Vatican City State adopts transparency law

Yesterday, the Pontifical Commission for the Vatican City State adopted Law Number XVIII, outlining the rules pertaining to transparency, supervision and financial information, and giving the force of law to the dispositions of Decree Number XI published by the President of the Vatican Governatorato (the office responsible for the administration of the Vatican City State) on 8 August of this year.

Implementing the motu proprio published by His Holiness, Pope Francis on 8 August 2013, and continuing the norms already in effect which were introduced by the motu proprio of Pope Benedict XVI on 30 December 2010, referring to the prevention and countering of illegal activities in financial and monetary matters, Law Number XVIII enhances the current internal system of prevention and combatting of money laundering and the financing of terrorism in accordance with international standards and, in particular, according to the Recommendations of the Financial Action Task Force and the relevant European Union authorities.

In particular, Law Number XVIII consolidates the existing discipline concerning:

·      Measures to prevent and combat money laundering and the financing of terrorism;

·      Supervision and regulation of entities performing professional activities of a financial nature;

·      Collaboration and exchange of information by the Financial Information Authority at both domestic and international levels;

·      Measures taken against those who threaten international peace and security; and

·      Statements referring to the cross-border transportation of cash.

Law Number XVIII clarifies and consolidates the functions, powers and responsibilities of the Financial Information Authority in matters pertaining to the exercise of their functions pertaining to the supervision and regulation for the purposes of preventing and combatting money laundering and the financing of terrorist activities, as well as the function of prudent supervision as outlined in the motu proprio dated 8 August of this year.

This new legislation, which should be considered in light of recent declarations pertaining to substantive criminal law as well as procedural and administrative sanctions, as well as the motu proprio on criminal jurisdiction published on 11 July of this year, is a further important step toward transparency and oversight of financial activities and contributions to the stability and integrity of the industry at a global level.