Sunday, March 25, 2012


Reports that JP Morgan Chase has given notice to the Vatican bank*, that it intends to close its account at the international investment bank, on or about 30 March, may mean that the recent designation of the Holy See as a "Jurisdiction of Concern,"  in the annual International Narcotics Control Strategy Report (INCSR) is getting attention amongst compliance officers at international banks.

The State Department designation, apparently applied due to deficiencies in the Vatican bank's anti-money laundering policies and procedures,  wasn't all that was disturbing to JPMC. What is known so far, and publicly reported:

(1) The account, which was reportedly opened in 2009, moved $1.5bn into other accounts in the EU, and no satisfactory reason for this traffic was given to routine enquiries, according to Italian sources.

(2) The account was "swept" daily, meaning that that it was cleaned out before the close of business each day. This procedure is inconsistent with the use of an account to conduct legitimate business, but is commonly employed when seeking to hide illicit cash obtained by criminal means. Was it the proceeds of corruption ?

Bear in mind the seizure, by Italian authorities, of $33m in 2010; was this incident merely this the tip of the iceberg ? These questions deserve answers.

Compliance officers at international bank entrusted with the assessment of country risk should examine the facts, make diligence enquries, and adjust country risk for the Vatican accordingly.
* Formally known as Istituto per le Opere di Religione, or The Institute for Works of Religion, a/k/a IOR.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.