At press time, this case still had not been resolved, despite early reports that it would be resolved in days. This has reportedly cost the Vatican as much as 30,000 euros a day due to lost sales when tourists wished to pay with credit cards but had to use cash they did not have with them. —The Editor
Vatican City State vendors, including the Vatican Museums and supermarket, stopped accepting credit- and debit-card payments January 1, citing technical difficulties amid unofficial reports of regulatory concerns by Italian financial authorities.
Jesuit Father Federico Lombardi, Vatican spokesman, said on January 2, “The arrangement between several Vatican City State offices and one of the POS (point of sale) providers, whose services were employed to facilitate payments by tourists and pilgrims inside the Vatican, is about to expire.” He said the Vatican was already in negotiations with other providers, and the “no-plastic” policy was expected to be short-lived.
While declining to speak on the record, sources at the Vatican did not dispute reports that the credit- and debit-card problem arose when Italy’s central bank denied Deutsche Bank Italia — the Vatican’s point of sale provider — permission to operate in Vatican City State, a foreign country.
The central bank, the Bank of Italy, said it discovered in 2010 that Deutsche Bank Italia had been handling the Vatican’s credit- and debit-card transactions without the necessary approval. Deutsche Bank recently applied for permission, but was denied December 6 by the Bank of Italy, which claimed the Vatican City State did not have banking and financial laws stringent enough to prevent money laundering.
While the Vatican negotiates with potential new credit card handlers — presumably non-Italian companies — it continues voluntarily updating its financial laws and procedures to comply with international norms against money laundering and the financing of terrorism, a Vatican official said.
Just a few days after the Deutsche Bank petition was denied, amendments to the Vatican’s financial laws went into effect, giving the Vatican’s new Financial Information Authority greater independence in sharing information with other countries’ financial watchdog offices. In December 2010, Pope Benedict XVI instituted the agency to monitor all Vatican financial operations.
At the same time, the Vatican promulgated a new law that defined financial crimes and established penalties — including possible jail time — for their violation.
In 2011, the Vatican requested that “Moneyval” — the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism — evaluate its financial and banking laws. Moneyval’s first report, issued in July, said the Vatican met nine of its 16 “key and core” recommendations to prevent finance-related crimes.
The current credit-card situation is not the only recent example of tension between the Vatican and Italian financial authorities. In 2010, Italian treasury police, in a money-laundering probe, seized 23 million euros (about $30 million) that the Vatican bank had deposited in a Rome bank account. The Vatican criticized the confiscation, saying the deposit was legitimate and that the Vatican bank was committed to “full transparency” in its operations. The Italians released the funds in 2011 after the Vatican’s new financial laws went into effect.
—Cindy Wooden (CNS)