ROME: The Vatican signed an agreement to share tax-relevant information with Italy, in the latest phase of a wider campaign to clean up the tiny state’s finances and end years of mismanagement and scandal.
The agreement will allow Italian tax authorities to ask for financial information about Italian residents with accounts at the scandal-ridden Vatican bank, officially known as the Institute for the Works of Religion, or IOR.
Archbishop Paul Gallagher, the Vatican’s equivalent of a foreign minister, wrote in the Vatican newspaper that the agreement is a “significant step by the Holy See toward the goal of maximum transparency in the field of financial dealings.”
In identically worded statements, the Vatican and Italy said the agreement was a consequence of overhauls initiated in 2010, under Pope Benedict XVI, who that year established a watchdog agency—the Financial Information Authority—to ensure compliance with international standards on financial crimes.
In 2013, the Moneyval committee, a European anti-money-laundering watchdog, praised the Vatican for progress in making its finances more transparent, but called for tightening regulatory oversight of the IOR. The same year, Pope Francis named a special commission to overhaul the bank.
The IOR’s mission is to hold funds for church institutions, but has served as an offshore haven for Italians and others seeking to evade taxes. The bank has been reviewing accounts to ensure they comply with anti-money-laundering regulations; it announced last July that it had closed thousands of its almost 19,000 accounts over the previous 18 months.