Monetary Agreement between the European Union and the Republic of San Marino

MONETARY AGREEMENT

between the European Union and the Republic of San Marino

2012/C 121/02

THE EUROPEAN UNION,

and

THE REPUBLIC OF SAN MARINO,

Whereas:

• (1) On 1 January 1999, the euro replaced the currency of each Member State participating in the third stage of Economic and Monetary Union, among which Italy, pursuant to Council Regulation (EC) No 974/98 ([^E0001]) of 3 May 1998.

• (2) Before the introduction of the euro, Italy and the Republic of San Marino had concluded bilateral agreements on monetary matters, and lastly the Convenzione monetaria tra la Repubblica Italiana e la Repubblica di San Marino, concluded on 21 December 1991.

• (3) The Declaration No 6 annexed to the Final Act of the Treaty on European Union stated that the Community should facilitate the renegotiation of existing arrangements with the Republic of San Marino as might become necessary as a result of the introduction of the single currency.

• (4) The Italian Republic concluded on 29 November 2000, on behalf of the European Community, a Monetary Agreement with the Republic of San Marino ([^E0002]).

• (5) In accordance with this Monetary Agreement, the Republic of San Marino uses the euro as its official currency and grants legal tender status to euro banknotes and coins. It should ensure that European Union (EU) rules on banknotes and coins denominated in euro — including those related to its protection against counterfeiting — are applicable within its territory. The Republic of San Marino shall undertake all the necessary measures to combat counterfeiting and to cooperate with the European Commission, the European Central Bank (ECB) and Europol. Until a cooperation agreement between Europol and the Republic of San Marino is signed, the Republic of San Marino shall cooperate with Europol via the competent Italian authorities in this area.

• (6) The Republic of San Marino should take particular account of the recommendations of the Financial Action Task Force (FATF), notably FATF calls to its members and FATF-style regional body members to apply necessary countermeasures against identified high risk jurisdictions. The Republic of San Marino, which is represented in the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, takes duly account of the recommendations made or to be made in the Republic of San Marino mutual evaluation reports so as to enhance its response to money laundering threats.

• (7) This Agreement does not impose any obligation on the ECB and national central banks to include the financial instruments of the Republic of San Marino in the list(s) of assets eligible for monetary policy operations of the European System of Central Banks.

• (8) The Republic of San Marino has a banking sector which expects to operate in closer connection with that of the euro area. Relevant EU banking and financial legislation, legislation concerning the prevention of money laundering, the prevention of fraud and counterfeiting of non-cash means of payment and statistical reporting requirements should therefore be made progressively applicable to the Republic of San Marino with a view to ensuring a more level playing field.

• (9) A Joint Committee composed of representatives of the Republic of San Marino, the Italian Republic, the Commission and the ECB should be established in order to examine the application of this Agreement, decide the annual ceiling for coin issuance and assess the measures taken by the Republic of San Marino for implementing relevant EU legislation.

• (10) The Court of Justice of the European Union should be the judicial body in charge of settling any disputes which may arise from the application of the Agreement,

HAVE AGREED AS FOLLOWS:

Article 1

The Republic of San Marino shall be entitled to use the euro as its official currency in accordance with Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro ([^E0003]) and Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro. The Republic of San Marino shall grant legal tender status to euro banknotes and coins.

Article 2

The Republic of San Marino shall not issue any banknotes, coins or monetary surrogates of any kind unless the conditions for such issuance have been agreed with the European Union. The conditions for issuing euro coins as from the entry into force of this Agreement are laid down in the following articles.

Article 3

The annual ceiling (in value terms) for the issuance of euro coins by the Republic of San Marino shall be calculated by the Joint Committee established by the present Agreement as the sum of:

• — a fixed part, whose initial amount for the first year following the entry into force of this Agreement is set at EUR 2 600 000 . The Joint Committee may revise annually the fixed part with a view to taking into account both inflation — on the basis of the HICP inflation of Italy in the last 12 months for which the data are available at the moment of the calculation — and the possible significant trends affecting the euro coins collector market,

• — a variable part, corresponding to the average per capita coin issuance of the Italian Republic in the last 12 months for which the data are available multiplied by the number of inhabitants of San Marino.

Article 4

Article 5

Article 6

Article 7

Article 8

• (a) euro banknotes and coins;

• (b) banking and financial law, in particular in relation to the activity and supervision of the institutions concerned;

• (c) prevention of money laundering, prevention of fraud and counterfeiting of cash and non-cash means of payment, medals and tokens and statistical reporting requirements. Regarding legislation on the collection of statistical information, the detailed rules of implementation and the technical adaptations (including the appropriate derogations taking into account the specific status of San Marino) shall be agreed with the European Central Bank not later than 18 months before the required start of the statistical reporting;

• (d) the measures necessary for the use of the euro as a single currency adopted under Article 133 of the Treaty on the Functioning of the European Union.

• (a) shall be automatically and temporarily cut by 1/3 if and when a deadline specified in the Annex is not met, for as long as the EU legal acts or rules concerned have not been adopted;

• (b) may be temporarily cut by 1/2 on a decision of the Council acting by qualified majority on a proposal from the Commission and after having heard representatives of the Republic of San Marino if and when the Republic of San Marino fails during more than two years to comply with one or several EU legal acts or rules listed in the Annex, that it has adopted within the agreed deadline.

The ceiling shall be restored to its normal level using the same procedure as soon as the Republic of San Marino has adopted the appropriate measures to address the issues at the origin of the temporary cut.

Article 9

Credit institutions and, where appropriate, other financial institutions authorised to carry out their activities in the territory of the Republic of San Marino may have access to interbank settlement and payment and securities settlement systems in the euro area under appropriate terms and conditions to be determined by the Bank of Italy, in agreement with the European Central Bank.

Article 10

Article 11

Article 12

Each party may terminate this Agreement subject to one year's notice.

Article 13

This Agreement shall enter into force on the first day of the month following the date on which the Parties have notified each other that their ratification, conclusion or adoption procedures have been completed in accordance with the rules applicable to each Party.

Article 14

The Monetary Agreement of 29 November 2000 shall be repealed from the date of entry into force of the present Agreement. References to the Agreement of 29 November 2000 shall be understood as references to the present Agreement.

Done at Brussels on 27 March 2012 in two originals in the English language.

For the European Union

Olli REHN

Vice-President of the European Commission in charge of Economic and Monetary Affairs and the Euro

For the Republic of San Marino

Antonella MULARONI

Minister of Foreign Affairs

ANNEX