The Vatican has signed a deal with the U.S financial regulator to combat money laundering and terrorism financing globally that will involve the exchange of information in a move seen as increasing overall financial transparency in the world smallest State.
The signing took place in Washington DC on Tuesday.
Vatican Radio said the Financial Intelligence Authority (AIF) of the Holy See and Vatican City State signed the memorandum of understanding with its U.S. counterpart at the U.S. Department of Treasury, the Financial Crimes Enforcement Network.
The Vatican had faced international pressure over its financial governance due to criticism that its system is not open enough and a number of scandals dating back to 1982 involving a Vatican banker who took his life in London, England.
Among bodies that said the Vatican's financial system was difficult to examine was the Council of Europe made up of 47 States in Europe.
The Memorandum was signed by René Brülhart, a Swiss lawyer who is director of the AIF, and Jennifer Shasky Calvery,director of the U.S. Financial Crimes Enforcement Network (FinCen).
"This is a clear indication the Holy See and the Vatican City State take international responsibilities to combat money laundering and the financing of terrorism very seriously, and that we are cooperating at the highest levels," said Brülhart.
"The Vatican has shown that it is a credible partner internationally and has made a clear commitment in the exchange of information in this fight."
In 2010 Italian prosecutors said they were investigating into whether the Vatican bank had violated Italy's money-laundering laws, which the Holy See denied.
The deal withpromote bilateral cooperation in the exchange of financial information.
The AIF was established in 2010 and became operational in 2011 after being set up by Pope Benedict XVI.
Belgium, Spain, Slovenia and now the United States are signatories of the Vatican's financial exchange deal. It is discussing similar agreement with about 20 other States.