Chapter

SAN MARINO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: September 23, 1992.
Exchange Arrangement
CurrencyThe currency of San Marino is the euro.
Other legal tenderThe monetary agreement between San Marino and Italy, renewed on December 21, 1991, provides for San Marino to issue annually agreed amounts of San Marino lira coins equivalent in form to Italian coinage; these coins are legal tender in both countries. The San Marino gold scudo is also issued, but is legal tender only in San Marino. It is generally not used in transactions because its numismatic value exceeds its defined legal value, which is €30.99 per 1 scudo.
An agreement between San Marino and Italy (on behalf of the EU) that entered into force on April 1, 2001, provides for San Marino to issue, as of January 1, 2002, agreed amounts of euro coins equivalent in form to euro area coinage; these coins are legal tender in the euro area. It also envisages the possibility for San Marino to issue banknotes, provided that an agreement is reached with the EU. The current agreement does not affect San Marino’s right to continue issuing gold scudi.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderForeign exchange transactions are conducted through commercial banks without restriction at rates quoted in international markets.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward transactions may be conducted through commercial banks without restriction at rates quoted in international markets.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with foreign countries on foreign accounts are made in convertible currencies or in euros.
Payments arrangementsNo.
Administration of controlIn accordance with the Finance and Exchange Agreement signed by San Marino and Italy in 1991, the Central Bank of San Marino (CBSM) may authorize Sammarinese banks to maintain “nostro accounts” with financial institutions abroad for cross-border transactions (since August 1, 2000, five banks have been so authorized). Authorized banks are required to provide statistical information to the CBSM. Unauthorized banks may carry out cross-border transactions through an authorized Sammarinese bank or an Italian bank. Residents of San Marino are allowed to conduct cross-border transactions freely, with settlement effected through authorized Italian and Sammarinese intermediaries.
International security restrictions
In accordance with UN sanctionsSan Marino adopts the restrictions applied by the EU.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)Laws establish that the CBSM is the sole agency entitled to carry out transactions in gold. The CBSM may authorize other banks or domestic companies to buy gold for production purposes, after ensuring the necessary controls. Currently, there is no gold trade in San Marino.
Controls on external tradeYes.
Controls on exports and imports of banknotesTo combat money laundering, transactions in cash or bearer securities in excess of €15, 500 must be made through financial institutions.
Resident Accounts
Foreign exchange accounts permittedResidents are free to maintain any type of deposit accounts, with the exception of numbered accounts.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are free to maintain any type of deposit accounts, with the exception of numbered accounts.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresNo license, other than the general business license, is required to engage in trade transactions. Imports from the EU are not subject to restrictions, whereas imports from third countries are subject to control under the relevant EU regulations.
Import taxes and/or tariffsCustoms duties on imports from outside the EU are collected by EU customs authorities on behalf of San Marino. A sales tax is levied by San Marino on all imports at the time of entry. The structure of this tax corresponds closely to the Italian VAT, but the average effective rate is about 3% lower. Sales taxes levied on imports are rebated when the goods are reexported.
State import monopolyThe importation of electricity, gas, and water is reserved for the public sector.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo licenses, other than the general business license, are required to engage in trade transactions.
Exports to the EU are not subject to restrictions, while exports to third countries are governed by relevant EU regulations.
Without quotasCustoms clearance formalities concerning the export of arms, works of art, and precursor and dual-use products must be carried out at the customs offices identified by the EU-San Marino Cooperation Committee.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo controls are applied on transfers. However, payments exceeding €15, 500 are to be reported to the CBSM for statistical purposes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo controls are applied; however, proceeds exceeding €15, 500 are to be reported to the CBSM for statistical purposes.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsInward and outward capital transfers, with few exceptions, are not restricted.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsSales are subject to authorization, while the issue of shares or other securities of a participating nature is not allowed.
Bonds or other debt securitiesThe regulations governing the sale and issue of shares or other securities of a participating nature apply.
On money market instrumentsThe regulations governing the sale and issue of shares or other securities of a participating nature apply.
On collective investment securitiesThe regulations governing the sale and issue of shares or other securities of a participating nature apply.
Controls on derivatives and other instrumentsThe regulations governing the sale and issue of shares or other securities of a participating nature apply.
Controls on credit operationsThe granting of substantial amounts of financial credits to a person or a company is subject to the banking law provisions as well as those of the Supervision Department of the Central Bank (SDCB). In addition, the average interest rates applied by the financial system are monitored and their threshold rates are determined in order to prevent usury.
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Inward direct investmentInvestments require government approval, which is based on conformity with long-term developmental and environmental policy considerations. Foreign investors are accorded equal treatment with national firms.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsPurchases by domestic companies and nonresidents require approval from the Council of Twelve. Approval is granted on a case-by-case basis.
Purchase locally by nonresidentsYes.
Controls on personal capital transactions
Loans
By residents to nonresidentsExcept for occasional transactions, this activity is not allowed.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)The granting of substantial amounts of financial credits to a person or a company is subject to the banking law provisions as well as those of the SDCB.
Lending locally in foreign exchangeThe granting of substantial amounts of financial credits to a person or a company is subject to the banking law provisions as well as those of the SDCB.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsThe purchase of securities of a participating nature exceeding 5% of a Sammarinese bank’s capital must be declared to the SDCB.
Provisions specific to institutional investors
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsNo.
Changes During 2003
No significant changes occurred in the exchange and trade system.

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