San Marino the professor Elio Blasio: “Central risks and Aqr go in parallel”

nterview with the well-known tax lawyer, prof. Elio Blasio. With him we tried to talk about the San Marino banking system and the future, also in the light of the so-called Voluntary bis. Blasio, formerly a university lecturer in the science of finance and tax law for over twenty years, boasts in his long experience also a past as a career officer of the Guardia di Finanza.

Professor, what are the new features introduced by the umpteenth Italian “shield”?
Decree Law 193/2016, in force since October 24, 2016, introduced the procedure of the new voluntary collaboration called Voluntary Disclosure-bis. With it you can regularise assets and financial assets established or held abroad in violation of tax monitoring obligations, violations in relation to tax returns in relation to such activities and violations not related to the foreign assets being reported. First of all, let’s say that this new procedure can be applied until July 31st 2017 and I immediately say that there will be no further extensions with respect to the deadline indicated. About the differences compared to the first Voluntary there are no substantial changes compared to that provided by Law 186/2014 which introduced the previous manoeuvre that came into force in January 2015.

One of the novelties concerns the introduction of the new crime of fraudulent surfacing of financial assets and assets arising from crimes not covered by the exclusion of punishment. This offence, not provided for those who have joined the first Voluntary for the principle of legality, punishes with imprisonment from one year and six months to six years those who fraudulently use the procedure to bring out financial assets and assets arising from different crimes from those covered by the exclusion of punishment, such as extortion, to cite a particular crime. It is important to underline that it is not possible to adhere to the voluntary collaboration procedure if the request is presented after the start of accesses, inspections, checks or any other administrative assessment activity or criminal proceedings for violation of tax laws related to the holding of the financial activity and property assets in violation of the declarative obligations subject to the Voluntary.

What will be the impact of the Voluntary bis on the San Marinese banking system?
According to the Bank of Italy statistics, there are about 30 thousand Italians who have not carried out the first Voluntary. A percentage of them will surely involve the Republic of San Marino. It is inevitable that there is still a significant number of tax-payers residing in Italy who have not yet joined the Disclosure. The new fact that concerns the Titan closely is that this year another decisive step will be taken in the transparency of bank data with the entry into force of the automatic exchange of information. San Marino is among the first 54 countries to adhere to the most advanced OECD standard. The automatic exchange of information will start operationally in September. In practice the San Marino Clo (Central Liaison Office) will have to transmit all bank details of non-resident subjects referable to the year 2016, to the respective foreign financial administrations. The Italian tax authorities will be automatically forwarded their name, current account number, balance and other fiscally sensitive data. I add that certainly after the Voluntary bis there will be no further loopholes. If this is added to the automatic exchange of information, I should say that the unfaithful taxpayers have no way of escaping the net of the tax authorities.

How is the San Marino banking system perceived from outside?
“I answer you as a professional naturally. San Marino, like other countries, has suffered opaque events, scandals and so on. The Titan, however, was, so to speak, in good company, he was not the only one. The image in the past has been blurred but important steps forward have undeniably been made and the exit from the black list in 2014 is a concrete and tangible fact of the goodness of the path to transparency and how it was perceived from the outside . I believe that in recent years the country has redeemed its image in an absolutely positive way.

How important is it to have a central risks?
The central risks is a great tool that has fundamental validity and allows the banking system to be promptly aware of any difficulties that a company-customer may suffer. Its absence, I think, can certainly lead to possible critical issues in this regard. We are talking about an instrument of which the Republic of San Marino must necessarily avail itself.

Before or after a possible Asset quality review?
At least in parallel. The Central risks is a master instrument that should be introduced to have a compliant Aqr and in tune with the needs and objectives that your Central Bank has set itself.

We are “beautiful”, we are transparent, we have the right papers … so why in your opinion does the signature of the memorandum of understanding with Bankitalia not arrive?
I believe that with the exit from the black list and the automatic exchange of information that as I said will be active from September, there is no longer any constraint to the signature of the memorandum and a collaboration between the two central banks that will result in an increasingly close synergy between the two countries.

San Marino is becoming the home of “trust”. What do you think of this tool?
The best possible. Unfortunately, in the collective imagination when this term is evoked we immediately think of some unclear practice and objectively it has been used in some cases in a distorted, illicit or illegal way. In reality we are talking about a useful and flexible tool in many situations. I am thinking, for example, of those who have a disabled child or the need to plan a possible moment in which they can no longer take care of themselves. So the Titan has done well and is doing well in encouraging and supporting this precious tool.

Ultimately with an eye on the Voluntary bis what advice do you feel you should give?
As a lawyer who has dealt a lot with the Voluntary under the operational profile, I would say to be careful not to miss the last train. We always rely on possible extensions, but I do not think there will be more in the future because now the tax office has in hand all the tools to investigate any wrongdoing.