Economy Lawsuit Against San Marino: €150M Claim and Treaty Breaches

On April 1, 2026, Bulgarian investment firm Starcom Holding AD and its majority shareholder Assen Christov served a notice of dispute on the Republic of San Marino, opening a €150 million arbitration claim under the Bulgaria–San Marino bilateral investment treaty. The claim, filed with the International Centre for Settlement of Investment Disputes (ICSID) through the law firm Pinsent Masons, follows the collapse of Starcom’s attempted purchase of a controlling stake in Banca di San Marino (BSM) and the freezing of roughly €15 million of the investor’s money inside the country.¹²

What Set Off the Claim

The dispute begins with a deal that never closed. On January 28, 2025, Starcom offered €36.75 million for a 51% stake in BSM, one of only four remaining commercial banks in the republic. The seller was Ente Cassa di Faetano (ECF), a church-linked foundation that owned the bank and was carrying debts it could not service. The bank itself needed a €20 million capital injection after a Ponzi scheme run by a former branch manager caused significant client losses.³

The ECF board voted unanimously to accept in February 2025. Shareholders amended the foundation’s articles to allow the sale, and on May 15, 2025, a formal purchase agreement was signed between ECF and San Marino Group S.p.A. (SMG), a special purpose vehicle Starcom created for the transaction. SMG paid a €1.425 million confirmatory deposit and placed the balance in a BSM current account.⁴

Then the deal stopped. On October 15, 2025, San Marino judges opened a criminal investigation into the sale. Nine days later, the Central Bank of San Marino formally rejected the share transfer on anti-money-laundering grounds.⁵ On November 7, 2025, San Marino’s Financial Intelligence Agency (AIF), directed by Nicola Muccioli, issued a report that triggered the freezing of approximately €15 million in SMG funds held at BSM. The AIF cited “suspicious haste” and alleged concealed links to Germany’s Varengold Bank. Starcom’s attempts to withdraw the money were blocked.⁴

Prosecutors then extended charges to Christov himself, obtaining an international arrest warrant and alleging a “parallel plan”: a conspiracy to force the acquisition through by intimidating regulators and judges, using media campaigns, lawsuits against ECF board members, and alleged Masonic and intelligence-service contacts. In February 2026, the San Marino Congress of State constituted itself as a civil party in the criminal case.⁶

The Treaty Breaches Starcom Alleges

The eleven-page notice of dispute was served on San Marino’s Secretary of State for Foreign Affairs Luca Beccari, Central Bank President Catia Tomasetti, and AIF Director Muccioli. It invokes Article 10 of the Bulgaria–San Marino Bilateral Investment Treaty and identifies three categories of alleged breach.¹

Fair and equitable treatment under Article 2. Starcom alleges arbitrary and disproportionate measures, lack of transparency, and administrative intimidation by San Marino’s institutions.
Expropriation under Article 5. The claimants argue that the freezing of their funds and the killing of the deal amounted to expropriation without compensation.
Free transfer of funds under Article 7. They assert that the AIF’s block on withdrawals violated the treaty’s guarantee of free capital movement.

The €150 million figure is described as a minimum. It covers the frozen funds, the deposit and consideration already committed to the transaction, and consequential damages Starcom attributes to the collapse of the acquisition and the reputational and legal costs that followed.²

Where the Criminal Case Now Stands

The arbitration claim is filed against the backdrop of a criminal prosecution that has partly unraveled. On February 27, 2026, Sammarinese Appellate Judge David Brunelli annulled the arrests of ECF board member Andrea Delvecchio and Marina Manduchi, ordered their release, and canceled outstanding arrest warrants tied to the “parallel plan” theory.⁷

Judge Brunelli found that the alleged conspiracy lacked the “grave indicial gravity” needed for coercive measures. He characterized the underlying activities as either not criminal or as “deplorable and reckless intentions, with emphatic tones, exaggerations, and boasts” that never rose above the intention stage. He also noted that several of the original charges relied on provisions of San Marino’s criminal code derived from Fascist-era Italian law.⁸⁴

The ruling did not end the case. Money-laundering charges and allegations of “crimes against the State” against Christov remained pending as of mid-2026, and the international arrest warrant against him was still active.¹

A separate strand concerns Muccioli’s dual role. In addition to running the AIF, he was elected Chairman of the Council of Europe’s MONEYVAL committee for the 2026–2028 term, the body that evaluates national anti-money-laundering frameworks including San Marino’s, which is next due for a full evaluation in 2029. Starcom has initiated legal action against Muccioli in Bulgaria, calling his AIF report “defamatory” and based on “unsubstantiated allegations.” MONEYVAL has said the Chair does not participate in evaluations of their own jurisdiction and that the committee does not intervene in national commercial disputes.⁹

The Six-Month Clock and What Happens Next

The Bulgaria–San Marino treaty requires a six-month window for good-faith negotiations before formal arbitration proceedings can begin. That clock started with the April 1, 2026, notice. If the two sides do not settle, Starcom can move to a full arbitral hearing at ICSID as early as October 2026.¹

The notice of dispute is not the arbitration itself. It is the treaty-mandated trigger that opens the negotiation window and preserves the claimant’s right to escalate. Settlement during this period would end the matter; failure to settle allows Starcom to file a formal request for arbitration under the ICSID Convention, after which a tribunal is constituted and proceedings begin in earnest.

Why Bulgaria’s EU Veto Matters to This Claim

The arbitration does not sit in isolation. San Marino has negotiated an association agreement with the European Union, concluded alongside Andorra’s, that is intended to anchor the microstate’s future regulatory alignment. As of mid-2026, Bulgaria has maintained a “blocking reserve” on ratification at the EU’s Committee of Permanent Representatives (Coreper), making it the only member state to withhold approval.¹⁰

Bulgarian officials have said explicitly that resolving the Starcom dispute is a precondition for lifting the objection. Former Bulgarian Foreign Minister Solomon Passy has formally requested that Bulgarian authorities halt San Marino’s European integration path until the frozen funds are returned, and has suggested that Andorra’s portion of the agreement be “unbundled” and allowed to proceed separately. Italy has opposed any such separation.¹¹

The Cypriot EU presidency, which held the rotating chair through June 30, 2026, scheduled Coreper discussions in early June to try to advance the text. The EU Council has said “swift approval” remains possible despite the impasse.¹⁰ The practical effect is that Starcom’s private commercial dispute carries a diplomatic lever attached: San Marino’s most important foreign-policy objective is on hold until the €15 million question is answered.

1
Bilaterals.org. Starcom Files EUR 150 Million
2
CDR News. San Marino Faces EUR 150 Million ICSID Arbitration
3
EU Alive. Exclusive: San Marino Bank Heist — How €15 Million Vanished After a Done Deal
4
EU Reporter. The Association Agreement With San Marino: Some Awkward Facts That Cannot Be Ignored
5
Central Banking. San Marino Blocks Bank Sale, Looks to Quell Instability
6
EU Alive. The Secrecy Surrounding San Marino Bank Starts to Unravel
7
EU Alive. San Marino Saga Takes Positive Turn: Judge Dismantles Parallel Plan, Opposition Demands Inquiry
8
EU Alive. Bulgarian Investor Publishes Full Judicial Files to Counter Total Secrecy in San Marino Bank Heist
9
Giornale SM. Da EUAlive: Un Potenziale Conflitto di Interessi Emerge nel Fiasco Bancario Starcom-San Marino
10
Alto. Andorra EU Association Coreper Approval May
11
First Online. UE-San Marino: Si Decide Ma Resta l’Altolà della Bulgaria sull’Accordo di Associazione