(By Christopher Livesay) Vatican City, May 22 - The Vatican's financial watchdog agency took a step Wednesday to show greater transparency in the Holy See by publishing its first annual report on the Vatican's efforts to combat money laundering and funding terrorism. In it, the Financial Information Authority (AIF) said it had uncovered six cases of suspect transactions in 2012, a notable increase since 2011 when only one such case was flagged. Two of those cases were sent onto Vatican prosecutors for a probe. AIF Director Rene' Bruelhart did not go into the specifics of the transactions, specifying only that "they were not tied to financing terrorism". Established by Benedict XVI in 2010, the AIF is charged with monitoring the commercial and monetary activities of Vatican agencies, such as the Governorate of Vatican City State and the Vatican Bank, also known as the Institute for Religious Works (IOR). The Holy See has been trying without success to join the 'white list' of states that meet international standards on combating money laundering and the financing of terrorism. In a report last July, the Council of Europe's Moneyval department said that the Holy See had made progress on financial transparency, but added that more reforms were needed. It furthermore questioned the authority and independence of the AIF, and said the Vatican Bank's rules for reporting suspicious transactions were not sufficient. According to Bruelhart, who was appointed soon after the Moneyval report went public, the cases flagged in 2012 "are a sign that the reporting system has started to work. It's rather promising and encouraging". Of the six transactions flagged by the watchdog last year, one involved the Vatican Bank. Over the years the Vatican Bank has acquired a murky image on transparency. There have been allegations that IOR was used to launder money most notably by 'God's Banker' Roberto Calvi, the former head of Italy's biggest private bank, whose body was found hanging under Blackfriar's Bridge in London in 1982, a suspected victim of the Mafia. IOR was also named in kickbacks probes stemming from the 1990 collapse of public-private chemicals colossus Enimont, part of the Clean Hands investigations that swept away Italy's old political establishment. More recently, there has been a series of Italian TV reports and a best-selling book claiming to show how individuals have used IOR to squirrel away money, dodging Italian regulations. Bruelhart said Wednesday a "deep screening process" was "in the works" to identify all of (the Vatican Bank's) clients. "In the coming months we will have the results," he said. A Vatican report to Moneyval is due in September, Bruelhart added. Other efforts to make IOR more transparent include a move to publish its balance sheets online by the end of the year. The AIF said it would launch new procedures "in the coming weeks and months" aimed at conforming to the European Union's transparency standards. Bruelhart said the procedures would promote "a new system for strengthening the inspection powers of the AIF". The annual report did not mention the move by the Bank of Italy to freeze credit cards and other electronic payments inside the Vatican at the end of 2012, forcing the thousands of daily visitors to pay in cash for the first months of this year amid an investigation by Rome prosecutors into an alleged money laundering.