The report follows the structure adopted in the past and provides a comprehensive overview of the work done.
In 2019, the Holy See joined the Single Euro Payment Area, which led to a Vatican IBAN issuance. In August 2019, the AIF also conducted a "targeted on-site inspection at the IOR for the purpose of verifying compliance with the current legislative and regulatory framework for payment services, including the fulfillment of all the necessary requirements for the IOR to join the SEPA schemes, as well as the 'effectiveness' of the payment systems."
The IOR adhered to the SEPA schemes in October 2019, while the Holy See joined the SEPA area in March 2019.
In May 2020, the AIF initiated the first general on-site inspection of the IOR for prudential purposes. The inspection is not linked to any particular event: it simply had to be done, and it could take place only after the issuance of the new IOR statutes, which were approved in June last year.
In 2019, the Financial Security Committee produced a second update of the General Risk Assessment. The report says the update "confirms a medium-low level of money-laundering (ML) risk and a low level of financial terrorism (FT) risk, with no significant domestic threats."
The AIF also issued in 2019 several instructions to counter money laundering and the financing of terrorism.
Regarding intelligence activity, the AIF suspended three transactions in 2019 for a total of €240,000 , and froze one account for a total of €178,970.65.
Barbagallo emphasized the Memorandum of Understanding he signed with the Vatican interim general auditor, Alessandro Cassinis Righi. A protocol of that kind was approved already in 2019 between the then president Bruelhart and the interim general auditor. Has the memorandum changed, or was it just updated? Barbagallo's statements suggest that it was mostly an update.
Barbagallo also underscored that the AIF signed a memorandum of understanding with the Vatican prosecutor. The signing of that Memorandum led to the AIF's re-admission to the use of the Egmont Group's secure communication network.
Egmont Group gathers some 165 financial intelligence units from all over the world. Via its secure network, members share intelligence about crimes such as money laundering, tax fraud, and terrorism financing. The AIF joined the Egmont Group in 2013.
Egmont suspended the AIF from its secure network following search and seizure operations on the AIF's offices during the Vatican police investigation into the purchase of luxury real estate in London by the Vatican Secretariat of State. The seizures also involved documents coming from foreign FIUs.
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The memorandum was designed to heal the breach generated by the seizures of reports from other FIUs. In the end, the protocol had to guarantee the independence of the investigation and the confidentiality of the information exchanged. International observers watched those developments keenly.
The report also presents two example cases, with no mentions of names.
The first example case seemingly referred to the investigation on Italian entrepreneur Angelo Proietti, who was sentenced guilty for self-money-laundering connected with some procurements in the Vatican. It is known that the AIF reported the case. It is noteworthy that the Vatican tribunal sentence came in 2018, two years after Proietti reached a plea agreement in Italy.
The second example referred to the freezing of the accounts of a customer of Vatican financial institutions investigated by a foreign jurisdiction.
The 2019 figures show that the AIF's work in strengthening the Vatican anti-money laundering system has been widely positive. Neither the AIF president, nor its director were confirmed at the end of their five-year mandates, the successes notwithstanding.
In the meantime, the AIF's staff was doubled, from 6 to 12 employees. The new powers of the president and the composition of the board suggest a comeback of the past. The president will return to be a sort of deus ex macchina. The board is already less "international" and more Italian. After the resignations of Juan Zarate and Marc Odendall as board members, and the expiration without renewal of René Bruelhart's mandate, the Italian Barbagallo (who comes from the Bank of Italy) was appointed president. Also, the Italian Antonella Sciallone Alibrandi filled one of the vacant seats on the board.