Pope Francis has issued a new decree effectively expanding the supervisory role of the Financial Information Authority (FIA) over the Institute for Works of Religion (IOR), otherwise known as the Vatican Bank, in a serious attempt to thwart and eliminate any money-laundering schemes and activities within its halls.

Dated July 11, 2013, the "motu proprio" will take effect on Sept 1. A "motu proprio" is classified as a decree made and executed at the own initiative of the spiritual pontiff.

The IOR does not lend money. It only handles the funds for Vatican departments, Catholic charities and congregations.

Instituted by Pope Benedict XVI in January 2011 to investigate suspicious financial transactions, the new decree expanded the supervisorial functions of the FIA to cover all the offices of the Roman Curia as well as over to the non-profit organisations operating outside Vatican, including Caritas Internationalis and Aid to the Church in Need.

Specifically the FIA now has the power to "evaluate and approve the financial activities and the services offered" by the Vatican bank and the Administration of the Patrimony of the Holy See, the office that handles Vatican property and investments, according to Fr Federico Lombardi, Vatican spokesman.

Moneyval, the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, although said it believed the Vatican is exerting efforts to meet international standards on fighting crimes such as money laundering, funding of terrorism and proliferation of weapons of mass destruction, however, said in a July 2012 report that Holy See still has a long way to go.

"Moneyval is the instrument we are using to determine whether we are up to international standards," Fr Lombardi said.

Moneyval is the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism.

The Vatican has until November to update Moneyval on its progress.

"In today's world, it is all about resisting increasingly insidious forms of financial criminality. We have to be equal to the challenges in order to protect legality, and not be left behind," Fr Lombardi said.