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Vatican's new banking rules to take effect

March 31, 2011

Tough new standards governing all financial transactions by Vatican agencies will come into effect on Friday, April 1.

The new rules--promulgated by Pope Benedict XVI last December, in response to heavy criticism of the Vatican Bank--call for transparency and careful record-keeping. The Vatican Bank, the Institute for Religious Works (IOR), had come under fire from European banking officials for lax procedures that allowed for exploitation by criminals engaged in money-laundering.

The head of the Italian Anti-Money Laundering Authorities Association says that the new Vatican banking law represents "a great step forward, and in some ways, it is more advanced than the Italian law." However, he still found fault with the Vatican's higher threshold for reporting of cash transactions, and the failure to include strong provisions to combat laundering of profits involved in tax evasion.

The Vatican is hoping that the new standards will qualify the IOR for inclusion on the "white list" of banks whose financial accounting standards meet European standards for transparency. The new Vatican rule will be enforced by a Financial Information Authority, created this year for that purpose.


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