Vatican reforms – a test of faith

The Central Bank of Italy telegraphed its dissatisfaction with the Vatican’s progress towards compliance with international anti-money laundering standards on 1 January 2013 when it suspended all card payments in the world’s smallest country and instructed Deutsche Bank Italia, which manages electronic fund transfers for the city state, to cease processing transactions. Suspicions persist, certainly in the Italian financial sector, that the reforms are mere lip service. Keith Nuthall and Lee Adendoorf, in Lucca, Italy seek the truth.

On paper, the anti-money laundering (AML) procedures of the Holy See and the Vatican City State are being strengthened by an almost hasty reform process. And a recent report from European regional AML body Moneyval [1] has welcomed the progress, albeit with some caveats. Yet, the conviction of Paolo Gabriele, the former butler of Pope Benedict, and his 18-month prison sentence for the aggravated theft of personal papers, which he leaked to an Italian journalist, goes against this grain of financial transparency. Particularly unusual is his jailing within a detention room of the Corps of Gendarmes of Vatican City State, rather than in an Italian jail, as would have been anticipated under the 1929 Lateran Pacts between Italy and the Vatican State. The Vatican Information Service has cited a technical procedure related to appeals to explain Gabriele’s incarceration in the Vatican, but he certainly has less opportunity to speak to outsiders in his current cell than he would in an Italian jail.