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Sanctions - statutory supervisory function

Administrative fines published pursuant to Article 32 of Law No. 96/2005 (BCSM Statute) for violations under Decree No. 76 of May 30, 2006, as amended and supplemented.

 

Publication of sanctions

The Central Bank of the Republic of San Marino, as the supervisory authority on credit, financial and insurance activities, proceeds to impose administrative pecuniary sanctions against all subjects subject to its sanctioning power, in case it finds violations of the primary regulations pertaining to the financial system and/or its own implementing regulations issued.

Consistent with the provisions of Article 32 of Law No. 96/2005 (Central Bank Statute) and Article 23 of Decree No. 76 of May 30, 2006, sanctions imposed for violations provided for in Title I of the aforementioned Decree are published in this section.

The publication of sanctions, functional to the strengthening of the relevant deterrent power consistently with the provisions of the law, responds, also, to the pursuit of purposes of transparency and accountability of the action of the Supervisory Authority, as well as to encourage the dissemination of behaviors and management practices in accordance with the principles of sound and prudent management of supervised entities.

The publication of sanctions is in addition to the description of the sanctioning activity conducted by the Central Bank and reported in the annual final reports, from time to time published on the website (publications and statistics section).

Except as expressed below, the publication takes place for all sanction proceedings initiated as of January 1, 2020 with the specific application methods defined by the relevant regulatory regime:

  • for proceedings instituted under the sanction regime following the amendments set forth in Delegated Decree No. 50 of March 26, 2019 (so-called Basel III): including in the case of administrative appeals against the sanction, providing subsequent disclosure of its outcome;

  • for proceedings instituted under the regime prior to the so-called Basel III Decree: once the sanction has become unenforceable.

Pursuant to Article 32 of the Central Bank Statute, the Central Bank may exclude or temporarily suspend the publicity of the sanction measure only in cases where it deems that one or more of the following circumstances, predetermined by it, exist:

  • the publication of personal data appears disproportionate;

  • publication would jeopardize the stability of financial markets or an ongoing criminal investigation;

  • publication would cause, to the extent that this can be determined, disproportionate harm to the legal persons or natural persons involved.

 

Circumstances predetermined by the CBSM itself under which publication may be excluded or temporarily suspended are as follows:

The publication of personal data, referring to natural or legal persons, is considered disproportionate in cases where, due to the limited offensiveness or dangerousness of the violations:

  • the sanctioning measure consists of a mere removal order adopted pursuant to Article 141, paragraph 1 bis, of Law No. 165 of November 17, 2005, as amended;

  • the administrative pecuniary sanction has been imposed for an amount below the threshold of 10,000.00 (ten thousand) euros taking into account that:

    • to the quantification of the sanction already concur the circumstances predetermined by Article 31 paragraph 3 of the law in question, as mitigating or aggravating elements to be considered with respect to the minimum and maximum edictal fixed by the legislator;

    • the aforementioned threshold falls within the edictal range of all sanctions that can be imposed for supervisory purposes, as currently defined by Decree No. 76 of May 30, 2006, as amended;

    • the edictal ranges of administrative sanctions already take into account the greater or lesser offensiveness or dangerousness of violations;

The stability of the financial markets is considered at risk when the sanctioning measure refers to a supervised entity of systemic importance and, by the nature of the violation committed and/or amount of the sanction imposed, is likely, if published, to undermine confidence in the financial system, according to the assessments conducted by the Coordination of Supervision, based on the overall information in its possession and in particular the situation, current and prospective, of the financial system itself at the time of publication;

An ongoing criminal investigation is deemed to be at risk in all cases where:

  • the devolution to the criminal court of the cognition concerning the administrative offence due to objective connection with crimes has been ordered, pursuant to the Delegated Decree implementing Article 32 of Law No. 68 of June 28, 1989;

  • to the Coordination of Supervision has been sent, also pursuant to Article 104 paragraph 3 of Law No. 165 of November 17, 2005, as amended, formal and documented notice of an ongoing criminal investigation concerning the same material conduct as in the administrative sanction proceedings;

It is considered that the damage that can be caused by the publication, to the natural or legal persons involved, is disproportionate and determinable, as by law, in all cases in which the same persons involved preliminarily prove, in counter-deductions to the act of contestation and adducing certain and determined elements:

  • significant and further damage than mere reputational damage, which is instead among the effects pursued by the reform with a view to strengthening the dissuasiveness of sanctioning measures;

  • the direct causal link between the aforementioned damages and the publication of the sanctioning measure, should it be adopted as a result of the ongoing administrative procedure.

With regard to the data subject to publication, the disclosure covers:

  • the date of the sanctioning measure;

  • the name of the supervised person/surname and first name of the sanctioned person;

  • the function held (for individuals);

  • the name of the supervised person jointly and severally liable, if any;

  • the amount of the administrative sanction;

  • the date or reference period of the violation;

  • the nature of the violation and regulatory references;

  • the filing of administrative appeal, if any, and its outcome, for proceedings instituted on the basis of the new so-called post Basel III regime.

The publication of the sanction is communicated to the recipient in the act of imposition, at the end of the sanction proceedings.

 

Modalities of publication

The publication methods provided for by the Law consist of the publication of the measure both on BCSM's website and in the Official Bulletin, Administrative Part and Advertisements, for the duration of five years.

Information about published sanctions will remain on the Central Bank's website until the lapse of five years from the date of publication.