Vatican seeks to expand transparency evaluation

[April 11, 2013]  VATICAN CITY (AP) -- The Vatican is seeking to show off a broader area of improvement in fighting money laundering and terrorist financing as a follow-up evaluation of its efforts looms at the end of the year.

The Council of Europe's Moneyval committee said Wednesday it had agreed to give the Vatican until December to assess its compliance while also accepting the Holy See's request to expand the scope of the evaluation beyond a core set of six criteria.

The Vatican said the aim was "to provide a more complete overview of the measures taken over the last year."

The Vatican submitted itself to the Moneyval evaluation process more than three years ago after it signed onto the 2009 European Union Monetary Convention. Since then, it has written and rewritten a law criminalizing money laundering, created a financial watchdog agency and ratified three anti-crime U.N. treaties, among other measures.

Each of those moves was required by the Financial Action Task Force, the Paris-based policymaking body that helps countries develop anti-money laundering and anti-terror financing legislation.

The Vatican in July passed Moneyval's first evaluation of its compliance with the task force's recommendations, but received poor or failing grades for its financial watchdog agency and its bank, specifically its ability to ensure its customers and transactions are clean.

According to Moneyval's procedures, the Vatican must submit a progress report a year after the initial evaluation, meaning July 2013. That deadline remains, but the report won't be discussed for another five months, during which time the Vatican can continue its efforts to come into compliance.

In addition, the follow-up evaluation usually only concerns compliance with six "core" recommendations out of the overall 49 task force norms.

Of those six, the Vatican had received poor, "partially compliant" grades on half, including those dealing with customer due diligence at its bank and reporting suspicious transactions. Moneyval had said coming into compliance would require yet another revision to the Vatican's anti-money laundering law, revisions that haven't yet been made.

Rather than focus solely on the six "core" recommendations, the Vatican this week asked Moneyval to also consider another nine "key" recommendations in its follow-up evaluation. Many of them concern the activities of the Vatican's financial watchdog agency, which was created amid much fanfare in 2010 to try to respond to international demands for greater fiscal transparency.

Moneyval had found serious problems with the agency's role as a supervisor and regulator of the Vatican's finances, giving it a failing grade.

Since then, the Vatican has brought in a Swiss anti-money-laundering expert, Rene Bruelhart, to take over the agency. Bruelhart was head of Liechtenstein's financial intelligence unit and also headed the Egmont Group, the informal group of about 130 countries' financial units aimed at sharing information.

[Associated Press; By NICOLE WINFIELD]

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