Vatican Watchdog Says Suspicious Transactions Almost Quadrupled

Officials say figures reflect greater vigilance rather than any rise in illicit financial activities

Rene Brulhart, president of the AIF pictured Thursday, says the Vatican’s oversight system uses a “rather low reporting threshold.”PHOTO: ASSOCIATED PRESS

By FRANCIS X. ROCCA-April 28, 2016

ROME—The Vatican’s financial watchdog registered 544 suspicious transactions in 2015—almost four times as many as the previous year—but officials said Thursday it reflected greater vigilance rather than any rise in illicit financial activities.

The Financial Information Authority, or AIF, said it turned over 17 of those cases, mostly involving potential money laundering, to Vatican prosecutors.

“I would like to see the figure zero,” René Brülhart, the AIF’s president told reporters. “But it doesn’t reflect reality. Wherever you have financial transactions, financial activity, you always see something potentially suspicious.”

Mr. Brülhart said the Vatican’s oversight system uses a “rather low reporting threshold,” in part to raise awareness of potential problems. He said it was a “fair assessment” that none of the suspicious activity was related to the financing of terrorism.

Thursday’s annual report was the fourth published by the AIF, which Pope Benedict XVI set up in 2010 to work toward compliance with international standards on financial crimes. That step began a series of financial reforms at the Vatican, which have been continued by Pope Francis.

Mr. Brülhart touted a December 2015 report by the Council of Europe’s Moneyvaal committee, which praised the “intensive review process” at the scandal-plagued Vatican bank. The bank has closed more than 4,800 accounts, in some cases because a client’s profile didn’t conform with the bank’s stated mission to serve “works of religion.”

But Moneyvaal also put the Vatican on notice to prosecute those suspected of financial crimes, since nobody has yet been prosecuted under a 2013 Vatican anti-money-laundering law. Since 2011, the AIF has referred 34 cases of suspicious activity to Vatican prosecutors.

AIF’s director, Tommaso Di Ruzza, told reporters Thursday that Vatican prosecutors were “working very seriously” on the cases. A Vatican statement last December noted that prosecution of suspected crimes is especially complicated in the case of the Holy See, since such cases often involve persons living outside the tiny city-state.

Mr. Brülhart also emphasized the Vatican’s commitment to international cooperation. The AIF reported 380 cases of bilateral cooperation with foreign authorities in 2015, up from 113 the previous year.

The regulator also tracks declarations of outgoing cash that exceed €10,000 ($11,335), of which it counted 1,196 in 2015, a rise of 85 over the previous year.

Write to Francis X. Rocca at francis.rocca@wsj.com