Commissioner Maroš Šefčovič has described the Association Agreement with Andorra and San Marino as potentially the EU’s most comprehensive arrangement with any third country. There is broad support for the Association Agreement across the Commission, Council and Parliament. Two cases—one dating back to 2015, one erupting last October—raise questions that those anxious to press ahead seem oddly determined to ignore, writes Dick Roche, former Irish minister for European affairs.
The Banca di San Marino case
In October 2025, funds deposited in an account at Banca di San Marino were seized by the Central Bank of San Marino (BCSM). The funds had been transferred to fund a bid by Bulgaria’s Starcom Holding AD to acquire a 51% stake in Banca di San Marino from Ente Cassa di Faetano (ECF)
The ECF board unanimously approved Starcom’s offer, and shareholders later endorsed it. To manage the acquisition, Starcom created San Marino Group (SMG). As a gesture of goodwill SMG lodged the funds in BSM instead of using an escrow account.
On 15 May 2025, ECF and SMG signed a sale and purchase agreement. Formal approval for the share transfer was sought from the Central Bank of San Marino (BCEM) two weeks later. ECF was paid a ‘confirmatory deposit’ of €1.425m, and €13.575 million was deposited in the SMG account in BSM.
Events took a dramatic turn on 15 October 2025 when Judges Battaglino and Santoni -following a contact from San Marino’s Financial Intelligence Agency (FIA) – launched an investigation into the BSM sale. Their investigations focused on Assen Christov the majority shareholder in Starcom, an ECF board member Andrea Delvecchio, and his wife, Marina Manduchi. Delvecchio and his wife were detained, released and then detained again.
While the judicial investigation was ongoing the Central Bank of San Marino (BCEM) rejected SMG’s application to acquire BSM shares.
With the takeover ended, SMG decided to withdraw its funds from the BSM account. Those efforts were blocked. On 29th October, the FIA suspended all transactions on the account. The FIA intervened following a tip-off from Banca di San Marino that multiple transfer applications– made in accordance with the bank’s own rules- were “suspicious”. In the following days the Central Bank of San Marino moved all the funds out of the SMG account.
Notably, neither the Central Bank nor FIA made any effort to freeze or recover the €1.425 million paid to ECF – money that had come through the same sources as the seized funds.
On 7th November the FIA director Nicola Muccioli —who simultaneously chairs MONEVAL, the Council of Europe’s anti-money laundering committee – submitted a report to Judges Battaglino and Santoni.
Notwithstanding the significant positions held by Mr Muccioli, his report is extraordinarily lacking in balance or objectivity and is riddled with inaccuracies. Much of the data used is unverified. Assertions made at several key points are demonstrably untrue.
One striking example is an assertion that “according to the information available Varengold Bank AG is — owned by companies belonging to the Starcom Group.” Varengold Bank had featured in the debate in San Marino on the BSM sale. Opponents argued Varengold had been penalised for money laundering and terrorist financing: a takeover by Starcom risked “reputational and geopolitical contagion” to San Marino.
The allegation that Starcom owned Varengold Bank is untrue, something Muccioli could have easily established. Not only did Starcom not own Varengold but the bank was not involved in any capacity – financial, operational, consultative, supervisory or otherwise – in Starcom’s efforts to acquire a stake in BSM. Why the director of San Marino’s FIA and chair of the Council of Europe’s MONEYVAL chose to deal with Varengold as he did one can only speculate.
Using fascist era law to silence critics
The Sammarinese authorities have gone to remarkable lengths to ‘kill’ any discussion of the BSM case. Media analysis of the case has triggered hysterical reactions. In February the head of San Marino’s Courts, Giovanni Canzio. Mr Canzio labelled debate on the BSM case as an “attack on the integrity and freedom of the state.” The intervention was not merely rhetorical. Judges Santoni and Battaglino using a section of the San Marino Criminal Code copied from Fascist-era Italian law, extended their cases against Andrea Delvecchio, Marina Manducci and Assen Christov. Delvecchio and Manducci were taken back into preventative custody. An appeal heard by another judge released the couple criticised, dismissed the additional charges and commented critically about the use of part of the criminal code “created during the Fascist era.”
The BSM case raises a series of questions about the wisdom of progressing with Association Agreement with San Marino. A case going back to 2015 raises questions about an Agreement with Andorra.
The Banca Privada d’Andorra (BPA) case
In March 2015 the U.S. Treasury’s FinCEN designated Banca Privada d’Andorra (BPA) as a primary money laundering concern under Section 311 of the PATRIOT Act. FinCEN alleged that BPA facilitated money laundering activities for Russian, Chinese and Venezuelan nationals as well as members of the Mexican Sinaloa cartel.
BPA had no warning that it was under scrutiny, was given no opportunity to answer FinCEN’s allegations or to see its evidence. Andorra’s government reacted swiftly – it seized the bank outright.
BPA shareholders filed a lawsuit against the U.S. Treasury, claiming its actions were unjustified and unconstitutional. While the litigation was in progress FinCEN withdrew its notice, concluding that Andorra’s dissolution of the bank meant it no longer posed any threat.
It subsequently emerged that the material prompting FinCEN’s investigation was supplied to the US by Spanish authorities as part of “Operation Catalonia,” the political campaign targeting prominent figures in the Catalan independence movement. Spanish authorities had pressured BPA into handing over private financial data on former Catalan president Jordi Pujol. The destruction of BPA arose from murky politics rather than from banking shortcomings.
Between 2017 and 2019 multiple court cases in the Spanish courts -where BPA had a subsidiary in Madrid—against BPA and its directors have been dismissed. The bank and its directors were found not guilty on charges including money laundering. While this was happening in Spain, Andorran prosecutors pressed on regardless, producing lengthy sentences that the ‘evidence’ struggles to support. Repeated requests by the defendants to the government to disclose key evidence about the events of 2015 have been denied.
BPA shareholders have argued that Andorra’s lack of due process and failure to investigate any other banks suggests that the Andorran government used BPA as a scapegoat to protect more politically connected banks. At the time of its demise BPA was the only Andorran bank not controlled by Andorra’s political elite. Whether that is the case or not, BPA, its shareholders and former employees have been subjected to rough justice that does not sit comfortably with EU rule of law ideals.
The case has resurfaced uncomfortably recently. In October 2024, Senator Bill Hagerty questioned the nominated U.S. Ambassador to Spain and Andorra about both countries’ roles in the affair. The Senator’s questions have only recently become public. With U.S.-Spain relations already strained, allegations that Spain exploited an American enforcement mechanism for domestic political purposes — and that Andorra facilitated it — could yet become a transatlantic irritant.
The inconvenient questions
Taken together, these cases point to a shared pattern: financial and legal mechanisms deployed selectively, due process bent under political pressure, and inconvenient scrutiny suppressed. In San Marino, funds that met all EU regulatory standards were seized without proof of wrongdoing; critics were threatened with prosecution under fascist-era law. In Andorra, a bank was expropriated on the basis of intelligence constructed to serve political purpose, individuals were prosecuted despite mounting exculpatory evidence, while politically connected institutions avoided scrutiny.
Commissioner Šefčovič is right that the Association Agreement is ambitious. That is precisely why the rule of law conditions attached to it must be more than a formality and why ‘Brussels’ should be digging more deeply into the BSM and BPA cases than it has done to date.
Dick Roche is former Irish minister for European affairs.
