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ASIF continues on the path to financial transparency
The Vatican’s Financial Supervision and Information Authority publishes its annual report, showing increasing alignment with international standards for combating money laundering and terrorist financing.
By Salvatore Cernuzio
The Vatican’s Financial Information and Supervision Authority (known by its Italian initials as ASIF) on Monday released its annual report for 2023.
The document recorded 123 reports of suspicious activities, 118 of which came from the Institute for Works of Religion (IOR), commonly known as the Vatican Bank. There was a decrease in the number of suspended operations (only one case; in 2022 there were five) and also in the number of reports sent to the Public Prosecutor’s Office (11, compared to 19 two years ago) – a sign that the system has stabilized within security and transparency parameters.
Intense national and international cooperation
At the same time, internal cooperation with other competent authorities of the Holy See and the Vatican State, and international cooperation with participation in the Moneyval and Egmont forums, among others, were on the rise. The training experiences have been “intense”, with relationships and the exchange of best practices with the Bundesbank and the Bank of Italy proving particularly fruitful.
The number of memoranda of understanding also increased in 2023, which saw agreements signed in 2023 with a further nine countries: Algeria, Azerbaijan, Bahamas, Curaçao, Lebanon, Senegal, Mauritius, Nepal and Zambia.
ASIF thus continued to offer a contribution to the recovery of revenue from criminal activities, becoming a center for net revenue through the exchange of information also with its international counterparts.
Barbagallo: the year with the most conflicts
All this in a year, 2023, which – as the president of ASIF, Carmelo Barbagallo, highlights in his introductory letter to the report – “has actually distinguished itself as the year with the highest number of conflicts since the Second World War”. Barbagallo notes that “this situation contributes to making international relations increasingly complex and difficult”, while at the same time serving “as an incentive to fight against money laundering and the financing of terrorism at a global level”.
“Maintaining and developing a strong network of international relations continues to be a fundamental strategic objective of ASIF in serving the interests of the jurisdiction,” continued Barbagallo.
Barbagallo also emphasized that “fruitful international relations were accompanied by equally fruitful relations” within the Vatican with the Office of the Prosecutor, the Gendarmerie and the Office of the Auditor General, thanks to “intense collaboration; as well as multiple opportunities for discussion and knowledge with the Financial Security Committee, the State Secretariat, the Economy Secretariat (SpE) and the Governorate.
Schlitzer: Involvement in the international arena
In turn, the Director of ASIF, Giuseppe Schlitzer, in the introduction to the document, stated: “Engagement in the international arena continued to be a priority for the Authority, particularly with regard to Moneyval, the Committee of Experts on the Assessment of Anti -Money Laundering and Terrorist Financing Measures incardinated in the Council of Europe.”
He went on to describe the Authority’s “external outreach” to equivalent authorities in other jurisdictions as “significant,” while also noting the “assiduous” collaboration with the other competent Authorities of the Holy See and the Vatican City State.
Surveillance over the IOR
The report then delves into ASIF’s supervisory activity – in its two components of combating money laundering and terrorist financing and prudential – with regard to the IOR, the only entity within its jurisdiction that is authorized to carry out financial activities professionally .
Under the Memorandum of Understanding with SpE, ASIF monitored the procedures adopted by the IOR to comply with the requirements established by the 2015 Agreement with the United States for Tax Compliance and Implementation of the Foreign Account Tax Compliance Act (the so-called Agreement FATCA). The report explains that since 2020, the Supervisory Office has carried out three inspections of the IOR, including a “broad” prudential inspection, a follow-up inspection and a “targeted” inspection on AML/CFT.
Moneyval recommendations and European directives
Also “worthy of note” is the work to review Law XVIII of November 2023 on Transparency, Supervision and Financial Information, which became necessary to implement some recommendations from the Moneyval Mutual Assessment Report (April 2021) and to align some provisions with European directives, as agreed in the Joint Committee (body that oversees compliance with the Monetary Agreement with the EU).
Suspicious Activity Reports
As for specific activities, ASIF reports 123 “suspicious activity reports” (STRs) received in 2023, including 118 from the IOR, four from authorities of the Holy See and Vatican City State, and one from a non-profit organization (NPO ). numbers that are in line with those recorded in 2022. On the other hand, the reports sent to the Prosecutor of Justice seem to have decreased to just 11 – a number that, along with others, can be read as representing a stabilization of security and parameters of transparency.
Just one case of suspension of operations
The number of suspensions of operations and transactions also fell, with only one case (involving a “modest” value of 5,848 euros) that required the use of preventive measures under article 48 of Law no. This marked “a substantial decrease” in the number of cases that required preventive measures by ASIF compared to the previous two years: in 2021 there were 4 suspensions of operations and transactions and the blocking of a current account, for a total amount of 626,188 euros; in 2022 there were 5 suspensions of operations and transactions totaling 829,050 euros.
Nine memoranda of understanding signed
In the field of international cooperation, in 2023 ASIF sent 22 requests for information or spontaneous communications to its counterparts, receiving 10 of these communications in return.
As mentioned above, there has been substantial activity with regard to memoranda of understanding with foreign financial intelligence units (UIF), with all nine signed in 2023. In fourteen years of activity, ASIF has seen the number of memorandums signed increase from 67 for a total of 76.
Money transport
Finally, with regard to declarations for the cross-border transport of valuables, in 2023 ASIF recorded an increase in declarations received, with 165 declarations worth more than 15 million euros (15,462,762); and 361 declarations issued, with a total value of more than 5 million euros (5,201,311). The Authority highlighted that this follows a trend observed since 2019, explaining that the vast majority of the amounts declared are attributable to the activity of the Vatican Public Authorities.
Alignment with international standards
The activities described in the report thus show how the Authority continues to pursue the objectives for which it was created in 2010 by Benedict XVI, in particular: high-quality action to prevent and combat money laundering and terrorist financing, and to financial transparency. The positive results achieved demonstrate a consolidation of the Vatican’s alignment with the best international standards.
Read the full report here.