Vatican City, Jun 3, 2021 / 06:00 am
The U.S. Internal Revenue Service has listed Vatican City State among the countries that meet its international standards for customer due diligence.
With the IRS approval of the Holy See and Vatican City State’s “know-your-customer rules,” the tax body recognizes the steps put in place by the Vatican to verify customers’ identities and risk profiles.
These procedures are a critical part of enforcing anti-money laundering rules and preventing fraud.
Vatican News highlighted the addition of the Holy See to the IRS’ list on June 2 as the Vatican awaits the publication of the Moneyval report on its financial transparency and the effectiveness of the Vatican judicial system.
The IRS cites recent changes in the Vatican’s criminal code, such as its money-laundering regulations passed after Vatican police searched the offices of the Vatican financial authority and Secretariat of State’s office on Oct. 1, 2019, in connection with the Secretariat’s investment in a luxury property in London.
It also referred to changes to a Vatican law on transparency, supervision, and financial intelligence made on Oct. 10, 2020. A 15-page decree altered Law XVIII from 2013, which set out provisions to combat money laundering and the financing of terrorism.
Carmelo Barbagallo, president of the Vatican’s Supervisory and Financial Information Authority (ASIF), said that the changes sought to tighten regulation of financial flows within the Vatican in an effort to meet international standards.
“The latest amendments to Law XVIII are part of an overall strategy aimed at making the management of Vatican finances ever more transparent, within a framework of intensive and coordinated controls,” Barbagallo said.