Cardinal Tarcisio Bertone, the Vatican’s secretary of state

On February 24, 2011, His Eminence Cardinal Bertone, secretary of state, wrote to the secretary general of the Council of Europe, requesting that the Holy See (including Vatican City State) (HS/VCS) become subject to the evaluation and follow-up procedures of MONEYVAL. MONEYVAL is the Council of Europe’s primary monitoring arm in anti-money laundering and countering the financing of terrorism (AML/CFT). The Committee of Ministers accepted this application on April 6, 2011. The Holy See (including Vatican City State) became fully engaged with MONEYVAL thereafter and arrangements were made for a MONEYVAL on-site visit in November 2011.

In order to bring the legal system of the HS/VCS into line with international standards on AML/CFT matters, the Act of the Vatican City State No. CXXVII [#127], concerning the prevention and countering of the laundering of proceeds resulting from criminal activities and financing of terrorism, was enacted on December 30, 2010, and came into force on April 1, 2011. By an apostolic letter of December 30, 2010, in the form of a motu proprio, His Holiness Pope Benedict XVI also extended this law to the Holy See itself and created the Autorità di Informazione Finanzaria (Financial Intelligence Authority ([FIA]) as the financial intelligence unit (FIU) for the HS/VCS and AML/CFT supervisor. This original AML/CFT Law was rapidly revised after the first MONEYVAL visit, largely to take into account the evaluators’ emerging findings. The first law was wholly supplanted and replaced by Decree No. CLIX [#159] of January 25, 2012, making amendments and additions, all of which came into force also on January 25, 2012.

The Decree has since been confirmed.

Ettore Gotti Tedeschi, former president of the IOR

The revised AML/CFT Law introduced a significant number of necessary and welcome changes, but due to the timing of its introduction it was not possible for the evaluators to assess the effectiveness of implementation. The amended AML/CFT Law clearly establishes the secretariat of state as responsible for the definition of the policies on AML/CFT, and for adhesion to international treaties and agreements. Money laundering has been fully criminalized in accordance with the FATF standards, although effectiveness of application has yet to be demonstrated, as there have been no investigations, prosecutions or convictions for money laundering. Likewise, financing of terrorism has been criminalized, although the specific criminalization of financing in respect of certain terrorist acts in relevant UN counter-terrorism conventions is absent. The authorities have the necessary powers to freeze, seize and confiscate criminal funds and assets although effectiveness of implementation has also still to be demonstrated. Detailed legislative provisions have been introduced to give full force and effect to the freezing of funds associated with terrorism and financing of terrorism in accordance with relevant UN Security Council Resolutions (UNSCRs). However, as of January 2012, they had not been brought into practical effect.

Though there is an IOR bylaw that sets out the categories of persons that may hold accounts in IOR, it is recommended that serious consideration be given to a statutory provision describing the categories of legal and natural persons who are eligible to maintain accounts in the IOR.

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