The Vatican has signed a tax-information sharing deal with Italy, in a bid to shed its image as a haven for money laundering and tax dodging activities.

The move forms part of a broader strategy driven by Pope Francis to clean up and improve transparency at the Vatican bank, which has been hit with a series of scandals in the recent times.

The Vatican bank had blocked accounts of 2,000 clients and ended about 3,000 customer relationships as of July.

Under the latest agreement, both parties will have to swap details of financial and tax information since 1 January, 2009.

The move will enable Italian tax authorities to ask for financial information about Italian residents with accounts at the Vatican Bank, also known as the Institute for Works of Religion.

Vatican foreign minister Monsignor Paul Gallagher referred to the deal as "a significant step by the Holy See towards the goal of maximum transparency in financial relations."

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