|Pope Benedict is set to announce Vatican legislation aimed at combating possible money laundering [AFP]
The Vatican has announced plans for new rules designed to make its financial transactions more transparent, following a corruption investigation that resulted in the seizure of $30.2m from a Vatican account.
A decree is expected from the Vatican on Thursday.
In a statement the Vatican said the planned ruling will create a compliance body to oversee all its finances, as required by the European Union and other international organisations that are combating money laundering.
The statement added that Pope Benedict XVI will issue Vatican legislation concerning the prevention of money laundering and the financing of groups accused of terrorism offences.
The Vatican says it has been working all year to enact such decrees and comply with international financial transparency norms.
On September 21, prosecutors in Rome seized $30.2m and placed Ettore Gotti Tedeschi, the chairman of the Vatican bank, along with his deputy, under investigation.
Prosecutors alleged the bank broke the law by trying to transfer money without identifying the sender or recipient.
The two men have not been charged.
The Vatican has insisted that the money laundering probe resulted from a "misunderstanding".
But the investigation has been an embarrassment to the Vatican and Rome courts have twice refused to release the money.
A judge said earlier this month that nothing had changed in the way the Vatican guards the identity of its clients.
Gotti Tedeschiwas named chairman of the the Vatican bank, formally named the Institute for Religious Works (IOR), last year.
|Gotti Tedeschi took the helm of the Vatican
bank last year [Reuters]
He says he has been working since then to get the Vatican to come into compliance with the norms of the Financial Action Task Force, the Paris-based policymaking body that develops anti-money laundering and anti-terror financing legislation.
The task force requires the Vatican to criminalise money-laundering, to establish a body to report and investigate shady transactions, to pass laws for proper identification of clients and to make that information available to enforcement agencies.
According to EU officials the Vatican has also agreed to put into law the EU directives on money laundering required of euro-zone countries.
Gotti Tedeschi has also said he wanted to get the Vatican on the Organisation for Economic Co-operation and Development's "white list" of countries that share tax information as part of a crackdown on tax havens.
Such a process could take years as the Vatican must enter into tax information sharing agreements with at least 12 other countries after making a formal commitment to transparency.
It is not clear which of these provisions will be included in the Vatican document expected on Thursday.