New offices will be in a separate building on property

America's embassy to the Holy See is moving from its current address at Via delle Terme Deciane, near the Circus Maximus, to the grounds of the larger American embassy to Italy on Via Veneto.

Washington has underlined that its Holy See embassy is being relocated, not closed, and describes the move as a security measure following the 2012 attack on the American embassy in Benghazi in which four people were killed, including US ambassador J. Christopher Stevens. It also said that having both embassies on the same grounds would save $1.4 million a year.

However several former American ambassadors to the Holy See have strongly criticised the decision, including James Nicholson who said it constituted a “massive downgrade of US-Vatican ties.” Speaking to the National Catholic Reporter Nicholson said the US embassy of Holy See would become “a stepchild of the embassy to Italy" and that the move was "an insult to American Catholics and to the Vatican.”

Nicholson's views were echoed by other former envoys Francis Rooney, Mary Ann Glendon, Thomas Melady, and Raymond Flynn who said the embassy's relocation reflected a hostility towards the Catholic Church, and provided no "diplomatic or political benefit to the United States."

The new US ambassador to the Holy See, Kenneth F. Hackett, took up his post in October, while the US ambassador to Italy John R. Phillips arrived in Rome just the month before.
Vatican rules state that a country cannot house embassies to Italy and the Vatican at the same address, however Washington's state department said on 25 November that the new Vatican embassy would have a separate entrance to its embassy to Italy.

The enormous Palazzo Margherita building, acquired by the US government from the Italian state in 1931, is located on sprawling grounds surrounded by four sidestreets off Via Veneto. One of its numerous entrances would technically provide the newly-located US embassy to the Holy See with a separate address.

A precedent has been set by the British embassy to the Holy See which operates independently of the British embassy to Italy, in separate buildings on Via XX Settembre.
In November 2011 Ireland announced the unexpected closure of its embassy to the Holy See, which had been based in Villa Spada on Rome’s Janiculum hill, now home to the Irish embassy to Italy. Ireland's controversial decision to close its Vatican mission was made on the basis that the embassy, which was established in 1929, was the only Irish mission in the world that did not have trade, consular or EU duties, and its closure would save the Irish government some €1.175 million over a full year.