United States recognizes Vatican finances and audit measures
Vatican City – The United States has added the Vatican City State to its list of countries that comply with international standards for verifying the identity of persons carrying out financial transactions through its institutions, including the self – saying Vatican bank.
The Internal Revenue Service, the US federal agency responsible for collecting taxes, commonly known as the IRS, has included the Vatican on its approved list of countries “that have submitted know-your-customer rules.”
The “know your customer” rules are a series of investment regulations that require financial institutions to know information about their customers and business relationships in order to avoid potential illegal financial activity.
Vatican News reported on June 2 that in its approval of the Vatican financial regulations, the IRS “explicitly mentions the laws and regulations that govern the requirements for obtaining documents to unequivocally confirm the identity of account holders at the Vatican.”
Throughout his pontificate, Pope Francis has made the fight against money laundering and financial mismanagement a priority, notably by centralizing the control of the Vatican’s finances, modifying its transparency laws and expanding the role of its financial supervisory agency in monitoring financial transactions.
At the end of September, a team of experts from Moneyval – the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering and Terrorist Financing Measures – carried out an on-site inspection of two weeks of the Holy See and Vatican City State.
According to Moneyval’s website, the program is designed to “assess its members’ compliance with all relevant international standards in the legal, financial and law enforcement sectors.”
In a meeting with experts on October 8, the Pope said the financial reforms adopted at the Vatican were aimed at restoring order, ensuring that the money served its purpose and did not become an object of idolatry. .
“Jesus drove out the merchants from the temple grounds and said, ‘You cannot serve both God and money,’” he said. “The measures you are evaluating are intended to promote ‘clean finance’, in which ‘merchants’ are prevented from speculating in this sacred ‘temple’, which, in accordance with the Creator’s plan of love, is mankind.”
In 2013, the Vatican Institute for Works of Religion, the official name of the Vatican bank, tightened its guidelines for who can have or open an account and began screening all account holders. Eventually, approximately 4,800 accounts were closed.
In 2015, the Vatican and the United States government signed a formal agreement in which the Vatican promised to send an annual report to the IRS listing U.S. citizens and permanent residents who have bank or credit accounts. other financial interests in the Vatican. The IRS uses the report to ensure that these people have filed the required US tax returns.