Vatican to Combat Money Laundering

by Katy Murcutt - Paralegal

30 December 2010, filed under Consumer

The Vatican has set up a watchdog to provide greater transparency for its financial operations in a bid to quash money laundering.

The Pope has agreed for the Vatican's finances to be regulated in line with international laws to prevent money laundering and the potential financing of terrorist acts.

This move directly follows accusations made by the EU against the Vatican for breaching money laundering rules.

Back in September, prosecutors in Rome ordered a criminal investigation against Ettore Tedeschi, the director of the Vatican Bank, after the Bank of Italy hinted of possible money laundering by the Vatican.

Italian authorities seized almost £20 million deposited at a branch of an Italian bank close to the Vatican.

The Vatican has stated that a misunderstanding had occurred and there had been no wrongdoing by either the bank or its employees.

On Thursday, Pope Benedict XVI signed the legal documents to confirm the Vatican's crackdown on money laundering rumours.

The Vatican is acting ahead of the EU deadline of 31st December 2010 whereby each party is to create an authority to oversee all financial operations.

It is likely the new laws will come into force on 1st April 2011 or earlier, once members of the Vatican's financial watchdog have been chosen.

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