A Vatican statement said that Monsignor Carlo Capella was being held in gendarmerie barracks inside the Vatican, and that his arrest follows a Vatican investigation.
Police in Windsor, Ontario, said Capella allegedly uploaded child porn from a social networking site while visiting a place of worship from over the 2016 Christmas holiday.
In the statement, Windsor police accused Capella of accessing, possessing and distributing child pornography.
The Vatican recalled Capella, the number four in its Washington embassy, after the US State Department notified it on August 21 of a "possible violation of laws relating to child pornography images" by one of its diplomats in Washington.
Capella was a high-ranking priest in the Vatican's diplomatic corps.
He served on the Italy desk in the Vatican's secretariat of state and was part of the official delegation that negotiated a tax treaty with Italy before being posted to the US embassy last year.
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