Freedom in the World 2010 - San Marino

Capital: San Marino
Population: 31,000

Political Rights Score: 1 *
Civil Liberties Score: 1 *
Status: Free

Overview

In 2009, San Marino found itself embroiled in scandals, including a money laundering scheme that led to the arrests of five heads of the nation's top bank. However, in September San Marino was removed from the Organization for Economic Cooperation and Development's "gray list" of tax havens.

Founded in the year 301, according to tradition, San Marino is considered the world's oldest existing republic and is one of the world's smallest states. The papacy recognized San Marino's independence in 1631, as did the Congress of Vienna in 1815. In 1862, Italy and San Marino signed a treaty of friendship and cooperation. Despite its dependence on Italy, from which it currently receives budget subsidies, San Marino maintains its own political institutions. It became a member of the Council of Europe in 1988 and a member of the United Nations in 1992. Tourism and banking dominate the country's economy.

The European Union (EU) Savings Taxation Directive, which provided a way to tax revenue from savings accounts held by EU citizens in a member state other than their country of residence or in certain non-EU countries, took effect in July 2005. San Marino was not an EU member, but it agreed to participate in the directive, which was intended to prevent harmful tax practices.

In June 2008, the left-wing leading government coalition – consisting of the Party of Socialists and Democrats (PSD), the Popular Alliance of Democrats (AP), the United Left (SU), and the new Democrats of the Center party (DdC) – collapsed when the AP withdrew its delegates. The move forced the Grand and General Council, San Marino's parliament, to call early elections for November, which put the centre-right Pact for San Marino coalition – comprised of the San Marino Christian Democratic Party (PDCS), the AP, the Freedom List, and the Sammarinese Union of Moderates – in power with 54 percent of the vote and 35 parliamentary seats.

In 2009, San Marino faced a series of scandals amid a faltering economy. In May, five top executives from San Marino's largest bank, Cassa di Risparmio della Repubblica di San Marino, were arrested and held in preventative custody on charges of money laundering. All five were released six months later under the condition that they remain in Bologna where they had been held, with the exception of Mario Fantini who was permitted to return to San Marino and live under house arrest for age reasons. Investigations were still under way at the year's end. Following the arrests, Italy placed the bank's consumer finance group, Delta, under bankruptcy proceedings. Bids to save to the group were still pending and the future of the group remained uncertain at the year's end.

In July, the Italian economy minister announced a tax amnesty for Italians who repatriated offshore accounts. The amnesty ran from September through December and drained San Marino of many of its Italian accounts, causing increased financial hardship for the country. However, San Marino signed 14 tax-information accords with EU nations in September, which lifted secrecy between signatories and assisted San Marino's removal from the Organization for Economic Cooperation and Development's (OECD) "gray list" of tax havens.

Reports surfaced at the end of 2009 that companies were registering in San Marino under fictitious residences, facilitating fiscal advantages and black market trade. While false registration of residence was outlawed in 2003, the government currently lacks a body to investigate companies' claims of residency. An emergency census was arranged by the government in September to address the issue.

Political Rights and Civil Liberties

San Marino is an electoral democracy. The 60 members of the Great and General Council, the unicameral legislature, are elected every five years by proportional representation. Executive power rests with the 10-member Congress of State (cabinet), which is headed by two captains-regent selected every spring and fall by the Great and General Council from among its own members. The captains-regent serve as joint heads of state for a six-month period. Although there is no official prime minister, the secretary of state for foreign and political affairs is regarded as the head of government; Fiorenzo Stolfi was elected to the post in July 2006. As the result of a 2008 electoral law, the winning coalition must have captured a majority of 50 percent plus 1, as well as at least 30 of the 60 parliamentary seats. New rules were also implemented to make it easier for Sammarinese living abroad to vote in elections.

The PDCS, the PSD, and the AP are the three dominant political groups in the country. There are several smaller groups, however, and majority governments are usually formed by a coalition of parties.

There are few problems with government corruption in the country. San Marino was not ranked in Transparency International's 2009 Corruption Perceptions Index.

Freedoms of speech and the press are guaranteed. There are three daily private newspapers and one weekly paper, a state-run broadcast system for radio and television called RTV, and a private FM station, Radio Titiano. The Sammarinese have access to all Italian print media and certain Italian broadcast stations. Access to the internet is unrestricted.

Religious discrimination is prohibited by law. Roman Catholicism is the dominant, but not the state, religion. Citizens can voluntarily donate 0.3 percent of their income through their taxes to the Catholic Church or other groups, such as the Waldensian Church – the world's oldest Protestant church – or the Jehovah's Witnesses. Academic freedom is respected.

Residents are free to assemble, demonstrate, and conduct open public discussions. Civic organizations are active. Workers are free to strike, provided they do not work in military occupations, organize trade unions, and bargain collectively. Approximately half of the country's workforce is unionized.

The judiciary is independent. Lower court judges are required to be noncitizens – generally Italians – to assure impartiality. The final court of review is the Council of Twelve, a group of judges chosen for six-year terms from among the members of the Grand and General Council. The country's prison system generally meets international standards, and civilian authorities maintain effective control over the police and security forces.

The population is generally treated equally under the law, although the European Commission against Racism and Intolerance has raised some concerns in the past about the status of foreigners in the country. San Marino has no formal asylum policy, and a foreigner must live in the country for 30 years to be eligible for citizenship. The European Convention on Nationality recommends that such residence requirements should not exceed 10 years.

Women are given legal protections from violence and spousal abuse, and gender equality exists in the workplace and elsewhere. There are, however, slight differences in the way men and women can transmit citizenship to their children. The country has restrictive laws regarding abortion, which is permitted only to save the life of the mother. Under the new 2008 electoral law, no more than two-thirds of candidates from each party can be of the same gender in an attempt to promote women's representation in government. Nine women were elected to the Great and General Council in 2008 and two to the Congress of State. In January 2009, an Authority of Equal Opportunities was established to curb gender-based violence.

*Countries are ranked on a scale of 1-7, with 1 representing the highest level of freedom and 7 representing the lowest level of freedom.