San Marino’s judicial time warp: why Brussels must demand real reform before any EU association

The Starcom case exposes systemic failures that risk importing arbitrariness, money-laundering vulnerabilities and outright repression into the heart of the European project, writes Dick Roche.

EUalive’s columnist Dick Roche is a former Irish Minister of State for European Affairs. His columns can be found here.

Few EU citizens – and, alarmingly, too many officials in Brussels – have ever heard of Starcom Holding AD or the extraordinary ordeal of its majority shareholder, Bulgarian investor Assen Christov. Yet this single case lays bare a judicial and regulatory system in the Republic of San Marino that is incompatible with the standards required for participation in the European Union’s Single Market.

San Marino proudly claims it has modernised its laws and courts to meet EU requirements. The Starcom affair proves the claim is hollow. The case exposes systemic failures that risk importing arbitrariness, money-laundering vulnerabilities and outright repression into the heart of the European project. Association without fundamental change is not a technical formality – it is a threat to the rule of law and the integrity of the single market.

A judicial system that abolishes impartiality

In San Marino the roles of judge, prosecutor and investigator are routinely concentrated in the same person. There is no meaningful appellate control. Complaints from the Bulgarian investor are examined by the very judge-investigators who launched the probe and issued the original orders.

Magistrates operate with dual – or triple – capabilities. In the early stages they act as investigating judges, gathering evidence and directing the inquiry. In the BSM/Starcom case, Judges Battaglino and Santoni launched their investigation after a contact from San Marino’s Financial Intelligence Agency (FIA). They then presided over the proceedings against Assen Christov, ECF board member Andrea Delvecchio and his wife Marina Manduchi. The same judges issued the warrants that led to the imprisonment of the Delvecchio couple.

On 7 November the FIA Director, Nicola Muccioli – who also chairs the Council of Europe’s MONEYVAL Committee – submitted a report to these same judges. The document is riddled with bias, multiple inaccuracies, unverified sources and demonstrably untrue assertions. It reads more like a scripted narrative than a professional assessment. Any self-respecting EU court would reject it outright. In San Marino it was apparently accepted without question.

Retaliation dressed up as justice

After a press conference at the Brussels Press Club on 5 February, which highlighted the unlawful withholding of funds, the head of San Marino’s Courts, Giovanni Canzio, made an extraordinary public statement. Judges Santoni and Battaglino promptly formulated new and far more serious charges against the Delvecchios and others for “attacking the territorial integrity and eternal freedom of the Republic of San Marino” and undermining “the freedom of public authorities”.

The charges rested on Article 324 of the San Marino Criminal Code – a provision copied almost verbatim from Article 241 of Mussolini’s 1930 Italian Criminal Code and introduced in San Marino during the fascist era. Its explicit purpose was the persecution of political opponents. Italy has long since reformed the provision. San Marino has not.

The couple were returned to custody. Only in February 2026 did an appeal judge finally annul all warrants and charges, explicitly criticising the use of fascist-era legislation. The damage, however, had already been done.

Blatant violation of the Bulgaria–San Marino Investment Protection Agreement

San Marino is in clear breach of the 2007 bilateral investment treaty with Bulgaria. Instead of conducting a good-faith supervisory assessment, its institutions allowed media insinuations and unfounded suspicions to override hard evidence. By mid-2025 the transaction was terminated without legal basis through refusal of authorisation and a cascade of coercive measures.

The FIA’s assessment cannot be described as objective. Director Muccioli escalated a politically charged narrative rather than checking basic facts with German authorities. Claims that Starcom owned Varengold are baseless. References to a decades-old teenage indiscretion involving a company where Muccioli served as director raise serious questions about his objectivity and the source of his information.

Worse still, BSM officials required Starcom to lodge multiple transfer requests – then reported those same transfers to the FIA as “suspicious.” This has all the hallmarks of a trap. Muccioli’s characterisation of the investor’s legitimate attempts to withdraw funds as a “frenzy” is not analysis; it is narrative construction.

Double standards that defy logic

The authorities apply entirely different rules to money from the identical source. They seized funds lodged by Starcom to an account in Banca di San Marino – which had passed all AML checks—and took no action in respect of funds paid to Ente Cassa di Faetano (ECF) that had come from Starcom through the same banks.

Gross violation of fundamental rights

The entire judicial persecution escalated immediately after – and was openly justified by – the investors’ decision to go public in Brussels. The message could not be clearer: exercise your right to free speech and you will face the full weight of the San Marino state. That is not justice. It is intimidation.

San Marino’s leadership openly contemplates using these draconian, fascist-era laws against EU citizens and EU-based media. The two investigating judges were content to follow that lead.

6. The bigger picture: a risk Europe cannot afford

San Marino insists it has aligned its system with EU standards. The Starcom case demonstrates the opposite with brutal clarity. A country that still deploys Mussolini-era statutes, concentrates judicial power in single individuals, retaliates against critics, and applies selective financial standards cannot be trusted with unfettered access to the EU Single Market.

If an EU member state outside the Commission’s favour behaved this way, the criticism would be thunderous. The relative silence surrounding San Marino raises uncomfortable questions.

The integrity of the single market – and the fight against money laundering – cannot be sacrificed for diplomatic convenience. Bulgaria has rightly refused to drop the case. It is now for Commission to conduct an honest, root-and-branch review of the Banca di San Marino case and what it tells us about its legal and financial architecture of San Marino. The Starcom affair is not an isolated dispute; it is a warning.

Until San Marino demonstrates genuine, verifiable reform – separation of judicial roles, repeal of fascist relics, transparent and non-discriminatory regulation, and respect for fundamental rights – any association agreement should be placed firmly on hold. The European Union cannot afford to import the very governance failures it was created to overcome.

Caption: A San Marino refrigerator magnet [Photo Georgi Gotev]