December 12, 2013

Vatican gets mixed report card on finance reform

The Holy See’s financial watchdog agency has yet to inspect the embattled Vatican bank, a true test of whether the new laws to fight financial crimes are being enforced.

By Nicole Winfield
The Associated Press

(Continued from page 1)

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Pope Francis waves as he arrives for his weekly general audience in St. Peter’s Square at the Vatican on Wednesday. The pope has ramped up the reforms, forming two commissions of inquiry into the Vatican’s finances.

The Associated Press

The report was the second from Moneyval. In July 2012, the Vatican passed the inaugural Moneyval test but received poor or failing grades for its bank and financial intelligence authority. This second round didn’t revise those grades but merely evaluated how the Vatican had responded to recommendations made last year.

Many of the areas where the Vatican fell short in 2012 have been addressed by the new legislation, Moneyval said.

One area that had been singled out for criticism in the 2012 report was the bank’s lax customer due diligence practices, which are necessary to make sure the bank knows who its clients are and where their money comes from. The revised report noted continued shortcomings – there’s still no clear law about who can have an account at the IOR – and said only 30 percent of the bank’s accounts had been reviewed by October; the review was to have been completed a year ago.

Bank officials noted that the first batch of accounts that were reviewed were the highest-risk accounts and therefore took more time; they say the pace is faster now and that the process is expected to be completed by the first quarter in 2014.

The Moneyval report said the bank, which was founded in 1942 by Pope Pius XII to manage assets destined for religious or charitable works, is considering codifying a law to clarify its client base and is now closing accounts that “are not strictly related to the purpose of the IOR at the service of the Catholic Church.”

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