The Most Serene Republic of San Marino is a sovereign State and an enclave inside Italy.
According to tradition, it was founded in 301 by a saint escaping persecution by the Roman Empire. An Italian protectorate until 1971, it is now fully independent.
As in many micro-States, the economy of San Marino is heavily based on financial services, protected by laws sanctioning bank secrecy.
However, San Marino has signed a Convention with Italy, just approved by Rome, which will significantly reduce the protection afforded to bank accounts in the enclave.
Italy will now be entitled to get any information which is ‘significantly relevant’ in order to apply her tax laws. San Marino made this concession in order to end a blacklisting by the Italian Government which was greatly affecting the economy of the enclave.
The agreement between Italy and San Marino can be considered part of a general trend of tax havens gradually lowering their defenses in Europe, thanks to international diplomatic pressure probably triggered by the crisis.