Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

SAN MARINO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of January 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: September 23, 1992.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Other security restrictionsAs a full member of the UN, San Marino implements the Security Council resolutions. San Marino also adopts the restrictions applied by the relevant EU regulations on terrorism.
References to legal instruments and hyperlinksUN Security Council Resolution No. 1267 (1999) and the successor resolutions.
Exchange Arrangement
CurrencyThe currency of San Marino is the euro.
Other legal tenderAn agreement between San Marino and Italy (on behalf of the EU) that went into effect April 1, 2001 (1) establishes that euro coins and banknotes are legal tender in the Republic of San Marino; (2) gives San Marino the authority to issue an agreed amount of euro coins, which are legal tender in the euro area and are equivalent in form to euro area coinage; and (3) includes the possibility of San Marino issuing banknotes, provided an agreement is reached with the EU. Although the gold scudo is legal tender in the Republic of San Marino, it is generally not used in transactions because its numismatic value exceeds its defined legal value of €31.50 per 1 scudo.
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.
References to legal instruments and hyperlinksn.a.
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 between San Marino and Italy, the Central Bank of San Marino (CBSM) may authorize Sammarinese banks to maintain nostro accounts with financial institutions abroad for cross-border transactions. Effective January 1, 2007, a total of seven banks (previously, six) are 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.
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.
On external tradeYes.
Controls on exports and imports of banknotesTo combat money laundering, transactions in cash or bearer securities in excess of the equivalent of €15,500 must be made through financial institutions.
On exportsYes.
On importsYes.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedResidents are free to maintain any type of deposit account, with the exception of numbered accounts.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are free to maintain any type of deposit account, with the exception of numbered accounts.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
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 a 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.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo license other than a general business license is required to engage in trade transactions.



Exports to the EU are not subject to restrictions; however, 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 taxes
Other export taxesn.a.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo controls are applied on transfers. However, payments exceeding the equivalent of €15,500 are to be reported to the CBSM for statistical purposes.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo controls are applied; however, proceeds exceeding the equivalent of €15,500 are to be reported to the CBSM for statistical purposes.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instrumentsInward and outward capital transfers, with few exceptions, are not controlled.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsSales are subject to authorization by the CBSM, except for shares listed on regulated stock exchanges.
Bonds or other debt securities
Sale or issue locally by nonresidentsPublic offerings are subject to the authorization of the CBSM.
On money market instruments
Sale or issue locally by nonresidentsThese are subject to the authorization of the CBSM.
On collective investment securities
Sale or issue locally by nonresidentsThese are subject to the authorization of the CBSM.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsThese are subject to the authorization of the CBSM.
Controls on credit operationsThe granting of a substantial amount of financial credit to a person or a company is subject to the banking law provisions as well as those of the CBSM. Under these provisions, banks and other credit institutions are required to periodically submit information on credit operations to the CBSM. This provision applies to all types of credit operations. In addition, the average interest rates applied by the financial system are monitored and their threshold rates are determined to prevent usury.
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Inward direct investmentNonresidents may not establish firms in “regulated sectors” without government approval.
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 nonresidentsNonresidents are not allowed to accept real estate by inheritance, endowment, or legacy without approval from the Council of Twelve. Approval is granted on a case-by-case basis.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)The granting of a substantial amount of financial credit, exceeding two-fifths of a credit institution’s capital, to a person or a company is subject to banking law provisions as well as the rules of the CBSM. This provision applies to all types of credit operations.
Lending locally in foreign exchangeThe granting of a substantial amount of financial credit to a person or a company is subject to banking law provisions as well as the rules of the CBSM.
Investment regulationsParticipation in domestic or foreign financial or nonfinancial companies requires authorization by the CBSM.
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 CBSM.
Provisions specific to institutional investors
Insurance companies
Currency-matching regulations on assets/liabilities compositionExchange risk exposure must be reported to the CBSM.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
No significant changes occurred in the exchange and trade system.
Changes during 2007
Arrangements for payments and receiptsJanuary 1. An additional bank was authorized to maintain nostro accounts with financial institutions abroad for cross-border transactions, bringing the total number of authorized banks to seven.

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