No Vatican-NZ money-laundering probe

Australian Cardinal George Pell is pictured at a cafe near the Vatican in Rome Oct. 4, 2020. The High Court of Australia in April unanimously overturned a 2018 jury verdict that had led Cardinal Pell to be imprisoned for 405 days. (CNS photo/Franco Origlia)

Media coverage of a spectacular error in an Australian financial authority’s reporting of financial transactions from the Vatican to Australian accounts earlier this year prompted some Catholic figures to mention possible New Zealand connections, as part of a wider discussion about money-laundering between nations.

But New Zealand Police have told NZ Catholic that the New Zealand Financial Integrity Unit “has not commenced any money-laundering investigations in relation to the transfer of funds between the Vatican and New Zealand”.

Cardinal George Pell, a former prefect of the Vatican’s Secretariat for the Economy, was quoted in a January story on the US-based Catholic News Service on the error made by the Australian Transaction Reports and Analysis Centre (AUSTRAC) concerning the transfer of funds from the Vatican to Australia.

The Australian cardinal commented on reports that the Australian Transaction Reports and Analysis Centre (AUSTRAC) overestimated
by the equivalent of more than US$1.5 billion the amount of money transferred from the Vatican to Australia between 2014 and 2020.
In December, AUSTRAC had reported that $2.3 billion Australian dollars (US$1.8 billion) in Vatican funds had been transferred in more than 40,000 transactions to Australia from the Vatican.

However, after it was discovered that the number was miscalculated due to a computer coding error, AUSTRAC amended its report and said there were only 362 transfers from the Vatican to Australia during that time, with a total value of AU$9.5 million.

Calling the error made by Australia’s financial watchdog “a spectacular error”, Cardinal Pell said Vatican authorities “were quite rightfully resistant and rather displeased by the accusation that AU$2 billion went through in that time” and that AUSTRAC’s clarification “is good news for the Vatican”.

“It looked as though Australia, and to some extent possibly New Zealand, has been a little bit wobbly and weak in their vigilance over money laundering but that’s for them to ascertain to what extent that is true. But all is not well there,” Cardinal Pell said.

Earlier this year, the Pillars website discussed ways in which figures outside the Vatican, who  may not even belong to Catholic apostolates, may have used Vatican financial institutions to transfer funds as part of money-laundering activities.

Discussing the AUSTRAC report, which had not been corrected at that stage, the Pillars article stated: “ One possibility is that the final destination of funds was actually New Zealand . . . which has become a popular place for hiding money, especially as banking regulations have tightened in Switzerland and other European countries in recent years. Australia might have been only a
pass through for transfers to New Zealand, or even back to Europe, as part of efforts to conceal complicated money trails.”

Asked by NZ Catholic if it is possible that Australia may have been used as a “pass through” with money from the Vatican ultimately being destined for New Zealand, New Zealand Financial Integrity Unit general manager Detective  Inspector Christian Barnard said, “Without having direct access to AUSTRAC data, this cannot be confirmed; however, the FIU has full confidence that our Australian counterparts would report any unusual transactions to it.”

As part of an Official Information Act request, NZ Catholic asked about the number and value of funds transfers from the Vatican to New Zealand and vice versa between 2014 and 2019, so as to compare with the Australian figures.

Detective Inspector Barnard replied that the Anti-Money Laundering and Countering Financing of Terrorism (Prescribed Transactions Reporting) Regulations 2016 came into effect on November 1, 2017, so the FIU did not receive “prescribed transaction reports” prior to this date.

However, information was supplied for 2018 and 2019. In 2019, there were nine transactions from the Vatican to New Zealand, totalling NZ$$165,602. In 2018 and 2019, there were 14 transactions from New Zealand to the Vatican, totalling $247,315.

Asked about Cardinal Pell’s comments about vigilance over money-laundering in New Zealand, Detective Inspector Barnard referred to a recent report on New Zealand by the Paris-based Financial Action Task Force (FATF).

Media reports stated that the FATF believes this country has made significant progress in tackling money-laundering, but there is room for improvement.

Stuff reported the task force saying that, due to New Zealand’s “very open economy” with “free flow of capital and people”, transnational organised crime groups seek to move funds through the country. Stuff added that about NZ$1.35billion is laundered through businesses annually as a result of fraud, illegal drugs, tax evasion and other crimes.

Recovery of the proceeds of crime, use of intelligence between agencies, and the strength of this country’s laws were among the aspects of New Zealand’s efforts praised by the FATF. There have been several high-profile police operations reported in media recently.

Transparency in terms of company ownership, and better awareness of money-laundering among some reporting entities, were among areas to improve.

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Michael Otto

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