New Regulation on Italian FDI Regime introduces pre-notification system

On 24 September 2022, a new regulation (Decree of the President of the Council of Ministries no. 133/2022) concerning the FDI regime in Italy (Regulation) entered into force.

Pursuant to the Italian FDI regime, certain transactions in a number of sectors deemed to be of strategic relevance for the national interest must be notified to the Presidency of the Council of Ministries to allow the Government to screen their possible effects. If the Government believes the notified transaction entails a threat of serious harm for the national interests, it may exercise its “golden powers” - the power to veto the transaction or impose conditions for the implementation of the transaction.

The main novelty introduced by the new Regulation is the adoption of a pre-notification system. The system provides that the undertakings may ask to the Presidency of the Council of Ministries for a preliminary decision on the applicability of the FDI regime to the envisaged transactions.

The pre-notification system

Article 7 of the Regulation provides that the undertaking aiming to implement “projects of incorporation, acquisition, resolution, deed or operation” may now submit to the Presidency of the Council of Ministries an informative communication concerning the envisaged transaction (the pre-notification communication), to receive a response from the Presidency stating that:

a. the envisaged transaction does not fall within the scope of the FDI regime so it does not need to be notified;

b. the envisaged transaction is likely to fall within the scope of the FDI regime so notification is required; or

c. the envisaged transaction falls within the scope of the FDI regime but the conditions for the exercise of the “golden powers” are clearly not met.

The Regulation also formally introduces the tool of the “recommendations”. Before the Regulation, the Government’s practice already included “recommendations”, which were sometimes included in the decisions not to exercise “golden powers” adopted in case of particularly complex and delicate transactions, albeit not determining an actual threat of serious harm for the national interests. Article 7 of the Regulation now expressly provides that in cases b) and c) above, at the end of the preliminary assessment on the authorization of the pre-notified transaction, the Presidency of the Council of Ministries may address recommendations to the undertaking.

With the pre-notification communication it is requested to provide all information and documents, in so far as they are available, required for the formal notification.

The Presidency of the Council of Ministers is required to provide its response, resulting in one of the outcomes described above (a, b or c), within 30 days from the pre-notification.

If the Presidency of the Council of Ministries does not adopt a decision within the 30-day period starting from the pre-notification, the undertaking that has pre-notified the transaction needs to proceed with the formal notification within the ordinary terms set for the FDI notification.