European Journal of Law Reform

Article

Financial Crime Prevention and Control

The Reforms of a ‘Unique’ Jurisdiction under EU Law and International Standards

Keywords Vatican financial system, money laundering, terrorist financing, 3rd AMLD, FATF Recommendations
Authors Francesco De Pascalis
Author's information

253258 Francesco De Pascalis
PhD in Law, Institute of Advanced Legal Studies University of London; Research Fellow, University of Zurich, Law Faculty. All errors and omissions remain the author’s.
  • Abstract

      Between 2011 and 2014, the Vatican City State (VCS) experienced a reform process which dramatically changed its financial system. The process is still ongoing, and its goal is to establish an anti-money laundering and counter-terrorism financing (AML/CTF) system. Importantly, this system will be based on the AML/CTF EU legislation and international standards. These facts are noteworthy. First, the reforms cast light on the main Vatican financial institutions against the background of the secrecy that has always characterized their functioning and business operations. Accordingly, there is now more transparency and information about the Vatican financial system. Second, the relevant EU law and international standards are tools through which the VCS can, for the first time, join an international network of countries, sharing and applying the same rules against money laundering (ML) and terrorist financing (TF). This is of extraordinary importance for a jurisdiction like the VCS, which has never referred to European or international principles in its rule-making. In particular, the openness to EU law and international standards stimulates investigating the reasons behind these changes and the impact that these sources of law are having on a jurisdiction regarded as ‘unique’ in the world.

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