Vatican: AIF reports 64 suspicious activity cases in 2019
The Financial Intelligence Authority (AIF), the agency of the Holy See and Vatican City State charged with fighting money laundering and terrorist financing, received 64 suspicious activity reports, took action in four cases, and froze one IOR account.
Vatican City (AsiaNews) – The Vatican’s Financial Intelligence Authority (AIF[*]), the agency of the Holy See and Vatican City State that fights money laundering and financing of terrorism, released its annual report today.
In it, the financial watchdog says that it received 64 suspicious activity reports in 2019, taking four preventive measures and froze an IOR[†] account.
The report suspended three transactions worth € 240,000 (US$ 269,500), froze one bank account with € 178,970.65 (US$ 201,000), and forwarded evidence to Vatican prosecutors 15 times.
The majority of potential financial crimes "involve foreign subjects or actions undertaken in, or in connection with, foreign jurisdictions. The main potential offences are international fraud, including tax fraud, and misappropriation.”
International activity was particularly intense. More than 370 subjects were involved in exchanging requests for information with foreign financial intelligence units (FIUs).
"Four new memoranda of understanding were also signed with the FIUs of foreign jurisdictions (Finland, Cook Islands, Czechia and Serbia), for a total of 60 Memoranda of Understanding signed since 2012.”
In addition, AIF exchanged information with foreign supervisory authorities in 18 cases (16 requests made to foreign authorities and two requests from foreign authorities).
International collaboration also allowed “the analysis of complex financial schemes with connections in different jurisdictions, leading to reports of potential violations and illegitimate behaviour.”
Regarding the fight against terrorist financing, the report notes that during 2019 there was only one potentially related case, which "turned out to be devoid of subjective or objective elements”. This confirms "a low level of risk associated with terrorist financing".
In this regard, in 2019, "three updates were made to the list of high-risk states with strategic deficiencies in their respective systems for preventing and fighting money laundering and terrorist financing, taking into account the updates of the lists published by the Financial Action Task Force.”
Overall, the Financial Security Committee (COSIFI[‡]) confirmed “a medium-low level of risk in the fight against money laundering and a low level of risk in the area of financing of terrorism, noting no significant internal threats.”
“The main risks identified are related to international and/or cross-border activities.” However, in 2019, cross-border cash flow decreased significantly. There were incoming and outgoing 1,121 declarations, worth € 21,630,000 (US$ 24.2 million), compared to 1,239 in 2018 worth more than € 26 million (US$ 29.2 million).
The report highlights that "the analysis of the declarations made by AIF did not find any significant anomalies or risk indicators.”
The Holy See has "made a strong commitment to ensure international collaboration and information exchange in order to prevent tax evasion and facilitate the fulfilment of tax obligations by foreign citizens and legal persons who entertain a relationship with IOR.
“Checks and controls by the AIF in 2019 have shown that the implementation of the procedures adopted by the IOR is overall effective. Furthermore, overall monitoring activities did not lead to the detection of significant anomalies and risk indicators.”
Speaking about the IOR, the AIF carried out two inspections in 2019. “The first, in June, was aimed at verifying technical compliance with the current legislative and regulatory framework regarding payment services, as well as the existence of all the necessary requirements for the Institute’s participation in SEPA[§] payment schemes”. The inspection was substantially successful.
The second, in August, was “aimed at verifying compliance regarding preventing and fighting money laundering and terrorist financing, as well as the effective functioning of adopted measures and safeguards.” In this case too, a "broad level of compliance" of the rules to fight money laundering and terrorist financing was found.
[*] Autorità di Informazione Finanziaria
[†] Istituto per le Opere di Religione, Institute for the Works of Religion, generally known as the Vatican Bank
[‡] Comitato di Sicurezza Finanziaria
[§] Single Euro Payments Area