Vatican City, Jan 23, 2013 / 20:03 pm

With credit card transactions suspended in Vatican City since the new year, three-way talks are due to be held among the stakeholders on Jan. 25 to help resolve the situation.

"The parties have resumed work and in the course of next week there will be a technical meeting," the Italian wire service ANSA was told Jan. 17.

Italy's central bank, the Bank of Italy – analogous to America's Federal Reserve – refused to authorize Deutsche Bank Italia to transact foreign credit cards in tiny city-state beginning Jan. 1.

This has meant that those visiting the Vatican must bring cash for the price of admission to the state's museums, and to purchase good at Vatican gift shops, post office, and pharmacy. Normally, visitors are able to pay by credit or debit card, and utilize ATMs.

In 2011, 5 million visitors to Vatican City spent some $121 million. Catholic World News estimated that only being able to accept cash is costing the Vatican some $40,000 per day.

Bank of Italy claimed it made its decision due to what it called a lack of anti-money-laundering measures in the state.

"The Vatican City does not have either a banking regulatory framework or European recognition of 'equivalence' for anti-money-laundering purposes," said a Jan. 10 statement from Bank of Italy provided to CNA.

"The Bank of Italy therefore had no choice but to reject the request...put forward by Deutsche Bank Italia."

The bank added that there was "no discretionary decision" and that "any other European supervisory authority would have behaved in the same way."

European Union law on banking and anti-money-laundering permits its banks to operate in non-European Union countries only if they have adequate regulation in place.

In July, the Council of Europe's Moneyval found that while the Vatican had made progress against money-laundering, it was still less than compliant with seven of 16 "key and core" recommendations for combatting terrorist financing and money-laundering.

"The Holy See has come a long way in a very short period of time and many of the building blocks of anti-money laundering and combating the financing of terrorism regime are now formally in place," concluded the Moneyval report July 18.

"But further important issues still need addressing in order to demonstrate that a fully effective regime has been instituted in practice."

Because of this, Vatican City was unable to be placed on the Council of Europe's "White List" of nations adhering to the highest standards of financial transparency.

This report was cited by Bank of Italy as a basis for its decision to suspend credit card transactions in Vatican City.

After Moneyval's report, the Vatican hired Rene Bruelhart as a consultant to assist the the Holy See in implementing the study's concerns, "strengthening its framework to fight financial crimes," Vatican spokesman Father Federico Lombardi said in September.

Bruelhart heads the Vatican's internal scrutiny body, Financial Information Authority. Bruelhart is one of the leading experts on money laundering and spent eight years at a similar position in Liechtenstein.

In a Jan. 13 interview, Bruelhart told Corriere della Sera that "I'm surprised by the measures taken by the Bank of Italy to block all credit card services of the Deutsche Bank in the Vatican."

He explained the Vatican was not subject to any special measures for monitoring money laundering by Moneyval, or any other international body.

"We don't have problems with other European countries," he added.

"On the contrary, we have close collaboration and no other country in the world has adopted similar measures, which is why I'm truly surprised."

He said that since the July report, the necessary steps have been taken to improve financial transparency in the state.

In December, the Vatican secretary of state Cardinal Tarcisio Bertone announced that the nation's financial regulations were being adjusted, giving Financial Information Authority more autonomy from the secretariat of state.

"The reality is that, considering the particular nature of the Vatican City State, adequate measures have been adopted for vigilance, prevention and fighting money laundering and financing terrorism."