Vatican 49-Percent Compliant in Financial Transparency Test

The Vatican has passed an important financial transparency test, the Council of Europe reported on Wednesday. The announcement reflects the Vatican’s latest effort to wash away a longstanding financial reputation that is smudged with secrecy and scandal.

The Vatican received praise for complying more with international rules that fight money laundering and terrorist financing. Associated Press reports, “The report showed the Vatican had received compliant or largely compliant grades on nine of the 16 ‘key and core’ internationally recognized recommendations to fight money laundering and terrorist financing.”

However, it received poor grades for its financial oversight agency, its lack of fiscal transparency and policies of the Vatican Bank, which is where Vatican officials and others hold their accounts.

The Vatican has a history of hiding its financial transactions. Its handling of Nazi finances is one notable example. In 1997, a United States Treasury document revealed that, during and after World War ii, the Vatican may have performed an ignoble service for the Nazis’ Croatian puppet regime. Evidence indicates that it hoarded gold that had been stolen from Holocaust victims. The Vatican dismissed the accusation, but refused to open its archives to dispel it.

The Vatican scored compliant or largely compliant in 49 percent of the European council test criteria. But don’t think that it is a transparent organization. Pope Benedict xvi himself has expressed a strong interest in influencing the world’s financial system. This is a step toward that end. Watch for the Vatican to gain more control over world finance, and read our article “The Vatican, Germany and Global Regulation.”