December 30, 2010.  Benedict XVI has reinforced the rules against money laundering in the Vatican because it considers the activities of criminal organizations and terrorist financing as serious global threats to peace.

The Pope has declared the law for the Holy See will follow all European standards on the prevention of money laundering and terrorist financing as well as creating the Financial Information Authority, which will monitor and cooperate with other States.

Fr. Federico Lombardi
Director of the Press Office (Vatican)
“The key is that not only have we enacted new rules but we've also created an authority to oversee its implementation, provide guidance on its application and obligates respect.”

The creation of the Financial Information Authority is likely the most important measure of transparency in recent years, it brings the Vatican's standards up to par with to the so-called “white list” of countries that respect international standards on anti-money laundering.

The new law mandates jail time for up to 12 years for money laundering, 15 years for terrorist funding and up to 6 years for insider trading. Of course if convicted, one would have to serve their sentences in Italian jails because the Vatican does not have its own prison.

Fr. Federico Lombardi
Director of the Press Office (Vatican)
“The new measures will affect the day to day operations because they require more strictness, to provide more detailed information.”

The body of the Church most affected by the new measures is the Vatican's bank, the Institute for Religious Works, or also known as the IOR. It is a special type of bank, because their customers are dioceses, religious orders, Vatican departments and employees of the Holy See.

It was created so there would be no outside speculation with money from religious groups and also to save on the cost of operations.

Italian police are currently investigating several transactions in which the bank did not disclose names of their customers. The Vatican claimed this was a misunderstanding and has already submitted the information requested by the authorities.

The new rules ensure that these incidents could not happen again and make sure that no criminal can take advantage of the Vatican.