Italian authorities announced today that they have impounded US$30 million from the Institute for the Works of Religion, or as many call it, the “Vatican Bank”, and placed its top two officers, president Ettore Gotti Tedeschi and director general Paolo Cipriani, under investigation in connection with a money laundering inquiry.
The 2005 Directive 2005/60/EC of the European Parliament and of the Council requires that financial institutions in the member states of the EU record and report on certain money transfers to state financial intelligence units to prevent and detect money laundering and terrorist financing activities.
The Vatican Bank investigation stems from two apparently suspicious transfers in September from an account held by the Vatican Bank – one for US$26 million and the other for US$4 million – that were reported by the Bank of Italy to Italy’s financial intelligence unit. The Vatican Bank is a privately held institute located inside the Vatican. Its president reports to a committee of cardinals, and ultimately to the Pope. In the 1980s, the Vatican Bank was involved in a major political and financial scandal in connection with the US$3.5 billion collapse of Italy’s Banco Ambrosiano.