Under the pope's plan, the agency will be split into three parts, the Vatican said on Saturday. They are vigilance, rules and legal affairs, and financial information.

The Vatican's Financial Information Authority, known as AIF, will now be called the Supervisory and Financial Information Authority, or ASIF.

This reflects its regulatory function over other Vatican entities and departments.

The overhaul is part of reforms wanted by Francis to ensure "transparency and reinforce controls in the economic-financial sector," the agency's president Carmelo Barbagallo, previously at Italy's central bank, told Vatican media in an interview.

In late November, Francis told reporters aboard a papal flight that AIF had failed in "its duty of control."

Smoking out financial scandal has been a motif of Francis' papacy. One "opaque" investment deal in prime London real estate provoking a raid of the AIF offices in October 2019.

The Vatican suspended five employees after the raid, including the former director of the office, Italian layman Tommaso Di Ruzza.

The president of the anti-money-laundering authority, René Brülhart, resigned following the raids. Brülhart issued a strong defense of Di Ruzza and expressed dismay at his treatment by Vatican officials.

The deal-broker Gianluigi Torzi has been arrested and faces charges of extortion, embezzlement, aggravated fraud and money-laundering in the £160 million deal, which was paid for with money donated by ordinary churchgoers.

The scandal also saw the resignation of ex-cardinal Angelo Becciu. Becciu resigned following allegations he had sent €100,000 in Holy See funds to a charity controlled by his brother.

Shortly after the upheaval, the Egmont Group, a global network of financial intelligence authorities, suspended the AIF.

Beyond countering corruption and the financing of terrorism, ASIF will also be responsible for the "prudential supervision" and regulation of any Vatican office that handles investments or financial transactions. It is also tasked with carrying out financial investigations.

The new Vatican statute states that the new financial watchdog will "have access to documents and data, even of a confidential nature, and exchange information at domestic and international level."

Sources

• Religion News
• Bloomberg
• Morning Star

The scandal, affecting two departments at the heart of the Vatican, was the first after several years of relative calm in which reforms enacted by Pope Francis appeared to be taking root.

A Vatican spokesman said he had no immediate comment on the report.

On its website, L'Espresso published a picture of a police notice to guards at Vatican gates telling them not to allow in the five employees because they had been suspended.

The notice included photographs of the five, one of whom is a woman. Read more

"The path we are walking upon has become a well-paved and well-regulated one."

At a press conference on Tuesday, Rene Brülhart, President of the Vatican's Financial Information Authority, or AIF, presented the annual financial report for 2018 with those remarks.

He said the Vatican has made several significant achievements regarding financial transparency, including the implementation of a regulatory framework and an improved reporting system. Read more

The Authority says efforts to help the Vatican comply with international norms for fighting money laundering and terrorist financing are paying off.

A report which the Authority released last Friday says 150 suspicious financial transactions were flagged in 2017, 57 fewer than in the previous year.

Only eight of those were judged possibly to be the result of criminal activity.

Sixteen fewer reports were sent to the Promoter of Justice in the Vatican City's tribunal for investigation in comparison to the 24 sent in 2016.

The report noted none of the suspicious transactions involved financing terrorism.

Furthermore, the report confirmed a "robust reporting system and an effective application of the regulatory framework of the Holy See and the Vatican City State."

The Financial Information Authority was set up by Pope Benedict XVI in 2010 as an anti-money laundering watchdog unit.

Its establishment followed decades of scandals involving the Vatican Bank.

Among the successful prosecutions of serious criminal offences the Vatican undertook in 2017 was that of Giuseppe Profiti.

Profiti was the former president of the Vatican-owned Bambino Gesù Hospital.

He was given a one-year suspended prison sentence for "abuse of power" for diverting €422,000 (£370,000/$500,000) of the hospital's funds to upgrade former Secretary of State Cardinal Tarcisio Bertone's Vatican apartment.

The Financial Intelligence Authority reported it is also continuing with a "pro-active approach to cooperate and exchange information with its foreign counterparts to fight illicit financial activities."

Source

• NZ Herald
• National Catholic Reporter
• Catholic Herald
• Crux Now
• Image: 123RF

Moneyval, which is the Council of Europe's monitoring body, also says the prosecutor should be more "proactive" in other financial crimes.

These include corruption, embezzlement and abuse of office.

Furthermore, Moneyval says the prosecutor should "actively consider appealing sentences which he considers unduly lenient".

Moneyval's mixed bag of comments in its current periodic report also praise the Vatican's efficiency in flagging suspicious transactions.

However, as was the case in 2015, Moneyval said although the Vatican freezes assets if it identifies suspicious transactions, it isn't doing enough to prosecute offenders.

Of the 69 possibly problematic transactions the Vatican's Financial Information Authority has flagged in the past four years, criminal investigations have begun in 27 of them.

Eight of the investigations were closed without charges and six ended without indictment.

The Moneyval report expresses surprise that "no prosecution or indictment has ... been brought before the [Vatican] tribunal which involves a count of money laundering".

The report goes on to say the success rate of the prosecutor before the Tribunal "is so far not encouraging".

One major case the Vatican did prosecute was in relation to the former president and treasurer of the Vatican's pediatric hospital.

They were put on trial earlier this year facing embezzlement charges for allegedly diverting donations to renovate a cardinal's apartment.

The former president was convicted of the lesser offense of abuse of office and given a suspended one-year sentence.

The former treasurer was absolved.

The Vatican has released a statement following Moneyval's report acknowledging "there are still areas for further improvement, in particular as regards law enforcement and the judicial side".

Source

• Reuters
• Crux
• Image: Global Witness

The Vatican Financial Information Authority (AIF) says over the past year it has entered "growing number of agreements" involving international cooperation and information exchange.

These allow information to be shared with other foreign financial intelligence authorities.

While these agreements help, the AIF is taking a "preventive and proactive approach" to its role.

It would like to see a continued tightening of standards for financial disclosure to guard against increasingly sophisticated means of money-laundering.

The AIF's statistical account of its work in 2016 show it made 700 requests to foreign authorities for documents, data and information relevant for preventing or countering criminal activity.

This is up from 500 requests in 2015 and 20 in 2014.

It also says the "544 questionable transactions" it reported in 2015 more than halved last year: 202 suspicious financial transactions were picked up at Vatican institutions.

The suspicious activities led to several transactions being suspended and a $1.5 million account at the Vatican bank being frozen.

Twenty-two cases were referred to Vatican prosecutors. No prosecutions have been announced yet.

The AIF report also shows a steady increase in the number of cases involving cooperation with foreign prosecutors: from 81 cases in 2013 to 113 in 2014, 380 in 2015, and 837 last year.

Source

• Catholic Culture
• Catholic Register
• The Inquisitr