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COVID-19: Pressure Points: FDI Regime during the crisis: Important novelties under the Liquidity Decree (Italy)

15 April 2020 | Italy
Legal Briefings


Foreign investments in certain Italian strategic sectors are subject to the regime set out by Law Decree No. 21 of 15 March 2012, as subsequently amended in 2017 and 2019 (the "Golden Power Decree"). In particular, according to the Golden Power Decree, certain transactions and corporate resolutions in the defence and national security sectors, as well as on certain networks, plants, assets and relationships deemed strategic for the national interest in other sectors (i.e. communications, energy, transport and high-tech sectors) (collectively, the "Strategic Sectors") must be notified to the Italian Government. Accordingly the Italian Government can request information, impose specific rules or conditions or, under certain circumstances (the "Exceptional Circumstances"), exercise a veto in relation to the relevant transaction or corporate resolution.

On 8 April 2020 the Italian Government issued Law Decree No. 23 (the "Liquidity Decree") setting out a number of provisions in order to face the impact on the Italian economy of the COVID-19 crisis, including stronger powers of intervention in respect of foreign investments in strategic sectors1.

Amendments to the previous regime include a broader scope of application of foreign direct investment rules in terms of:

  1. sectors;
  2. nationality of buyers; and
  3. transactions.

In particular, the Liquidity Decree sets out:

  1. the extension of the Government powers in relation to acquisitions of controlling interests by non-EU persons in all the sectors listed under Article 4 letter from a) to e) of Regulation (EU) 2019/452 (the "FDI Regulation") which includes, inter alia: financial services, infrastructures and critical technology, energy, transport, water and health, food security, access to sensitive information and personal data, artificial intelligence, robotics, semiconductors, cybersecurity, nanotechnology and biotechnology (collectively, the "New Strategic Sectors");
  2. the extension to EU persons of the duty to notify to the Government any acquisition of a controlling interest in any company holding assets in a Strategic Sector or in the New Strategic Sector;
  3. the introduction of a duty to notify to the Government also acquisitions, by any non-EU person, of interests representing more than 10% of the shareholding in any companies owing assets in a Strategic Sector or in a New Strategic Sector if the acquisition value exceeds Euro 1 million. As a consequence, now the foreign direct investments regime also apply to SMEs. The Government must be notified also for acquisitions leading to a surpassing of each of thresholds of 15%, 20%, 25% and 50%;
  4. the extension of the duty of notification to Consob (the Italian Financial Markets Authority) to all companies having a broad shareholder base, regardless of the relevant marked capitalisation, in case of 'major holdings' acquisition. In addition, Consob may introduce a duty of notification also in case of acquisition of an interest equal or above the current 5% threshold.

    With respect to point (a) above, the Liquidity Decree leads to an extension of the Golden Power Decree regime even in respect of Strategic Sectors. In particular, with reference to the energy sector, under Ministerial Decree No. 85 of 25 March 2014, the Government had to be notified and it had the power to intervene only in case of transactions involving any of the following assets:

    - national natural gas transmission network, related compression stations and dispatching centres, as well as gas storage facilities;
    - infrastructures for the supply of electricity and natural gas from other States, including onshore and offshore LNG regasification facilities;
    - national electricity transmission grid and relevant control and dispatching facilities; or
    - management activities related to the use of the networks and infrastructures mentioned above.

    By virtue of the general reference to Article 4(1), letters a) and c) of the FDI Regulation, the Liquidity Decree extends now its scope of application of the foreign direct investments regime to all energy infrastructures, real estate investments essential for the use of these infrastructures and energy supply (e.g. generation, wholesale supply, etc.). As a consequence, the Italian Government’s intervention in the energy sector has been significantly extended to all stages of the supply chain;
  5. In case of breach of the obligation of prior notification, the Government can now exercise its powers under the Golden Power Decree ex officio.

The rules mentioned under b) and c) above applies until 31 December 2020 or, later, in respect of transactions for which the obligation to notify will have arisen before 31 December 2020. The extension under a) above applies on a permanent basis, but a subsequent Ministerial Decree (i) setting out the assets and contractual relationships included within the New Strategic Sectors, and (ii) implementing FDI Regulation, is expected. In sum, the Liquidity Decree has materially broadened the Governmental intervention in foreign investments. Investors should carefully evaluate the implications relating to the transfer of assets or shares of companies operating in Strategic Sectors and New Strategic Sectors in order to efficiently plan the timing and structure of any potential transaction.


1. These measures follow the European Commission Guidelines of 25 March 2020 instructing Member States how apply national rules on FDI screening in line with, but ahead of, the EU's FDI Regulation coming in full force and effect in October 2020.

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