The Republic of San Marino is an enclaved microstate within central Italy, near Rimini. It occupies 61 square kilometres, and is the third smallest state in Europe after the Holy See and the Principality of Monaco. The population of San Marino is 33,419 (2018). San Marino's landscape is dominated by the UNESCO World Heritage-listed Mount Titano, which peaks at 749 metres. The official language of San Marino is Italian and the majority of the population is ethnically Sammarinese, with smaller numbers of Italians also present.
Australia and San Marino established formal diplomatic relations in 1995, with accreditation through the Australian Embassy in Rome. San Marino has had an Honorary Consul-General in Australia, based in Victoria, since 2007. In recognition of the growing relationship between Australia and San Marino, a bilateral Tax Information Exchange Agreement was signed in 2010.
A reciprocal Working Holiday Maker (WHM) visa program between Australia and San Marino took effect on 1 January 2017. The WHM is a cultural exchange program which provides the opportunity for young adults to have an extended holiday in San Marino and Australia, during which they can undertake short-term work and study.
In April 2012, then-Parliamentary Secretary for Foreign Affairs, the Hon Richard Marles MP, visited the Republic, the first such high-level visit from either side. Senator the Hon Concetta Fierravanti-Wells, then-Minister for International Development and the Pacific, visited San Marino in January 2017 to discuss opportunities for enhancing bilateral trade and investment and collaboration in international organisations.
Australia's economic relations with San Marino are minimal and official statistics are not recorded.
Archaeological evidence shows the area around San Marino has been inhabited since prehistoric times. San Marino's traditional history begins, however, in 301AD with the establishment of a community of Christians escaping persecution from the Roman Emperor Diocletian. The community was founded by the stonemason Marinus, later given sainthood to become the San Marino after whom the state is named.
San Marino was under temporary occupation by foreign military forces in 1503 and 1739 but avoided occupation by Napoleonic troops in the prolonged series of European wars at the end of the 18th century. During the mid-19th century war of unification, San Marino's provision of asylum to Garibaldi's pro-unification troops enabled it to extract a guarantee of independence from the newly formed Italy.
The Republic has a reputation for hospitality, especially its historic generosity to those seeking protection. During the Second World War, despite having a resident population of just 15,000, San Marino provided shelter and asylum to 100,000 evacuees from Italy.
San Marino claims to be the world's oldest continuous republic, with a constitution that dates back to 1600. Head of State functions are fulfilled by two Captains Regent who have largely ceremonial roles and are selected by the legislature of the Republic, the Great and General Council (Consiglio grande e generale). The Captains Regent serve concurrent six-month terms. Their investiture occurs on 1 April and 1 October every year. The Great and General Council of the legislature of the Republic is a unicameral legislature with 60 members. The members of the Council are elected under a system of proportional representation to serve five year terms.
Executive power is vested in the Congress of State, a cabinet group formed from the ranks of the winning coalition in the Great and General Council. The Congress currently comprises seven ministers.
San Marino held a general election on 20 November 2016 but no party or bloc won a majority. A run-off on 4 December 2016 between the two top coalitions, San Marino First and Adesso.sm, resulted in the latter winning 58 per cent of the vote, and the winning alliance receiving 35 seats in the Great and General Council.
San Marino's economy is based predominantly on tourism and banking. It also has small agricultural and manufacturing sectors. Italy is San Marino's main trading partner, accounting for over 80 per cent of exports. Although not a member of the European Union, San Marino uses the Euro as its national currency under a special agreement with the Council of the European Union.
In September 2009, the OECD removed San Marino from its list of tax havens in recognition of the efforts San Marino had made towards harmonising its fiscal laws with the EU and international standards. In 2010, San Marino signed Tax Information Exchange Agreements with most major countries, including Australia. In February 2014, Italy removed San Marino from its blacklist of tax havens following the signing of a double taxation agreement in 2013.
The global economic downturn (including weakened demand from Italy) and the restructuring of San Marino's banking sector had a negative effect on the country's economy, which contracted every year from 2008 — 2015. The economy rebounded in 2016, but there were some signs of slowing momentum amid deepened financial sector uncertainties triggered by a sizable loss at the largest bank and a closure of a small bank in 2017. Banking sector legacy issues continue to pose considerable challenges.