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Fitch upgrades San Marino’s rating to BB+

15
Jan, 2025
  1. “Authority”: the Civil Aviation and Maritime Navigation Authority;
  2. “Register”: the Naval Register of the Republic of San Marino;
  3. “Pleasure Craft”: vessels used for recreational navigation, even when used for commercial purposes as the subject of rental or leasing contracts.

    This definition includes:
    1. “Pleasure Craft”: rowing vessels and vessels with a hull length of less than 10 metres;
    2. “Pleasure Boat”: vessel with a hull length of between 10 and 24 metres;
    3. “Pleasure Ship”: vessel with a hull length greater than to 24 meters.
      “Commercial Unit”: any other unit other than Pleasure Craft and used for the transport of people or goods, or other commercial activities;
  4. “Vessel”: Pleasure Craft and Commercial Craft without distinction;
  5. “Representative”: an agent, a natural person resident or a company with registered office in the Republic of San Marino appointed pursuant to Article 32 by the owner and the shipowner, if different from the owner, of the Vessel registered in the Register and responsible for communications and notifications with the Authority. In the cases referred to in Articles 26 and 64 of this law, the Representative is appointed by the lessee or user under a lease or financial lease agreement.

Powers and functions of the Authority

The Authority has administrative and technical management functions in matters of maritime navigation on Ships flying the flag of San Marino. In particular, it carries out the following functions:

a) issues regulations, directives and circulars;
b) prepares regulatory projects on the subject;
c) issues qualifications and certifications in maritime matters;
d) delegates third-party bodies to operate on behalf of the Authority in carrying out technical activities in the maritime sector;
e) monitors the performance of maritime activities;
f) maintains relations with international technical bodies in the sector;
g) monitors and determines, also through delegated bodies or subjects, the state of navigability of ships flying the San Marino flag;
h) ensures the maintenance of the Naval Register;
i) issues, suspends, modifies or revokes any certificate, licence, permit, authorisation or any other provision issued on the basis of this law or on the basis of the Authority’s regulations in the event of their violation or where required in order to guarantee maritime safety;
l) carries out on-board inspections as well as investigations into accidents involving ships flying the flag of San Marino, also through delegated bodies or subjects;
m) takes, in collaboration with the authorities of the State in whose waters they are located, the appropriate measures for the rescue of ships registered in the Register of San Marino or for the removal or recovery of wrecks of the same;
n) imposes the administrative sanctions within its jurisdiction;
o) annually presents a report to the competent council commission on the progress of the maritime sector;
p) establishes the tariffs for its services.

The Authority is legally represented by its General Director. In carrying out their functions, the General Manager and the employees of the Authority assume the qualification of public officials.
In carrying out some functions relating to the management and promotion of the Register, the Authority may be assisted by third parties following the stipulation of specific agreements.

Naval Register

The Naval Register kept by the Authority includes the following sections:

a) Commercial Section containing the registrations, transcriptions, entries and annotations relating to Commercial Units;
b) Recreational Section containing the registrations, transcriptions, entries and annotations relating to Recreational Units.

Qualification of technical bodies

In carrying out its activities and functions, the Authority may avail itself, following specific qualification, of technical bodies with proven experience in the sector.
The requirements and the procedures for the qualification of technical bodies are specified by means of a specific regulation issued by the Authority.

Language of documentation

All documentation requested by the Authority in carrying out its functions may be presented in Italian or English. This rule also applies to any other type of communication addressed to the Authority.
The Authority may use the English language in carrying out all its functions where required or deemed more suitable.

Applicableity of international conventions

The international conventions ratified and implemented by the Republic of San Marino apply to the relationships governed by them even in the absence of the elements of internationality or connections with a contracting State required by the conventions themselves.

Law governing acts performed on board ships

In the absence of closer connections with another legal system or a choice of applicable law agreed by the parties after the event, the acts and facts that occur on board a ship registered in the Register are governed by the law of the Republic of San Marino.

Law applicable to ownership, real rights and real rights of guarantee

Ownership, real rights and rights of guarantee on ships are governed by the law of the State in whose register the ship is registered.
Special privileges on ships are governed by the International Convention for the Unification of Certain Rules Relating to Naval Liens and Mortgages concluded in Brussels on 10 April 1926 and any subsequent amendments.

Law applicable to the powers and duties of the master

The powers and duties of the master of the ship as head of the maritime expedition are governed by the law of the State in whose register the ship is registered.

Law applicable to the liability of the shipowner

The liability of the shipowner is governed by the law of the State in which the shipowner has his habitual residence, if a natural person, or his principal place of business, if a legal person.
The liability of the shipowner for collisions of ships is governed by the Brussels Convention of 23 September 1910 for the Unification of Certain Rules Relating to Collisions between Ships and the London Convention of 20 October 1972 on the International Regulations for Preventing Collisions at Sea (COLREG) and any subsequent amendments.
The limitation of the shipowner’s liability is governed by the London Convention of 19 November 1976 on Limitation of Liability for Maritime Claims (LLMC), as amended by the Protocol of 2 May 1996 and any subsequent amendments.
The liability of the shipowner for oil pollution is governed by the Brussels Convention of 29 November 1969 on Civil Liability for Oil Pollution Damage (CLC), as amended by the Protocols of 29 November 1976 and 27 November 1992 and any subsequent amendments.

Law applicable to employment contracts

The employment contracts of the master and crew are governed by the law agreed upon by the parties or, in the absence of such designation, by the law of the State in which the shipowner has his habitual residence, if a natural person, or his principal place of business, if a legal person, without prejudice in any case to compliance with the Conventions of the International Labour Organization (ILO) ratified and implemented by the Republic of San Marino.

Law applicable to contracts relating to the commercial use of ships

The Brussels Convention of 25 August 1924, as amended by the Protocols of 23 February 1968 and 21 December 1979 and any subsequent amendments, applies to the contract for the carriage of goods by sea.
The Athens Convention of 13 December 1974, as amended by the Protocols of 19 November 1976, 29 March 1990 and 1 November 2002 and any subsequent amendments, applies to the contract for the carriage of passengers by sea.
For anything not provided for by the international conventions referred to in the previous paragraphs of this article, lease, rental, transport, towing and other contracts relating to the commercial use of the vessel are governed by the law agreed upon by the parties or, in the absence of such designation, by the law of the State in which the shipowner has his habitual residence, if a natural person, or his principal place of business, if a legal person.
Financial leasing contracts for vessels and financing contracts for the purchase or construction of vessels are governed by the law agreed upon by the parties or, in the absence of such designation, by the law of the State in which the financing entity has his habitual residence, if a natural person, or his principal place of business, if a legal person.
The methods of registration of vessels under construction will be defined by a specific Implementing Regulation, prepared by the Authority itself.

Salvage and general average

Salvage carried out by or in favour of vessels registered in the Register is governed by the London Convention

Fitch has upgraded the rating of the Republic of San Marino from BB to BB+, confirming the progress achieved in the economic and financial fields.

Government objectives

The administration aims to harmonize the assessments of the rating agencies, with the aim of presenting a more faithful representation of the economic situation of the country, strengthening the confidence of international investors.

Economic progress and reforms

  • Reduction of public debt through targeted interventions.
  • Consolidation of the state budget with responsible fiscal policies.
  • Strengthening the banking sector through the management of impaired loans.

International recognitions

The Government’s interventions have received recognition from the International Monetary Fund and the rating agencies S&P and DBRS Morning Star, which have assigned the BBB- rating, equivalent to Investment Grade. Fitch, however, while improving its own assessment, maintains the rating at a lower level than other agencies.

Criticisms and prospects

The Government highlights the need to overcome the penalties linked to the World Bank’s WBGI data, which are deemed unrepresentative. San Marino continues to demonstrate economic management capacity, supported by the Association Agreement with the European Union, which underlines the commitment to further regulatory reforms.


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