IOR continues to progress toward greater transparency and compliance

(Vatican Radio) On Wednesday, the Istituto per le Opere di Religione (the Institute for Works of Religion, or IOR) – known familiarly if inaccurately as the “Vatican Bank” – released a press statement on the progress of its program towards greater transparency and compliance.

The press release dealt primarily with the technical details of the steps taken toward those ends, and about future reforms.

Stefan von Kempis of Vatican Radio’s German section spoke with IOR President Ernst von Freyberg about the IOR’s progress. Listen:

Below, please find a complete transcript of the interview:

(Stefan von Kempis) Q. Mr von Freyberg, what’s new in the transparency and compliance program of the IOR?

(IOR President Ernst von Freyberg) A. In May 2013 we told the world that we would become completely compliant and transparent. At that time, many people said, “That is impossible.” This was a myth. It is very possible to reform an institution like the IOR and to give to the Holy Father the possibility to choose between several options for the future of the IOR.

On the compliance side, we have used the past year to create the system and to analyse our customers for possible irregularities. When I speak about the system, I mean a system which extends between the IOR, and which goes from the IOR to the Vatican authorities, and from the Vatican authorities to international collaboration with other authorities involved in the great anti-money laundering effort.

Our part of the system is to have procedures and handbooks which allow us to identify suspicious transactions, to have the proper IT systems in place, and to train our people to work these systems.

The next part of the system is then for us to deliver our findings to the competent authorities. And we have vastly improved this process, and the contents of our reports. And from there on it goes to the international collaboration, which yesterday was demonstrated in an excellent way on the Scarano case.

Q. On the Scarano case, authorities, Italian authorities, work on the findings the Vatican delivered in June, don’t they

A. It is not for us to comment on individual cases.

We have worked very hard to fulfil our part under the legal obligations we have and to deliver that to our authority. From what I understand from the press conference of the Procuratore di Salerno yesterday, the Italian authorities are very happy with the collaboration with the Vatican authorities. They view the Vatican as having the same goal, and that is to enforce the law.

Q. Could a case like the Scarano case happen again in the IOR, or would there be an alarm sounding immediately.

A. With the systems we have in place today, we would have alarm bells ringing immediately.

Q. What’s the point in your new anti-money laundering handbook, what’s the key to understand where suspicious transactions pass?

A. The key is to request very detailed data, and to monitor transactions on two levels: immediately, and then through a controlled system.

Q. You’re checking all our clients, actually. At what point is that process? Is the bigger part already passed?

A. By the end of 2013 we had screened approximately 10,000 client relationships, 8,000 client relationships remain to do.

Q. If I understand your press statement of today, the riskier parts of your clients have already been checked in the past.

A. We have obviously organized our work in that way, that the theoretically riskier relationships have been screened first.

Q. What’s the next step?

A. In 2014, we have a lot of work to do on transparency and compliance. While we have made more progress than was imagined, in general, last year when we started, we cannot say everything is finished

We are waiting for the Holy Father to decide on the definition of the future mission of IOR, and following his decision, we will then work to implement that in our operations.