Italy strengthens its investment screening in areas of strategic importance

12 Jul 2019

By adopting Decree-Law No. 64 of 11 July 2019, Italy significantly amended its FDI screening mechanism laid down in Decree-Law No. 21 of 15 March 2012. It is the second time that the Italian Government extends its powers to review and intervene in acquisitions relating to companies operating in the sectors of defence, national security, communications, energy and transport.

The new Decree Law prolongs the timelines of the screening procedures from 15 days to 45. Furthermore, it expands the investigative powers of the government by allowing inquiries to any third parties. It also enhances cooperation between different public authorities and the information flow between the Bank of Italy, the Italian Supervisory Authority on Financial Markets (CONSOB), the Italian Supervisory Authority on Pension Funds (COVIP), the Italian Insurance Supervisory Authority (IVASS), the Authority for the New Rules of Transport (ART), the Antitrust Authority (AGCM), the Italian Communications Authority (AGCom) and the Italian Regulatory Authority for Electricity Gas and Water (ARERA).

Also, administrative sanctions up to the double value of the transaction are introduced.The Law provides clarifications as to the definition of a "foreign investor". It now covers all entities domiciled outside the European Union, but also EU-companies controlled by non-EU residents and any EU vehicle established to evade the application of the Italian FDI screening legislation.

As this Decree Law was not converted into law by the Parliament, its provisions have lapsed on 10 September 2019.