SUMMARY:
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MONEYVAL REPORT: GIVING CONCRETE FORM TO THE MORAL COMMITMENT OF THE
VATICAN AND THE HOLY SEE
______________________________________
MONEYVAL
REPORT: GIVING CONCRETE FORM TO THE MORAL COMMITMENT OF THE VATICAN
AND THE HOLY SEE
Vatican
City, 18 July 2012 (VIS) - Msgr. Ettore Balestrero, under secretary
for Relations with State, today presented a briefing to journalists
in the Holy See Press Office concerning the publication of the first
Mutual Evaluation Report on the Holy See and on Vatican City State
("MONEYVAL Report") regarding adherence to the 40 + IX FATF
recommendations against money laundering and countering the financing
of terrorism (AML/CFT). Msgr. Balestrero was head of the Holy See
delegation to the plenary session of MONEYVAL held in Strasbourg,
France, on 4 July.
Extracts
from Msgr. Balestrero's English-language presentation are given
below:
"Vatican
City State has a very small territory, with a small population, a
very low level of domestic crime and no market economy. It is not a
financial centre and its financial activities are meant to support
its works of charity and of religion. However the Holy See enjoys a
recognised moral voice and in this sense is deeply connected not only
with its immediate neighbours, but with all countries of the world.
Moreover the Holy See, as primarily responsible for the universal
mission of the Church, has a special ability - even duty - to guide
and orient Catholic religious organisations throughout the world.
While those organisations exist within their own civil jurisdictions
and are bound to follow the laws of those jurisdictions on AML/CFT
issues, it is important that the Holy See use its moral authority to
raise maximum awareness about the far too frequent transnational
crime of money laundering and the financing of terrorism".
Beginning
along the path and first accomplishments
"There
has always been a clear determination to fight money laundering and
terrorist financing, as well as a legal system that already had
several of the elements necessary to tackle ML/FT problems.
"At
the end of 2010, we passed an AML/CFT law and requested evaluation in
February 2011 by MONEYVAL. Our law came into force on 1 April 2011.
Our Financial Intelligence Authority was operational by June. In
November 2011, we received our first MONEYVAL on-site visit. The team
of our evaluators was widely considered to be perhaps the strongest
team MONEYVAL had ever assembled. It included the president, the
secretary and an administrator of MONEYVAL, the president of the
Egmont Group of Financial Intelligence Units, two senior financial
experts and a professor of international law".
Revision
of the First AML/CFT Legislation
"Based
on the preliminary remarks of the evaluators in November, it became
apparent that the first version of the law, while representing an
important effort at proper legislation, contained gaps and other
difficulties that needed to be addressed in order to move forward.
"All
jurisdictions that receive an on-site visit are given two months to
introduce changes in their legislation, that will be included in the
evaluation report. Within this time frame, on 25 January 2012, a new
law was introduced that provided for more effective cooperation among
the Vatican authorities involved in the prevention and countering of
money laundering and the financing of terrorism. The new law stressed
the importance of their mutual connections and the need to better
allocate their respective competences in order to establish a
stronger and more sustainable AML/CFT system".
The
present AML/CFT system
"Some
of the more important elements of the current AML/CFT regime include:
"-
The establishment of a risk-based approach to AML/CFT work,
particularly in regard to the identification of suspicious
transactions.
"-
Enhanced emphasis on international cooperation, including full
exchange of information with foreign counterparts. And I stress that
this includes exchange of information including information prior to
1 April 2011.
"-
Laws relating to financial institution secrecy are consistent with
international standards.
"-
The criminal law is significantly improved, by providing a
comprehensive definition of money laundering, and an array of
predicate crimes in line with international standards, as well as the
criminalisation of the financing of terrorism.
"-
The power of the courts to prosecute money laundering, financing of
terrorism, and its predicate crimes, as well as to freeze and
confiscate the proceeds of ML/FT activity has been strengthened.
"-
The sanctions for failure to fulfil AML/CFT requirements are enhanced
and made applicable to legal persons.
"-
Entering into a Memorandum of Understanding (MOU) is a requirement
for the exchange of financial information with financial intelligence
units from other States. We pledge this to be an effective and
reliable tool for exchanging information on the basis of reciprocity
with those jurisdictions that are also committed to the fight against
money laundering and the financing of terrorism.
"-
The power of the AML/FT supervisor to perform an inspection of any
financial institution is made explicit and the law provides for the
creation of a specific and detailed regulation upon the basis of
which that inspection could be conducted.
"In
addition, the Holy See, acting also on behalf of Vatican City State,
has ratified the following Conventions: the Vienna Convention against
Illicit Traffic on Narcotic Drugs and Psychotropic Substances (1988);
the New York Convention for the Suppression of the Financing of
Terrorism (1999), and the Palermo Convention against Transnational
Organised Crime (2000).
"These
Conventions are immediately applicable in our legal system, without
any further need to implement legislation regarding extradition and
cooperation.
"In
addition, the area of international cooperation was carefully
assessed The findings of the evaluators were that the current system
of the Holy See and of Vatican City State is largely compliant with
international standards".
Areas
Where Evaluators Noted a Need for Improvement
"We
are aware that, like other jurisdictions, some areas of the Vatican’s
systems to fight money laundering and the financing of terrorism
still need to improve. After the new law was adopted in January, we
addressed many of these issues in the course of our continuing
exchanges with the evaluators. Other issues will be addressed
expeditiously and giving proof of effectiveness. For example:
"-
There are some concerns expressed in the report regarding the use of
an MOU to establish the basis for international cooperation between
financial intelligence units. We feel that the adoption of this
requirement, which is in line with international standards,
represents the right approach for the Vatican which, as a smaller
jurisdiction, wishes to interact on fair and fully reciprocal terms
with other countries. Indeed, this is a common choice made by many
jurisdictions, including New Zealand, Canada, Australia and others;
nor is this choice disfavored by such noted FATF members as the
United States.
"-
The Pontifical Commission is mandated by the law to provide for a
regulation permitting the AML/CFT supervisor to perform on-site
inspections. The evaluators note that until such a regulation becomes
law, the supervisor's inspection powers are not yet defined. We
agree. That regulation, which is already being drafted, will reflect
our seriousness of purpose.
"-
The report notes that the original structure of a Financial
Intelligence Authority, which combines the financial intelligence
unit function and the regulatory functions of a supervisor, appears
to create difficulties. This structure of the FIA, which concentrated
all AML intelligence and supervision, was inherited from the first
version of the law. It was retained in the second version of the law.
The evaluators have expressed certain scepticism as to its
'workability'. We are grateful for this observation which we take
seriously.
"-
The report notes that conflicts of interest may arise due to the same
person working at the same time as a supervisor and in one of the
supervised entities".
Next
Steps After Passing the New Law
"After
adoption of the present law, the Holy See has continued to improve
its anti-money- laundering system. Above all, the Holy See and the
Vatican authorities have moved from shorter-term solutions to the
creation of long term, sustainable and effective solutions; and will
continue to do.
"For
example, after 25 January, that is after the above mentioned period
of two months following the first on-site visit:
"-
The Holy Sere established and implemented a terrorist list in line
with the measures required by the United Nations Security Council.
"-
We have officially applied to join the Egmont Group, which is the
internationally accredited group of Financial Intelligence Units
formed to favour rapid and reciprocal exchanges of information.
"-
Through the execution of memoranda of understanding, we have
expeditiously moved to insert our own financial intelligence
authority into the international network of financial intelligence
units.
"-
As mentioned, the Commission of Cardinals for Vatican City State is
in the process of adopting an inspection regulation.
"-
We have initiated further revision of our criminal law, with a view
to further modernise its provisions in light of international
standards.
"-
Shortly we will complete our risk assessment.
"-
We are considering ratification of other crime fighting conventions
and new legislation regarding non-profit organisations".
Conclusion
"We
have taken a definitive step to lay the foundations to a structure -
a house if you will - that is to a robust and sustainable system to
combat money laundering and the financing of terrorism. Now it is our
wish to fully construct a building that effectively shows the Holy
See’s and Vatican City State’s desire to be a reliable partner in
the international community".
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