San Marino to Share Bank Information on Tax Evaders

[OffshorePrivacy]

Nov. 20 (Bloomberg) -- San Marino will share banking information with other countries concerned about tax evasion and can withstand the outflow of funds that investors bring back to Italy as part of a tax amnesty, government officials said.

San Marino “isn’t on its knees,” Antonella Mularoni, secretary of state for foreign affairs, said at a conference today in San Marino, referring to the Group of 20’s efforts to crack down on tax evasion.

The government plans to authorize the central bank to support the nation’s lenders and provide them with short-term funding, Gatti said. So far no banks have asked for the aid and he said the nation’s lenders were well capitalized.

San Marino, a 23-square mile republic nestled in the hills of Italy east of Bologna, has pledged to make its banking system more transparent. In September it was dropped from the Organization for Economic Cooperation and Development’s “gray list” of countries that haven’t “substantially” implemented international agreements on exchanging tax information. Banking represents about a fifth of gross domestic product and San Marino is a favorite offshore banking center for Italians.

Pressure Mounts

G-20 leaders in April asked governments to make taxpayers disclose more information and require banks and other financial institutions to report dealings involving tax havens. In March, Switzerland, Luxembourg and Austria agreed to soften banking secrecy rules. In August the Swiss government agreed to turn over to the Internal Revenue Service details on about 4,450 UBS AG accounts held by American clients suspected of tax evasion.

An Italian government tax amnesty is also hitting San Marino’s banks because it allows investors to repatriate funds for a fee without facing penalties or back taxes. Italian officials expect about 100 billion euros ($148 billion) will return to the country before the amnesty ends on Dec. 15.

Italians have so far repatriated about 1.2 billion euros of assets from San Marino, almost 10 percent of the total held by banks in the republic, Gabriele Gatti, secretary of state for finance, said at the conference.

San Marino is negotiating a tax accord with Italy based on the OECD guidelines, Mularoni said.

[Disrespectful]

Originally Posted by OffshorePrivacy

An Italian government tax amnesty is also hitting San Marino’s banks because it allows investors to repatriate funds for a fee without facing penalties or back taxes. Italian officials expect about 100 billion euros ($148 billion) will return to the country before the amnesty ends on Dec. 15.

Italians have so far repatriated about 1.2 billion euros of assets from San Marino, almost 10 percent of the total held by banks in the republic, Gabriele Gatti, secretary of state for finance, said at the conference.

That alone has got to be scaring more euros into growing wings. I wonder how much of the 100bn euro estimate (seems ridiculously high) will flow back into Italy & what effect this will ultimately have on San Marino...

Biggest threat I can see is one of liquidity. Run on the banks could get interesting.

[slogold]

if a lot of client will remove money from bank this would mean liquidity problems for a lot of them