Vatican bank sets up anti-money-laundering unit to end financial scandals

ROME - The Vatican has announced the setting up of an anti-money laundering unit to make its financial dealings more transparent and bring it into line with international legislation designed to prevent money-laundering.

The move came after an Italian court in September froze 23 million Euros of the Vatican’s money over claims that its bankers were trying to move the cash across international borders without identifying its source, destination or purpose.

According to the Guardian, the head of the Vatican bank, Ettore Gotti Tedeschi, and his deputy are still under investigation on suspicion of money-laundering, although no charges have been brought against the two men, who both deny wrongdoing.

Full details of the new measures are to be released on Thursday, but a statement made clear they would include the creation of a new compliance authority and the introduction of legislation to combat money laundering and the financing of terrorism.

The Vatican bank, known as the Institute for the Works of Religion, or IOR, is perhaps the world’s most extraordinary financial organization.

Its reputedly state-of-the-art facilities are housed in a 15th century tower next to the pope’s palace and its ATM behind St Peter’s Basilica is in Latin.

In the 1980s the IOR was at the centre of a long-running scandal arising from its involvement in the 1.3 billion dollar collapse of Italy’s largest private bank, Banco Ambrosiano, and the death of the bank’s chairman, Roberto Calvi, whose body was found hanging under Blackfriars Bridge in London.

The Vatican denied any wrongdoing but paid 250 million dollars to Ambrosiano’s creditors.

The IOR was set up to look after the wealth of Catholic organizations, such as religious orders. Its statutes allow lay individuals to open accounts, but only if the purpose is to promote “works of religion or charity”.

The new rules appeared designed to comply with a mutually agreed deadline of 31 December for the implementation of the EU’s money-laundering directive.

The Vatican had also undertaken to set up a financial watchdog body by the first day of 2011. (ANI)