Vatican City Banking


 

Map Vatican city

 

 

Vatican City  or Vatican City State, in Italian officially Stato della Città del Vaticano which translates as State of the Vatican City, is a landlocked sovereign city-state whose territory consists of a walled enclave within the city of Rome, Italy. It has an area of approximately 44 hectares (110 acres), and a population of just over 800.

Vatican City was established in 1929 by the Lateran Treaty, signed by Cardinal Secretary of State Pietro Gasparri, on behalf of the Holy See and by Prime Minister Benito Mussolini on behalf of the Kingdom of Italy. Vatican City State is distinct from the Holy See, which dates back to early Christianity and is the main episcopal see of 1.2 billion Latin and Eastern Catholic adherents around the globe. Ordinances of Vatican City are published in Italian; official documents of the Holy See are issued mainly in Latin. The two entities even have distinct passports: the Holy See, not being a country, issues only diplomatic and service passports; Vatican City State issues normal passports. Very few passports are issued by either authority.

 

  Banks in Vatican City

 

The Institute for Works of Religion (Italian: Istituto per le Opere di Religione – IOR), commonly known as the Vatican Bank, is a privately held institute located inside Vatican City run by a professional bank CEO who reports directly to a committee of cardinals, and ultimately to the Pope (or the Camerlengo of the Holy Roman Church during a sede vacante). Since its assets are not considered property of the Holy See, it is not overseen by the Prefecture for the Economic Affairs of the Holy See, and it is listed in the Annuario Pontificio together with foundations such as the John Paul II Foundation for the Sahel, which provides funds for training people to fight drought and desertification in nine African countries. The current President is Ettore Gotti Tedeschi.

The Institute was involved in a major political and financial scandal in the 1980s, concerning the 1982 $3.5 billion collapse of Banco Ambrosiano, of which it was a major shareholder. The head of IOR from 1971 to 1989, Archbishop Paul Marcinkus, was under consideration for indictment in 1982 in Italy as an accessory of the bankruptcy; however, he was never brought to trial due to the Italian courts' ruling that the priest, being a high-ranking prelate of the Vatican, had diplomatic immunity from prosecution.

The Bank Identifier Code of the Institute for Works of Religion is IOPRVAVX.

Banco Ambrosiano scandal
The Institute for Works of Religion was Banco Ambrosiano's main share-holder. Archbishop Paul Marcinkus, head of the IOR from 1971 to 1989, was indicted in Italy in 1982 as an accessory in the $3.5 billion collapse of Banco Ambrosiano, one of the major post-war financial scandals. Banco Ambrosiano was accused of laundering drug money for the Sicilian Mafia, led by Filippo Barbagli, which used Propaganda Due ("P2"), a mobbed up Masonic lodge, as an intermediary. P2 and its Worshipful Master, Licio Gelli, were also involved in financing right wing terror groups during the 1970s. As for Archbishop Marcinkus, he would never come to trial in Italy, where courts ruled that he possessed diplomatic immunity. He lived in retirement in Sun City, Arizona (US) until his death on February 21, 2006.

The Institute for Works of Religion has denied having legal responsibility for the Ambrosiano's downfall but did acknowledge "moral involvement", and paid $241m (£169m) to creditors. As of 2006, investigations are continuing concerning the murder of Ambrosiano's chairman, Roberto Calvi, which, according to Ernest Backes, former #3 of Clearstream, may have been linked to the death of Gérard Soisson, who used to work for Clearstream, a "bank of banks" which practices financial clearing. According to recent wiretap information, however, Calvi's death was almost certainly decreed by the Cupola, the ruling council of the Sicilian Mafia, which had come to view Calvi as a liability since the bank's collapse.

 

 

2009–2010 Vatican money laundering investigationIn 2009, the Italian magazine Panorama reported that Vatican Bank was being investigated by Italian authorities from the Financial Intelligence Unit of the Banca d'Italia and the Guardia di Finanza over money laundering transactions worth €180 million (US$ 218 million) through a branch of UniCredit located at Via della Conciliazione across from St. Peter's Basilica. The bank handles accounts of the religious orders and other Catholic associations using the "offshore" (i.e., foreign) status of the Holy See.

On 21 September 2010, Italian police declared that Gotti Tedeschi and another IOR manager were under investigation for money laundering charges. €23 million were seized as a precaution. Police began an investigation regarding Tedeschi around a week before the news was made public after a division of the Bank of Italy alerted police to two transactions involving the Vatican Bank that were deemed suspicious. The money seized was bound from an Italian bank, Credito Artigianato, to JP Morgan Chase and another Italian bank, Banca del Fucino. Both the origin and destination of the funds were accounts under the control of the Vatican Bank. The Vatican Bank had allegedly failed to disclose the origin of the money, a violation of Italian law.

In a statement regarding the investigation, the Vatican said that it was "...perplexed and astonished by the initiatives of the Rome prosecutors, considering the data necessary is already available at the Bank of Italy." According to the police, the presence of the investigation did not mean either of the officials involved had been charged with a crime, and a judicial ruling would be necessary to continue the investigation. Contrary to the Holy See's statements, IOR president Ettori Gotti Tedeschi and IOR Director General, Paolo Cipriani, were indicted for money laundering.

On Thursday, December 30, 2010, the Catholic News Service homepage reported that Pope Benedict XVI had issued an Apostolic Letter that established the Financial Information Authority as an independent agency to oversee the monetary and commercial activities of all Vatican-related institutions, including the Vatican bank. It will monitor all Vatican financial operations and make sure they meet international norms against money-laundering and the financing of terrorism
 

Economy: The unique, noncommercial economy of Vatican City is supported financially by contributions (known as Peter's Pence) from Roman Catholics throughout the world, the sale of postage stamps and tourist mementos, fees for admission to museums, and the sale of publications.

The Vatican also conducts worldwide financial activities, the Istituto per le Opere di Religione (also known with the acronym IOR and wrongly known as the Vatican Bank). This Institute has an ATM with instructions in Latin, possibly the only such ATM in the world.

A souvenir shop on the roof of St. Peter's BasilicaThe Vatican has often been accused by critics of being excessively wealthy, as in Avro Manhattan's The Vatican Billions. However, the papal state has previously run budget deficits and obtains much of its money from international donations such as Peter's Pence.


 

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