by Tom Gallagher
Join the Conversation
Send your thoughts to Letters to the Editor. Learn more
As reported by Italian writer, Sandro Magister:
This penalty is provided for by law no. 127 of the state of Vatican City, promulgated last December 30, which will go into effect next April 1. A law aimed against money laundering and the financing of terrorism.
But beyond this, the new norm will bring much more substantial novelties in the practices of the Vatican institutes that operate in the financial field, beginning with the one that most resembles a bank, the Institute for Works of Religion (IOR).
Until now, the IOR has enjoyed broad autonomy of action. It worked outside of the international norms that regulate, standardize, and supervise the activities of the banks in various countries.
For the depositors of the IOR, mainly dioceses and religious institutes, this autonomy was seen as an advantage. The procedures for depositing and managing money were simple and confidential, like in a family. Secrecy was guaranteed. Interest rates were higher than in other financial institutions.
This absence of external supervision enjoyed by the IOR was, however, also very attractive to less virtuous subjects, tempted to use the Vatican bank for illicit operations, using religion as a cover, disguising themselves as benefactors or exploiting the naivety of depositors.
