http://www.zerohedge.com/news/2013-09-30/vatican-bank-shut-all-embassy-accounts-halt-money-laundering
Submitted by Tyler Durden on 09/30/2013 19:15 -0400
http://www.reuters.com/article/2013/09/16/us-vatican-bank-prelate-idUSBRE98F0HE20130916
Vatican Bank To Shut All Embassy Accounts To Halt Money Laundering
Followng Pope Francis' demand that the Vatican Bank review its procedures, Reuters reports that the bank is likely to close all accounts held by foreign embassies, following concerns about large cash deposits and withdrawals by the missions of Iran, Iraq and Indonesia, according to people with knowledge of the situation. The private bank IOR has around EUR7.1 billion in assets but is concerned it could be "an unwitting vehicle for money laundering and other illicit finances."
The Vatican bank is likely to close all accounts held by foreign embassies, following concerns about large cash deposits and withdrawals by the missions of Iran, Iraq and Indonesia,according to people with knowledge of the situation.The Vatican's financial watchdog, which examined the transactions in 2011, believed the embassies' justifications for the transactions were too vague or disproportionate to the amounts -- up to 500,000 euros at a time -- these people said. In one case, a large cash withdrawal was said to be for "refurbishment", one person added.Now the bank and the watchdog want to reduce the possibility that the Institute for Religious Works (IOR), as the bank is called, could be an unwitting vehicle for money laundering and other illicit finances.Four people with knowledge of the matter said the closure of the accounts was likely to be a key recommendation of a broad review that Pope Francis has ordered of the bank, whose scandal-tainted history has long been an embarrassment for the Holy See....The IOR is a private bank - currently with about 7.1 billion euros in assets under management - whose stated goal is to hold and manage funds for religious orders of priests and nuns, Catholic charities, Vatican employees, and other Catholic institutions. But the number of account holders has swelled to 19,000 over the years and diversified beyond the original categories with the right to hold accounts....The bank is also coming clean on possible illicit financial activities.The Vatican has said it detected six possible attempts to use the IOR to launder money last year, and at least seven in the first half of this year. In one case, a prelate who had close ties to the IOR was arrested in June on suspicion of plotting to smuggle 20 million euros in cash into Italy from Switzerland to give to rich friends in southern Italy.The prelate, who will be tried in December, says he was not acting for personal gain.
(Reuters) - The Vatican department in charge of paying salaries and managing real estate acted improperly as a parallel bank, providing accounts to outsiders, an arrested prelate who worked there for 22 years has told Italian prosecutors.
The latest allegations of misdoings come as Pope Francis struggles to tackle years of financial scandals involving the Vatican bank, which has long been in the spotlight for failing to meet international standards against tax evasion and the disguising of illegal sources of income.
The allegations concerning the Administration of the Patrimony of the Apostolic See, known as APSA, will present another headache for the pope, who has appointed two commissions to advise him on how to clean up Vatican finances.
A key suspect in a widening investigation by Italian magistrates looking into alleged money laundering through the Vatican bank told them that officials at APSA allowed the office to be used by outsiders even though it was against its regulations, according to a transcript of his questioning.
The prelate, Monsignor Nunzio Scarano, 61, is under investigation by magistrates in his home city of Salerno, where he is suspected of using his close ties with the Vatican bank to launder money. He is under arrest in a hospital in Salerno.
Scarano's lawyers say he did not launder money.
Scarano was arrested in Rome on June 28 along with an Italian secret service agent and a financial broker in a separate investigation concerning an alleged plot to smuggle 20 million euros ($26 million) into Italy from Switzerland.
Under questioning by Rome magistrates in July, Scarano said some officials at APSA, whose purpose is to pay Vatican salaries, fund its departments and manage its real estate, allowed the department to be used improperly by outsiders.
"As APSA, we were not allowed to have outside clients, but, despite this, in reality, we acted as a bank," Scarano told the magistrates, according to the transcript of the questioning obtained by Reuters.
"We took in money, used it, and paid out interest to depositors," he said.
The Vatican spokesman, Father Federico Lombardi, said he had no comment on Scarano's questioning.
BANK ACCOUNT
During the questioning by magistrates, Scarano named one Italian banker who had an account at APSA. That account was closed when the banker was caught up in an Italian investigation into market-rigging, Scarano added. Another account holder at APSA was a long-time Vatican benefactor, the prelate said.
Scarano also told prosecutors that he informed a superior of his concerns with the so-called "lay accounts". After this meeting, Scarano said some of the accounts were closed, but then he was promoted to another APSA office where he subsequently had limited access to first-hand information.
In addition to managing real estate and paying salaries, APSA acts as the purchasing office and human resources department for the Vatican, according to the department's statute. Among its lesser-known roles are financial portfolio management and stock management for the Vatican.
Vatican sources say the pope wants the Holy See to cooperate with Italian investigators on the Scarano case. Speaking to reporters aboard the plane taking him back from Brazil in July, Francis used an Argentine expression that means "he's no saint".
Through his position at APSA, Scarano had ready access to the Vatican bank, formally known as the Institute for Works of Religion (IOR), where he had several accounts.
The IOR is currently under pressure from the international financial community to ensure more transparency and comply with international standards against money-laundering.
Since his arrest, Scarano has written three letters to Pope Francis and has asked to meet the pontiff to tell him of what he says were irregular activities in financial administration.
http://bigstory.ap.org/article/vatican-hires-swiss-anti-money-laundering-expert
VATICAN CITY (AP) — The Vatican has hired a Swiss anti-money-laundering expert to advise it as it moves into a new phase of trying to combat money laundering and terrorist financing.
The announcement Tuesday came two months after the Holy See passed a key European financial transparency test, but received failing grades for its financial watchdog agency and its bank, long the source of some of the Vatican's more storied scandals.
The Vatican said attorney Rene Bruelhart, 40, would help strengthen the Vatican's regulatory framework as it moves to implement the recommendations from the Council of Europe's Moneyval committee, which evaluated the Holy See's financial trustworthiness.
For eight years Bruelhart was head of Liechtenstein's financial intelligence unit — the national agency that analyzes information about suspect financial transactions. In 2010, he was also named head of the Egmont Group, the informal group of about 130 countries' financial units aimed at sharing information.
In his new role, Bruelhart will have to tackle some of the serious problems singled out by the Moneyval inspectors concerning the Vatican bank and its financial oversight agency, created amid much fanfare in 2010 to try to respond for international demands for greater transparency.
The bank, or the Institute for Religious Works, isn't a traditional bank per se but rather a private financial institution created in 1942 to manage the pope's assets destined for religious or charitable works. Today it has about €6 billion ($7.7 billion) in assets, which it invests primarily in bonds and the stock market, and its 35,000 accounts belong primarily to Vatican employees and religious orders.
The institute, known by its Italian acronym IOR, has long been the subject of rumor and scandal, earned in part because of its role two decades ago in one of the most spectacular banking collapses in Italy, and ongoing suspicions by Italian investigators — which the Vatican denies — that it hasn't abided by anti-money-laundering norms.
The Vatican subjected itself to the Moneyval evaluation in a bid to move beyond the IOR's tainted past and get onto the so-called "white list" of countries that share financial information.
One of the areas where Bruelhart will have to focus his attention is the Vatican's new Financial Intelligence Authority, which received a failing grade. Moneyval said its role, authority and independence was unclear. Moneyval also said the IOR's rules for customer due diligence, wire transfers and suspicious transaction reporting were insufficient.
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