Mr. Bruelhart:  I’ve been here a little more than one and a half years, having taken office almost exactly 18 months ago. So the first step was to carry out an internal risk assessment to get an understanding of the risks and vulnerabilities here in the Holy See. We put in place a new legal framework, which was approved by Moneyval in its report in December last year. Once we put a new legal framework in place where the competent authority received a broader mandate, and it was clear what it had to do, that also had an impact on the institutional framework. Almost of the same importance was very strong communication of the purpose of all these changes, the risks, and what happens if you do not implement the changes.  When the financial institutions understand it has to be done, you give them guidance, and help them.

On the external side we entered international cooperation, such as membership in theEgmont Group in summer of 2013. The Holy See is a global institution,present all over the world. It is important to get access to information in case something is happening or better to get early enough alerts to avoid something happening.

Mr. Bruelhart: It’s the oldest institution in the world and if you want to change something or if something has to be changed, it’s important to say why and how. It’s a question of internal transparency and also credibility. What is the impact? What are the consequences? Why are we having a new law? Why should we become members of Egmont Group, the global organization of financial intelligence? Why do we participate in Moneyval? These are the kind of elements which are important, about which we have to be clear and transparent. In the Holy See, you don’t have a financial center, don’t have any kind of commercial banks, or a stock exchange, so it’s a different environment and you have to communicate quite actively.

Mr. Bruelhart: I can tell you what our approach is, how we have done it and are doing it, which might also work for others. At the very beginning, normally you start with risk assessment, but not only on the technical side. You have the technical level on how you are doing transactions, what kind of business relationships you have, what kind of clients you have in different countries. But it’s also very important to get an understanding of who are the players that have an impact on the institution. You have the clients, the authorities, you have competitors, the media, you have people who have taken advantage of special circumstances, so you are trying to understand the field you are in, where your universe is, where you might find certain vulnerabilities.

It’s far too easy if you go into a financial institution to say “we will do a risk assessment as learned in school, look into clients, and also any politically exposed people.” That’s far too simplified. The world today is much more complex. It is important that all relevant factors are taken into consideration to be in a position to take the right measures.

Mr. Bruelhart: Here it’s almost all about implementing a risk-based approach. We have included it in our new legislation, which entered into force in October last year. We were already working with the new recommendations. The point here is really to get an understanding of where your risks and vulnerabilities are, take time to look into them, and take time to move. This approach was affirmed by Moneval in its report of Dec. 13.

Mr. Bruelhart: As I said earlier,  the Vatican is a global institution. For sure you are in countries where you have war, countries which are sanctioned, and still you have priests there, parishes, etc. You have to ensure they can do their good work, and help the people. With the regulations we have in place on the international level it’s not always that easy. Also cash. Take Africa where they don’t have a well-functioning banking system, or Asia, or other parts of world where cash is still mainly used. When you have cash transactions you want to know exactly who is behind that, and from where the money is coming.

Mr. Bruelhart: I have been in charge since November of 2012 so am not in a position to look back. The only hint I can give you is that the first anti-money-laundering law was put in place at the very end of 2010 or early 2011, and now has been fully revised in 2013. So there’s not a long history of anti-money laundering legislation.

Mr. Bruelhart: It is a movement towards transparency, but is also a question of reputation. When I say reputation I am talking about financial activities, protecting the Holy See from any kind of abuse in the area of financial activities. Here you don’t have a responsibility to shareholders or whatever, but you have a responsibility to 1.2 billion Catholics out in the world and you have a responsibility towards higher moral standards and integrity. That is kind of the movement we are in and we are trying to help the Holy See to proceed.

Mr. Bruelhart: I think to continue. I think we are on the right track, the right path, but we have to continue to move ahead, continue the implementation, do the daily work day by day, and put the pieces of the puzzle next to each other.