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New amendments to the Foreign Direct Investment (“FDI”) legislation in Italy

  • Italy
  • Competition, EU and Trade - Foreign investment regimes

19-01-2021

Following the COVID-19 outbreak in Italy back on 8 April 2020, the Italian FDI regime embodied in Law Decree 21/2012 has been widely extended in its scope, in particular with Law Decree no. 23/2020 (Art. 15 et seq.).

Indeed, Article 15 has extended, among other things, the notification obligations for acquisitions by non-EU companies of undertakings with assets and relationships in the ‘sectors’ listed in Art. 4, para 1 of Reg. (EU) 452/2019. This provision was applicable until the approval of a specific implementing decree that identified the strategic assets in the sectors listed in the abovementioned Art. 4.

In addition, the aforementioned Article 15 has also introduced a transitional regime, applicable until 30 June 2021 (as recently extended back on 18 December), which imposes among other things:

  • the requirement to file before the Italian Presidency of the Council of Ministers a notification of the transfer of assets of Italian companies active in the "sectors" referred to in Art. 4, para 1 of the Reg. (EU) 2019/452, “as well as” the transfers of assets identified following the approval of the aforementioned implementing decree;
  • the notification of transactions entailing the acquisition of control, also by EU companies, over Italian targets that hold assets in the "sectors" mentioned in Art. 4 of the EU Regulation or those identified following the approval of the aforementioned implementing decree; and finally
  • the notification of transactions entailing the acquisition of control by non-EU companies of shares up to 10% and when the total value of the investment is up to or greater than €1M, and then the acquisition of shares up to 15%, 20%, 25% and 50%.

That noted, back on 30 December 2020, the implementing decree mentioned in Art. 15 of Law decree 23/2020 (namely, Decree of the President of the Council of Ministers no. 179/2020) has finally been adopted. Accordingly, the government has identified the truly strategic assets in the sectors indicated in Art. 4, Reg. (EU) 452/2019. This has impacted, on the one hand, the application of the transitional legislation approved following the COVID-19 outbreak and applicable, as said, until 30 June 2021, and on the other hand it has ensured a clarification on the objective scope of the application of the Italian FDI legislation.

Lastly, it is worth considering that, in parallel to the publication in the Italian Official Journal of the aforementioned Decree of the President of the Council of Ministers no. 179/2020, the Italian government has also published the new Decree no. 180/2020 which has slightly revised a prior government regulation from 2014 that identified the strategic assets in the transport, energy and communication sectors.

The finalised list of strategic assets in the sectors listed in the EU Reg. 452/2019 (Decree of the President of the Council of Ministers no. 179/2020)

The Decree of the President of the Council of Ministers no. 179/2020 gave rise to the following impact on the application of the Italian FDI legislation:

a) in case of acquisitions of control over Italian targets by non-EU companies, the broad reference to the "sectors" mentioned in Art. 4, Reg. (EU) 452/2019 will no longer apply, but the new Decree no. 179/2020, which as mentioned clarified the assets of national interest in the sectors referred to in Art. 4 of the European regulation, will be in essence the new benchmarking provision

b) until 30 June 2021, in cases involving the transfer of assets to foreign companies also based in the EU, the sales of assets both in the ‘sectors’ mentioned in Art. 4 of the EU Regulation and those identified specifically in Decree 179/2020 shall be served before the Italian Presidency;

c) and finally, again until 30 June 2021, in cases involving acquisitions by a non-EU company of shares up to 10% and in cases where the transaction will have a value up to € 1M, and then for further acquisitions of shares up to 15%, 20%, 25% and 50%, the new Decree 179/2020 will apply

That noted, the new Decree 179/2020 has identified, among other things, the following strategic assets:

  • the critical infrastructures where fuels, nuclear materials or radioactive waste are located, as well as the technologies and infrastructures that carry out the treatment, management and transport of those same fuels, materials and waste
  • the critical technologies used in the management of infrastructures and services for the collection, purification, distribution and wholesale supply of drinking water for human consumption and for irrigation, including the technologies intended to improve the efficiency and sustainability of water networks, water supply and treatment and purification processes
  • digital technologies functional to the provision, even remotely, of health services
  • data collected through digital systems that allow remote reading and remote management of electricity, gas and water meters (“Smart Metering”), technologies relating to constructions and buildings equipped with advanced functions and interconnected systems for monitoring and managing plants and consumption (Smart Building), digital technologies for the improvement of comfort and safety in the home (Smart Home), technologies in the field of the distribution of services on demand for computing (server), archiving (database) and analysis (software), configurable and available remotely (Cloud Computing) to the extent the data collected and processed refers to at least three hundred thousand natural persons or entities
  • digital technologies relating to payment, electronic money and money transfer systems and services
  • blockchain technologies applicable to banking and financial services
  • technologies applied in industrial automation
  • critical technologies for artificial intelligence, as well as for semiconductors, microprocessors and computational systems, microelectronics, sensors and actuators
  • activities of a national nature and of strategic importance carried out by the providers of audio-visual or radio media services, by the providers of conditional access services, by the undertakings exercising the broadcasting activity, by the press agencies, by the publishers of daily newspapers, periodicals or magazines, for which it is a requirement to be registered at the Register of communication operators held by the Italian Communication Authority
  • in the energy, water, health and financial sectors, companies that carry out activities in the aforementioned sectors are considered strategic in themselves, regardless of the assets held, to the extent that their net annual turnover is not less than € 300 million and if their average annual number of employees is not less than two hundred and fifty units

Accordingly, we can conclude that this new regulation has certainly ensured greater clarity on the objective scope of Italian FDI legislation; however, there are some grey areas other than very broad definitions - such as those referring to strategic assets in the field of processing personal data, media, artificial intelligence and in the automation sector - which, on the one hand, suggest that the objective scope will always remain rather broad and which, on the other hand, infer that legal specialist assistance will always be necessary to provide a clearer interpretation of the new regulation and to maintain relations with the Presidency in the pre-notification phase in order to determine mutual agreement as to whether the transaction at stake shall be notified or not.

New strategic assets in the “energy” and “transport” sectors (Decree of the President of the Council of Ministers no. 180/2020)

As for the abovementioned new Decree of the President of the Council of Ministers no. 180/2020, which replaced the previous regulation that had identified in 2014 the assets of strategic importance in the energy, transport and communications sectors, it is worth briefly pointing out the main amendments approved:

  • in Art. 1, let. d), in the energy sector, the addition of "properties" connected to the use of strategic networks and infrastructures - such as the national natural gas transport network, the electricity and gas supply infrastructures from other states and the national electricity transmission network) will be considered strategic
  • in Art. 2, in the transport sector, the following assets of national interest have been added: national spaceports, interports of national importance and road and motorway networks of national interest

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