Made in San Marino n. 6/2011 EN

Year III November-December 2011 n. 6

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C ONTENTS

INFORMATION MAGAZINE PUBLISHED BY THE CHAMBER OF COMMERCE OF THE REPUBLIC OF SAN MARINO

Promotion: Matching and meetings Economy Day Foreign Club Ministry for Foreign Affairs: transparency and international cooperation

Joint stamp issue: San Marino - Italia Author/Autore: Nicoletta Ceccoli

E DITORIAL Massimo Ghiotti - General Manager

Start doing what is necessary, then what is possible. And all of a sudden you will find yourself doing the impossible Saint Francis of Assisi

The San Marino economy is passing through a period of transition. An economy whereby the banking and financial system amply supported the country’s GDP is today on the road to reorganization. Luckily, thanks to sector diversification and the fact we had not staked everything on the banking-financial system, our country has been able to withstand the double crisis it is passing through, the international crisis and that caused by the reduction in exports (due to the incentive decree) towards Italy, our number one trading partner.

Another change is also under way however.

The number of companies operating in our country is falling. This has resulted on the one

hand in a contraction in related economic activities for the real-estate sector (less need for business premises) and as regards legal and administrative services, while on the other, it does not appear to have had any serious effect on the reduction of value added for the State budget.

It is true to say, in fact, that since 2009, numerous companies have shut shop, but many of these did not have firm roots in the country, with a labour cost/production value below 3%.

We must however keep our guard up because the first signs of a loss of sound companies with high value added are beginning to appear and this is clear from the loss of 12 million euro in value added deriving from the recent closure of these companies.

Three priorities therefore exist for the future of our economy: to monitor the sound compa-

nies and ensure they have a competitive edge by being located in San Marino (we are in fact experiencing a gradual drop in the perception of the benefits of remaining in San Marino); to unblock relations with Italy to recover the drop in exports which followed the incentive decree; to promote the internationalisation of companies with respect to foreign markets, with special focus on the emerging markets that will follow Brazil, Russia, India, China (BRIC), i.e., Mexico, Indonesia, South Korea and Turkey (MIKT).

A big effort on the part of companies, but also of the institutions, to create conditions favourable to internationalisation, but also for the reconversion of those companies with types of business strictly tied to local markets.

Together with priorities, also two challenges therefore: that of looking outwards and that of improving and changing ourselves inwards.

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O PPORTUNITIES

PROMOTING SAN MARINO AND ITS COMPANIES AT MATCHING FAIR The Chamber of Commerce successfully took part in Matching 2011, the trade-fair event of the Compagnia delle Opere staged in Milan at the end of November.

A chance to meet people and make yourself known. A yearly appointment whose winning formula lies in the early planning of meetings.

Federica Tonelli and Marianna Bucci, head of the Legal Department and of the Marketing and Foreign Department respectively of the San Marino Chamber of Commerce, successfully grasped the opportunities offered by the three trade-fair days: on the one hand by promoting the Republic of San Marino, its economic activities and the Club Estero, and on the other by trying to gather information and make interesting contacts for the development of internationalisation.

PHILIPPINES, MALAYSIA, GABON: MEETINGS CONTINUE WITH THE DIPLOMATIC CORPS Trade, cooperation in the economic field and business opportunities were at the centre of discussions between the executives of the San Marino Chamber of Commerce and the Ambassadors of Malaysia and the Philippines, during the meeting with the Minister for Industry.

Also interesting was the meeting with the Minister of Small and medium industry of Gabon who, in the offices of the San Marino Chamber of Commerce, also met members of the Chamber of Commerce Club Estero, as well as Director Ghiotti and the representatives of the WUSME.

TRADE-FAIR ACTIVITIES In the last few weeks, contacts have continued with foreign and Italian-foreign Chambers of Commerce in Germany, Spain, Serbia, Russia, Brazil, Slovenia and with the representatives of foreign institutions encountered at Matching.

Thanks to participation in the workshops furthermore, it has been possible to acquire a better knowledge of the Russian market and its potential and discover the advantages and different ways of interaction between companies offered by network contracts.

Chamber’s staff with the Ministers for Industry, for Finance and CDO

Via Cinque Febbraio - 47899 Serravalle Republic of Repubblica di San Marino Tel. (+378) 0549 900190 - Fax (+378) 0549 960125 info@palacehotelsanmarino.com

The La Miglior Best Idea Soluzione to be per the ilProtagonist Tuo Evento 2 november-december 2011

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www.palacehotelsanmarino.com

S TATISTICS

PLAN THE FUTURE analyzing the present That is why, once again this year, the Chamber of Commerce organised the Economy Day: to discuss in detail with the Institutions the data contained in the Report on San Marino companies in 2010 and in the Analysis of the Economic Situation published in October 2011.

Speakers did in fact include the President and the Director of the Chamber of Commerce, Simona Michelotti and Massimo Ghiotti, the Minister of Labour, Francesco Mussoni, the Industrial Economist, Luigi Bidoia and the Statistical Area Manager of the Chamber of Commerce, Nicola Michi.

The Minister of Labour emphasized the importance of statistical data for obtaining an overall view. The data do in fact show that the crisis continues but that it can be reversed by working well and facing a number of what are crucial challenges for the Republic of San Marino such as debureaucratization, the single labour market, and investment policies, to mention just some.

WHAT THE REPORT SAYS Wholesale: it would appear to be able to successfully tackle the crisis.

There was a slight drop in turnover, both in 2009 and 2010, but business has picked up somewhat since 2009.

Retail: turnover figures have even risen slightly, to the detriment of profit margins which have dropped considerably and in some cases disappeared.

Construction sector: this has been hit hard by both the effects of the global crisis and by internal difficulties due to the saturation of the property market and building in general which, in 2010, made the situation even more critical, with a constant downward production trend.

An exemplary figure is profitability which has halved over the past three years and now stands at 4.2% compared to the 8% of 2007.

Transport sector: this has not undergone any particular changes over the years, having remained substantially tied to low turnover figures and profitability similar to 2007.

Services to companies: this is the largest and perhaps most strategic sector for the future growth of San Marino’s economy. It does however show several signs of crisis. It involves real-estate, information technology, research and development, rental and telecommunication

activities, many of which have left or are leaving the market, first and foremost the weaker ones, perhaps less tied to the area context.

Services to people: they apparently managed to withstand the crisis of previous years, but began to feel the pinch in 2010.

Hotels and restaurants:: they have increased sales volumes by maintaining low profit margins – around 0.4%.

The publications are available online on the website www.cc.sm and can be obtained free of charge from the Chamber of Commerce offices.

INTERNATIONALIZATION - President Simona Michelotti “A very important signal is reaching us from companies, and one that is decisive for their growth: business expansion onto foreign markets. Finally, attempts are being made to move beyond our borders, beyond the markets closest to us in terms of logistics and culture and therefore more convenient. We are starting to feel ready to organise ourselves differently and tackle new and global situations – the global economy. In October 2010, the companies which had relations with countries other than Italy totalled 25%, in May 2011, 30% and in October 2011, 33%. An important and constant growth trend, which clearly indicates the road to be followed”.

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IS EXPANDING YOUR ENTERPRISE… REALLY AN ENTERPRISE?

ENTER A NEW AGE! With the Club Estero the world is within your reach!

INSTRUMENTS To best perform activities tied to internationalisation, providing your company with suitable instruments is crucial: dedicated-language material, multi-language website, professional organisation for business trips and welcoming foreign customers… for this reason, specific SPECIAL RATES have been granted to Club Estero members

TRAINING AND INFORMATION Being acquainted with new markets and the opportunities they offer, having qualified and professional contacts in the various Countries, being able to rely on constantly updated information is crucial when choosing a foreign business partner… …that is why free and priority participation is contemplated for Club Estero members in SEMINARS and MEETINGS WITH DELEGATIONS

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PROMOTION Promote your company through the channels provided by the Chamber of Commerce! Your logo and corporate profile on our official website and on the promotion material to be: - distributed during meetings, trade-fairs, missions and visits - distributed to foreign contacts for finding partners …to always be there on important occasions, the Chamber of Commerce takes you along!

…and that’s not all!

Direct line - The Chamber of Commerce will contact you every time requests or cooperation proposals of interest to your sector are received, or news from foreign markets, or regarding initiatives and specific events.

Stay connected! In the Foreign area of the website www.cc.sm you can access confidential material and information and take a look at cooperation proposals and business opportunities notified by our foreign contacts.

Help us to help you! Let us know about any problems affecting your sector and we’ll make sure these are brought to the attention of San Marino Institutions.

Strength lies in unity! Stay in contact with other Club Estero members, recount your experiences and benefit from those of others.

SEMINARS 2012 Free for Club Estero members Price ffor non-members € 150,00 (per person, per seminar)

Commercial credit: management, reminders, recovery Warehouse management: indices, stocks and inventories Foreign sales plan Internationalisation check-up Organizing hospitality in modern accommodation facilities Country Seminar: Russia Country Seminar: Brazil

MEETINGS WITH DELEGATIONS (selective entry)

Free and priority participation for Club Estero members Price for non-members: € 30,00 per meeting (according to availability)

SPECIAL AGREEMENTS • Web: specific Internet services for abroad • Translations: discounts on translations • Advertising: discount on the purchase of advertising space on San Marino information website with excellent positioning on search engines • Flights: BlueBiz special agreements in conjunction with Alitalia, Air France, Delta, KLM • Business trips: discount voucher for the purchase of business services, concierge services, Bologna airport parking discounts and everything else you need for your business trips • Do you have guests? Have them stay at a participating San Marino hotel • Consultancy: business plan and management control for internationalisation • Chamber of Commerce: discount on the purchase of publishing-product advertising spaces (website, magazine, newsletter, event sponsoring)

2012 AFFILIATION New members € 750.00

Young company € 550.00 if your company has benefitted from Youth Entrepreneur Commission contributions or is among the winners of the Nuove Idee Nuove Imprese competition.

Loyalty rate € 550.00 – if your company has been a member of the Club Estero for at least two years (even if not consecutive)

CHAMBER OF COMMER CE LOYALTY PRIZE!

If you renew your Club Es ter two years, as and from o membership for the third year,

the fee drops to € 55

0,00

www.cc.sm

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M INISTRY FOR FOREIGN AFFAIRS

TRANSPARENCY AND INTERNATIONAL COOPERATION: THE PROGRESS MADE

BY SAN MARINO WITHIN THE OECD Since December 2008, San Marino has been treading a path towards greater and greater transparency and has signed a number of major agreements relating to the exchange of information (TIEA) e and to the Elimination of Double Taxation (DTA), according to the 2005 standard of the Organisation for Economic Cooperation and Development (OECD), with numerous Countries and jurisdictions.

The agreements on information exchange (TIEA) - 23 agreements signed, 21 of which already effective, (Andorra, Australia, Austria, Bahamas, Canada, Denmark, Finland, France, Guernsey, Faroe Islands, Liechtenstein, Luxembourg, Malaysia, Malta, Monaco, Norway, UK, Romania, Spain, Sweden and Hungary); - the agreement with the Czech Republic, signed on 25 November 2011, and still to be ratified by the San Marino Parliament; - agreements with Indonesia and Poland already initialled and waiting to be signed.

The agreements on the elimination of double taxation (DTA) - 5 DTA signed according to OECD 2005 standard (Liechtenstein, Malaysia, Portugal, Saint Kitts and Nevis and Hungary); - 5 Protocols aimed at the updating of the DTA previously stipulated to OECD 2005 standard (Austria, Belgium, Luxembourg, Malta and Romania); - Amendment Protocol agreed with Croatia suitable for updating the DTA in effect (stipulated in 2005) to the new OECD standards on information exchange;

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- Similar Protocol proposed to Cyprus as that agreed with Croatia; - Agreements with Greece, Libya and Vietnam already initialled and waiting to be signed; - A DTA was signed with Italy in 2002; in 2009, an Amendment Protocol to this agreement was initialled, aimed in particular at updating the article on the exchange of information to the OECD 2005 model.

On 23 September 2009, San Marino was included on the OECD white list. The San Marino Government has continued to tread the path of transparency and negotiations are in progress with numerous other jurisdictions.

AS REGARDS MONEYVAL AND FATF MONEYVAL

GLOBAL FORUM on transparency and information exchange for tax purposes In the Supplementary Report on San Marino, published by the OECD’s Global Forum on 26 October 2011, the progress was acknowledged made in the context of transparency and information exchange. These measures have brought San Marino legislation into line with international standards. The Report marked the end of the first assessment stage (relating to the analysis of the regulatory framework). The second stage, scheduled for the second half of 2012, will assess the actual implementation of the law in question.

The progress made by San Marino was expounded by the Global Forum in its Report to the Finance Ministers of the G20, which indicated the “need for improvement” as regards just three elements, due mainly to Italy’s delay in signing the Protocol initialled on 25 June 2009 and aimed at updating the 2002 DTA to the most recent standards concerning information exchange.

In this legislative period, San Marino has undertaken decisive action within the Moneyval and has provided adequate and prompt answers to the requests made by the international organisation in order to update regulations to international standards as regards combating money laundering and the funding of terrorism.

In September 2011, Moneyval approved the legislative measures adopted by San Marino with regard to anti-laundering and the fight against the funding of terrorism, defining them to a large extent in compliance with standards. It also adopted the report on San Marino (published on the website www.coe.int/t/dghl/monitoring/moneyval), the conclusions of which confirm the substantial progress made by our country.

FATF The choices made by the San Marino authorities have also been rightly acknowledged by the International Financial Task Force, which has not included San Marino on the updated list, distributed on 25 June 2010, of the countries subject to close monitoring.

GLOSSARY DTA: Double Taxation Agreement INITIALLING: in international law, the signing of a document by initialling – initials affixed to the wording of an agreement on which a basis of consensus already exists between the parties.

TIEA: Tax Information Exchange Agreement.

continued on page 8…

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…continued from page 7

M EMBERS’ AREA

RELATIONS WITH ITALY Ever since the spring of 2009, the San Marino Government has been negotiating with the Italian Government in order to update the DTA signed in 2002 to the OECD 2005 model. The text of a Protocol in this sense was initialled in Rome on 25 June 2009.

In that same year, the Agreement on economic cooperation and the Agreement on financial collaboration were signed. Nevertheless, the ratification procedure for both treaties has come to a halt while waiting for the signing of the amendment Protocol of the Agreement against double taxation.

It must be emphasized that in this legislative period, the Great and General Council (San Marino Parliament) has also passed a series of laws in line with anti money-laundering and funding of terrorism, transparency and international cooperation standards.

These include: • amendment to the law on bank secrecy; • elimination of S.A. companies;

• introduction of the offence of invoicing for non-existent operations and the offence of conspiracy to commit crimes; • amendment to the law on letters rogatory and legal assistance in criminal offences in order to facilitate cooperation with the authorities of other countries; • amendment to the law on information exchange; • strengthening of communication obligations for fiduciary and trust companies; • strengthening of monitoring authority and independence of the Central Bank, in line with the recommendations of the International Monetary Fund.

On 22 July 2011, the San Marino Parliament approved a law for the unilateral implementation of international tax assistance through the exchange of information regarding both civil and criminal cases. This law is effective with States and jurisdictions with which a TIEA or DTA has been negotiated and initialled, including in the case of these not having been signed or become effective.

Following the positive reports of the OECD and the MONEYVAL, on 14 November 2011 a technical meeting was staged in Rome between the representatives of the Ministries and Institutes of the two countries. The Italian delegation promised to recommend to the new Government, as soon as this had taken office, the prompt signing of the Protocol amending the Double Taxation Agreement and the start of the ratification process of the Protocol itself and of the Agreements on economic cooperation and collaboration with regard to financial matters.

C HAMBER OF COMMERCE The San Marino Chamber of Commerce is a joint-stock company with mixed public and private capital, held for 51% by the state of San Marino and for 49% by trade associations (ANIS, OSLA , UNAS, USC and USOT), banks (Banca Agricola Commerciale, Banca di San Marino, Cassa di Risparmio and Credito Industriale Sammarinese) and the University of San Marino. It offers support services for companies and organizes promotional activities for the territory and the local economy. For enterprise, it provides a channel of access to the public administration, the meeting point between industry and the state.

BOARD OF DIRECTORS Simona Michelotti - President of the Chamber of Commerce Silvano Andreani Paride Bugli Riccardo Cervellini Emanuel Colombini Giorgia Gasperoni Giorgio Petroni Vladimiro Renzi Gian Franco Terenzi

Year III - November - December 2011 - n. 6 Executive Editor: Massimo Ghiotti Editorial Team: Marianna Bucci Camera di Commercio di San Marino S.p.A. Str. di Paderna, 2 - 47895 Fiorina di Domagnano - RSM Tel. 0549-980.380 - Fax. 0549-944.554 - Mail: info@cc.sm

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STAFF Massimo Ghiotti - General Manager Evelina Guglielmi - Quality and Production Department - Foreign Trade Office Roberto Bucci - Fairs and events organization consultant Marco Macina - Executive Assistant and IT Department Jessica Dell’Ominut - Accounting and Secretarial Office Federica Tonelli - Legal Office Massimo Zani - Buying and Sales Department - Foreign Trade Office Marianna Bucci - Marketing Department and Foreign Trade Office Nicola Michi - Production and Planning Department

Graphic Design: 3 STUDIO Printed on: STUDIO STAMPA Circulation 1500 copies

For the cover images, our thanks go to the State Philatelic and Numismatic Department in san marino