Vatican Embarrassed by Account Closure

Lack of transparency causes JP Morgan Chase to close account

The Vatican suffered a blow to its efforts to have its bank included in the European "white list" of states that comply with international standards against tax fraud and money laundering on Monday when JPMorgan Chase shut the account of the Vatican bank at an Italian branch.

Reuters reported that JP Morgan closed the account of the Vatican's bank, known as the Institute for Works of Religion, despite a major effort at reform IOR undertook in 2011 in an attempt to clear charges of fraud and money laundering. In a letter dated February 15, an Italian newspaper reported, Chase notified the IOR that its Milan account would begin to be phased out on March 16 and would be closed on March 30.

The Italian financial daily Il Sole 24 Ore was cited as saying that JPMorgan Chase told IOR that it was closing the account because the Milan branch felt IOR had not provided enough information on money transfers. Il Sole identified the Vatican account as a sweep facility, with all funds transferred to another IOR account in Germany at the end of each day.

Two regular daily newspapers in Italy, Corriere della Sera and La Stampa, reported the account closure on Monday, leading to additional embarrassment for IOR. Italian investigators had frozen 23 million euros ($33 million) in two Italian banks in September of 2010 over money laundering concerns; IOR had said it was merely transferring money between accounts, and the funds were released in June of 2011. however, the investigation is continuing,

The Vatican, which now follows the rules of the Financial Action Task Force, based in Paris, had seen its IOR associated with the 30-year-old collapse of Banco Ambrosiano, a scandal that involved everything from allegations of murder and money laundering to freemasonry and the mafia.

The Vatican suffered a blow to its efforts to have its bank included in the European "white list" of states that comply with international standards against tax fraud and money laundering on Monday when JP Morgan Chase shut the account of the Vatican bank at an Italian branch.

Reuters reported that JP Morgan closed the account of the Vatican's bank, known as the Institute for Works of Religion (IOR), despite a major effort at reform IOR undertook in 2011 in an attempt to clear charges of fraud and money laundering. In a letter dated February 15, an Italian newspaper reported, Chase notified the IOR that its Milan account would begin to be phased out on March 16 and would be closed on March 30.

The Italian financial daily Il Sole 24 Ore was cited as saying that JP Morgan Chase told IOR that it was closing the account because the Milan branch felt IOR had not provided enough information on money transfers. Il Sole identified the Vatican account as a sweep facility, with all funds transferred to another IOR account in Germany at the end of each day.

Two regular daily newspapers in Italy, Corriere della Sera and La Stampa, reported the account closure on Monday, leading to additional embarrassment for IOR. Italian investigators had frozen 23 million euros ($33 million) in two Italian banks in September of 2010 over money laundering concerns; IOR had said it was merely transferring money between accounts, and the funds were released in June of 2011, however, the investigation is continuing.

The Vatican, which now follows the rules of the Financial Action Task Force (FATF), based in Paris, had seen its IOR associated with the 30-year-old collapse of Banco Ambrosiano, a scandal that involved everything from allegations of murder and money laundering to freemasonry and the Mafia.


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