Pope Approves New Law Strengthening Vatican Entities

March 15, 2024

Pope Francis has approved a new law strengthening Vatican-related foundations and non-profit organizations, detailing sanctions, and clarifying existing norms on transparency, accountability, and mandated compliance with anti-money laundering measures. The new law, which is effective from Dec. 8, applies to all legal "persons" or entities dedicated to a specific purpose and that are connected to the Holy See or Vatican City State.

These entities include foundations, non-profit or volunteer organizations and specific funds that are dependent on and supervised by either the Secretariat of State, the Governorate of Vatican City State, an office of the Roman Curia, a pontifical academy or university, or some other Vatican-related body. However, since their assets and "goods are part of the patrimony of the Apostolic See, it is necessary for them to be subject not only to the supervision of the curial institutions on which they depend, but also to the control and supervision of the economic bodies of the Roman Curia.

Specifically, the Secretariat for the Economy shall supervise, inspect, and verify the economic and financial activities, assets, and budgets of these legal entities as well as their compliance to international standards against money laundering and the financing of terrorism.

The law specifies the secretariat, and the office of the Vatican auditor general may have access to all accounting records, information on financial transactions, donors, beneficiaries, governing members, and other necessary information about the legal entity. It also outlines the process for the handling, liquidation, and transfer of assets after an entity is suppressed.

The new law on "legal persons" related to the Holy See/Vatican City State reflects a number of recommendations made by Money Val, the European financial watchdog committee, in its 2021 report assessing the Vatican's compliance with financial regulation standards to prevent financial crimes such as money laundering and terrorism financing.

However, the Vatican authorities shall continue to pursue the introduction of an overarching law to cover the registration, administration and winding up of legal persons in the Holy See/Vatican City State"; provide guidance on the "creation of legal persons in order to provide an overview of the applicable legal provisions and processes applied in practice and make it publicly available"; and review the administrative sanctions applicable to legal persons in order to ensure compliance.

Attribution: https://www.ucanews.com

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