The report from the Financial Intelligence Authority showed the agency received six internal reports on suspicious transactions in 2012, up from one a year earlier, and that two were sent onto Vatican prosecutors for investigation.

But the 10-page report made scant mention of any supervisory operations carried out in 2012. International financial authorities have recommended the agency conduct inspections and issue internal regulations to fight money laundering and terror financing.

The report also made no mention of the troubles that led to the suspension of credit card services inside the Vatican for several months, an embarrassment that inconvenienced the thousands of people who visit the Vatican and its museums each day.

The Vatican created the oversight agency in 2010 in a bid to shed its image as a secretive tax haven and improve its reputation in global financial circles following a series of scandals at its bank and a money laundering investigation launched by Rome prosecutors in 2010.

As part of that effort, the Holy See submitted itself to the Council of Europe's Moneyval evaluation process, which assesses countries' compliance with international anti-money laundering and anti-terror financing norms.

The Vatican in July passed the test on the first try and Moneyval said it had made great progress in a short amount of time. But the Holy See received poor or failing grades for the watchdog agency and its bank.

Specifically, Moneyval said the role, authority and independence of the watchdog agency was unclear and that the Vatican bank's rules for customer due diligence, wire transfers and suspicious transaction reporting were insufficient. It said the bank needed an independent supervisor and must conduct a thorough risk assessment to ensure that it knew its clients and the risks it faces.

The report issued Wednesday addressed few of those recommendations.

"I'm not here today to say that everything is great and perfect," said Rene Bruelhart, the agency director.

But at a press briefing, he stressed that a lot had been accomplished and that the Vatican was committed to pursuing the Moneyval process. He said that within the coming weeks and months, the Vatican would update its laws to more closely respond to the Moneyval recommendations and he said that screening of the bank account-holders was currently under way.

"We are more than on the right track in having an increased amount of suspicious transactions reports, that's also a clear sign that this type of screening is taken very seriously," he said.

The Vatican must submit a progress report to Moneyval in September, Bruelhart said.

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