(Reuters) - A crackdown on tax havens and a money-laundering scandal at its largest bank are threatening the future of the tiny offshore center of San Marino.
Here are five facts about the Most Serene Republic of San Marino:
* Landlocked by Italy, San Marino is the third-smallest independent state in Europe after the Vatican and Monaco. Perched on a hill just 10 km (6.2 miles) from Italy’s Adriatic coast, the city-state of about 31,000 residents covers a territory of 61 square km.
* It was occupied twice in its 1,708-year history, once in 1503 by the wily Cesare Borgia, son of Pope Alexander VI, and by Cardinal Giulio Alberoni in 1739.
* In 1861, U.S. President Abraham Lincoln accepted San Marino’s offer of honorary citizenship in a letter that said:
“Although your dominion is small, your State is nevertheless one of the most honored, in all history.”
* San Marino lays claim to a long history of hospitality. Legend has it a stonemason founded it in 301 A.D. on Mount Titano for a small community of Christians seeking refuge from the emperor Diocletian.
In 1849, Italian hero Giuseppe Garibaldi sought refuge on San Marino when surrounded by enemy armies, and the state says it gave protection to over 100,000 refugees during World War II.
* San Marino’s financial system comprises 12 banks and 55 other financial institutions, including two life insurers and two asset managers. As of April, it managed wealth of about 13.6 billion euros ($19.41 billion).
The financial sector is one of the most important growth drivers for San Marino and accounts for about 20 percent of the government’s tax revenues, but tourism is also a major industry, as is the sale of attractive San Marino postage stamps and coins that are popular with collectors worldwide.
Compiled by Deepa Babington