Prosecutors question Vatican commitment to banking rules

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The Independent

Saturday, 23 October 2010

Associated Press

Italian prosecutors contest claims by the Vatican bank that it is trying to comply with international rules to fight money laundering, saying an investigation that led to the seizure of €23 million (£20m) from a Vatican bank account shows “exactly the opposite”, according to a court document.

An Italian court rejected a Vatican request to lift the seizure, leading the Vatican to express “astonishment” at the court’s ruling and indicating the case will not be cleared up quickly, as the Vatican originally predicted.

Since the money was ordered seized last month, the Vatican and the bank’s chairman, Ettore Gotti Tedeschi, repeatedly said the allegations resulted from a “misunderstanding” and that the Vatican bank – officially known as the Institute for Works of Religion – was working to comply with international rules to fight money-laundering.

The strongly worded document from the prosecutors’ office said that while there is a “generic and stated will” to conform by the bank “there is no sign that the institutions of the Catholic church are moving in that direction”.

It said the prosecutor’s investigation had found “exactly the opposite”.

The document was submitted to the court as part of the prosecutors’ case against the bank.

The Vatican spokesman, the Rev. Federico Lombardi, issued a new statement, saying Vatican bank officials “confirm their intent to follow the line of transparency” in all financial transactions and are confident in being able to provide as soon as possible all clarifications requested.

Under the investigation, financial police seized the money September 21 from a Vatican bank account at the Rome branch of Credito Artigiano Spa, after the bank informed the Bank of Italy about possible violations of anti-money laundering norms.

The bulk of the money, 20 million euro, was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.

The prosecutors’ document suggests confirmation of Italian press reports that the probe was widening, looking into possible violations in earlier years linked to Italian corruption, in addition to the two most recent cases.

The document cites suspicious transactions involving cheques drawn from a Vatican bank account at Unicredit bank in 2009, involving the use of a false name.

The prosecutors also cited a 650,000 euro withdrawal from a Vatican bank account at Intesa San Paolo bank where the Vatican did not specify the money’s ultimate destination despite a specific request by the Italian bank.

The prosecutors called this “a deliberate failure to observe the anti-laundering laws with the aim of hiding the ownership, destination and origin of the capital”. The Italian banks declined comment.

The Vatican bank is required to provide such information because it is considered by Italy to be a foreign bank.

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