* v * t * e
The INSTITUTE FOR THE WORKS OF RELIGION (Italian : ISTITUTO PER LE
OPERE DI RELIGIONE – IOR), commonly known as the VATICAN BANK, is a
private bank situated inside
The institute was founded by papal decree of
In June 2012, the IOR gave a first presentation of its operations. In July 2013, the Institute launched its own website. On 1 October 2013 it also published its first-ever annual report which has been available for download since then.
On 24 June 2013,
On 7 April 2014,
* 1 Origin and mission * 2 Organization
* 3 Controversies
* 3.1 Historical allegations * 3.2 Judicial events and reorganisation (2010–2014)
* 4 Process of reform
* 4.1 Institutional milestones * 4.2 Reform Steps 2010/2011 * 4.3 Reform steps 2012 * 4.4 Reform steps 2013 * 4.5 Reform steps 2014
* 5 See also * 6 Notes * 7 References * 8 External links
ORIGIN AND MISSION
The Istituto per le Opere di Religione (IOR) was founded on 27 June
The purpose of the IOR is "to provide for the safekeeping and administration of movable and immovable property transferred or entrusted to it by physical or juridical persons and intended for works of religion or charity". The Institute does not use deposits to lend money and does not issue securities for resale or other financial products. The IOR's surplus is at the disposal of the Holy See, to which the Institute in 2012 made a contribution of €50 million.
In 2014, the Vatican officially confirmed the IOR's mission as provider of "specialized financial services to the Catholic Church worldwide." Furthermore, it was affirmed by the Vatican that the "valuable services that can be offered by the Institute assist the Holy Father in his mission as universal pastor and also aid those institutions and individuals who collaborate with him in his ministry".
According to its statutes, in effect since 1990, the IOR is composed of five elements:
A SUPERVISORY COMMISSION OF CARDINALS with 5 members, appointed for renewable five-year terms, who elect their president. They are:
Santos Abril y Castelló , Archpriest of the Basilica of St. Mary
Major - President
Josip Bozanić , Archbishop of Zagreb
Thomas Christopher Collins , Archbishop of Toronto
Pietro Parolin , Vatican Secretary of State
Christoph Schönborn , Archbishop of Vienna
A PRELATE, appointed by the Supervisory Commission of Cardinals with approval by the Pope, who acts as secretary of the Commission and attends meetings of the Board of Superintendence
A BOARD OF SUPERINTENDENCE, defining the strategy and ensuring oversight of operations. The mandate of the current members of the Board of Superintendence expires in December 2015.
A DIRECTORATE, in charge of operational activities and accountable to the Board of Superintendence
A BOARD OF AUDITORS, charged with the internal audit of the IOR books and reporting to the Board of Superintendence
When the Holy See, whose tax-exempt status on income from Italian investments was revoked in 1968, decided to diversify its holdings, it employed as financial adviser Michele Sindona . Once among the country's most powerful businessmen, subsequent investigations into his business affairs brought to light questionable associations with the Mafia as well as the secret P2 , a bogus "Masonic" lodge that the Italian Parliament branded as a subversive organization. The 1974 failure of Sindona\'s Franklin National Bank and the subsequent collapse of his financial empire, into which he had channeled part of the Holy See's investments, entailed losses for the Vatican estimated by one source at 35 billion Italian lire (£20 million).
In 1982, a political and financial scandal connected with the
Banco Ambrosiano involved the head of IOR from 1971 to
Several books published during the 1980s and 1990s were highly
critical of the Institute for the Works of Religion's historical
relations with anti-communist governments . Tony Abse, writing in
The Weekly Worker , an organ of the
Communist Party of Great Britain ,
has said that the
Alperin v. Vatican Bank is a class action suit by Holocaust survivors against the Institute for the Works of Religion and Franciscan Order ("Order of Friars Minor") filed in San Francisco, California on 15 November 1999. The case was dismissed as a political question by the District Court for the Northern District of California in 2003, but reinstated in part by the Ninth Circuit Court of Appeals in 2005. That ruling has attracted attention as a precedent at the intersection of the Alien Tort Claims Act (ATCA) and the Foreign Sovereign Immunities Act (FSIA). The complaint against the Vatican Bank was dismissed in 2007 on the basis of sovereign immunity , but the case against the Franciscan Order continues as of 2009. According to one analysis, "the case is extremely complicated and potentially massive, considering the large class spread across many countries".
JUDICIAL EVENTS AND REORGANISATION (2010–2014)
In September 2010, Italian magistrates seized €23 million from the
IOR, on the grounds that the anti-money laundering laws in force had
been violated. The money was originally to be transferred from the
Italian Credito Artigiano to
On 24 May 2012, Ettore Gotti Tedeschi was ousted as Head of the Vatican Bank because of his alleged "failure to fulfill the primary functions of his office". In July 2013, the money laundering case against Gotti Tedeschi was dropped. In March 2014, he was again acquitted by the Roman court that followed the public prosecutor's position and relieved Gotti Tedeschi from any responsibility in that operation.
On 15 June 2013, with the approval of
On 28 June 2013, three persons were arrested by the Italian police on suspicion of corruption and fraud. Allegedly, they had planned to smuggle €20 million in cash from Switzerland into Italy. One of the arrested was Monsignore Nunzio Scarano, previously senior accountant at APSA, the Vatican's Administration of the Patrimony of the Apostolic See . Subsequently, he was indicted with corruption and slander and set under house arrest. On 21 January 2014, he was further charged with money laundering through IOR accounts in yet another investigation. According to a police statement, millions of euros in "false donations" from offshore companies had moved through Scarano's accounts. Already in July 2013, the IOR had frozen the money in Scarano's accounts. As news agency Reuters reported, Elena Guarino, the Salerno magistrate who led the investigation, told reporters "the Vatican was fully cooperative and gave her much information on Scarano's bank movements."
PROCESS OF REFORM
In June 1990, the IOR was re-structured by a Chirograph of
REFORM STEPS 2010/2011
On 1 January 2010, a renegotiated monetary agreement between the EU
On 30 December 2010,
In June 2011, the Roman prosecutors ordered the release of the seized €23 million that should have been transferred via an IOR account at Credito Artigiano. According to the prosecutors, this request of release was due to the newly instituted mechanisms that should help the Institute to conform to international anti-money laundering and antiterrorist financing standards, such as the AIF's establishment.
REFORM STEPS 2012
In July 2012,
Moneyval , the Council of Europe's Committee of Experts
on the Evaluation of Anti-Money Laundering Measures and the Financing
of Terrorism, published and issued a report on the
Moneyval stated that the Vatican "has come a long way in a very short period of time" and stated that the City State met the international requirements in 9 out of 16 core topics. At the same time, Moneyval requested further reforms to be enacted The Vatican expressed a goal to get into the so-called OECD white list which includes countries that comply with international anti-money laundering standards and regulations against tax offences.
In November 2012, a Swiss anti-money laundering expert, René Brülhart, was appointed director of the AIF. Previously, he had worked for the Financial Intelligence Unit (FIU) in Liechtenstein as well as for the Egmont Group of Financial Intelligence Units .
REFORM STEPS 2013
On 15 February 2013, Ernst von Freyberg was appointed the IOR's President. Since the beginning of his tenure at the IOR, von Freyberg has focused on comprehensively reforming the Institute, stating he would focus on transparency and a "zero tolerance" approach to any suspicious transactions.
In May 2013, the international consulting and auditing firm Promontory was assigned a forensic review and screening of the Institute's client relationships. In this context, all accounts of the IOR's 19,000 customers were being checked if they meet the respective criteria.
On 24 June 2013,
In July 2013, the Holy See's Financial Intelligence Authority (AIF), charged with monitoring the monetary and commercial activities of Vatican agencies, was admitted as a full member of the Egmont Group, an international network of Financial Intelligence Units .
On 1 October 2013, the IOR published its first ever annual report. The annual report is available for download on the Institute's homepage which was launched in July 2013. The report's figures were audited by the global accounting firm KPMG. According to the report, the Institute in 2012 had a net profit of €86.6 million, of which it has transferred €54.7 million to the budget of the Holy See to help the pope carry out the church’s global mission. Both measures - the annual report's publication and the launch of the website - were reviewed as remarkable signs of enhanced transparency and compliance: The Guardian called the website launch a "giant leap" and Reuters named it a "transparency drive".
Also in October 2013, newspapers reported that the IOR had requested around 1,300 customers to close their IOR accounts. Allegedly, this request was directed at lay account holders, who do not fit into any of the five categories of clients the IOR is legally allowed to have. The closures are said to be a result of the review process conducted by Promontory.
On 12 December 2013,
Moneyval published its Progress Report that
assessed the Holy See's progress made on measures to combat money
laundering. It was stated that the IOR has made significant progress
but at the same time needed more institutionalized internal controls,
especially with regard to the AIF's watchdog function. Overall, the
report was rated as the approval of the economic and financial reforms
REFORM STEPS 2014
On 22 January 2014, the IOR published a report on the progress of the
compliance and transparency program. IOR
On 7 April 2014,
In September 2014, the Cardinals’ Commission of the IOR appointed
Mauricio Larraín (Chile) and Carlo Salvatori (Italy) as members to
the IOR Board of Superintendence. Other members include Jean-Baptiste
de Franssu (France),
Administration of the Patrimony of the Apostolic See
* Economy of the
* ^ The
Annuario Pontificio lists it under neither "Holy See" nor
* ^ SPIEGEL ONLINE, Hamburg, Germany (18 March 2013). "Interview
With Vatican Financial Oversight Director Ren Brlhart". SPIEGEL
ONLINE. CS1 maint: Multiple names: authors list (link )
* ^ Pollard, 2005, p. 2
* ^ IOR launches website, Vatican Radio, 31 July 2013
* ^ IOR: IOR Annual Report 2012 Archived 8 October 2013 at the
Wayback Machine .
* ^ Vatican bank publishes first ever annual report, BBC News, 1
* ^ Nicole Winfield: Secretive Vatican bank takes step to
transparency, AP, 1 October 2013
* ^ "Vatican Radio". radiovaticana.va.
* ^ A B "Communique: Holy Father approves recommendations on the
future of the Ior". vatican.va.
* ^ "Profits jump at Vatican Bank amid reforms". ANSA news agency.
* ^ "IOR releases Annual Report 2014" (PDF). www.ior.va.
* ^ A B C D "Chirografo con il quale viene data nuova
configurazione all\'Istituto per le Opere di Religione". vatican.va.
* ^ A B
Annuario Pontificio 2012, p. 1908
* ^ "The
Roman Curia - Index". vatican.va.
* ^ "New Coordination Structure For Economic And Administrative
Affairs Of The
Holy See And The Vatican State". vatican.va.
* ^ Vatican bank launches website in effort to increase
transparency, Catholic Herald, 1 August 2013
* ^ Vatican Bank Discloses Annual Earnings Report for First Time,
Bloomberg, 1 October 2013
* ^ A B "New Economic Framework for the Holy See". Vatican
Information Service. 9 July 2014. Retrieved 13 July 2014.
* ^ "IOR > Governance". ior.va. Archived from the original on 3
* ^ "Two New Members Appointed to Board of Vatican Bank". Zenit. 16
September 2014. Retrieved 26 September 2014.
* ^ Saxon, Wolfgang. "Michele Sindona, Jailed Italian Financier,
Dies Of Cyanide Poisoning At 65", The New York Times, 23 March 1986
* ^ Spotts, Frederic and Wieser, Theodor. Italy: A Difficult
Democracy, Cambridge University Press, 1986 ISBN 9780521315111
* ^ Sidona\'s World. New York Magazine.
* ^ Lombardi, Mark; Hobbs, Robert Carleton and Richards, Judith.
Global Networks, Independent Curators, 2003 ISBN 0-916365-67-0 , pp.
* ^ The Banker.
* ^ International Economic Integration in Historical Perspective.
* ^ "1971 Agreement between IOR\'s Paul Casimir Marcinkus and Banco
* ^ ior.va: Annual Report 2012
* ^ A B Lizzy Davies. "Vatican bank launches a website". the
* ^ New York Times online, 01.10.2013: Vatican Bank Publishes Its
First Annual Report
* ^ "Vatican bank opens website in transparency drive". Reuters.
* ^ SPIEGEL ONLINE, Hamburg, Germany (9 October 2013). "Officials
Order Clients to Close Accounts as Part of Vatican Bank Cleanup".
SPIEGEL ONLINE. CS1 maint: Multiple names: authors list (link )
* ^ "IOR continues the process of closing down lay clients\' bank
* ^ "Home - Conseil de l\'Europe". coe.int.
* ^ "Finance watchdog welcomes Vatican reform, urges bank
* ^ "
Moneyval okays Vatican financial transparency reforms".
* ^ ior.va, 22.01.2014: Press release
* ^ "Vatican Radio". radiovaticana.va.
* ^ "Vatican bank gets pope\'s blessing to keep going". Mail
Online. 7 April 2014.
* ^ AP, 08.04.2014.
* John F. Pollard: Money and the Rise of the Modern Papacy:
Financing the Vatican, 1850–1950 ISBN 0-521-81204-6
Mark Aarons and John Loftus : Unholy Trinity: How the Vatican's
Nazi Networks Betrayed Western Intelligence to the Soviets. New York:
St.Martin's Press, 1992. 372 pages. ISBN 0-312-07111-6
* Official website * Hennelly,