Vatican Financial Information Authority records increased collaboration in annual report

By Vatican News

The Vatican’s Financial Information Authority (AIF), has released its latest annual report, highlighting the activities of the institution, and the results obtained in the past year.

Presenting the report, AIF President Carmelo Barbagallo said that since the establishment of the AIF in 2010, it has grown to gain a solid reputation as “an active player in the fight against money laundering and the financing of terrorism.”

He pointed out that the aim of the institution’s activities in these past months includes: ensuring operations in the realm of international cooperation, consolidating collaboration with other institutions of the Holy See and the Vatican City State, intensifying prudential supervision, reinforcing the Authority’s governance and staff, and reorganizing the Authority.

Cooperation with local and domestic authorities

The annual report shows that the AIF succeeded getting reinserted back into the Egmont Group (the forum that gathers the Financial Information Units around the world) after a two-month suspension in November 2019. Crucial to this was a Memorandum of Understanding (MoU) signed by the AIF and the Promoter of Justice.

At the domestic level, the Authority also signed four Memoranda of Understanding with different domestic authorities between February and June of this year. That list names the Secretariat of State, the Secretariat for the Economy, the Promoter of Justice, the Gendarmerie and the General Auditor.

Prudential supervision

Barbagallo said that the supervision of entities that carry out a financial activity on a professional basis was based on AIF’s regulations and operational practices.

The AIF report indicated that the institution conducted inspections of the Institute for Works of Religion (IOR) in August 2019 and May 2020. He also added that progress had been made on the personnel front as the number of staff in the AIF had seen an increase.

Change of name

The AIF President announced that the name of the Authority would change to the Supervisory and Financial Information Authority (SFIA). This name, Barbagallo said, “highlights the Authority’s dual nature as intelligence unity and supervisory (and regulatory) authority.” 

Barbagallo also hopes to issue a new Statute and the first internal regulation of the Authority to set out “detailed procedures in the furtherance of a healthy and transparent administration.”

Prevention of financial fraud

The report indicates a considerable decrease in the flow of cross-border money. In 2019 for example, 1,121 incoming and outgoing declarations were recorded, totaling just over 21 million Euros, compared with 1,239 declarations in 2018 which amounted to over 26 million Euros.

The Holy See is, therefore "strongly committed to ensuring international cooperation and the exchange of information for the prevention of tax evasion and the promotion of the fulfillment of fiscal requirements by foreign citizens and legal entities having an account at the IOR."

The AIF

The Financial Information Authority is the institution of the Holy See and the Vatican City State in charge of supervision and financial intelligence for the prevention and countering of the money laundering and financing of terrorism, as well as prudential supervision.

It was established on 30 December 2010 by Pope Benedict XVI.