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Update | Italian Golden Power regime – Extension of the term for the Italian Government to exercise the special powers...

With our article dated January 12, 2021, we provided a brief overview of the legal framework relating to the Golden power regime and we analyzed the 2021 new provisions on special powers and measures introduced by the Italian Government aimed at strengthening the monitoring of foreign investments in Italian companies as well as ensuring transparency in the capital market (full article at the following link, including measures applying to transactions within the European Union.

In 2021, the Covid-19 emergency kept affecting the Italian market (though the consequences of the pandemic were less disruptive than in 2020 and Italy is now showing a steady recovery).

In light of the above, the Italian legislator, with Law Decree dated December 30, 2021 no. 228, deemed necessary to further extend the term for the exercise of the “strengthened” Golden power regime by the Italian Government and the related notification obligations (provided for in article 4 bis, par. 3 bis and 3 quarter, of Law Decree 105/2019) up to December 31, 2022.

As already indicated in our previous article, the extension of the notification obligation relates in particular to sectors identified by article 4, paragraph 1, of Regulation (EU) 2019/452 (a) critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure; (b) critical technologies and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies; (c) supply of critical inputs, including energy or raw materials, as well as food security; (d) access to sensitive information, including personal data, or the ability to control such information; or (e) the freedom and pluralism of the media. In addition, it should be noted that the provision relates also credit and insurance industries.

The so called “golden power” as extended by the law decree under scrutiny can be exercised in two main areas (as better detailed and identified by DPCM 179/2021):

  • (i) the resolutions or transactions, approved by an entity holding assets and business relationships strategic interest in the areas indicated in the aforementioned areas, that result in a change in the ownership, control or availability of said assets or a change in their use (article 4 bis, paragraph 3 bis, letter a), of Law Decree 105/2019);
  • (ii) in relation to the assets and business relations described in Prime Ministerial Decree 180/2020 (energy, transportation, communications) and the assets and business relations indicated in point (i) above:
    1. the acquisition of participations, for any reason, by foreign entities, including those belonging to the European Union, “of such importance as to determine the permanent establishment of the purchaser by virtue of the acquisition of control of the company whose shareholding is the object of the purchase, pursuant to article 2359 of the Italian Civil Code and the Consolidated Act [Testo Unico] referred to in Legislative Decree no. 58 of 24 February 1998”; as well as
    2. the acquisition of participations by foreign entities not belonging to the European Union, “which grant a share of the voting rights or of the share capital of at least 10%, taking into account the shares or quotas already directly or indirectly held, when the total value of the investment is equal to or greater than one million euros”; and
    3. the acquisitions which determine “the exceeding of the thresholds of 15%, 20%, 25% and 50% of the share capital”,

(article 4 bis, paragraph 3 bis, letter b), of Law Decree 105/2019).

Finally, pursuant to article 4 bis, paragraph 3 quarter, of Law Decree 105/2019, the aforementioned provisions and scenarios whose term has just been extended to December 31, 2022 are the ones applicable to “resolutions, activities or transactions, as well as acquisitions of equity investments […] whose notification obligation arose during the abovementioned period, even if the notification was made afterwards or was omitted […]”.

In conclusion, with Law Decree 228/2021 the Italian Government once again intended to safeguard the national interest during the Covid-19 emergency by strengthening the monitoring of foreign investments in Italian companies and, therefore, it deferred the term for the exercise of the Golden power by the Italian Government and the related notification obligations companies shall abide until December 31, 2022.

We finally remind that, regardless of the extensions described in this article, the golden power regime in Italy applies also to the defense sector, 5G technology, energy, transportation and communications sectors.


Photo credits: Simone Ramella, shared under the Creative Commons 2.0 license.

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