ASIF President: "New steps forward, we must not lower our guard"

Vatican News

The Supervisory and Financial Information Authority (ASIF) has published its latest report. ASIF is the authority of the Holy See and the Vatican City State for supervision of matters regarding the prevention and countering of money laundering, the financing of terrorism, and financial intelligence. ASIF President Carmelo Barbagallo tells us more about the report in the following interview.

In the report’s introduction, you explain that 2021 marked “a year of consolidation.” Can you explain why and give some examples?

Recent years have been characterized by various important changes for ASIF, which I have had the privilege of heading since November 2019. These changes concerned the internal organization of ASIF, with the approval by the Holy Father of a new statute that gives a more functional internal organization consisting of three offices (Supervisory Unit, Financial Intelligence Unit, and Regulation and Legal Affairs Unit), as well as greater adherence to the organizational principles of the Roman Curia. The changes also regard the composition of the Board, the appointment of a new authoritative management and a strengthening of the staff members. Also of great significance is the signing of important memorandums of understanding with other authorities. The highly positive outcome of the assessment of the Vatican jurisdiction by MONEYVAL topped off all these developments. We needed to consolidate all these changes and that is what was done in 2021 and continues to happen. Examples include the settling of labour procedures, the full integration of new resources, efforts to increasingly enhance the development of all colleagues, and increasingly professional contributions of the offices.

How important was the MONEYVAL review and at what point are we on the path undertaken to counter instances of money laundering and financing of terrorism?

The MONEYVAL review is part of the global circuit of prevention and countering money laundering and the financing of terrorism. It is of fundamental importance for the financial reputation of the jurisdictions that adhere to it. An eventual negative review would have repercussions on the path of transparency undertaken long ago by the Holy See, and would also risk complicating the financial relationships of institutions, like the IOR or APSA, with their foreign counterparts. On the other hand, the great work done in previous years, and especially more recently, has prevented that from happening. However, we cannot “let our guard down” in terms of the effectiveness of prevention and enforcement actions, because a continuous refinement, which includes frequent assessments in accordance with international standards, is imperative. ASIF, together with the Financial Security Committee, is coordinating the jurisdiction’s implementation of the MONEYVAL recommendations in this direction.

How would you characterize the relations between ASIF and the various authorities and dicasteries of the Holy See?

Collaboration between ASIF and the authorities and dicasteries of the Holy See is essential for the full efficacy of the work in preventing and countering money laundering and the financing of terrorism. Aware of this, ASIF is constantly committed to maintaining a proactive dialogue with all those involved, respectful of the competencies and roles assigned by internal regulations and consistent with international standards. Opportunities for discussion and collaboration have increased in recent years. To give just one example, there are regular meetings with the Office of the Promoter of Justice, the Gendarmerie, and the Office of the Auditor General. 

What steps have been taken to improve on the work of financial intelligence, especially through international relations with other similar bodies?

The development of a network of international collaboration and its strengthening are ongoing objectives and priorities for ASIF. This is especially important for a jurisdiction like the Vatican, given the capillary presence of the Church throughout the world. One of the instruments utilized by ASIF in this regard is the signing of memorandums of understanding. In 2021 we signed three additional ones. In this area, ASIF gives special importance to its participation in the Egmont Group, an essential instrument for strengthening relations with similar foreign authorities.

The only financial intermediary supervised by ASIF is the Institute for the Works of Religion (IOR). How would you assess the work carried out by the IOR and what steps now need to be taken?

For quite a while now, the IOR has undertaken a good path that distinguishes it clearly and significantly from the sad events of the past. Contributing to that has the been the beneficial work of its reorganization, which is still underway, with the goal of rendering the management of the Institute ever more effective, efficient and dependable. Also, in the area of preventing and countering money laundering and the financing of terrorism, the best confirmation of the positive actions taken so far was expressed in the rating given by MONEYVAL during its recent assessment, which was entirely favourable regarding both the safeguards put in place by the Institute and the oversight by ASIF. The path ahead is clear. It is now a matter of continuing to follow it with confidence, with the awareness of the importance for jurisdiction of a financial entity like the IOR, and with the certainty that ASIF will continue to supervise the Institute with the utmost attention and effectiveness.

In 2021 ASIF received 104 reports of suspicious activity. What can you tell us about this?

The analysis and review of reports of suspicious activity are among the most significant and sensitive responsibilities given to ASIF. Much of the analysis carried out by the investigative authorities concerns further assessment of possible criminal profiles. Regarding the question of the nature of the reports, we note that most of these usually come from the IOR. We also note a stable trend, underway since 2017, towards improving the quality of reports. This is due to the intensification of preventive measures taken by the IOR, and the more experienced implementation of a risk-based approach.