Vatican passes key financial transparency test

(July 18, 2012) The Vatican has passed a key European financial transparency test but received poor grades for the effectiveness of its new financial watchdog agency and the ability of its bank to track suspicious transactions. The first evaluation report on the Vatican issued earlier on July 4 but made public only on Wednesday by Moneyval, the Council of Europe department that evaluates how effectively member states are fighting money-laundering, said the Vatican had received negative grades on seven of the sixteen so-called key and core recommendations, and passing grades on the other nine. Moneyval however, praised the Holy See for making much progress in a short amount of time to come into compliance with the norms but said more work needs to be done. Vatican’s under Secretary for the Relations with States and Head of Holy See’s delegation to the plenary session of Moneyval, Msgr. Ettore Balestrero explained that for the Holy See, this process is first and foremost a moral rather than a technical commitment. He said that just as the rest of the international community equips itself with the tools necessary to fight the evils of money laundering and financing of terrorism, it is right and good that the Holy See share in these efforts, while also carrying out the mission of the Holy See. Msgr. Balestrero clarified that the tiny Vatican City State is not a financial centre and its financial activities are meant to support its works of charity and of religion. Moreover, he said, the Holy See, as primarily responsible for the universal mission of the Church, has a special ability and even the duty to guide and orientate Catholic religious organisations throughout the world. In conclusion, he said that with regard to the actual findings, the Holy See wishes to strengthen the overall system, focussing particularly on seven of the sixteen key recommendations of the international standards to fight money laundering and financing of terrorism. Msgr. Balestrero said that Moneyval’s report on the Vatican is not the end but rather an important passage of the Holy See’s continuing efforts to marry moral commitments to technical assistance in its desire to be a reliable partner in the international community. Pope Benedict XVI himself had said he wanted Vatican’s finances to follow international principles, saying peace in the world today is threatened by terrorism and the improper use of the global financial system.