The Vatican bank has taken steps to satisfy tough EU and
international norms on money laundering and terror financing after being
confronted with an unprecedented crackdown by Italian prosecutors, The
Associated Press has learned.
In recent weeks
the bank has made written and in-person pledges to pass anti-money
laundering legislation, report and investigate suspicious transactions,
identify customers to law enforcement and create a special compliance
authority.
Prosecutors, though, aren't buying
any of it.
They claim that even as the bank was making such overtures,
it broke the law by trying to transfer money without identifying the
sender or recipient, or what the money was being used for.
Italian
prosecutors have placed bank chairman Ettore Gotti Tedeschi and his
deputy Paolo Cipriani under investigation and financial police seized
euro23 million (US$30 million) from a Vatican bank account on Sept. 21.
The
Vatican has reacted furiously, insisting that the omission of data was
just a "misunderstanding" that could be easily clarified. It tried to
get the seizure lifted, but the court refused.
Now
the Vatican has finally given its commitments to some of the key
institutions involved in the fight against money laundering, officials
at the institutions told the AP.
Vatican bank
officials in recent weeks made a written commitment to the Financial
Action Task Force — the Paris-based policymaking body that develops
anti-money laundering and anti-terror financing legislation — to do
whatever is necessary to come into compliance with its norms, a senior
FATF official familiar with the negotiations told The Associated Press
on Friday.
The FATF requires the Vatican to
pass legislation making money-laundering a crime; to establish an entity
to report suspicious transactions and then investigate them; and to
pass legislation requiring that the bank identify its customers properly
and make that information available to law enforcement agencies, the
official said.
Separately, on Oct. 15,
Vatican bank officials met with European Commission officials and agreed
that Pope Benedict XVI would act to bring into Vatican law EU
directives on money laundering that are required of euro-zone countries,
said Amadeu Altafaj i Tardio, spokesman for European Commissioner for
Economic and Monetary Affairs Olli Rehn.
The
bank, formally known as the Institute for Religious Works, also pledged
to establish a compliance "authority" headed by a senior Vatican
cardinal on Jan. 1 to implement the anti-money laundering legislation,
he said.
The authority will be the contact for all EU and international
agencies working to fight money-laundering.
Vatican
bank officials also had two meetings starting in the spring of this
year with officials from the Organization for Economic Cooperation and
Development to learn how to get on the "white list," of countries that
share tax information to crack down on tax havens, said Jeffrey Owens,
head of tax issues at the OECD.
To join the
OECD's club, the Vatican must first make a formal commitment to
transparency and exchange of financial information and then take part in
peer review sessions. To get on the "white list" the Vatican must enter
into tax information sharing agreements with at least 12 other
countries — a process that can often take years.
"The
next stage is: They know what the standards are. Do they want to
advance the dialogue with the aim of committing to the standards?" Owens
said.
Despite such efforts — which predate
the seizure of the Vatican account — prosecutors have said the Vatican
has done nothing concrete to comply with Italian law, to which it is
subject, much less international norms to fight money laundering.
In an
October court document, prosecutors said such compliance "doesn't even
seem possible" given the lack of internal norms at the Vatican.
Citing
an Oct. 6, 2010, Bank of Italy memorandum, prosecutors said the Vatican
bank's consultations had been "completely fruitless," according to
Corriere della Sera.
Gotti Tedeschi has
insisted his efforts are sincere and has said he is mortified by the
scandal.
He has continued speaking publicly about the need for ethics in
finance and has continued his promotion of the pope's encyclical on the
global financial crisis.
At the same time,
the bank is gearing up for another possible assault by Holocaust
survivors who claim that Nazi loot was stored at the Vatican.
A U.S.
federal appeals court threw their case out in March after determining
the Vatican bank enjoyed immunity since the Holy See is a foreign
sovereign.
Attorney Jonathan Levy has since
taken his case to the European Commission, asking for an investigation
into whether looted Nazi gold had been used in Vatican euros and
commemorative coins.
"The issue here is that
it's the EU's problem because they entered into an agreement with the
Vatican to mint euros," Levy said.
"From our point of view, it's the
EU's responsibility to hold the Vatican responsible to meet money
laundering standards."
SIC: NPR/INT'L