Australian financial authorities have walked back their reports that more than $2 billion (AUS) were transferred in recent years to Australian bank accounts, from accounts connected to the Vatican City State.
Officials say that while they’re still investigating suspicious transfers, the amount transferred was dramatically exaggerated in their report because, apparently, of a coding error in their database.
According to The Australian, the financial investigative agency Austrac now reports that less than $10 million was actually transferred from the Vatican City State to Australia. The error, The Australian reports, seems to have been a coding mistake that identified transfers from Italy as coming from the Vatican City State.
A publicly available Austrac report published in July 2020 records that tens of billions have been transferred from Italian accounts to Australian accounts since 2010. While the numbers attributed to the Vatican City State were comparatively much smaller, they raised red flags because the Vatican City State is among the world’s smaller countries, with a correspondingly small economy.
Initial reports raised the concern that massive transfers from the Vatican City State to Australia could have been used to conceal money laundering, a problem plaguing the banking system of the Holy See for decades.
Reports of the transfers garnered international attention in part because of the burgeoning Vatican financial scandal that has led in recent months to arrests and the demotion of one formerly prominent Vatican cardinal.
But the “coding error” described by The Australian may point to an additional ambiguity in the economic relations between Italy and the Vatican City State, which was formally recognized in law by the 1929 Lateran Treaty, after the unification of Italy and the loss of the papal states.
There remains a lack of legal clarity about the status of certain Catholic entities incorporated under Italian law, and largely state funded, but controlled by or affiliated with the Holy See - among them several hospitals and under charitable institutions in Rome, some of which have faced charges of corruption or mismanagement. Whether those entities would be regarded as Italian or Vatican entities for the purposes of international finance is not entirely clear.
Moreover, there is also legal ambiguity about the status of corporations doing business in Europe, with bank accounts or addresses in the Vatican City State - an issue Cardinal George Pell attempted to address while he oversaw an effort to reform and modernize Vatican finances.
Curiously, Austrac has confirmed that even while its report about transfers was in error by several orders of magnitude, it continues to investigate some suspicious transfers between the Vatican City State and Australia. Among transfers that have raised suspicions is a transfer of $2 million to an Australian corporation, apparently authorized by disgraced Cardinal Angelo Becciu during the criminal trial of Cardinal George Pell.