In a report published today, MONEYVAL encourages the Holy See (including the Vatican City State) to further strengthen measures to combat money laundering and financing of terrorism. The Council of Europe’s anti-money laundering body draws up a comprehensive assessment of the country’s level of compliance with the Recommendations by the Financial Action Task Force (FATF).
The report states that the jurisdiction’s authorities have a generally good high-level understanding of their money laundering and financing of terrorism threats and vulnerabilities. In fact, in a range of areas, there is a detailed understanding of risk. However, domestic cases which have raised a red flag for potential abuse of the internal system by mid-level and senior figures (insiders) for personal or other benefits have not been addressed within the national risk assessment.
MONEYVAL notes that money laundering investigations during the period under review (until October 2020) were protracted, partly because of late responses from foreign counterparts to requests for assistance and partly because of under-resourcing on both prosecutorial and law enforcement sides, where there has been insufficient specialisation of financial investigators. Consequently, results in court have been modest with only two convictions for self-laundering. Recent developments highlighted in the report in this area are encouraging.
The report highlights as well the importance given to confiscation as a policy objective, which is illustrated by the adoption in 2018 of a robust framework for non-conviction-based confiscation - which has since been used in a high-profile case. Although the competent authorities are tracing and seizing proceeds effectively, there is a considerable gap between the amounts seized and those confiscated.
The Holy See (including the Vatican City State) has a domestic mechanism in place that allows to give effect to United Nations’ sanctions without undue delay. However, some delays persist in transposing such designations into national lists.
With regard to preventative measures, MONEYVAL underlines that the sole authorised institution has a sound understanding of its money laundering and financing of terrorism risks. In general, customer due diligence (CDD) and record-keeping obligations have been applied diligently and there is a rigorous risk-based transaction monitoring programme that requires the collection of information and documentation as necessary throughout the course of a business relationship.
Supervisory controls over the financial sector prevent criminals and their associates from sitting on the board of the authorised institution and the body representing its shareholder. Adequate controls are in place over senior management. The supervisor has a good to very good understanding of the risk profile of the authorised institution and its most recent inspection took place in 2019. Coverage and quality look to be very good, including consideration of risks presented by insiders.
The report compliments the national authorities for efforts invested in rendering constructive and timely international co-operation.
The Holy See (including the Vatican City State) will be subject to MONEYVAL’s regular follow-up reporting process as a result of the positive report, becoming one of only five member-jurisdictions with this outcome so far.