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Vatican fights money laundering.

Pope decree against money laundering. Photo credit to REUTERS/Tony Gentile

Pope Benedict XVI on Thursday issued a document to combat money laundering in financial institutions in the Vatican, three months after the Vatican Bank was investigated.  Benedict’s ‘Moto Proprio’ document, concerns ‘the prevention and opposition to illegal financial activity’, according to a Holy See press release.

The changes come in the wake of an investigation into the bank – also known as the Institute for Religious Works (IOR)- for alleged violation of money-laundering rules.

In September, Italy’s financial police seized 23 million euros from IOR after the financial intelligence office at the Bank of Italy noticed two operations by the bank that it deemed suspicious.

Through an apostolic letter, Benedict XVI stressed his commitment to the adoption of the principles and legal instruments promoted by the international community to combat the phenomenon of money laundering and terrorist financing and indicates that the Vatican adopts all rules for this purpose.

The Pope states that the “law for the prevention and combating of money originating from criminal and terrorist financing” is applied to the offices of the Roman Curia and all of its agencies and subsidiaries, creating the Authority of Financial Reporting (IDA) which provides skills in these areas.

The vatican decree is the application of the rule of the Monetary Convention signed on December 17th 2009 in Brussels between the European Union (EU) and the Vatican, to combat illegal activities in the financial and monetary field.  If there are assumptions of crime , according to that established in the vatican law , the Pope will delegate the alleged criminals to the judiciary organs of the State of Vatican City , and leave the exercise of criminal jurisdiction to the offices of the Roman Curia and of all agencies and subsidiaries of the Vatican.

Illegal financial activity will then be punished under current Italian laws, including possible imprisonment of six months to a year, and fines from 5,000 to 50,000 euros (S$86,000), according to Italian media reports on Thursday.

With these measures, the Vatican wants to join in the “white list” or list of states that comply with the standards for combating money laundering in the Organization for Security and Cooperation in Europe (OEEC).