Vatican Financial Information Authority Publishes Annual Report Revealing 104 Reports of Suspicious Activity

The Supervisory and Financial Information Authority (ASIF) has published its latest report on June 13, 2022. ASIF is the authority of the Holy See and the Vatican City State for supervision in matters regarding the prevention and countering of money laundering, the financing of terrorism, and financial intelligence. 

The ASIF is the main overseer of the Institute for the Works of Religion (the IOR or Vatican bank).

Here is an excerpt of the 35-page report from it's director Giuseppe Schlitzer:

During the year, the Authority was heavily involved in the final stages of the assessment of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe (MONEYVAL), which between September and October 2020 had carried out an on-site inspection, eight years after the first. This assessment was completed at the Plenary meeting held in Strasbourg at the end of April 2021. The particularly favorable outcome for the jurisdiction, which was placed under ordinary monitoring, was amply accounted for in the last Annual Report (pp. 10-15).
The Authority provided intense support to the Financial Security Committee (Co.Si.Fi.), a body with strategic and coordination functions in relation to the various Authorities that are part of it. During 2021, the Committee met 4 times. It also entrusted its Secretariat – a leaner body with advisory functions – with the preparatory work needed to incorporate the MONEYVAL recommendations into a new General Risk Assessment, which will be prepared by the end of 2022.
The Authority also actively participated, for its own areas of competence, in the work of the ‘Joint Committee’ for the implementation of the Monetary Convention with the European Union, a body that met in October 2021 in remote mode. In this context, it is noteworthy that, as agreed in the meeting, in November 2021 the European Commission recognized the legal equality of the Institute for the Works of Religion (IOR) with the other financial operators of the SEPA circuit. The actions performed and the results achieved by the operating units were also significant. The Regulatory and Legal Affairs Unit provided numerous legal analyses and constant support to the President, the Directorate and the other operating units of ASIF, and actively collaborated with other Authorities of the Holy See/VCS. In the latter context, it carried out an in-depth analysis with the Governorate on the cross-border movement of cash, aimed at facilitating the drafting of the new Regulation on that subject matter and the related updated version of the Declaration Form, promulgated on 23 December 2021 by means of a specific decree. With regard to prudential supervision, the Supervisory Unit regularly verified the profiles related to the prudent, healthy and sustainable management of the IOR, currently the only entity authorized to carry out financial activities on a professional basis in the jurisdiction. In particular, following the full-scope inspection carried out at the IOR in 2020, the Institute prepared a detailed Remediation Plan, the implementation of which was constantly monitored by the Supervisory Unit during 2021. In the ML/TF area, a follow-up inspection was launched to verify the adequacy of the remedial actions implemented by the IOR following the inspection in 2019. Supervisory and Financial Information Authority
With regard to financial intelligence activities, in 2021 ASIF’s Financial Intelligence Unit (FIU) received 104 reports of suspicious activity, 98 of which from the obliged entity, 5 from Vatican authorities, and 1 from a non-profit organization. No reports were received that were directly or indirectly linked to the financing of terrorism. ASIF submitted 21 reports to the Office of the Promoter of Justice, the highest number recorded in the last five years; of these, 3 were first reports and 18 were supplemental reports.
In addition, domestic cooperation remained intense and productive for the FIU. It sent 62 requests for cooperation and received 30 such requests. The number of outgoing requests showed a substantial increase compared to 2020, while incoming requests were slightly lower. Moreover, the interaction between the FIU, the UPG and the Eco-Fin Section of the Corps of the Gendarmerie continued to be extensive and fruitful.
With regard to international cooperation, the FIU sent 34 requests for information or spontaneous communications to foreign FIUs and received 19 such communications from its counterparts. International cooperation has led to the transmission of financial information to the UPG and to foreign counterparts. 

In 2021, ASIF signed memoranda of understanding with the FIUs of Ukraine, El Salvador and Guatemala, for a total of 65 memoranda signed since 2012. In 2021, ASIF recorded 168 incoming declarations, for a total amount of 11,470,000 euros, and 277 outgoing declarations, for a total amount of 4,870,000 euros. 

The number of incoming crossborder declarations was higher than that recorded in 2020 (by 37 declarations), and the amount declared was almost double, indicating a greater tendency to bring currency into the jurisdiction, possibly for reasons related to the COVID 19 pandemic. Conversely, both the number and amount of outgoing cross-border declarations decreased considerably, indicating greater use of traceable forms of funds transfer and/or less willingness to move funds out of the jurisdiction. Finally, in 2021, ASIF participated in the plenary meetings of the MONEYVAL Group held, in hybrid mode, from 26 to 30 April at the Council of Europe. It also took part in the FIU Forum hosted by the Principality of Monaco from 3 to 5 November, the first in-person event the UIF participated in since the start of the pandemic.