What an upcoming appointment will tell us about Vatican financial reform

Catholic Church

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Vatican Metropolis, Mar 24, 2021 / 12:00 pm (CNA).- The Vatican’s financial watchdog will quickly get a brand new director answerable for its supervision unit. Carmelo Barbagallo, president of the Vatican Supervisory and Financial Info Authority (Autorità di Supervisione e Informazione Finanziaria, or ASIF), broke the news in a March 20 interview with Vatican media.

The information appeared in one of the final strains of the textual content, and actually, appeared to be a marginal difficulty. Within the interview, Barbagallo praised the Authority’s work thus far and underscored its partnership with the Egmont Group, which gathers 160 monetary intelligence models worldwide.

Presently, the supervision unit is overseen by Alessandra Coni, as Barbagallo explained in an interview with the Italian newspaper Corriere della Sera on July three, 2020.

In the interview, Barbagallo also famous that the two models of the Authority have been led by ladies: Coni is on the helm on the supervision unit, whereas Diana Rocco leads the financial intelligence unit.

The watchdog, previously often known as the Financial Info Authority (Autorità di Informazione Finanziaria, or AIF), was subsequently reformed and a new unit added, the Regulation and Authorized Affairs Unit.

Barbagallo did not reveal who can be the new individual at the supervision unit. But the upcoming appointment could possibly be vital.

If the new director comes from an Italian establishment, it might affirm a growing Vatican development.

This development emerged early in the Vatican financial watchdog’s journey. Francesco De Pasquale, first AIF director after which president, got here from the Financial institution of Italy. The board members have been all Italians and, apart from Giuseppe Dalla Torre, all came from the Financial institution of Italy milieu.

The Vatican’s anti-money laundering regulation was then reformed, and the AIF took on a extra worldwide facet. The director after which president was René Brülhart, a prime skilled on money-laundering issues, whereas the board included just one Italian, Maria Bianca Farina, a supervisor from Poste Italiane, the Italian postal service.

Pope Francis lately restored the Italian-Holy See connection, after the so-called Sloane Avenue scandal: the controversial Secretariat of State investment on a luxurious actual property in London.

The scandal got here while both the mandates of the AIF president and director have been expiring. Brülhart was not confirmed as AIF president, and Carmelo Barbagallo, coming from the Bank of Italy, was referred to as to exchange him. The director Tommaso Di Ruzza was not renewed either and was replaced by Giuseppe Schlitzer, who additionally collaborated with the Financial institution of Italy prior to now.

Additionally it is noteworthy that Diana Rocco comes from the Financial institution of Italy’s monetary intelligence unit.

Other Vatican appointments confirmed the development. The president of the Vatican Tribunal is Giuseppe Pignatone, a retired Italian public prosecutor. The Vatican’s prosecutors are all Italian, and either at present work or previously worked for legal companies in Italy. Saverio Capolupo, the previous commander common of Italy’s financial police pressure, is now president of the Monti Basis, which manages the disgraced IDI hospital.

Beyond this piece of stories, Barbagallo’s interview with Vatican media has another fascinating points.

He confused that the Holy See made a “vital” selection to hitch the Egmont Group, “a worldwide forum of the Financial Intelligence Models of over 160 nations, that share good practices for the worldwide cooperation and the trade of monetary intelligence info.”

Through the in-flight press conference coming back from Japan in 2019, Pope Francis careworn that Egmont Group is “a personal group.” At that time, the Egmont Group had unplugged the Vatican Monetary Intelligence Authority from its safe community to change info. The rationale was that through the Sloane Avenue investigation, Vatican police had seized some monetary intelligence paperwork within the Vatican monetary watchdog workplaces, thus jeopardizing the establishment’s autonomy.

Egmont re-admitted the Authority into its secure community solely when the AIF and the Vatican tribunal signed a memorandum of understanding concerning the documents’ use.

In the interview, Barbagallo also praised how the Vatican anti-money laundering system has been perfected over time. He especially underscored the 2013 anti-money laundering regulation, followed by the AIF’s new statutes in 2014.

He stated that the monitoring system had been more and more strengthened, noting that there had been several memoranda of understanding between the AIF and its counterparts everywhere in the world.

After praising the past, Barbagallo noticed that underneath his presidency the AIF’s statutes have been amended. The AIF changed its identify to ASIF, thus “rationalizing and strengthening its governance.”

The change of identify had been discussed already in 2012 when Cardinal Attilio Nicora was the Authority’s president. Nicora finally determined to maintain the identify as altering it may need created some confusion.

Additionally, the amended statutes enhanced the ASIF president’s power, in a type of “return to the previous.”

Within the 2014 AIF statutes, the Authority’s president was designed as a guarantor, while the director was in control of operational issues and the board outlined the overall methods. The new statutes appear to limit the director’s powers, while the board has taken on a extra government position. This may prompt some issues for an eventual battle of interest, because the board members also work for other establishments.

While praising the work finished up to now, Barbagallo’s interview didn't handle a number of the issues at stake. In the long run, Barbagallo has never faced a press convention presenting ASIF’s work and criteria.

The ASIF president burdened that the Authority was “briskly working,” waiting for Moneyval’s progress report. Moneyval is the Council of Europe’s committee that evaluates how its member states match worldwide standards in countering money-laundering and the financing of terrorism.

The Holy See joined Moneyval in 2011. In 2012, Moneyval submitted a complete report on the Holy See/Vatican Metropolis State, followed by three progress studies in 2013, 2015, and 2017.

The upcoming progress report will probably be issued throughout Moneyval’s plenary assembly, scheduled for April 26-30. The report shall be concerning the effectiveness of the anti-money laundering system. Moneyval will look into the Vatican judicial activity of the last five years to assess if the Vatican prosecutor has followed Moneyval’s recommendations and how.

The report will say if the current trials and investigation of Vatican financial issues can be sufficient for the Vatican judicial system to move the check. Moneyval had prior to now criticized the effectiveness of the system.

Its 2017 report famous that “the general effectiveness of the Holy See’s engagement with combatting cash laundering depends upon the results which might be achieved by the prosecution and the courts.”

The report also harassed that “the outcomes on the regulation enforcement/prosecutorial/judicial aspect two years after the final evaluation stay modest.”