In January I argued that because of a series of issues highlighted by the ‘Banca di San Marino (BSM) case’—a controversy that arose from the handling of a proposed takeover of a bank by the Sammarinese authorities needed to be closely examined before any further steps are taken on the proposed Association Agreement with San Marino. [ https://www.eureporter.co/world/san-marino/2026/01/13/why-the-eu-should-put-ratification-of-its-association-agreement-with-san-marino-on-pause/] Since that piece appeared in EU Reporter a series of striking developments and new information have reinforced the view that the EU needs to take a long hard look at the standards that operate in San Marino before moving further on the Agreement, writes Dick Roche.
The facts
On 28th January 2025 Starcom Holding AG, a Bulgarian company, submitted an offer of €36.75 million for 51% of the shares in Banca di San Marino (BSM). A church-based foundation Ente Cassa di Faetano (ECF), controlled the shares in BSM. At the time ECF reportedly had debts that it was unable to service. The bank, which had been in the headlines for a Ponzi scheme operated by a senior manager that resulted in severe financial losses to clients was said to require a capital injection of €20 million.
In February the ECF board voted 5-0 to accept the Starcom offer. The following month ECF shareholders voted to amend the organization’s articles of association to allow the sale of 51% of the shares to proceed. A special purpose vehicle, San Marino Group (SMG) was the established by Starcom to handle the acquisition process. The share capital of SMG (€500,000) was provided by Assen Christov (88%) and Richard Werner (12%).
A sale and purchase agreement between ECF and SMG for 51% of the shares in Banca San Marino was signed on 15 May 2025. The chairman of ECF, Marco Beccari, stated that the negotiations with Starcom had been conducted “with transparency and absolute correctness, maintaining direct contact with the Central Bank.”
The purchase agreement provided that SMG would pay a ‘confirmatory deposit’ of €1.425 million to ECF upon signing the Agreement. The balance of the ‘base price’—€13.575 million—would be lodged into a current account in BSM from which it would be paid when the deal was finalised. If the share purchase was not finalised the funds would be returned to Starcom. These arrangements – a departure from the more usual practice of using a standard escrow account – were intended to demonstrate Starcom’s commitment to the BSM acquisition.
The fund transfers into the SMG account in Banca di San Marino were made through Starcom’s accounts in one of the largest banking groups in the European Union, a bank with a robust system for both due diligence and money laundering prevention measures.
On 29th May 2025 SMG submitted the documentation to the Central Bank (BCSM) seeking approval for the transfer of the shareholding in BSM. Between June and September there were a number of exchanges between Starcom, SMG and BCSM. While a range of issues were touched on in these exchanges, there were no concerns or questions regarding the sources of the funds.
The intervention that ended the bank sale
On 15th October Judges of the San Marino Tribunal initiated a criminal investigation which effectively brought an end to the sale of BSM to Starcom.
Orders were made for the indefinite arrest of Andrea Delvecchio and his wife Marina Manduchi. The orders were classified as ‘precautionary measures’ intended to facilitate the conduct of a full Court investigation into the proposed sale of BSM shares to Starcom. The couple were were arrested and placed in custody
The charges against Mr. Delvecchio and Ms. Manduchi arose from a fully disclosed contract between one of Starcom’s advising legal firms and IBC a company owned by Marina Manducci.
The charges against the couple included breach of trust, private corruption, and money laundering. Andrea Delvecchio, a member of the ECF Board of Directors when it voted unanimously in February in favour of the sale of Banca di San Marino to Starcom was accused of influencing other members of the Board of Directors and ECF shareholders, who had voted to amend ECF’s Articles of Association to allow the sale of BSM. It is not clear what—if any—evidence was produced as to how Mr Delvecchio influenced fellow ECF Board Members or the shareholders or whether the influence he allegedly exercised involved any criminal actions.
A separate order was made against Starcom’s Assen Christov the lead shareholder in SMG. As Mr. Christov resided outside the Court’s jurisdiction, the order was not executed.
On 10th November further charges based on a report prepared by San Marino’s Financial Intelligence Agency were laid against Mr. Christov and SMG. These charges referenced the ‘suspicious origin of the funds in the SMG account,’ the ‘concealed links with the German bank Varengold Bank,’ alleged ‘deliberate’ omissions in material provided to CBSM and attempts to transfer the funds in the BSM account back to the Bulgarian bank from which they originated.
On 24th October the Central Bank of San Marino (BCSM) without waiting for the completion of actions underway in the San Marino courts, rejected the request for the transfer of BSM shares to SMG ending the Starcom takeover bid.
The seizure of funds
When the BCSM announced that the transfer of BSM shares to SMG could not proceed, Starcom unsurprisingly sought the return of the funds it had placed in the SMG account at Banca di San Marino. The attempt to withdraw the funds ran into a ‘brick wall’.
Initially BSM explained that technical problems prevented the fund transfer requests from being processed. Starcom was, next, informed that its funds in BSM could not be transferred via a single transfer request. Transfers would be limited to a €500,000 maximum. No more than three transfer requests could be made in any one day. When Starcom submitted transfer requests in line with these requirements the BSM manager who had been dealing with Starcom and SMG from the outset flagged concerns about the “suspicious haste” of the transfer efforts to San Marino’s Financial Intelligence Agency (AIF). AIF ordered an immediate suspension of all transactions on the SMG account. Although the suspension notice was issued on the 29th, it was backdated to 24th October—the date the Central Bank decided to prohibit the sale of BSM—providing retrospective cover for BSM’s failure to meet any transfer requests submitted by SMG.
The role of San Marino’s Financial Intelligence Agency
A communication from AIF on 24 July set in course the investigations by Judges Battaglino and Santoni that culminated in the criminal charges being laid against Assen Christov, the San Marino Group, Andrea Delvecchio and Marina Manduchi.
From that point onward the FIA has played a central and particularly biased role in the Banca di San Marino (BSM) case. A submission from the FIA Director, Niccola Muccioli to Judges Battaglino and Santoni dated 7th November 2025 demonstrates that bias.
In addition to his role as director of the FIA Mr. Muccioli is Chairman of MONEYVAL, the Council of Europe committee dealing with anti-money laundering measures and the financial financing of terrorism. It is not unreasonable to expect that a report produced by the holder of two such significant positions would be balanced, accurate, and objective.
The Muccioli submission fails on all three counts. Flawed analysis based on questionable data and self- reinforcing negative interpretations of individual events run throughout the text. The submission is focused more on constructing a negative narrative than on objective analysis.
A striking example of this is a reference by Mr. Muccioli linking the director of one of the companies involved in Starcom’s funding process to “reports of crimes dating back to 1996 and 2000.” The ‘crime’ referred to is the alleged theft of fruit from an orchard in the 1990s when the director named was a teenager. The portrayal of the actions of a teenager as somehow raising a red flag in relation to the way Starcom raised funds for the BSM share acquisition poses questions about balance and judgement.
The absence of balance is particularly evident in a distorted, misleading and inaccurate discussion by Muccioli on Starcom’s relationship with Varengold Bank a German bank.
Opponents of Starcom’s acquisition of BSM sought to discredit the move by linking Varengold—in which Starcom owned shares—to terrorist funding and money laundering. Varengold had been heavily fined by German regulators in 2025 for reporting failures but was not charged or found guilty of money laundering or terrorist financing.
Rather than seeking to establish the facts Muccioli’s submission suggests, “according to the information available,” Varengold Bank AG belonged to companies in the Starcom group. This is incorrect. Starcom held shares in Varengold but never owned it. A basic check would have established the facts. Given his position in MONEYVAL and FIA, Mr. Muccioli’s failure to fact-check is striking.
Varengold wrote to the Central Bank of San Marino pointing out that it was not involved in any capacity—financial, operational, consultative, supervisory or otherwise—in the process of acquiring the stake in BSM. The correspondence was shared with Mr. Muccioli who has not reacted publicly.
Mr. Muccioli’s report also contains a grossly skewed discussion focused on Euroins Insurance Group (EIG) a part of Eurohold Bulgaria which is controlled by Starcom Holding AD. His ‘analysis’ is based on material culled from online commentary on a dispute between Euroins Romania and Romanian regulators. In addition to failing to establish the veracity or context of the material he uses the FIA Director fails to mention the fact that the position taken by the Romanian regulator has been widely challenged including by leading actuarial consultants.
A striking lack of balance is also evident in Mr. Muccioli’s treatment of Starcom’s efforts to retrieve its funds from the account in BSM after the BCSM decision not to allow the sale of Banca di San Marino shares to SMG. Muccioli refers to the “suspicious haste” of the efforts to withdraw funds that had been in SMG’s current account “for 4/5 months in SMG’s current account without being invested.” He characterised the multiple transfer requests that Starcom was required to make by local regulation as “demonstrating (an) objective frenzy” triggering money laundering concerns. It is not explained why Mr. Muccioli sees Starcom’s wish to ‘repatriate’ millions of Euros and put them to constructive use as ‘suspicious’.
San Marino’s efforts to supress comment on the BSM case
San Marino has gone to extraordinary lengths to suppress comment or debate on the BSM case. An event held in the Brussels Press Club on 4th February has produced a particularly hysterical reaction. On 5th February San Marino’s State Council issued a statement describing efforts to inform MEPs about the BSM case as “intimidation” and “diplomatic boycott leverage.” The following day a statement from the head of San Marino’s Courts, Giovanni Canzio, labelled debate on the BSM case as an “attack on the integrity and freedom of the state.” He referred to “substantial evidence” of a “parallel plan” aimed at portraying San Marino “as a micro-State that is not fully democratic, nor reliable with regard to the effective respect of the rule of law.” These ‘attacks’, Canzio announced, had led Judges Santoni and Battaglino “to formulate new and more serious charges against various individuals, both citizens of San Marino and elsewhere” for attacking “ the integrity and freedom of the Republic of San Marino” and the “freedom of public authorities
Using a section of the San Marino Criminal Code, copied from Fascist-era Italian law, Judges Santoni and Battaglino extended their cases against Andrea Delvecchio, Marina Manducci and Assen Christov. They charged the three with fomenting the ‘parallel plan” referred to in Canzio’s announcement and added a rambling list of additional offenses, carrying potential prison sentences ranging from 13 to 24 years. Andrea Delvecchio and Marina Manducci were taken back into preventative custody. Much of the evidence on which the extended charges were based was derived from wiretapping phone calls.
On 27th February Professor David Brunelli, a San Marino Court Appeal Court Judge, referring to the fact that a part of the Criminal Code dating back to the Fascist era had been used in framing the extended charges against Mr Delvecchio and Ms Manducci annulled the arrest warrants against both and ordered their immediate release.
The decision by Judge Brunelli while undoubtedly welcome to those affected does not reverse the reality that the judicial authorities of San Marino were willing to attack the legitimate exercise of free speech – protected under EU law – as serious criminal conduct.
The Association Agreement
The BSM case raise a series of issues that are relevant to the proposed Association Agreement with San Marino.
The basis on which funds – lawfully transferred to a bank in San Marino to fund an investment proposal about which San Marino’s authorities were fully aware were seized and the duplicitous manner in which a range of authorities contrived to effect that seizure raise questions as to the compatibility of standards operated in San Marino with those applicable in the EU, an issue of particular importance in financial services.
The role played by the San Marino’s Financial Intelligence Agency (AIF) raises fundamental questions about the agency and its director Niccola Muccioli. The AIF position that the multiple transfer applications on these funds made in compliance with rules created in San Marino were somehow so “suspicious” that they triggered the seizure of millions of €millions is ludicrous. Mr. Muccioli’s report to the investigating judges raises multiple questions that demand scrutiny.
In addition, the anti-democratic efforts to muzzle scrutiny of public decisions and the threats of imprison EU as well as citizens of San Marino for daring to exercise the right to question policy demonstrated by the case are incompatible with core EU standards.
While there is an understandable ambition to complete the Association Agreement—the focus of so much effort over many years—it would be a bad mistake to do so until the full range of issues highlighted by the BSM case is fully reviewed.
