Financial Crime World

EU Parliament Approves Deal with San Marino: Combating Banking Fraud and Tax Evasion

The European Parliament endorsed an agreement with the microstate of San Marino on Thursday, 12 January 2017, aimed at curbing tax evasion and banking fraud by EU citizens using accounts in San Marino. Below are the key points of this important deal.

Agreement Details

  • The European Parliament approved the deal, which will see the automatic exchange of financial account information between the EU and San Marino.
  • This agreement comes after the signing of the deal in December 2016.
  • The deal is set to take effect on January 1, 2017.
  • Similar arrangements have previously been established with Switzerland and Liechtenstein.

Terms of the Agreement

  • San Marino will automatically share information on income, account balances, and sales proceeds from financial assets of its residents and EU citizens with their respective tax administrations in both entities.
  • The exchange of information applies to accounts with a balance above a specified threshold.
  • The deal strengthens San Marino’s regulatory framework, bringing it in line with those adhered to by EU members since March 2014.
  • It also meets the global standard on the automatic exchange of financial account information, as set by the Organization for Economic Co-operation and Development (OECD).

Benefits of the Agreement

  • The arrangement enhances the ability of tax administrations within both the EU and San Marino to accurately identify taxpayers, enforce tax laws, and assess the likelihood of tax evasion.
  • EU member states and San Marino will benefit from a streamlined process, preventing the need for unnecessary investigations.

Vote and Reactions

  • The resolution was passed with a strong majority, receiving 607 votes in favor, 22 members voted against, and 18 abstained.
  • Concerns have arisen regarding the implications for privacy, with critics arguing that automatic information exchange may infringe upon individual rights.
  • Supporters maintain that these measures are essential for promoting transparency and fairness within the global financial system.

In conclusion, this agreement is a significant step in the ongoing international effort to combat tax evasion and financial fraud.