Italian court upholds seizure of Vatican bank funds
December 20, 2010
An Italian court has rejected a motion to release €23 million in funds that were seized in September from the Vatican bank.
The funds were frozen by Italian authorities in connection with a money-laundering investigation. Officials at the Vatican bank, the Institute for Religious Works (IOR), had insisted that the failure to provide proper documentation for the transfer of funds was a clerical error, which could quickly be explained. The Vatican had asked an Italian court to lift the freeze on the funds-- a highly significant move, insofar as officials of the Holy See were deliberately accepting the authority of the Italian judicial system over the IOR, which is not ordinarily subject to Italian law since it is an arm of the sovereign Vatican city-state.
But Judge Maria Teresa Covatta said that the purpose of the transactions in question was still unclear, and refused to lift the freeze on the funds. Italian banking authorities have charged that the IOR has conducted transactions for shadowy Italian figures who are seeking to avoid disclosure of their financial affairs.