Reuters International

Rene Bruelhart, head of the Vatican's Financial Information Authority (AIF), attends a news conference at the Vatican May 22, 2013. REUTERS/Alessandro Bianchi/File Photo

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By Philip Pullella

VATICAN CITY (Reuters) - The Vatican received 544 reports of suspicious financial activity in 2015, nearly four times more than the year before, its financial watchdog said on Thursday, putting the increase down to better compliance, not more crime.

After a string of scandals, some stretching back decades, Pope Francis made cleaning up Vatican finances a priority, and the man in charge of overseeing that said it was new awareness of reporting obligations that had produced the spike in cases.

"It shows the system is working," Rene Bruelhart, head of the Vatican's Financial Intelligence Authority (AIF), told a news conference, insisting the quadrupling of cases "was not due to a higher financial crime rate".

Bruelhart said "a very low bar" had been set for filing "Suspicious Transaction Reports" and most of the 544 were routine, relating to closing accounts and tax compliance. Only 17 were cases were passed on to the prosecutor.

Those related to serious offences such as money laundering and insider trading, the AIF said.

That appeared to be a reference to an investigation last year that found a department which oversees real estate and investments, known as APSA, was used for possible money laundering, insider trading and market manipulation.

The AIF said it had concluded a review of clients of the Vatican bank, the Institute for Works of Religion, for decades embroiled in scandals involving Italians who used it for money laundering and tax evasion, according to Italian magistrates.

"That nightmare is behind us," said AIF director Tommaso Di Ruzza.

He said 4,935 accounts had been closed, an exercise that was a key part of Pope Francis' aim to achieve transparency. About 15,000 accounts remain.

In December, the European watchdog agency Moneyval said the Vatican had made great strides in financial transparency but that its prosecutor should be more aggressive in indicting people for financial crimes.

Di Ruzza said the prosecutor's office was "working very seriously" on cases.

(Editing by Robin Pomeroy)

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