From the Official Vatican Website
The applicable law is the Motu Proprio Sacramentorum sanctitatis tutela (MP SST) of 30 April 2001 together with the 1983 Code of Canon Law. This is an introductory guide which may be helpful to lay persons and non-canonists.
A: Preliminary Procedures
The local diocese investigates every allegation of sexual abuse of a minor by a cleric.
If the allegation has a semblance of truth the case is referred to the CDF. The local bishop transmits all the necessary information to the CDF and expresses his opinion on the procedures to be followed and the measures to be adopted in the short and long term.
Civil law concerning reporting of crimes to the appropriate authorities should always be followed.
During the preliminary stage and until the case is concluded, the bishop may impose precautionary measures to safeguard the community, including the victims. Indeed, the local bishop always retains power to protect children by restricting the activities of any priest in his diocese. This is part of his ordinary authority, which he is encouraged to exercise to whatever extent is necessary to assure that children do not come to harm, and this power can be exercised at the bishop's discretion before, during and after any canonical proceeding.
B: Procedures authorized by the CDF
The CDF studies the case presented by the local bishop and also asks for supplementary information where necessary.
The CDF has a number of options:
B1 Penal Processes
The CDF may authorize the local bishop to conduct a judicial penal trial before a local Church tribunal. Any appeal in such cases would eventually be lodged to a tribunal of the CDF.
The CDF may authorize the local bishop to conduct an administrative penal process before a delegate of the local bishop assisted by two assessors. The accused priest is called to respond to the accusations and to review the evidence. The accused has a right to present recourse to the CDF against a decree condemning him to a canonical penalty. The decision of the Cardinals members of the CDF is final.
Should the cleric be judged guilty, both judicial and administrative penal processes can condemn a cleric to a number of canonical penalties, the most serious of which is dismissal from the clerical state. The question of damages can also be treated directly during these procedures.
B2 Cases referred directly to the Holy Father
In very grave cases where a civil criminal trial has found the cleric guilty of sexual abuse of minors or where the evidence is overwhelming, the CDF may choose to take the case directly to the Holy Father with the request that the Pope issue a decree of "ex officio" dismissal from the clerical state. There is no canonical remedy against such a papal decree.
The CDF also brings to the Holy Father requests by accused priests who, cognizant of their crimes, ask to be dispensed from the obligation of the priesthood and want to return to the lay state. The Holy Father grants these requests for the good of the Church ("pro bono Ecclesiae").
B3 Disciplinary Measures
In cases where the accused priest has admitted to his crimes and has accepted to live a life of prayer and penance, the CDF authorizes the local bishop to issue a decree prohibiting or restricting the public ministry of such a priest. Such decrees are imposed through a penal precept which would entail a canonical penalty for a violation of the conditions of the decree, not excluding dismissal from the clerical state. Administrative recourse to the CDF is possible against such decrees. The decision of the CDF is final.
C. Revision of MP SST
For some time the CDF has undertaken a revision of some of the articles of Motu Proprio Sacramentorum Sanctitatis tutela, in order to update the said Motu Proprio of 2001 in the light of special faculties granted to the CDF by Popes John Paul II and Benedict XVI. The proposed modifications under discussion will not change the above-mentioned procedures (A, B1-B3).