Saint Peter’s Square at the Vatican, Rome, Italy. Photo: Reuters

The Vatican bank asked Italy yesterday to resume financial relations effectively frozen since 2010, saying it had made great progress with new anti-money laundering measures Rome had demanded.

The request was made in a status report on the “compliance and transparency programme”, of the bank, whose official title is the Institute for Works of Religion (IOR).

“The IOR looks forward to a resumption of full interaction with Italian financial institutions pending review by Italian regulatory authorities of the Holy See and Vatican City State’s anti-money laundering provisions,” the report said.

Italian banks stopped dealing with the Vatican bank in 2010 after the Bank of Italy told them they had to enforce strict anti-money laundering criteria.

That year, Rome magistrates investigating possible money laundering froze €23 million held by the IOR in two Italian banks. The IOR said it had merely been transferring its own funds between accounts in other countries.

Accounts are being closed and scrutinised

The money was released but the investi-gation continues.

The Bank of Italy blocked the Italian branch of a German bank last year from handling credit card payments at the Vatican museums and other lucrative tourist destinations.

Service was restored after several months when the Vatican struck a deal with Swiss card payment specialist Aduno.

The report was prepared for the IOR’s board, which is made up of five internationally known businessmen and bankers from Germany, Italy, the US and Spain.

IOR president Ernst Von Freyberg, who was hired last year and has been spearheading the bank’s reforms, “ordered several special investigations with regard to specific account and transaction activity,” the report said, without giving details.

The IOR was thrust back into the spotlight onTuesday when Monsignor Nunzio Scarano, a former Vatican prelate on trial for an alleged plot to smuggle €20 million into Italy was further charged with laundering millions through the bank.

In the case of Scarano, who as a senior accountant in another Vatican department had ready access to the bank, it commissioned a separate internal investigation into his bank activities after his first arrest last June on money smuggling charges.