'Moneyval' report gives Vatican passing grade on financial transparency

July 18, 2012

European banking inspectors have given the Holy See generally passing grades in an audit of financial transparency, while citing some deficiencies and calling for improvement.

The “Moneyval” report, prepared by independent inspectors at the request of the Holy See, found that the Vatican met Europe’s tough new standards on 9 of the 16 testing criteria. The report offered suggestions for improvement on the 7 other criteria.

Moneyval evaluations typically fault financial institutions on at least some of the 16 criteria, and the criticism leveled at the Vatican on some issues was not unexpected. The nature of the Moneyval report enabled journalists to portray it as either an endorsement or a rebuke of Vatican financial management. But the report did give Vatican officials a passing grade, and complimented them on the steps taken during the past year to increase the transparency of financial transactions.

The Moneyval standards are designed to prevent money-laundering and the financing of terrorist or criminal groups. Commenting on the July 18 report, Msgr. Ettore Ballestero, the undersecretary for relations with states, said that the Vatican is strongly committed to the effort. “For the Holy See, this process is first and foremost a moral rather than a technical commitment,” he said.

“We are aware that, like other jurisdictions, some areas of the Vatican’s systems to fight money laundering and the financing of terrorism still need to improve,” Msgr. Ballestero said. He added that the Vatican would take steps to implement the suggestions found in the report.

The Moneyval report was most critical of the Vatican’s newly formed Financial Information Authority. The European inspectors said that the organization, which is intended to supervise all financial activities involving the Vatican, does not appear to have the authority and resources necessary to maintain adequate oversight. The report also recommended more professional oversight of the Vatican bank, the Institute for Religious Works.

The Moneyval report was completed and delivered to the Vatican early in July. Originally, officials said that the report would not be made public for a month, until Vatican financial personnel had an opportunity to review and comment on the findings. But in fact it was published in two weeks.

 

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Further information:

• Vatican reacts to Moneyval Report (Vatican Radio)
• Moneyval Report: Giving Concrete Form to the Moral Commitment of the Vatican and the Holy See (VIS)
• Vatican passes key financial transparency test (AP)
• Report berates Vatican bank, urges serious reform (Reuters)
• European banking inspectors report on Vatican procedures (CWN, 7/5)