 Good afternoon. Good to see some friendly faces in the audience. Thank you for being with us. Welcome to the Center for Strategic International Studies on behalf of CSIS, as well as the Foundation for Defense and Democracy Center on Sanctions and Elicit Finance. Welcome to this conversation on Vatican Financial Reform with Dr. Rene Brilhart. In all transparency and openness, it should be known I'm very close friends with Rene, although I'll be a tough questioner and I've tried to be a tough board member in terms of the Financial Information Authority at the Vatican. With Dr. Brilhart is also Dr. Tomaso DeRuza, who is the director of the AIF. They're here meeting with government officials and regulators and others in the private sector to talk through the financial reforms underway at the Vatican and the Holy See. So we're very privileged to have Rene with us, privileged to count him as a friend, and really to have a discussion about what's really happening inside the Vatican. A discussion that's often filled with much mystery and secrecy, filled with lots of lore and legend, and often not a discussion that's filled with much fact or what I would consider to be rather pedestrian and mundane elements of what a reform agenda looks like in the context of financial reform. But I think this is an important discussion because in some ways what's happening in the Vatican is not just emblematic of reforms in the Holy See, but also what's happening globally in terms of the anti-money laundering, counter-elicit finance regimes, a quest for transparency, accountability, higher global standards, higher accountability in the financial sector, all of which is impacting the expectations as well as the work at the Vatican. And so we're privileged to have Rene here to talk through what those reforms look like. Just so you all know, this is being live streamed, so you have to be on your best behavior. What we'll do is we'll have a discussion up here for about half an hour, this whole discussion set for an hour, so we'll open it up to questions. We will have microphones that way, others who aren't with us can hear what the questions are. And when that time comes, I'll ask you to identify yourself and ask a question, of course. So again, welcome very much, and thank you very much for being here. Rene, talk just a little bit about what you walked into at the Vatican, because you were asked in many ways initially to serve as advisor, then director of this new financial information authority or reform body, and then now as its president. Can you talk to us and explain to us what you walked into, especially given your experience and having been really one of the renowned turnaround artists in the anti-money laundering space, having helped Lichtenstein get out from under the cloud of suspicion and taint, and having helped to build the financial intelligence unit for Lichtenstein. What did you walk into when you walked into the Vatican, and did it meet your expectations? First of all, thank you very much, Juan, for these very warm words. And good afternoon, everybody. It's a pleasure to be here, and many thanks to CSIS for hosting this event. Now, talking about expectations, it's maybe the wrong word. It was more really kind of finding something you, potentially you can't imagine, because it's a wonderful world there, but it's a different world. And I think that's something when you kind of tasked, and I was tasked with this work starting in September 2012, first as advisor, and then talking operational role, and now stepping back from the operational role, and looking into it more from a non-executive function. There are many, many rumors out there, many, many gossip. And I think we really here have kind of to distinguish on what is kind of the outside view, and especially then also what internally it really is. So if you go back to kind of 2012, what happened that time was that accounts were blocked of the IOR, so of the Institute for Religious Work, mainly in Italy. All of a sudden, by the end of the year, when tourists wanted to kind of pay their entrance fee to the museum, the credit cards didn't work anymore. The president of the IOR in a way or another also was not there anymore, the same also with the director and with the deputy director. So it was all kind of quite a heat linked also, or also combined with a lot kind of, let's say, media work and media heat there too. So that was kind of the outside situation. Internally, it looked quite different, or not to say completely different. And internally, I think there was a very strong kind of, let's say, political support and willingness, A, to understand really what happened, but also then how can we turn around that? So how can we address it in the best way possible? How could that happen? So I think that was really kind of the very first question in a way or another I was confronted with. And a lot of this, and you've spoken about this, started under Pope Benedict. Pope Benedict began to sort of deal with some of this. How did that take shape, and what steps was he taking, and how does that play into what you're doing now? Well, I think the kind of the really, let's say, the formal starting point was with the Motor Proprio of 30th of December 2010. It's like an executive order. Yeah, kind of a clear, strong sign to do something, or clear expression of will. So it's, and I think there were mainly kind of two issues linked there. One was the setup or the establishment of AIF, so of the authority I'm chairing today. And second was the introduction of the first anti-money laundering law in the Vatican, that time so-called the law number 127. So these are really kind of the first formal steps to be taken to directly address the issues I was mentioning before. Renee, maybe for the audience it may not understand sort of the Vatican structures well enough, and where you sit and what the AIF does. Could you give kind of just a thumbnail sketch of the structures? And in particular with Cardinal Pell and his role, how does this all fit? Can you give us kind of a mental picture of the architecture? How much time do we have? I try to keep it simple, so because it's kind of, it's rather complex, but to keep it simple is if you look at the Vatican, so it's, you have mainly until some, been more than a year ago, you had mainly for, let's say, all the organizational administrative issues, you had the secretary of state being in charge. And now with part of the reform, especially on financial matters, but not on regulatory matters, but on financial matters, the so-called secretary for the economy under Cardinal Pell has been introduced. So it's mainly kind of taking control over the financial administrative side of the Vatican as such. Completely apart from that, really on the anti-money laundering world, and especially also on the regulatory side, as I said earlier with this monopropy of 30th of December 2010, AIF has been established as an operationally autonomous body taking care of these kind of issues. So first kind of as a so-called financial intelligence unit, so this is kind of the institution which receives so-called suspicious transaction reports, analyzes it, and then forwards it to law enforcement in a way or another. But then what we did in the course of 2013, we set up not only this kind of FIU, but also we set up a full-fledged regulator and supervisory body. So under the umbrella of AIF today, we have kind of two key pillars, one as financial intelligence unit and one as supervisor and regulator for the Holy See. And I think it's why it's worth to mention that because sometimes there are certain kind of misunderstandings. The beautiful country which surrounds the Vatican called Italy has no jurisdiction over the Vatican. So also law enforcement authority, the prosecutors, the tribunal, these are all Vatican or Holy See institution as such and the same is with AIF. If you look into the structure of AIF and I think that's kind of interesting, they're completely independent from the secretariat of state and from the secretariat for the economy on operational matters. We have a board with some lovely members like Sarati and then we have the directorate. So the board is exclusively responsible for the strategic matters. These are all non-executive members and then we have the director who is present here today, Dr. Thomas DiRuzza, but really again in full operational autonomy. Now you describe the autonomy of AIF which is fairly unique in the Vatican structure and the role of the Vatican city-state you know surrounded by the Italian polity. But it's not immune from external pressure. I mean what you described in terms of the situation you walked into was enormous external pressure, suspicion about the Vatican, considered a high-risk jurisdiction with banks beginning to close accounts, freeze accounts, etc. Can you talk through the external both demands and pressures that the Vatican is under both from Italy but also European standards and expectations and where this sits globally? I mean in many ways you've been a part of the global system to drive the anti-money laundering system. How does the Vatican sit in that context given the fact that the Vatican is so unique? In fact I mean when we started to do you know to do our work so kind of for the first months at least to the outside visibility it seemed that we hadn't done anything but we have done a lot internally and mainly kind of to understand from various pressures. So it's and is it justified? So and when we talk about kind of pressure so who are the players? So are these authorities? Are these the media? Are these kind of individuals with certain single interests? You know it's a religious organization there are other issues which play a role in there also some kind of let's say political issues. So it was really kind of to get a proper understanding you know what are kind of the threats out there? So what are the vulnerabilities and in a way kind of what went wrong and then on the basis of that we could start to address these kind of issues and to get a proper understanding how to handle with that. So for sure and to be a little bit more concrete for sure the media played quite a key role for sure also let's say authorities or certain authorities maybe also with their own interests play kind of a key role but I think here the critical element comes into the game. So why do you want to go into this kind of transformation? So do you want to go into that because it's such a high pressure because you think that you have to do it because you know the others are telling you that or is it much more do you realize that you want to do the right thing because you have a completely different responsibility especially speaking about the Holy See and especially also speaking let's say about a moral responsibility and I think that was kind of an internal process which we started to address and when I say we then it's not even if I'm sitting here today it's not me there are many people involved it's a team that's really kind of bringing this process forward and ultimately really standing up and saying we do it for us you know we really do it because we want and we want we have to protect the Holy See as such and that's why we want to take these measures and then on the basis of that you can start to come up in tailoring a system which has to be functional and almost as important as that it has to be sustainable at the end of the day so that's really kind of the development and I think the we could have done a fantastic job in in few weeks with a lot of window dressing you know so it's talking to the newspapers going in in TV shows or whatever and telling everybody what we're going to do but you haven't chosen that approach would be maybe much easier but most probably not sustainable we're quite sure it's sustainable so we try to go the sustainable way in the sense that also starting to speak to the media or when you gave the very first kind of press conference in in mid 2013 talking about facts talking about what have you done and especially also how how we're doing it yeah so how we continue and really speaking about facts well let's get into those facts and talk through sort of your plan as you assess the landscape the external pressure the internal pressure and challenges what steps were taken and in your mind what metrics are good examples of the kinds of reforms that are underway first step and it was really kind of a step-by-step approach the first step was really to change the legal framework I'm not saying that kind of the the first legal framework per se was deficient to a certain extent yes but it was mainly not really kind of addressing the let's say the risks and vulnerabilities the Vatican is facing so it was really about setting up a new legal framework as such and especially in a very tailor-made matter this we did with the so-called new law number 18 which has been which has entered into force in October 2013 so once we hopefully got that right or to say to the extent also kind of parallel because in the law itself we as an authority also obtained much more power got different instruments in addressing the issues made it very transparent internally but also to the external role changing the institutional framework so really kind of establishing the authority with the necessary competencies also from a good governance point of view to be in a position to execute its mandate and then as a third step international cooperation so not only talking about cooperation but acting so and they're becoming member to the Agmont group in 2013 which is kind of the the worldwide worldwide umbrella organization of financial intelligence unit I think nowadays there's something like more than 150 members in there and then also bilateral bilateral agreements so with players here in the US with Finzen with the OCC we have present here today with European countries with Italy with Germany with France with UK with Australia and these are information sharing agreements exactly yeah really kind of building a network that allows an international network that allows us to if necessary to you know to share information to cooperate together and then once you have this kind of let's say three pillars to make the thing the whole thing operational so give you some figures on that we had till until kind of November till October 2012 we had one single suspicious activity report you know by end of 2006 it's 2012 yet six by end of 2013 we had 202 and by end of 2014 we had 147 suspicious activity reports you know so there the system really works now it's functional international cooperation so 2011 12 not even a handful 2013 in more than 80 cases we cooperated with other competent authorities in 2014 in more than 110 cases so it's it's really developing a system as such now is today everything perfect and great it was probably not but I think the approach we are following and especially also the system we have set in place is functioning Renee have you had to close accounts internally other changes that have had to take place and you mentioned sort of building the legal structure around the risks that are attended to the Vatican financial system you know what are those risks how would you classify those I mean one of the risks we we strongly faced and this is also linked to let's say what you would call kind of to the account closure you can go a little bit into figure into the figures in a second was really to get an understanding who has access to financial activities in the Vatican and I think that was one of the vulnerabilities for quite a bit of for quite a while so that it was not really kind of ultimately clear and I'm not saying that there was a huge abuse or whatever but at least how it was set up it was not really kind of absolutely clear who really had access to client relationships etc and that was really something where we went into the whole kind of verification process to get a proper you know proper CDD measures etc putting that in place to really mitigate potential abuse risks that's one issue another issue the use of cash you know so if you look into the statistics so in the last years cash has tremendously the use of cash has tremendously decreased in the Vatican but still so having cash cash transactions or whatever different measures are necessary so meaning that you have to have a much better profile clients profile that you can mirror if the cash you bring in the cash you take out makes sense in regard to this client relationship so if you just have a name but you have any kind of background information on that it's almost impossible to properly mirror the use of cash so this just has kind of two examples how to do that now on the kind of account closure and I assume that you have massively seen that also in the in the media we in kind of in the last few years something like more than four four point five thousand accounts have been kind of closed or blocked quite a big amount of them were somehow dormant account but some of them were also not really kind of really in line let's say with the mission of the institute for religious work and I think that is one of the issues where we really go back to the roots so what the institute really stands for and that is to serve the holy church and from that point of view I think the measures which have been introduced were absolutely appropriate and the institute your time as IOR commonly referred to as the Vatican bank just again for for folks who may not be familiar can you explain what the Vatican bank or your does and doesn't do or or doesn't doesn't do doesn't does not do now well I hope I know what it does and what it doesn't do so it's I hope you do too so it's uh I mean yeah we call it we call it mainly kind of a financial institution is who it generates and not really a bank because kind of the the activities it carries out which are mainly kind of type of payment services providing kind of credit card business so to to very limited extent type of kind of retail banking or retail business and some kind of asset management but there are no loans or not no loans anymore there are no mortgages etc so it's not really kind of a bank it's more more like a fund or a type of family office you you have there it's also not kind of possible if you would like kind of to walk into the Vatican and you would like to open kind of a client relationship it just doesn't work so you can't do that so it's not kind of let's say a player on the commercial on the commercial market but it's really kind of a financial institution for serving kind of the holy church as such so it's so it's service wise but also access wise it's it's very very much limited that's such and does it hold assets like artwork or real estate or holdings like that now you're starting to ask tricky questions so it's no it's mainly it's it's really mainly as a financial institution without this type kind of of of investments or whatever so we don't have an investment banking sector hopefully you know so it's really kind of direct treatment of the of the customers as such Rene you've touched on this already but I think one of the interesting dimensions of of the work that you're undertaking and of this topic is just how unique the Vatican is as an institution in terms of its reach can you talk a little bit about the uniqueness of the institution itself you've touched on it from a legal perspective and a jurisdictional perspective but also culturally religiously in terms of its global reach and how that matches or mirrors or maybe even is in conflict with the principles of transparency and accountability that are the hallmark of the global anti-money laundering system I was only there to allow to myself to speak about that really in in regard to let's say to financial activities the the the the holy sea carries out no so it's a I think keep in mind the the holy sea is a global institution and there's also kind of a global responsibility and is it's active all over the world and especially all over there where there's a lot of kind of pain and where there's also kind of need for help so and especially you and your former kind of role at treasury mainly kind of doing a lot on sanctions or whatever so mainly also active in in countries which are sanctioned you know but you have poor people there you have clerics there they also need help and support and so it's really kind of it's not kind of a commercial role there so it's really kind of a role to help and to help to facilitate that people there are going to find the help that they're going to get access to to money at the end of at the end of the day so you you speaking for example about Africa or parts of Asia there are no banking systems there no so you don't you don't you're not going every morning to the ATM machine and you're withdrawing cash or whatever so it's a or you go somewhere to a bank counter and you withdraw money or you're going to go with your check or whatever so so you have to find a way that you can also ensure that in these parts of the world where mainly also the poor parts that you can facilitate certain financial services in a way or another so I think the task there and the responsibility is a completely different one and unfortunately often media they only talk about the negative things no so only about the scandals or something is happening or is bumping up but all kind of let's say the good work which is done out there and how it's it's facilitated and how it's helped this is not really kind of mention now having said that for sure this is also causing tremendous challenges no so it's a and we are here in DC talk about sanctions we have seen the news this morning on Iran let's see what kind of impact is going to have on the sanctions regime as such but still there's another world there's a human world also out there and sometimes this when we talk about let's say kind of AML CFT measures this human world is sometimes getting forgotten and especially also the measures to combat money laundering and terrorism financing is sometimes unfortunately also combating humanity feeding off of that I think an interesting point that you've made and just alluded to is the moral responsibility of the anti money laundering system both within the Vatican and globally can you speak to this question and this issue of global standards and the standards that you would like to see the Vatican sort of employ for itself and and be a part of because there's a lot of talk as you look at the reforms and especially with those major banks have been hit with major fines or sanctions or even criminal prosecution uh a quest for the highest global standards is that sort of the quest you're on at the Vatican what what are you hoping to achieve and what's your message externally and internally I think the highest standard for us ultimately is a moral standard you know so it's a you can have now we have whatever just to give you an example it's a new or not that new 40 recommendations again so it's a so or whatever you take puzzle three etc so you have all kind of the the frameworks which are given and they show you the direction and they somehow kind of indicate let's say the type of the the formalistic standard as such is that enough most probably know that at least not to me because the question there is how you're going to implement that and and I think here we have kind of the uh the divergency somehow do you do it because you have to do it or do you do it because you want to do it and I think when you do it because you want to do it you're going to go on another kind of moral level as such and here you know taking for example or taking the Vatican you don't have kind of responsibility or partially responsibility you don't have responsibility to stakeholders to regulators or to a certain extent or whatever or to whatever so to to your kind of rating agencies or whatever but you have a responsibility to 1.2 billion Catholics out there and I think that is something that is pushing you and this is also kind of helping and supporting you in doing this kind of work and hopefully kind of bring it into the right direction on a different level no so it's a and again going back to your question I think one of the key issues is really kind of the implementation no so it's a and I think in the international world now with the risk assessments and all that I think it's going into into a right direction but I mean each jurisdiction in a way another has its own kind of own threats vulnerabilities risks etc and I think there there's still quite some room for improvement and also in the financial institutions no so it's a that you really start to do the things and maybe sometimes stop a little bit look back and say okay where we're standing why we're doing these kind of things how can you protect ourselves and just looking you know every quarter in the next figures and we have to increase the earnings or whatever where's the sustainability no so it's a we're also kind of to certain extent the moral values that sometimes also giving back something to the society as such so and I think maybe now if all kind of the crisis and especially also looking into Europe or whatever I think it's a perfect example also with Greece where we're standing no why are we doing that and how are we doing so sometimes it's also good to stop a little bit looking back reflecting and then hopefully taking the right decisions let me take the prerogative of one more question then we can open it up there's a lot of interest in the pope and the pope's role in pushing reform across the board what's pope francis's role in all this and what's your relationship with him let's let's keep internal issues internal and the what is fair to say is as you said earlier on pope Benedict started the process and I think it's fair to say that pope francis the holy father is strongly supporting transparency and is also in that regard also strongly supporting transformation you just have to look into into the facts as such so it's a if you look back to last a bit more than two and a half years the the development and especially also the progress we have done wouldn't have been possible without kind of a strong political support starting with the holy father but also especially also with the secretary of state the secretary for the economy came later into the game so there is internally a strong support in bringing this transformation these reforms forward bringing this kind of transformation forward but really under one clear condition and I think that's what you're standing for to help the holy sea and ultimately to protect the holy sea for any kind of illicit behavior or abusive behavior in financial matters great let's open it up now for questions as as promised raise your hand and we'll have an attendant who might come to you this woman here in the center please thank you hi thank you have two questions you said it's a fund who regulates your fund is it or is it a self regulatory fund next question is are you bringing in money from outside countries and if so who monitors the traffic of your money from outside countries in and you're the Vatican to other countries thank you the thank you for the question the the IOR so the Institute for Religious Works is a financial institution no so I was saying it's it has to a certain extent certain certain indicates the parameters of the fund or whatever but let's call it a financial institution as such so who is regulating it my authority so AIF has been set up as the supervisor and regulator within the Vatican to supervise and regulate financial institutions therefore also the the IOR reply to your first question regarding the second question yes you have so money is coming in cash as I said it's it's brought as in other any other kind of jurisdiction to the Vatican and is also leaving the Vatican so what is happening any kind of transaction over 10 000 euro has to be reported and ultimately these reports are going to us so there we have full control over the movements of the cash yes if you could identify yourself please thank you Phil Bozelli can you clarify or elaborate on how the Vatican Bank makes money I assume it's not a charity I know they give out money but how do they really make their money in context we all understand here in the States as many other financial institution now so it's you you have a part on the so you have kind of the different issues part is kind of fees from you from your customers a part is on on investments on on the assets and the part is is really kind of too in the framework of the asset management as such so it's a where it's also kind of investing its own asset so it's it's kind of very ordinary way as such how this is done so it's a so in that regard it goes a little bit kind of really as a fund to a certain extent some type of banking issues but but it's mainly kind of these elements which I just mentioned yes sir Pedro Bozelli can you explain in terms of the new structure of the secretary for economic affairs how that has brought in not just the fund say the you know the money management but also the asset fiscal asset management of the Vatican and at what point you know do you sit there in the discussion and view the money that's actually liquid and the you're tracking whether it comes in and goes out in the right way and the assets that exist and whether they are you know held in the right way where they're valued in the right way where they're reflecting their true economic value of those assets and who has them who has who has the ability to enjoy the perks of a fantastic apartment you know that we had a consolation and stuff like that I mean there's a little bit of the whole management of the entire asset base which I assume from your title it goes beyond the Vatican Bank to the entire financial assets and well-being of the Vatican you have mentioned kind of the fiscal side just to clarify that at the beginning so there is no real tax system in the Vatican so it's a but don't try to apply to become kind of get domiciled in the Vatican so this is not going to be difficult that's going to be slightly difficult on that talking about the secretariat for the for the economy so as you can imagine kind of the the Vatican as the oldest institution in the world has also kind of grown in a way which has not always been in the let's say in the most kind of streamlined way as such or in the always in the kind of in the most transparent way a lot makes a lot of sense but there are some also some kind of peculiarities so let me try to give you a picture so what is kind of currently going on so if you have kind of a family enterprise so family company so you have the father he's running successful business and then you have kind of you know the son he's going to do something slightly different but he's opening up his own company the daughter second daughter third daughter so so you really have kind of a conglomerate of family businesses going on now if kind of the father with his son and with his kind of three daughters is sitting on a table and saying let's go for an IPO no let's go and bring it to bring it public then most probably let's say the accounting standards are not sufficient no and that's what is more or less small at the moment so don't worry we're not going to bring the Holy See to the stock exchange so we're not going to bring the Vatican public but that's a little bit kind of what is happening at the moment so it's mainly really kind of trying to to identify internally also the type of accounting mechanisms the internal transparency on this kind of issues and then having in a way another kind of a consolidated accounting system in place based on clear standards and guidelines and that's mainly kind of the work of the of the secretariat for the economy in that regard so when you see sometimes in the news that we have found this and this millions or here or whatever so it's really kind of a process and it's not really kind of finding I mean this these assets have been there no so it's just more how you evaluate it in a in a maybe in a different way and how to bring that all together but that's mainly kind of what the secretary for the economy is currently focusing on this gentleman here yeah yeah good afternoon yeah I have a new C foundation for defensive democracies question you explained how unique this experience has been and of course it's it's clear it's a very unique jurisdiction but if you were to go back to lichtenstein or any other fi you could you describe what practically would you bring back from this experience in terms of lessons learned that could translate into another jurisdiction I think the the institution as such is definitely unique but maybe how it has been done is maybe less unique or less exciting and more boring than you can expect so it's a but I think the lessons learned or let's say kind of the type of methodology it's it's really maybe at the very really first to get an understanding what we are talking about no as as simple and stupid as it sounds but really who are the players no so it's a what are the threats what are the risks the vulnerabilities so it's a what are kind of the different factors which do play a role in that kind of environment and then really once having identified that coming up in introducing a tailor-made system and I think it's sometimes everybody wants to be the first one and it's it's it's also kind of a lot especially in that field and I don't know maybe you see that different one but it's quite a bit of copy and paste no so you take a system you take methodology it fits everywhere no no it's it's just different no so and once you you really look into that in a clear way so you know what the standards are no they're on paper no so it's a but maybe you don't know exactly what the mentalities are no so what the motivations behind where no what the story behind is and I think sometimes not enough respect is given to the history or how things have been developed and when you want to build something sustainable I think it's while worth to take a little bit time to look into that and really kind of facing yourself especially also with the mentality there this gentleman in the back thank you Pastor Britt Mitchell Renaissance Institute this is really kind of a layman's question so forgive me I'm used to praying for people not for you know looking into financial affairs my question is and I'm trying to picture it when you look at the Vatican Bank obviously it's not a retail bank like Bank of America it's a closely held institution inside the Vatican do you act as the general bank for all the Catholic Church and do you hold all the assets under your hand to your investments under your hand that I guess that's what I'm trying to figure out yeah I'm very glad that you that you that you're asking that so no I mean it's look kind of the assets under management of the of the IOR as something like six billion euro so every small Swiss regional bank is larger so what do you have really in the with the IOR in the Vatican so there is no obligation or whatever so if you have kind of a diocese somewhere in Asia or here in the US or whatever that you have so-called to bring the money back home or whatever so it's so there's sometimes kind of misunderstanding that the Vatican has full control over everything what is happening in the world that then need to certain extent also held responsible for that but definitely for kind of for financial matters there's a lot of kind of freedom there what before the kind of bank you want to work here in the US or in Switzerland or or in Singapore or whatever so it's a that is not the case however what you're kind of trying to focusing on is especially you know the type of standards especially you know on transparency but also kind of what should apply internally that this almost becomes kind of a global standard for let's say for religious organizations on that but that's going to be a long way so that includes Catholic universities charities hospitals diocese sort of that the full panoply of Catholic institutions what you're saying is it's not all collectivized that's correct yeah so it's not all kind of under the control of the Vatican that is sometimes really getting misunderstood so that's not the case father and then this gentleman here two questions in front please i am a priest of the archdiocese of washington and sometimes we refer to the archbishop as a corporation soul and you know they're very definitely you know is a distinction but moving over to europe i was wondering does the the bank and and your particular role in it and overseeing well problems have any particular connection with brussels or berlin or the bank in in frankfurt the thank you father the keep in mind that the Vatican entered into a so-called monetary agreement in 0910 with the european union so which means that the Vatican has as official legal tender the europe based on this convention and in that regard the Vatican committed fully to implement aml cft's anti-money laundering combating financing of terrorism standards of the european union so currently the third u directive soon the fourth u directive in addition to that what what the Vatican did was unilaterally kind of requesting to apply relevant and applicable parts of the u financial regulations which we mainly implemented with regulation number one so as a strong commitment especially also on the supervisory side to be in line with the european standards so this is really something where that's kind of the closest link we have there but we are not kind of linked to the or the ior is not linked to the european central bank in a way another except via the currency as such thank you very much for a very interesting presentation you touched on the agreement with Iran which was announced today and the details are publicly available there is a timetable within it for lifting of financial sanctions the range of financial sanctions u s e u and others and i just wondered if you had any thoughts about how as those sanctions get lifted the business of your bank will change will there be more financial transactions more accounts opened or do you see any other changes taking place thank you could you identify yourself i'm jonathan broer i work at the u n i'm a member of the u n panel on your own thank you john thank you jonathan and i'm glad that it could make it to come over it's always good to see you um frankly speaking i would be very very much surprised if um the events of this morning would have directly or indirectly um on the financial side any um any impact on uh on the Vatican this young white hi um porter mcconnell from the financial transparency coalition you mentioned the european union anti money laundering directive and i guess i'm curious to know in the spirit of um the moral obligation argument i'm curious to know whether you will be implementing um and maybe it's your colleagues uh a public registry of beneficial owners or whether you will sort of be meeting the letter of the law yeah i mean that's a little bit kind of let's say the at least from a formal point of view the music of the future with with the fourth u directive so it's a um the system we have chosen so far um is mainly kind of on the internally within kind of the the financial institution or the financial institutions as such to have kind of full disclosure but more important um from our side as kind of supervisor to have full access on all the relevant information and which is granted and which which is given now regarding the regarding a potential register um we will have to see how this is going to uh how this is going to develop also um in the future but again keep in mind the the uniqueness of the sorry to use the word but of the business model or of the clean tail we have in the Vatican as such this is not kind of a commercial bank this is not um you know kind of a financial institution which is in competition um with others in the world or whatever so it's really kind of most of the or very many of the customers or that they're involved in or have a kind of client relay or customer relationship with the with the IOR um have in a way another almost an institutional um function or even clerics or whatever and here you also have to be a little bit kind of careful as I said earlier on um you know when you have kind of clerics being active priests or whatever being active in um in countries which uh which are dangerous no so which are maybe not kind of very friendly to this religion um now if you're going to have a full transparency you can also put people's life in danger so there is always kind of a balancing act on on this kind of issues and I think we will look into that very very closely and very attentively and for those who aren't following the fourth EU directive uh so closely over the beneficial ownership rules is a major sort of debate both in the EU and even in the US around uh registry of beneficial ownership of corporate vehicles and entities and what form that takes and and to what degree that should be public and so that's that's an ongoing debate in fact there's a proposed rule here in the US that has not yet been finalized regarding beneficial ownership so this is a really important issue I'm glad you raised it other questions this gentleman in the back here we've got about five more minutes Dante Figueroa from the Library of Congress in the performance of your duties particularly in the well conducted investigation where did you draw the line between crime and sin given the uniqueness and whether the criteria you used has been met with some level of resistance and from inside thank you thank you could I pass the first question to the father here we're gonna open a confessional next door father I'm just a humble servant so I'll never dare I started to talk about sins no so and therefore also about kind of confession so it's uh no I mean it's kind of let's say being in the financial world I think kind of the criteria is out there are quite clear on the conduct which is kind of carried out slightly different element is once you're going to sanction this kind of conduct in a way or another and the question then there is also who let's say has committed certain commit not talking about crimes but maybe certain type of offenses or whatever and they're definitely kind of the the catalog of sanctions in the Vatican is slightly different than for example the OCC so there you can apply also different or potentially different flexibility that is one issue on the what was your second question sorry for that oh okay look wherever you have kind of let's say changes or whatever so for sure not everybody's happy no so and I think we are here really in in in a field which which is almost kind of a contradiction no so to have Vatican the church and you know talking about money laundering corruption things so this is almost kind of a clash of these two worlds if I may say so so I think one of the key issues there was really to have a very extensive internal communication why are we doing that how are we doing it no and as I said a few times this afternoon ultimately really to protect the Holy See as such and I think that is one element and the other element is then when you go in changes I think also building bridges no so it's also you know really kind of being almost kind of a mediator and bringing kind of the different let's say forces together and get the best out of it together so this is not about about me this is not about other individuals this is about the Holy See as a whole and I think we are here to serve not more and not less sir in the front hi I'm Paul Catero from the monk school of global affairs at the University of Toronto thank you you mentioned European law and the you directives that you subscribe to but earlier you alluded to the Holy See's higher purpose and indeed higher authority what keeps you awake at night excuse me what keeps you awake at night in your role I'm sleeping very well unfortunately unfortunately not enough because it's too much traveling so it's but yeah I got a little bit old that's true so it's but no I mean it's I think it's a responsibility at the end of the day and having this kind of two elements no so what you mentioned on the on the European you know kind of it's not only the European let's say legislation but it's you know kind of FATC a stand sorry FETF standards etc so kind of international standards which do play a role but I think it's more this to me is more kind of these are the building blocks no so this is really kind of which gives the direction but the question then is and here we go a little bit more into into the moral side is how you're doing it no so how how you're doing it who you involve how you involve the people and especially then also how you kind of turn it into the hopefully proper results as such and I think the approach here we are following is a very proactive one so it's really a preventive one no and you know kind of the you have a lot this kind of discussion especially here in the US so it's a I think that kind of the sanctions of financial institution has become quite massive also when you look into the figures etc and I think what my vision is really kind of building something together no so you have a regulator you have a financial institution but ultimately use it in the same boat no and I think we all want to have a clean we want to have clean financial activities we don't want to do kind of dirty stuff or whatever so let's do it together we have to be fully aware of the different roles or the regulator has or the financial institution has but sometimes together goes better than against each other as such one last question sir hi Richard Greco feeling Jerry capital partners this is sort of a follow-up question on to the comparable analysis and some of the other micro states in Europe that exist and Dora Monaco Lipton Stein San Marino as there's a push for greater transparency and of course anti money laundering anti terrorism etc a lot of these countries have over the last decades really thrived on these sort of bad systems and have almost become dependent on them for their economies as you're implementing a push towards transparency global standards how do you balance the sovereignty and sort of the right to have an economy I guess and the push towards global standards is there room for these small micro states to survive okay I'm glad that you didn't mention the Vatican though because it definitely doesn't fit into this kind of into this micro state so I think it's the just speaking a little bit out of my experience in doing Lipton Stein for some years tricky question I think the point there is really what do you find in these kind of states no so what kind of let's say type of economy or whatever so for example when you talk about the principality of Liechtenstein you only talk about the financial sector but the industrial sector is much larger than the financial sector and it's also you know you might take kind of advantage of certain circumstances but the perception then and I'm not talking here about Liechtenstein but in general so it's and Andorra got lately got quite heavily hit no so by by Finzen for example I think one issue is really let's say that you have potentially few bad players that they really have an impact on on the perception of the country or of the jurisdiction as such and here we are back which where I'm really kind of convinced is that a stronger kind of the regulator and the supervisory so as strong the authorities is as strong or ultimately is also the financial center as such and when you look back a little bit kind of it was mainly when these kind of things happened was deficiency of the authorities so either no authorities were in place or they didn't really kind of act in an accurate way or whatever that these kind of things happened but yes it has kind of a financial or it can have kind of a financial impact but I think the rules of the game today they have become so clear and I think also the whole kind of let's say transparency movements as such also before kind of the mutual evaluation reports etc I think it's going to be it's going to be difficult in the in the near future that that can continue except that the same standards are not applied everywhere in the same way and I think that is something we are facing as really kind of when I say we am not meaning the Vatican also but the talking also a bit excuse me for one no so it's that kind of the the regulatory frameworks today almost have become kind of a competition issue in the financial in the financial world how they are kind of implemented how then they also kind of are going to be evaluated and I think here it's going to be kind of really crucial that the same standards have to be kind of supervised and reviewed in the same way which today is definitely not the case if you would reach that then for sure such kind of jurisdiction will have to focus more and more on maybe on industrial advantages or in trade advantages because a part of the business as it has been kind of carried out in the past will not just not be possible anymore wow a great hour great discussion fascinating of course we could go on longer Renee Brewhards a Swiss lawyer a global anti-money laundering expert president of the AIF for the Vatican and a servant of the church and fortunately for me a friend so thank you Renee join me in thanking Renee