Vatican clean-up 'has not sorted out scandal-hit bank and asset managers'

http://www.theguardian.com/world/2013/dec/12/vatican-cleanup-scandal-bank-council-europe

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The Vatican's efforts to clean up its financial institutions were welcomed in a report by a Council of Europe body, published on Thursday. But the authors expressed surprise that the Holy See's regulators had not done full inspections of the Vatican bank or of the Administration of the Patrimony of the Apostolic See, which manages the papacy's assets.

Both groups were embroiled in scandal this year when Italian police arrested a prelate who allegedly tried to smuggle €20m in cash into Italy from Switzerland by way of the Vatican bank, properly known as the Institute for the Works of Religion.

The prelate, Nunzio Scarano, is now on trial in Rome charged with corruption and slander.

The report, by Moneyval, the Council of Europe body, which monitors safeguards against money laundering and terrorist funding, revealed that the financial clampdown, which began under Pope Benedict XVI, had led to a surge in reports of suspect transactions.

It said the Holy See's supervisory body, the Financial Intelligence Authority (FIA), had received 105 notifications of suspect transactions in the first 10 months of 2013, compared to just six last year.

The reporting had led to three cases being referred to the Vatican's prosecutors for investigation. They are known to have included the Scarano affair.

But no details were provided of other cases. A table in the report shows the Vatican prosecutors seized €1.98m in one case, again presumably that involving Scarano.

Moneyval said that "a very wide range of legislative and other measures have been taken in a short time" to implement recommendations it made last year. The powers of the FIA were now much clearer.

But the body added that the authority, headed by a Swiss lawyer, René Bruelhart, needed more resources. It was especially important to bring in "experienced professionals" to monitor the soundness of the Vatican's financial institutions. The FIA planned to comb through the books of the Vatican bank this month or next. But there appeared to be no firm plan yet for a visit to APSA.

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