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Moneyval Report a "positive sign"

(Vatican Radio) European evaluators have highlighted the progress made in the past year by the financial institutions of the Holy See in a progress report published Thursday. The Council of Europe’s Moneyval published the report as a follow-up to its original 2012 report, which named several areas that needed updating to meet international standards. Since that time, several new laws have been passed by the Holy See and Vatican City State to better implement the suggestions.

The Director of the Vatican's Financial Information Authority, René Brülhart, spoke to the head of Vatican Radio’s German section, Father Bernd Hagenkord about this latest report…Listen: RealAudioMP3

You have just returned from Strasburg [from meetings with Moneyval]. Are you happy with these discussions and this report.

The report has been fully adopted, so yes I think it is a very positive sign and the resolve you see is a very good one.

Is Moneval also happy?

I can’t talk for Moneyval, so I think the question should be addressed to them, but the discussions we had were very much focused…done in a very constructive manner. When you look at the report, it is a very comprehensive report, describing very much in detail about the steps the Holy See has taken over the last months, and obviously it seems we have satisfied Moneyval, otherwise the report would not have been adopted.

Last time we heard from Moneyval there was a kind of rating system, 16 important points, 9 of which fulfilled by the Vatican. Is there some ratings system this time as well?

What has been presented this morning is a so-called progress report, which is a follow-up report to the report which has been presented in July 2012, and based on the rules of procedures of Moneyval these progress reports never have any kind of re-rating. In other words, this report focusses on the implementation of the recommendations which have been made by Moneyval in its report of July 2012.

What recommendations are we talking about precisely?

There are recommendations on several levels. Mainly on the legal framework to implement additional issues – I will get to that in a second – but then also on the institutional and operational level. If you look back over the work we have carried over the last months, on the legal framework we came out with a completely revised anti-money laundering law entering into force on October 8th. On the institutional level, we have a new statute for AIF [Financial Information Authority] which is a few weeks old, clearly defining the functions and responsibilities of this authority, but also on the operational level. In particular here, on the reporting system, where we have clarified some of the issues. Almost more important, also on international cooperation, where we have become member to the Egmont Group in the July. The Egmont Group is the worldwide association of so-called financial intelligence units. It has something like 139 members at the moment. And we have also signed different “memorandum of understanding” which allows us to cooperate with other countries, among them are countries like Italy, the United States of America, and Germany.

When you talk about operative level? What are you talking about? Staffing? What exactly is that in the operative sense, in the things that you actually do?

Ultimately, it is the concrete work you are doing, so mainly receiving suspicious transaction reports, analyzing them, and if we have some kind of let’s say “enhanced suspicion” to forward that to the Promoter of Justice. On the other hand, then also to carry out a type of inspection – where we have carried out two ad-hoc inspections over the last month – to make the whole system become functional; and, what you see now, it is functional.

You mentioned the suspicious transactions. Last year, if I remember correctly, there have been about 6. This year, a lot more: more than 100. What does that tell you?

Yes. We see for until the end of October 2013, we see 105 suspicious transaction reports: A clear indication that the reporting system works. Now, we talk always about suspicious transaction or activity reports. So we talk about a suspicion. It doesn’t mean we talk about money laundering cases ultimately, as such. Important is that where a financial institution has a suspicion or a reasonable ground for suspicion, that a report is filed with the Financial Intelligence Unit, in that case it is us, AIF, and then it is up to us to analyze them, and then to take further steps.

You are the head of the supervisory authority, the AIF: You come back from Strasbourg, from this meeting with Moneyval, what’s next on your desk? What are you going to do next?

Don’t worry! There is still some work waiting for us, but we are very happy to continue this path. One of the next steps will be, and this will be done shortly, is to carry out so-called onsite inspections, mainly at the IOR. One of the goals of that is to verify the so-called remediation process, which is currently in place. This remediation process is carried out under our supervision, as such, however we want to look in greater detail into how this is done. And also, we will have to – especially under the supervisory department, we have this new function as prudential supervisor – we will have to look into staffing to bring the relevant expertise – or further expertise – into to the Authority to carry out this work in a very constructive and sustainable manner.

The Vatican joined Moneval in 2011, two years ago now. Would you call it a success story?

It is not for me, to judge whether it is a success or not. We see a clear process which has been initiated: A clear path we are taking step by step. Now, with the publication of this report, and the adoption on Monday of this week, it is a clear indication that we are implementing and also applying international standards. Now if this is the criteria: Yes, it is a success story.