BishopAccountability said it is especially urgent that Benedict remove Law from the Congregation of Bishops, saying he long used his influence to shield bishops allegedly involved in cover-ups of pedophile priests.
Law is seen often in Rome attending embassy receptions and Vatican events.
He has led the August ceremony at St. Mary Major since his appointment in 2004.
SIC: CC