The following post is by Dante Figueroa, a senior legal information analyst at the Law Library of Congress. He has recently written for In Custodia Legis on the Italian Parliamentary Library; Spanish Legal Documents (15th to 19th Century); Recent Legislation Enacted by Italy to Tackle COVID-19; and Italy: A New Silk Road Between Italy and China – the Belt and Road Initiative.In this post, I explain some of the key sources and aspects of the criminal law of the Vatican, particularly legislation related to money laundering and other financial crimes, as this area has been recently updated and strengthened. In addition, reference is made to a recent change in Vatican criminal procedural law concerning the prosecution of high-ranking officers.
Some of the legislative changes have recently been applied in high-profile criminal cases. Earlier this year, a former president of the “Vatican bank” (officially named “The Institute for Works of Religion”) and his lawyer were convicted of financial crimes by a Vatican court. The defendants were sentenced to more than eight years of imprisonment and ordered to pay damages worth around US$24 million, in addition to the confiscation of the sums involved. The convictions were handed down pursuant to legislation on money laundering, corruption, and financial transparency. The judgments are currently under appeal by the defendants.
Sources and Principles of Vatican Criminal Law
To better understand the context of the recent legal developments, it is helpful to briefly outline several criminal law principles and guidelines of the Vatican criminal law system, including:
- The Principle of Legality: The Vatican City State was created by the Lateran Treaty of 1929 signed between the Holy See and Italy, which recognized Vatican City as having the status of a state, with a territory, a population, and the capacity to fully exercise sovereignty with its own independent legal system.
- Plurality of Legal Sources: The Vatican legal system has a plurality of sources, with canon law as “the first normative source and the first interpretative reference criterion” of the Vatican legal system. In addition, there are other laws specifically promulgated by the Vatican. International law, both written and customary, also applies. Finally, Italian laws are also a part of the Vatican legal system in supplementary and residual capacity, and only upon acceptance by the competent Vatican authority.
- Reference to the Italian Criminal System: In criminal matters, the Vatican legislature has made express reference to the Italian codes. In particular, article 7 of Law No. LXXI of 2008 refers to the application of “the Italian penal code implemented by the law of 7 June 1929, n. II, as amended and supplemented by Vatican laws.” Similarly, for the criminal procedural system, article 8 of Law No. LXXI refers to the “Italian criminal procedure code implemented by law no. II, as amended and supplemented by Vatican laws.”
Other relevant principles of criminal law include the principle that there is no crime without a previous law, the principle of the supremacy of Vatican law, and the prohibition of application of penal law by analogy.
Amendments on Money Laundering and Financial Transparency
A starting point for the developments with respect to the laws dealing with money laundering and financial transparency occurred in 2009, when the Vatican signed the Monetary Agreement between the European Union and the Vatican City State. Through this agreement, the “Vatican City State shall be entitled to use the euro as its official currency” (art. 1), and “shall not issue any banknote, coin or monetary surrogate of any kind unless the conditions for such issuance have been agreed with the European Union” (art. 2). This agreement signified a turning point for the Vatican state to adjust its legislation to EU standards in the financial and criminal law fields.
On April 24, 2012, the Vatican promulgated Law No. CLXVI, which confirmed Decree N. CLIX of the President of the Governorate of the Vatican City State. That decree promulgated amendments to and consolidated Law No. CXXVII of December 30, 2010, on the prevention and fight against money laundering coming from criminal activity and the financing of terrorism. The purposes of the legislation are to promote the transparency and integrity of the Vatican economic and financial sectors, and to support the active collaboration between the competent authorities and those required to comply with the legal obligations.
Later, in 2012, the Vatican enacted Law No. CLXVI of April 24, 2012, which confirmed the Decree of the President of the Vatican Governorate No. CLIX of January 25, 2012. That decree promulgated amendments and new provisions to Law No. CXXVII, referred to above. The decree, and therefore the law, was subsequently amended by Law No. CLXXXV of March 28, 2017.
Law No. VIII of July 11, 2013, on Supplementary Provisions in Criminal Matters, and Law No. IX on Amendments to the Penal Code and the Criminal Procedure Code, contain measures aimed at enhancing the fight against financial crimes, and also include greater tools of financial protection and the extension of liability to organizations.
Finally, Law No. XVIII, on transparency, oversight, and financial information was enacted on October 8, 2013, and subsequently amended by Law No. CCXLVII of June 19, 2018. According to the Vatican, the January 2021 convictions referred to in the opening paragraphs above were a product of this legislation. Broadly, the 2018 amendment expanded the criminal responsibility of Vatican officers and dependent employees who are “sufficiently informed about exposure to risk of money laundering and terrorism financing [and are] in a hierarchical position that allows them to adopt decisions allowing them to take decisions that affect exposure to risk.” (Law No. CCXLVII art. 1(1).) Also noteworthy in the amendment is the expansion of the powers of the Vatican financial authorities to obtain information about the transactions performed with them. (Id. arts. 10 & 20.) These provisions were relied on in investigating, charging, and convicting the defendants for embezzlement and money laundering.
Institutional Redesign of Financial Governance at the Vatican
In order to update the Vatican apparatus concerning financial matters, in 2020 Pope Francis approved the new governing statute of the Supervisory and Financial Information Authority (Autorità di Supervisione e Informazione Finanziaria – ASIF) for the “prevention and countering of money laundering and the financing of terrorism and for the financial intelligence.” The ASIF performs its duties in accordance with Law No. XVIII of October 8, 2013.
Previously, in 2014, Pope Francis established a new Dicastery of the Roman Curia for the economy for the coordination of economic and administrative affairs of the Vatican, constituted by a Council for the Economy, a Secretary for the Economy, and a General Auditor. The Economic Council is tasked with overseeing the economic management of the Vatican and supervising the structures and administrative and financial activities of the departments of the Roman Curia and the other institutions connected with the Holy See and the Vatican City.
Recent Amendment on Criminal Procedural Law concerning Cardinals and Bishops
On April 30, 2021, an Apostolic Letter in the form of a motu proprio was issued by Pope Francis, repealing article 24 of Law No. CCCLI of March 16, 2020, on the judiciary. (Motu proprio, at 2.) Under the new system, the Vatican Court of First Instance will have jurisdiction for common crimes concerning cardinals and bishops, thus amending the previous system under which jurisdiction over such clerics fell under the sole competence of the Vatican Court of Cassation. The amendment does not, however, change the requirement for papal authorization before the trial of a cardinal or bishop for a common crime takes place, and does not alter the current canonical procedures for the violation of ecclesiastical laws regulated by the Code of Canon Law.
Additional Resources on Vatican Criminal Law at the Library of Congress:
- Giuseppe dalla Torre, Diritto Penale della Città del Vaticano [Penal Law of Vatican City] (2014)
- Ioana Cismas, Religious Actors and International Law (2014)
- Monica Calzolari et al., Giustizia e Criminalità nello Stato Pontificio: ne Delicta Remaneant Impunita [Justice and Criminality at the Pontifical State] (2001)
- Beggi, Dr. (Francesco Orazio), The Papal Criminal History (1862)