New developments in Golden Power. The expected supplements and clarifications of the subjective and objective scope of the discipline

On 30 December 2020, two implementing decrees were published in the Official Gazette with the aim of expanding and defining the scope of application of the Golden Power legislation: i) Prime Ministerial Decree No. 179 of 18 December 2020 [1] and ii) Prime Ministerial Decree No. 180 of 23 December 2020 [2]. Furthermore, by the law dated 18 December 2020 [3] the obligation to notify certain transactions between persons based in the European Union was extended for a further six months, until 30 June 2021.

1. The new decrees issued by the Government

The new decrees extend and clarify the provisions set forth in Decree-Law 21 of 15 March 2012 (the “Golden Power Decree”), which governs, together with the secondary implementing legislation, the issue of special powers exercisable by the Government with regard to strategic assets in certain sectors of the economy.

The legislation on investment control requires notification of the President of the Council of Ministers of the acquisition of equity interests in companies holding strategic assets, as well as notification of certain acts and transactions, essentially along two lines: i) the protection of the essential interests of defence and national security (Article 1) and ii) the protection of public interest with regard to the security and functioning of networks and systems and the continuity of supply (Article 2, with particular reference to energy, transport and communications).

The Golden Power Decree has gradually been extended and its application has also been broadened to 5G networks and technologies [4] as well as to assets and relationships of strategic importance in the sectors referred to in Article 4, paragraph 1 of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 [5] (critical infrastructures and technologies and other sectors identified as significant such as health, finance, credit and insurance). [6]

Decrees No. 179 and No. 180, which will enter into force on 14 January 2021, intervene in two respects.

Firstly, with the adoption of Prime Ministerial Decree No. 179 of 18 December 2020, the assets and relationships of strategic importance to national interest are identified in the sectors indicated in Article 4, paragraph 1, of Regulation (EU) No. 2019/452

https://www.gazzettaufficiale.it/eli/id/2020/12/30/20G00199/sg

Secondly, with Prime Ministerial Decree No. 180 of 23 December 2020, the Government has identified assets of strategic importance in the energy, transport and communication sectors referred to in Article 2 of the Golden Power Decree, extending the scope of the previous secondary implementing regulations [7].

https://www.gazzettaufficiale.it/eli/id/2020/12/30/20G00200/sg

2. Goods and relationships of national interest in the sectors referred to in Article 4(1) of Regulation (EU) 2019/452

Accordingly, Prime Ministerial Decree No 179 of 18 December 2020 identifies goods and relationships of strategic importance to the national interest in the sectors referred to in Article 4(1) of Regulation (EU) No 2019/452, namely: a) in the energy sector; b) in the water sector; c) in the health sector; d) in the sector for the processing, storage, access and control of sensitive data and information; e) in the electoral infrastructure sector; f) in the finance sector, including the credit and insurance sectors and financial market infrastructures; g) in the fields of artificial intelligence, robotics, semiconductors, cyber-security, nanotechnology and biotechnology; h) in the sectors of infrastructure and non-military aerospace technologies; i) in the procurement of critical inputs and in the agri-food sector; l) in dual-use products, i.e. usable for both civil and military purposes; m) in the field of media freedom and pluralism.

Pending the introduction of today’s Prime Ministerial Decree, Decree Law No. 23/2020 “the Liquidity Decree”) imposed notification for the purchase of equity interests in companies operating generically in the sectors in question, without further specifications, resulting in legal uncertainty for operators, as well as a large number of notifications from companies, often for purely precautionary purposes.

Of relevance, in addition to the list of significant assets in the above-mentioned sectors referred to in the 17 Articles of the Prime Ministerial Decree 179/2020, is the defining force established in Article 2, proposing definitions of “critical infrastructure”, “critical technologies” “critical information” and “economic activity of strategic importance”, all of which refer, albeit with some lexical nuances, to the concepts of maintaining the vital functions of society, the health, safety and economic and social well-being of the population and to technological progress.  In addition, for the economic activities carried out in certain fields, namely in the sectors of energy, water, health, finance, credit and insurance, quantitative turnover thresholds (300 million per annum of net annual turnover) and employees (an average annual staff payroll of two hundred and fifty units) are established, below which notification is not required. For economic assets involving dual-use products (i.e. products and technologies usable for both civil and military purposes) only the turnover threshold and not the payroll threshold applies [8].

These developments have a clear deflationary goal, with the aim of reducing the number of transactions likely to fall under the Government’s lens. In this regard, it suffices to note that, while in 2019 the Government recorded 83 notifications [9], from January to October 2020 alone, depending on the regulatory changes as they occurred, more than 200 notifications have been recorded.

3. Strategically important assets in energy, transport and communications 

Prime Ministerial Decree No. 180/2020 also concerns the energy, transport and communication sectors, pursuant to Article 2 of the Golden Power Decree. The changes compared to the previous regulation are mainly apparent in the transport sector, where the Government has added road and motorway networks of national interest, national space ports and major national interport platforms as strategic assets.

In particular, within the national energy system, the Prime Ministerial Decree identifies assets of strategic importance as energy networks of national interest, and in the related contractual relationships. These assets include: (a) the national natural gas supply network and related compression stations and dispatching centres, as well as gas storage plants; b) electricity and gas supply infrastructure from other States, including onshore and offshore LNG regasification plants; c) the national electricity supply grid and related control and dispatching plants; d) the management of core real estate related to the use of the networks and infrastructure referred to in points a), b) and c) above.

As far as transport is concerned, strategic assets are identified as large networks and facilities of national interest, also intended to ensure the main trans-European connections, and in their contractual relations, namely (a) ports of national interest; (b) airports of national interest; (c) national space ports; (d) the national rail network of relevance for trans-European networks; (e) interport platforms of national significance; (f) road and motorway networks of national interest.

Finally, Article 3 identifies strategic assets in the communications sector: i) dedicated networks and public access network to end users in connection with metropolitan networks; ii) service routers and long-distance networks; iii) the facilities used to provide access to end users of services covered by the obligations of universal service and broadband and ultra-fast broadband services, and their contractual relationships; iv) dedicated components, even where the use is not exclusive, for connectivity (voice, data and video), security, control and management relating to telecommunications access networks at fixed locations.

4. Extension of the notification obligation to transactions executed by intra-EU entities and new notification forms

Under the Liquidity Decree, the Government extended the notification obligations, given the exceptional situation caused by the epidemiological emergency under Article 2 of the Golden Power Decree also to the purchase of equity investments in companies holding strategic assets “by foreign entities, including those belonging to the European Union”, until 31 December 2020.

By law dated 18 December 2020 [10], this provision was extended for a further six months, until 30 June 2021.

Therefore, until that date, with regard to the energy, transport and communication sectors and the additional strategic sectors referred to in Article 4 of Regulation 2019/452, transactions carried out with entities resident in the European Union will also continue to be subject to the reporting requirement [11].

It should also be noted that the Government has recently launched new notification forms, which require very detailed information, to be drawn up in both Italian and English.

http://www.goverNo.it/it/dipartimenti/dip-il-coordinamento-amministrativo/dica-att-goldenpower-moduli/9297

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For further information please contact Francesco Mazzocchi and Luca Toffoletti.

[1] Regulation for the identification of goods and relationships of national interest in the sectors referred to in Article 4, paragraph 1, of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019, pursuant to Article 2, paragraph 1-ter, of Decree-Law No 21 of 15 March 2012, converted, with amendments, by Law No. 56 of 11 May 2012”).
[2] Regulation for the identification of assets of strategic importance in the energy, transport and communication sectors, pursuant to Article 2, paragraph 1, of Decree-Law No. 21 of 15 March 2012, converted, with amendments, by Law No. 56 of 11 May 2012.
[3] Conversion into law, with amendments, of Decree-Law 137 of 28 October 2020 [known as the Savings Decree], setting forth further urgent measures on the protection of health, support for workers and companies, justice and safety, related to the epidemiological emergency caused by COVID-19.
[4] Article 1-bis of Decree-Law No. 21 of 2012, introduced by Decree-Law No. 22 of 25 March 2019, concerns the exercise of special powers with regard to electronic broadband telecommunications networks using 5G technology. In particular, a company that enters into, in any capacity, contracts or agreements for the acquisition of goods or services relating to the design, construction, maintenance and management of networks for electronic broadband communication services based on 5G technology, or acquires, in any capacity, technological components instrumental to the said creation or management, when established with parties outside the European Union, must therefore submit a notification pursuant to the Golden Power legislation.
[5]See Decree-Law No. 105 of 21 September 2019, which has further extended the scope outlined in Article 2 of the Golden Power Decree by inserting in paragraph 1-ter the possible compromising of the safety and functioning of the networks and systems and of the continuity of supply including to assets and relationships of strategic importance to the national interest in the sectors identified in Article 4, paragraph 1, of Regulation (EU) No. 2019/452.
[6] Article 15 of Decree-Law No. 23 of 8 April 2020 (the Liquidity Decree) provided that “Until the date of entry into force of the first Decree of the President of the Council of Ministers referred to in Article 2, paragraph 1-ter, of Decree-Law No. 21 of 15 March 2012, converted, with amendments, by Law No. 56 of 11 May 2012,, as replaced by paragraph 1, letter c), number 3), of this Article, without prejudice to the application of Articles 1 and 2 of the aforementioned Decree-Law, as amended by this Article, the notification referred to in paragraph 5 of Article 2 of the same Decree-Law No. 21 of 2012 shall be subject to the purchase for any reason of equity interests in companies holding goods and relationships in the sectors referred to in Article 4, paragraph 1, letters a), b), c), d) and e) of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019, it being understood that the finance sector includes credit and insurance, and the health sector includes the production, import and wholesale distribution of medical, medical-surgical and personal protection devices”.
[7] Set forth in Presidential Decree No. 85 of 25 March 2014.
[8] Pursuant to Article 12 of Prime Ministerial Decree 179/2020, “the assets and relationships referred to in Article 1 include economic assets of strategic importance relating to dual-use products indicated in Article 3(1) of Council Regulation (EC) No 428/2009 of 5 May 2009, carried out by companies with a net annual turnover of no less than €300 million”.
[9] See Golden Power 2019 report.
[10] See above Note 3.
[11] And not only those implemented with parties outside the Union. Unlike the sectors referred to in Article 2 of the Golden Power Decree, with regard to 5G technology, significant transactions must only be reported when carried out with parties outside the European Union, while for transactions falling within Article 1 of the Golden Power Decree, the rules provided, ab initio, for notification including of intra-EU transactions.