In 2024, the Vatican body in charge of financial supervision, combating money laundering, and financing terrorism received 74 reports of “suspicious activities,” compared to 123 in 2023, according to an activity report published April 9. What does this decrease reflect? Is it a sign that the fight against money laundering launched under Benedict XVI in 2010 and reformed by Francis in 2020 — is finally bearing fruit? Do the major financial scandals now belong to the past?

In its 2024 annual report, the Financial Supervision and Information Authority (ASIF) specified that the decrease is mainly due to a reduction in the number of reports from the Institute for the Works of Religion (IOR), also called the “Vatican Bank.” “It is not exaggerated to consider the drop in reports made by the IOR as a sign of cleansing,” a high-ranking Vatican source said.

Freezing of two accounts at the IOR

In detail, the ASIF report explained the drop by a “refinement of the selection process” for cases to be reported. The reports sent by the Vatican Bank to the ASIF would have improved quality. As proof: the number of cases reported by the bank before being forwarded to the justice system remained stable between 2023 and 2024 (11), despite the drop in reports. “This indicates that the reports made were more targeted and relevant,” the report stated. The drop would also be explained by better prevention and earlier detection of possible wrongdoing. In 2024, according to the report, ASIF adopted five preventive measures, including two to suspend transfer transactions for €1,058,130 ($1,168,525). The other measures consisted of freezing accounts held at the IOR.

Nearly half of the “suspicious activities” recorded in 2024 by ASIF concerned cash transactions (26% of reports) or fund movements inconsistent with the client’s status or with previous transactions carried out by the latter (23%). The rest concern illogical or needlessly complex operations (14%), clients for whom a “negative press report” was established (12%), or connections with high-risk jurisdictions (12%).

Bringing up to European standards

For about ten years, the Vatican has been seeking to professionalize the management of its finances to comply with European standards and to be able to continue using the euro. In the spring of 2024, the Holy See, including the State of Vatican City, received a positive evaluation from the Moneyval committee, this permanent body of the Council of Europe in charge of evaluating the compliance of its member states with international standards for combating money laundering and the financing of terrorism.

In recent years, this financial management cleanup has led to high-profile trials, mostly led by the famous anti-mafia judge recruited by Francis, Giuseppe Pignatone, who resigned from his duties last December due to age. In 2021, the former president of the Vatican Bank, Angelo Caloia, and the former lawyer, Gabriele Liuzzo, were notably found guilty of money laundering, embezzlement, and aggravated fraud and sentenced to pay compensation of about €23 million ($25.4 million).

The consequences of the Becciu affair

But the most spectacular trial included on the defendants’ bench was the former number three of the Holy See, Cardinal Giovanni Angelo Becciu, convicted in 2023 in the first instance (he has appealed the decision) to five years in prison, notably for embezzlement and abuse of power. According to the judgment’s summary, made public by the Holy See last October 30, “€454 million ($501 million) held by the Secretariat of State itself and coming largely from donations to Peter’s Pence” had been used, under the control of Cardinal Becciu, to take out what is called, in financial jargon, “a Lombard loan.”

In simplified terms, these €454 million were used as collateral with a lender, in this case, Crédit Suisse and the Bank of Italian Switzerland, to obtain a little more than €184 million ($203 million). According to the judges, this money would have served to purchase and resell a London building at a loss and enrich people close to the cardinal.

“We’re talking about a time when Peter’s Pence money arrived directly at the Secretariat of State, and where each dicastery managed its finances autonomously. It was enough for a cardinal to call the Vatican Bank to carry out a transfer, and it was done,” described the above-mentioned source, who believed that this time is over, at least in part. Certain bodies like APSA, the agency managing income from the patrimony of the Holy See, are not today controlled by ASIF. And certain dicasteries, like the one for evangelization (Propaganda Fide), continue to manage their own patrimony, outside of any external control.