WASHINGTON May 7 The regulator of the Vatican
bank on Tuesday signed an information-sharing pact with the U.S.
agency that tracks suspicious financial transactions, part of an
effort by the scandal-ridden bank to improve its international
The bank, which manages money mostly for dioceses and
religious institutions and is known as the Institute for Works
of Religion (IOR), has traditionally been isolated from the
international regulatory system.
It has been rocked by three decades of scandals, including
the 1982 incident in which Roberto Calvi, an Italian known as
"God's Banker" because of his Vatican ties, was found hanged
under London's Blackfriars Bridge.
More recently, Italian magistrates have been investigating
the IOR for money laundering. The IOR has assets estimated
between 6 and 7 billion Euros.
The Vatican has tried to burnish the bank's reputation, and
in 2010 it created the Financial Intelligence Authority, the
Vatican's equivalent of "financial intelligence units" set up by
many governments to collect and exchange information on
The regulator became operational in April 2011 and on
Tuesday solidified a partnership with the U.S. Financial Crimes
Enforcement Network (FinCEN), a unit within the U.S. Treasury
Department that tracks suspicious money flows.
In an official announcement about the new Memorandum of
Understanding, the Vatican said the new agreement was meant to
"foster bi-lateral cooperation in the exchange of financial
information" between the United States and the Vatican.
The Vatican expects to share with FinCEN information about
suspicious transactions that could relate to money laundering or
the financing of terrorism, the announcement said.
A representative from FinCEN did not immediately respond to
a request for comment.
Rene Bruelhart, a Swiss lawyer appointed last year as chief
of the Vatican's Financial Intelligence Authority, traveled to
Washington to sign the new agreement with FinCEN.
Bruelhart said in an interview that the agreement
represented a "clear commitment from the Vatican to strengthen"
its financial regulatory system.
In its first year of operation, the Vatican bank watchdog
only handled one "suspicious activity report", according to a
report issued by a committee of Council of Europe experts.
However, since last autumn, the financial intelligence
authority has generated several such reports which are now being
The kind of agreement which the Vatican regulator signed
with FinCEN establishes the "rules of the road" for
international information sharing that is vital to global
efforts to combat money laundering and terror finance, said Alan
Sorcher, a former senior advisor at FinCEN who is now a director
with the anti-money laundering practice at Deloitte.
Peter Djinis, a former regulatory policy official at FinCEN
who is now in private practice in Florida, said entities like
the Vatican are vulnerable because they take in huge amounts of
money and there is often little oversight as to how those funds
"It's a positive sign to see that there is a recognition
that there need to be financial controls on even those kinds of
donations, not because the money is being raised for malicious
purposes, but rather because large amounts of money sometimes
bring out the worst in people," Djinis said.
(Additional reporting by Brett Wolf; Editing by Karey Van Hall
and Paul Simao)