Marco Cosa has extensive experience in corporate and commercial law, with a focus on extraordinary transactions, day-to-day corporate advisory work, and corporate governance matters. He also regularly advises domestic and international clients on the negotiation of complex commercial agreements and the implementation of strategic projects, particularly in the digital and technology, heavy industry, food and beverage, fashion, and retail sectors.

Francesco Mazzocchi specialises in European Union and Italian competition law, assisting companies in proceedings before the European Commission and the Italian Competition Authority (AGCM). His practice covers, among other areas, state aid, merger control, antitrust litigation, cartels and abuse of dominance, unfair commercial practices, and Italy’s Golden Power regime on foreign direct investment screening.

“The promotion of Marco Cosa and Francesco Mazzocchi recognises two professionals careers built with rigour and dedication within the firm and reflects our commitment to valuing internal talent that contributes every day to our clients’ success and to the growth of ADVANT Nctm. Investing in people and their skills remains a cornerstone of our strategy to deliver high-quality legal services”, commented Paolo Montironi, Senior Partner at ADVANT Nctm.

Following these appointments, the firm’s partnership increases to 86 partners.

• Marie Hindré, Partner at ADVANT Altana
• Markus P. Linnartz, Partner at ADVANT Beiten
• Filippo Federici, Counsel at ADVANT Nctm

The new “EU Inc” proposals announced last month to create one harmonized set of corporate rules for companies operating across the European Union have the potential to be a genuine gamechanger for business success and EU competitiveness. Reducing complexity and costs will make it far easier for ambitious, innovative companies to start up, raise capital and grow so they can scale just as seamlessly within the bloc as they could if they were based elsewhere in the world in countries with lower administrative burdens such as the US or China. Yet, while this move towards greater simplification represents a major step forward, several key issues could still undermine the overall success of this important initiative.

Read the full article here

These instruments are intended to facilitate negotiations between the parties by transferring to the insurer the risk of financial losses inherent in the transaction, thereby pursuing the seller’s interest in achieving a clean exit while protecting the buyer against potential liabilities.

The solutions most commonly adopted in transactional practice include W&I policies, alongside other insurance products of a different nature, including: (i) policies covering specific known and identified risks that may emerge during the due diligence phase (Contingent Risk Policies), (ii) policies covering title to real estate assets (Title Risk Policies), and (iii) policies designed for fund closures (End of Fund Life Wrappers).

In addition, in today’s increasingly sophisticated transactional insurance market, brokers have expanded their range of services to include analyses and assessments of the insurance coverage already in place within target companies. Such assessments are aimed at evaluating the adequacy and completeness of existing coverage, identifying uninsured risks, and determining whether the existing policy limits are appropriate in light of the target company’s business activities.

The use of W&I policies and, more generally, transactional risk insurance products has progressively expanded across European civil law jurisdictions as well, driven by several factors, namely: (i) the gradual simplification of underwriting processes; (ii) the increased affordability of insurance premiums; and, above all, (iii) the introduction of tailored products, including solutions specifically designed for small and mid-sized transactions.

According to the latest available data, the number of policies underwritten in 2024 in connection with M&A transactions in the Italian market totalled nearly 400, meaning that approximately 20% of all Italian M&A transactions were backed by a W&I policy. This growth trend has remained steady in recent years and has also extended to the energy and infrastructure sectors, where insurance products accounted – consistently with broader M&A market trends – for approximately 20% of the total number of W&I policies underwritten in this particular market segment, which is characterised by a significant regulatory impact on generated cash flows.

Read the full document

This note analyses, without claiming to be exhaustive, some of the main changes introduced by the PPWR.

Introduction

Regulation (EU) 2025/40, known as the “PPWR” (Packaging and Packaging Waste Regulation), covers the entire life cycle of packaging and applies to all packaging placed on the market within the Union (whether produced domestically or imported from third countries) and to packaging waste generated within the EU. The choice of a regulation, which is directly applicable without the need for national transposition, meets the need to ensure regulatory uniformity across all Member States.

Among the changes with the greatest impact on businesses are the ban on PFAS (per- and polyfluoroalkyl substances) in food contact packaging and the introduction of a new harmonised labelling system for separate waste collection.

On 30 March 2026, the European Commission published a draft guidance document aimed at clarifying the operational aspects of the new regime, not yet applicable. The document will be formally adopted by the Commission at a later date, once all language versions are available. Only from that point onwards will the updated guidance apply.

1. Ban on PFAS in food contact packaging

The dangers of PFAS to human health are now well established. This is clearly highlighted in the PPWR Regulation, which states that, “based on the physical properties of PFAS, particularly their persistence, together with the identified effects on some PFAS, PFAS represent an environmental and human health hazard” (Recital 20).

Furthermore, “PFAS in food-contact materials will inevitably lead to the exposure of humans to PFAS. Due to the non-threshold nature of the PFAS hazards, exposure to PFAS from food-contact materials is an unacceptable risk for human health” (Recital 21).

On this basis, from 12 August 2026, Article 5(5) of the PPWR prohibits the placing on the market of food contact packaging containing PFAS (per- and polyfluorinated alkyl substances) above specific limit values:

• 25 ppb for any PFAS as measured with targeted PFAS analysis (polymeric PFAS excluded from quantification);
  • 250 ppb for the sum of PFAS measured as the sum of targeted PFAS analysis;
    • 50 ppm for total PFAS, including polymeric PFAS.

It should be noted that, from the same date, the presumption of conformity based on Annex C of EN 13428:2004 will no longer apply, as it does not reflect the new PPWR limits.

Furthermore, the PPWR does not provide for any transitional period for the depletion of stocks of packaging containing PFAS produced after 12 August 2026. Packaging already placed on the market before that date may remain on the market, but packaging placed on the market thereafter must comply with the new limits. No exceptions are provided for packaging containing recycled materials.

This is therefore a key factor to consider in procurement planning: businesses using food contact packaging will need to ensure that supplies delivered after 12 August 2026 comply with the new requirements, by requesting the necessary documentation from suppliers in accordance with Article 16 of the PPWR.

2. How will the labelling of packaging for separate collection change?

With specific regard to labelling for separate collection by consumers, the PPWR introduces fully harmonised rules. Member States will not be able to maintain national labelling systems after the deadlines set out in the PPWR (for example, the environmental labelling under Article 219 of Legislative Decree 152/2006)

The requirement will apply from 12 August 2028, or 24 months after the entry into force of the Commission’s implementing acts, whichever is later.

In accordance with Article 12(1), from the date of application, packaging placed on the market must bear a harmonised label providing information on the materials of which it is composed, with the aim of facilitating consumer sorting.

Such label shall be:

1. based on pictograms defined by the Commission; and
2. easily understandable, including for persons with disabilities.

For compostable packaging, the label  shall indicate (i) that the material is compostable, (ii) that it is not suitable for home composting, and (iii) that compostable packaging is not to be discarded in nature.

This regulation will apply to all packaging, including e-commerce packaging. Transport packaging, however, is specifically excluded.

Finally, under Article 12(12), packaging subject to labelling requirements that is manufactured within the Union or imported before the relevant deadlines  and that does not comply with the new rules, may continue to be made available on the market until three years from the date of entry into force of the relevant labelling requirements.

3. Priority actions for businesses

Businesses should take prompt action to ensure compliance with the PPWR.

First, it is necessary to map the packaging portfolio and prepare the relevant technical documentation. It is indeed a priority to verify whether packaging complies with the new PPWR requirements, in order to identify the necessary compliance measures. For food contact packaging, companies should verify the presence of PFAS and request the necessary documentation from suppliers in accordance with Article 16 of the PPWR, in view of the ban entering into force on 12 August 2026.

Finally, it is essential to monitor regulatory developments (for example, the adoption of implementing acts under the PPWR).

As a professional with an extensive track record in the telecommunications and ICT sector, Antonio Corda has gained significant experience in national and international contexts, holding executive positions in legal, compliance, privacy, regulatory affairs and security in companies in the ITC and telecommunications sectors: most recently, Chief Legal, Compliance & Security Officer at Fastweb+Vodafone.

In his new role, Antonio will work with ADVANT Nctm teams involved in M&A transactions and commercial projects in the telecommunications and ICT sector, both in the retail and infrastructure segments. 
Paolo Montironi, Senior Partner at ADVANT Nctm, said: “We are delighted to welcome Antonio to our firm. His expertise in the TMT sector and in compliance and cybersecurity is a valuable asset for the assistance we offer to our clients in highly technological and regulatory transactions”.

"Joining ADVANT Nctm”, Corda added, “is an opportunity for me to contribute my experience in a multidisciplinary and international context, helping to develop strategic projects in the telecommunications and ICT sector”.

With this new entry, ADVANT Nctm confirms its commitment to providing specialist expertise in sectors marked by strong technological innovation, with a particular focus on regulatory, compliance, privacy and security issues.

Street art, by its very nature ephemeral and located in public space, forces a balancing of competing interests: on the one hand, the author’s moral right to the integrity of the work; on the other, the prerogatives of the property owner, who may decide to remove, cover, or even destroy the work. Italian copyright law (Law No. 633/1941) protects the artist from the very moment of creation, yet unauthorized execution on another’s property may constitute an infringement of ownership rights and limit protection.

Part of the scholarship invokes the doctrine of accessione (Article 936 Civil Code), whereby the mural becomes an integral part of the building; others refer to commistione (Article 939 Civil Code) or to the dicatio ad patriam, namely the dedication of the work to collective use. In any event, the act of removal introduces an element of transformation: the work, conceived as site-specific, loses part of its original meaning once detached.

The debate is not confined to Italy. From a comparative perspective, Germany adopts an approach similar to the Italian one, generally recognizing the primacy of property rights – and treating unauthorized street art as damage to the property – while nonetheless preserving copyright protection where the requirements of originality are met. Consequently, if the property owner decides to remove the portion of the wall and sell it, such conduct may conflict with the author’s exclusive right of “distribution,” unless the artist has implicitly accepted the prospect of future alienation. Equally noteworthy is the French system, which, much like the Italian and German models, grants copyright protection to all works reflecting the artist’s personality, regardless of the medium. Original street art thus falls within the creations protected by the Intellectual Property Code, without prejudice to the fact that its unauthorized execution may amount to a criminal offence of degradation.

The Venetian case illustrates this tension well: the collective interest in preserving an artistic language born on the margins of legality clashes with the dominical prerogatives of the property owner, who may perceive removal as a form of protection or as an economic opportunity. Nor are precedents lacking.

In the absence of ad hoc legislation, the issue remains entrusted to evolving interpretations of long-standing civil law doctrines, conceived for very different contexts. The removal of The Migrant Child demonstrates how urgent a systematic reflection on street art has become: who may truly dispose of it? And how can cultural value, public interest, and individual rights be reconciled, regardless of the artist’s fame?

In a new legal briefing, our professionals Filippo Maria Federici, Simone Gaggero and Paolo Gallarati from ADVANT Nctm, together with Prof. Dr Rainer Bierwagen and Prof. Dr Hans-Josef Vogel from ADVANT Beiten and Morgane Gandaubert and Marie Hindré from ADVANT Altana, examine the implications of this evolving framework – including:

• A new 15% tariff benchmark for most EU products
• Sector-specific exclusions (e.g. aircraft parts, generics) and pending arrangements on steel and aluminium
• The scrapping of the $800 de-minimis rule and its consequences for direct sales
• Diverging national reactions from France, Germany, Italy, and Spain
• Legal guidance on contractual risk mitigation for EU companies exporting to the US

Read the full analysis here. 

What the Sezioni Unite decided

Why this matters

1. Precedent for strategic litigation – The ruling is Italy’s first high-level endorsement of climate tort claims against a fossil-fuel producer, echoing landmark cases like Urgenda(NL) and Milieudefensie v. Shell (NL), but within a civil-law jurisdiction.
2. Expands the net of liability – By recognising claims against shareholders, the Court broadens potential defendants to include investors with controlling stakes, strengthening the hand of activists and minority shareholders alike.
3. Aligns with EU sustainability agenda – The reasoning dovetails with the forthcoming Corporate Sustainability Due Diligence Directive (CS3D) and the revised EU Emissions Trading Scheme, adding judicial pressure to legislative and market forces.
4. Heightens directors’ duties – Executives now face clearer litigation exposure if corporate transition plans fall short of the best available climate science, raising the bar for disclosure and risk management.

Action points for boards, banks, and investors

• Stress-test transition plans against a 1.5 °C pathway; ensure emission-reduction targets are credible, time-bound and science-aligned.
• Map group-wide exposure — include subsidiaries and joint ventures — and embed climate clauses in intragroup governance documents.
• Document stewardship by significant shareholders (not only state entities) to demonstrate active oversight of portfolio companies’ climate performance.
• Update litigation risk registers to reflect potential tort claims under ECHR-based arguments, not just statutory environmental breaches.
• Banks and investors to assess direct and indirect liability from financing hard-to-abate and carbon-intensive sectors and to include related risk in PD, LGD and EV/NPV considerations.

Looking ahead

The case now returns to the Rome Civil Court for a merits trial that could impose operational emissions caps on ENI or mandate shareholder-driven policy shifts. Regardless of the outcome, the Supreme Court has already reshaped Italy’s climate-litigation landscape: corporations can no longer rely on jurisdictional or political-question defences to sidestep ambitious climate suits. Expect a surge in filings targeting high-emitters (including companies active in hard-to-abate and carbon-intensive sectors), shareholders and potentially lenders, heightened investor engagement, and closer integration between EU regulatory reforms and domestic judicial enforcement.

Key Figures of 2024: A Year of Challenges and Actions

The report clearly highlights how complex and interconnected the landscape of data protection has become:

• 2,204 data breaches were reported across both public and private sectors—evidence of increasing exposure to risk and the need for a rigorous, proactive approach from all actors, especially in light of the Authority's increasingly strict sanctions in serious cases.
• 130 inspections were carried out, focusing on highly innovative areas: digital identity systems (SPID), facial recognition, video surveillance, and artificial intelligence applications. These audits underscore how the privacy challenge is increasingly intertwined with technological innovation and cybersecurity.
• 835 collegial decisions were adopted, including 468 corrective and punitive measures—a strong signal of the Authority’s growing attention to both repressive and preventive efforts concerning the most relevant violations. Sanction-related payments amounted to €24,430,856.45.
• Over 16,000 inquiries were handled by the Authority, reflecting a growing and tangible interest in data protection and the need for clear and authoritative communication to support citizens and businesses.

Privacy and Artificial Intelligence: Assessments and Perspectives

In 2024, the Authority focused on the profound implications of adopting artificial intelligence in key sectors: from digital healthcare to age verification, digital identity management, and the risks linked to web scraping for algorithm training. The dialogue between technological evolution and legal regulation is becoming increasingly intense, leading the Authority to reaffirm the need for strict, up-to-date governance in response to emerging digital scenarios.

Audit activities and decisions also addressed the sensitive issues of automated decision-making and profiling, as well as the cybersecurity of public and private infrastructures. The report calls on all data controllers to maintain a high level of awareness and responsibility in terms of both technical and organizational security.

Culture of Compliance: Rights and Trust at the Core

The Authority’s assessment is clear: building a culture of compliance and data security is no longer a mere regulatory requirement. It is a safeguard for the fundamental rights of individuals and an essential foundation for digital trust in society and the marketplace.

A renewed call is made to all stakeholders—public and private—to invest in training, continuous process updates, and transparency, in order to strengthen a digital ecosystem that protects the dignity, freedom, and security of every individual.

The 2024 Annual Report of the Italian Data Protection Authority portrays a country where personal data protection is no longer just a technical issue, but a social, legal, and ethical matter. From managing data breaches to AI innovation, the challenge is ongoing and demands that all players rise to the occasion—working together to build a safer, more inclusive, and more transparent digital future.

Comments from Paolo Lazzarino, Partner at ADVANT Nctm (Italy):

“The new Code of Practice released by the European Commission on July 10, 2025, marks a significant step toward transparency in artificial intelligence. One of its core elements is the requirement for developers of generative AI models to disclose what data was used to train them. This isn’t just a formality—it allows users, journalists, and other developers to understand the foundations behind AI-generated content. Think of it as a nutrition label for AI: knowing what a model was ‘fed’ helps to assess the reliability of what it produces.

“This focus on transparency is aimed to build public trust and increase corporate accountability. If we know whether the data comes from a certain media or archives, we can better evaluate the model’s potential biases and limitations. While the Code is voluntary, companies that adopt it show a commitment to responsible AI, anticipating the binding requirements that will come into force under the EU AI Act in the coming years.”

Comments from Paolo Gallarati, Partner at ADVANT Nctm (Italy):

“This will also contribute to raise awareness on the fair processing of personal data in AI training models, with a view to preserving the right balance between the legitimate interest of AI developers and data subjects’ consent: in fact, big data and machine learning can pierce the veil of anonymous data enabling the identification of individuals with technical means whose affordability was unimaginable just a few years ago.”

Comments fromGiulio Uras, Counsel at ADVANT Nctm (Italy):

“From a compliance standpoint, the EU’s newly released code of practice for general-purpose AI systems reveals not only the technical direction of AI Act enforcement, but also the political and economic balancing act the Union is currently engaged in.

“While framed as a voluntary tool, the code is clearly intended to become the de facto compliance path for major AI providers. For legal and compliance professionals working within the AI Act’s risk-based framework, the immediate challenge is operational: how to ensure conformity and due diligence in an environment where upstream transparency — particularly in relation to model documentation and training data — remains discretionary and, in many cases, asymmetrical.

“Beyond the legal mechanics, however, the broader picture is harder to ignore. The EU’s attempt to ‘simplify’ compliance via soft law mechanisms is, in reality, a defensive maneuver. With geopolitical uncertainty increasing — and transatlantic tensions, industrial policy shifts, and global AI races accelerating — Europe’s regulatory approach risks becoming both overly cautious and structurally rigid. The code’s voluntary nature may ease the short-term burden on industry, but it also delays legal certainty and fosters fragmented compliance strategies across jurisdictions and actors.

“Moreover, the EU’s efforts to accommodate industry concerns, while politically expedient, arguably dilute the AI Act’s foundational promise of trustworthy and safe AI. In practice, this risks creating a compliance framework that is neither robustly enforceable nor truly innovation-friendly — particularly for EU-based firms that do not have the scale or leverage of the major GPAI developers.”

Who is obliged to comply with the regulations?

Digital accessibility obligations apply specifically to: 

- Private economic operators providing digital services to the public, including but not limited to:

• banks, insurance companies, transportation companies and telecommunications operators;
• e-commerce platforms, providers of audiovisual content, marketplaces and online services;
• operators of ATMs, self-service terminals, electronic ticketing and postal services.

- Entities involved in the design, production and marketing of digital tools intended for the general public, including but not limited to:

• web sites and mobile applications;
• electronic devices with user interfaces;
• management or application software accessible by end users. 

Who supervises and what do those who fail to comply risk?

The Agency for Digital Italy (AgID) is responsible for supervising the implementation of the regulations: it can carry out audits, inspections and, in case of non-compliance, take sanctioning and inhibitory measures.

Specifically, in case of violation, AgID can:

- issue a warning setting a deadline for compliance; 

- apply fines:

• up to 5% of the average annual turnover for serious violations committed by entities offering services to the public through websites or mobile applications, with an average turnover, in the last three years of activity, exceeding €500 million;
• between €5,000 and €40,000 for the other subjects, taking into account the seriousness of the violation, the number of users involved and the scope of the inaccessible services;
• additional sanctions of €2,500 to €30,000 in case of non-compliance with AgID warnings or obstruction of inspection activities. 

AgID can also take particularly strong administrative inhibitory measures, including: 

- website blackout or removal of applications from digital stores; 

- temporary or permanent ban on access to non-compliant digital services.

By order issued by the President of the United States on April 2, the U.S. government adopted new tariffs which provide for additional ad valorem duties on imports of products from all foreign countries.

The new protectionist policies adopted by the U.S. government – which took effect at midnight on April 2 – also apply to imports from the European Union.

Below are the main provisions introduced by the new measures:

• in the automotive sector, a 25 percent tariff is introduced on imports of cars, trucks and related components from all foreign countries (for components, the measures will take effect by May 3);

• imports of all goods from foreign countries into the U.S. customs territory are subject to an additional ad valorem rate of duty of 10 percent, effective April 5;

• for many countries, the rate was set to increase starting from April 9. In particular, the order issued by the White House stated that the European Union (and, consequently, Italy) would be subject to a rate of duty of 20 percent; for China, the rate would go up to 34 percent;

• however, on April 9 the President of the United States announced a 90-day pause on the new tariffs, dropping reciprocal duties to 10% for all countries;

• the only exception is China, which has responded to the new U.S. measures by approving counter-tariffs at 84%: against it, the U.S. government has ordered an increase in duties to 125% for goods imported from China;

• certain products are currently excluded from the new tariffs. These include pharmaceuticals, lumber and semi-conductors, several precious metals (including gold, silver, platinum and copper), energy products (including oil) and critical minerals, as well as all goods subject to specific measures.

The new provisions complete an initial set of measures previously issued on February 10, whereby the U.S. government had imposed a rate of duty of 25 percent on steel and aluminum imports.

2. THE IMPACT OF CUSTOMS TARIFFS ON COMMERCIAL AGREEMENTS

Besides the clear economic and commercial impact, the introduction of additional duties may have a direct effect on all commercial agreements - whether existing or yet to be signed - involving the supply of goods to the United States.

In particular, for agreements already in place, fulfilling contractual obligations in light of the increase in tariffs may prove to be significantly more burdensome than expected – or reasonably foreseeable – at the time of signing.
First and foremost, it is advisable to conduct a preliminary review of the individual contractual clauses, checking for the presence of:

• provisions on governing law and jurisdiction, to determine whether the agreement is subject to Italian law (and, consequently, to the possible remedies provided by the Italian Civil Code);

• any delivery terms (so-called “Incoterms”) to verify the allocation between the parties for customs duties related to import/export;

• any clauses on renegotiation and/or early termination upon occurrence of certain circumstances (e.g. force majeure clauses or hardship clauses).

In addition, the recent 90-day pause on the new tariffs confirms the current instability and uncertainty in international trade relations. We believe this calls for even greater caution in negotiating new agreements and special attention in managing existing ones.

2.1 Remedies under the Italian Civil Code

For commercial agreements subject to Italian law – lacking specific contractual remedies agreed upon by the parties – the Italian Civil Code provides for certain legal instruments that may mitigate the impact of the new tariffs on the original contractual terms. In particular:

• supervening impossibility of performance due to causes not attributable to the debtor (pursuant to Articles 1218, 1256 and 1463 et seq. of the Italian Civil Code);

• supervening hardship (pursuant to Article 1467 et seq. of the Italian Civil Code);

• provisions on supplementary equity (pursuant to Article 1374 of the Italian Civil Code) and obligations to interpret and perform the contract in good faith (pursuant to Articles 1366, 1375 of the Italian Civil Code).

Supervening impossibility of performance refers to any situation preventing performance that cannot be foreseen and cannot be overcome with the effort that may be legitimately required of the debtor. According to the general principle laid down in Article 1218 of the Italian Civil Code, if the non-performing party proves that the default was a consequence of the impossibility of performance for “reasons not attributable to such party”, the latter may be held not liable.

In cases of definitive supervening impossibility, the contractual obligation is extinguished, resulting in the automatic termination of the agreement (either in full or partially, if the impossibility affects only part of the performance). If the impossibility is only temporary, the performance of the obligation may be legitimately suspended.

That said, while each commercial agreement should be assessed on a case-by-case basis, the new tariffs (at least in general terms) do not seem to constitute a genuine case of supervening impossibility. However, a temporary impossibility may be invoked in specific circumstances, resulting in a suspension of the contractual obligation.

It is arguably more feasible to rely on the instrument of supervening hardship. This remedy allows the termination of agreements whose balance is altered by supervening events – extraordinary and unpredictable when the agreement was entered into – which do not fall within the normal contractual risk and which make the performance of any of the obligations underlying the contract excessively burdensome or objectively debased in value and/or usefulness.

In such a case, the counterparty that is interested in maintaining the contractual commitment in place may offer to rebalance the relevant agreement within the limits of normal risk, thus avoiding termination.

In any event, it is worth noting that both remedies – aside from the option to take the contract back to fairness – often face a practical obstacle: in the context of commerce, contract termination may not be a suitable remedy, as it would completely erase the business relationship. In this regard, during the Covid-19 pandemic (an exceptional event par excellence), the Italian Supreme Court expressed support for the existence of an obligation to renegotiate the contract rather than seeking termination (see Corte di Cassazione, Ufficio del Massimario, relazione tematica no. 56/2020).

An alternative might be to invoke the application of general principles of supplementary equity and good faith in contractual performance, with respect to which scholars has already acknowledged the possibility of claiming a general duty to renegotiate the contract upon the occurrence of supervening circumstances.

2.2 Contract remedies

As discussed, the provisions of the Italian Civil Code mainly offer remedies that lead to contract termination, which often do not align with the commercial need to preserve existing business relationships.

To encourage the use of conservative remedies, one solution may lie in the prior arrangement of specific contractual renegotiation clauses.

In this regard, commercial contracts often include certain clauses that are commonly used in both domestic and international commercial practice, that contractually regulate the effects of supervening events that may impact the contractual balance.

The most common contractual provisions in business practice include:

• force majeure clauses;

• hardship clauses;

• material adverse change (MAC) clauses.

Force majeure clauses regulate cases in which the contractual obligation becomes impossible due to the occurrence of an event specified in the relevant agreement. The application of the force majeure clause results in the suspension of the affected party’s obligations and may, subsequently, lead to the termination of the contract or grant the parties the right to terminate it.

The applicability of such clauses in relation to the introduction of tariffs must be assessed in light of their precise wording, even though – as previously noted – the new customs duties generally do not result in an actual impossibility of performance. A detailed review of the specific events covered by the clause is therefore necessary.

On the other hand, hardship clauses place an obligation to renegotiate contractual terms upon the occurrence of certain circumstances that make it excessively onerous for either party to perform the contract.

This remedy seems to offer a more viable solution in the context of the newly introduced tariffs. First, hardship clauses do not strictly refer to impossibility of performance (similarly to the Italian remedy of supervening hardship). Second, the preservative nature of the remedy may represent a more suitable solution for commercial purposes.

Finally, MAC clauses entitle one party to terminate the contract upon the occurrence of a specified “material” event (unless a so-called “right to cure” is provided, allowing the other party to remedy the consequences of the supervening event. However, it is still appropriate to undertake a case-by-case assessment to determine the actual applicability of the clause.

3. CONCLUSIONS

The introduction of the new customs tariffs by the United States raises several questions regarding the future of trade relations between the United States and Italy.

Pending the developments of the policies undertaken by the U.S. government, it is advisable to consider the inclusion – in commercial agreements under negotiation – of adequate provisions aimed at mitigating the risks arising from the high degree of uncertainty in the international context, with an eye to any potential mitigants that may be adopted by the European Union – such as providing specific clauses that clearly allocate the burden of newly imposed customs duties and/or provide for price revision mechanisms.

As for commercial agreements already signed, the performance of which may be impacted by the tariffs, it will be necessary to assess on a case-by-case basis the potential triggering of legal and contractual remedies.

The promotion is part of ADVANT Nctm's internal growth strategy aimed at enhancing its talents.

Roberto de Nardis di Prata has more than 20 years of experience in the areas of banking and finance law and debt capital markets, focusing on acquisition, leveraged and real estate finance, corporate lending, basket bond issues and debt restructurings. Roberto assists both primary lenders - banks and debt funds - and sponsors and industrial companies in financing transactions as well as private debt operators.

Francesca Pittau is an expert in employment law and assists Italian and international clients in the management of human resources at every stage, with particular focus on corporate reorganization and restructuring processes. In addition, Francesca is involved in the development and implementation of incentive plans for key managers, welfare policies, and diversity and inclusion activities.Alessia Trevisan works in M&A and, in particular, private equity and venture capital.Alessia assists investment funds, both Italian and foreign, industrial companies, family-office, venture capital funds in investment and divestment transactions, as well as managers in structuring and implementing incentive plans.

Federico Vecchio works in both extrajudicial and judicial assistance to leading national and multinational groups in litigation including arbitration and extraordinary corporate transactions. In addition, Federico has also developed a deep knowledge of sports law thanks to positions held in the justice bodies of CONI and various national and international sports federations.   

In April 2021, the European Commission put forward a proposal for a regulation on Artificial Intelligence (hereinafter, “Artificial Intelligence Act” or “AIA”).The AIA intends – inter alia – to ensure that the use of artificial intelligence (AI) systems, whatever the area of use (e.g., health care, education, finance, energy, etc.), takes place in accordance with the founding values of the European Union and within a defined regulatory framework.To that end, the AIA contains particularly strict provisions on data quality, transparency, human oversight and accountability arising from use of AI systems.The AIA also outlines standards for so-called generic AI, which are systems that can be used for different purposes with varying degrees of risk. Such technologies include, for example, generative AI systems with large language models such as ChatGPT.In June 2023 the European Parliament adopted its negotiating position on the AIA, kicking off the trilogue between the Commission, the Council and the European Parliament, which will conclude with the issuance of the final text. The final version of the regulation is expected to be published by the end of 2023 and to come into force in 2026, with a two-year grace period (like in the case of the GDPR). Such period will allow the recipients of the AIA’s provisions to (hereinafter, the “Obligated Parties”) to adapt to the changes provided for by the regulation before it becomes effective.Therefore, please note that this memorandum refers to a piece of legislation still subject to a legislative process that might lead to several changes in its contents. 

2. Application

3. What will be needed to comply with the AIA

• “real time” and “a posteriori” remote biometric identification systems in publicly accessible spaces (with an exception for law enforcement authorities using biometric identification ex post for the prosecution of serious crimes, subject to judicial authorization);
• social scoring systems (involving ranking of people based on their behaviour or characteristics);
• the use of cognitive behavioural manipulation techniques targeting specific categories of vulnerable people or groups (e.g., talking toys for children);
• predictive policing systems based on profiling, location or past criminal behaviour;
• emotion recognition systems used in the areas of law enforcement, border management, workplaces and educational institutions;
• untargeted extraction of biometric data from the Internet or CCTV footage to create facial recognition databases.

 3.2.2. High riskSimilarly, Annex III to the AIA provides a risk of high-risk systems  under Article 6(2) that must comply with multiple requirements, undergo conformity assessment (to be completed before the model is placed on the market) and, in any event, be subject to continuous surveillance even after being placed on the market.High-risk AI systems fall into two categories:

• AI systems intended for use as a safety component of a product, or which are themselves a product, covered by the European Union harmonization legislation listed in Annex II, such as toys, automobiles, medical devices and in vitro medical devices (referred to in Regulations (EU) 2017/745 and 2017/746);
• the product whose component is an AI system – or the AI system itself as a product – subject to third-party conformity assessment for the purpose of placing on the market or putting into service under the EU harmonization legislation listed in Annex II. In addition, there are certain AI systems falling within eight specific areas, which will need to be registered in an EU database:
  • biometric identification and categorisation of natural persons;
  • management and operation of critical infrastructure; education and vocational training;
  • employment, worker management (e.g., for the recruitment or evaluation of employees) and access to self-employment;
  • access to and use of essential private and public services and benefits (e.g., AI systems intended to be used to make decisions or materially influence decisions on the eligibility of natural persons for health and life insurance);
  • law enforcement;
  • migration management, asylum and border control;
  • assistance in legal interpretation and enforcement of the law.

AI systems used to influence voters and the outcome of elections, as well as recommender systems used by social media platforms designated as “large online platforms” under Regulation (EU) 2022/2065 (Digital Services Act) have been added to the high-risk list - originally proposed by the Commission -.Among the requirements applying to high-risk systems are:

• an appropriate risk management system;
• capacity to register activities (such as log registration);
• human oversight;
• adequate governance of data used for training, tests and validation;
• transparency and explainability;
• checks ensuring accuracy, robustness and cybersecurity.

For example, as concerns medical devices, industry regulations already provide for some conformity assessment procedures. In this regard, the AIA requires that AI conformity be assessed through conformity assessment conducted under the industry regulations, to avoid overlapping procedures. Consistently, the issuance of an EC certificate of conformity will attest to the AI system’s compliance with both the Medical Device Regulation and the AIA. So, Article 59 of Regulation (EU) 2017/745 and Article 54 of Regulation (EU) 2017/746 shall apply in any event.3.2.3. Foundation models (or base models)Foundation models, in the form of generative AI systems (such as, by way of example, ChatGPT) and basic AI systems, will also have specific regulatory rules. Generative and foundation AI systems can both be considered general-purpose AI because they can perform a variety of tasks.For such models, the AIA imposes higher transparency requirements, whereby:

• those who develop generative AI will have to make it obvious to the user, in the end result, that the content has been generated by the AI (e.g. this will allow the distinction between “deep fakes” and real images);
• Obligated Parties will have to provide guarantees against the generation of illegal content;
• Obligated Parties will have to document and make available to the public a sufficiently detailed summary of the use of training data protected by copyright law.

Providers of “basic AI” models will have to assess and mitigate the possible risks associated with their models (for health, safety, fundamental rights, the environment, democracy and rule of law) and register them in the EU database before they are placed on the market. 3.2.4. Limited or minimal riskThe remaining AI applications are considered to be of limited or minimal risk. Such systems must meet certain transparency requirements, which allow users to understand that they are interacting with an AI and to make informed decisions. Examples of such systems are: chat bots, “deep fakes” image or video generators (when they are not considered high risk), translation or weather forecasting systems.AI systems with minimal risk are, for instance, spam filters or video games. 3.3. Comformity assessment (pre-marketing) and enforcement (post-marketing)Providers of high-risk AI systems shall ensure that such a system undergoes a conformity assessment procedure in accordance with Article 43 of the AIA before it is placed on the market or put into service.If, following such assessment, the AI is deemed compliant with statutory requirements, providers shall draw up an EU declaration of conformity in accordance with Article 48 and affix the CE marking.The AIA requires high-risk AI providers to monitor the performance of their systems even after market launch, given that AI evolves as it receives new inputs. During such monitoring, providers will be required to carry out continuous analysis of the devices, software and other AI systems interacting with the AI system, taking into account restrictions arising from data protection, copyright and competition law.The Commission will have to provide a template for post-market monitoring plans within one year of the entry into force of the AIA. 

4. Data and data governance

• rules on how “training datasets” (including validation and test datasets) are to be designed and used (requiring datasets to be “relevant, representative, free of errors and complete”;
• rules on data preparation, including labelling, cleaning, and aggregation;
• exemption from those GDPR rules restricting the collection of sensitive personal data for the purpose of correcting algorithm bias.

5. Human Oversight

6. Innovation and research

7. Liability and artificial intelligence

8. European artificial intelligence board

9. Penalties

10. Conclusions

We warmly welcome Piero and his team.

1. OBLIGATIONS FOR DATA CONTROLLERS

Among the main innovations brought about by the Code of Conduct, the obligations for the parties and, especially, for data controllers must necessarily be highlighted.In particular, Article 5 of the Code prescribes the obligation for data controllers to give preference, when choosing business partners for telemarketing and teleselling activities, to companies adhering to the Code of Conduct.In confirmation of the significant importance that the Code attaches to the control of the lawfulness of the various operations carried out in telemarketing and teleselling activities, Article 14(2) of the Code requires controllers to ensure full and constant control of all the parties involved in any preliminary or implementation phase of the promotional campaign.With specific reference to the information notice, Article 11 of the Code admits the possibility of providing, during the marketing contact, simplified information. In this regard, the provision lists the minimum elements to be in any event provided in such information. In addition, before proceeding to the collection of any personal data of the data subject (or at the request of the same), the operator shall indicate where the extended information notice can be found, which must imperatively be provided before concluding any  contract.If the aforementioned checks show the existence of contracts for which the first contact is found to be flawed, the same may continue to be performed provided that the principal informs the data subject of the flawed nature of the contract and the data subject confirms his/her willingness to keep it in place. 

2. OBLIGATIONS FOR SUPPLIERS

3. CONSENT

This memorandum is not intended to be exhaustive and has the sole purpose of providing a preliminary overview of the sanctions imposed, and in the process of being imposed, against Russia, with a particular focus on the sanctions adopted by the European Union and some other countries.This memorandum is not to be construed as legal advice. An ad hoc analysis should be carried out regarding the applicability of individual sanctions in each specific case.Click here for the full document 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 Lorena Possagno, Jacopo Stefanini and Ekaterina Aksenova.

1. Responsibility associated with packaging management

Legislative Decree No. 116/2020 - implementing Directive (EU) 2018/852 - also amended Articles 217 et seq. of the TUA on management of “packaging” and “packaging waste”.First, Article 218 of the TUA provides for the following definitions:- “packaging”: “the product, composed of materials of any nature, used to contain certain goods, from raw materials to finished products, to protect them, to allow their handling and delivery from the producer to the consumer or user, to ensure their presentation, as well as disposable items used for the same purpose”;- “packaging waste”: “any packaging or packaging material covered by the definition of waste under Article 183, paragraph 1 (a), excluding production residues”[1].That being said, new Article 217 of the TUA outlines the purposes of the new regulations on packaging: lawmakers intend in particular to promote measures aimed at preventing the production of packaging waste, to encourage the reuse of packaging, recycling and other forms of recovery of packaging waste, thereby pursuing the goal of reducing the final disposal of waste and ensuring a high-level of environmental protection.The rules cover the management of all packaging and packaging waste resulting from its use, used or produced by industries, businesses, offices, stores, services, households or any other subject.The new packaging management rules also contain important requirements in relation to the “extended producer responsibility” regime.Whereas clause 20 of Directive (EU) 2018/852, in particular, expressly provides that  effective extended producer responsibility schemes can have a positive environmental impact by reducing the generation of packaging waste and increasing its separate collection and recycling.Consequently, Article 1(8) of Directive (EU) 2018/852 amended Article 7 of Directive (EC) 94/62 providing, on the part of Member States, for the obligation to establish by 31 December 2024 extended producer responsibility schemes for all packaging.Furthermore, second paragraph of Article 217 of the TUA makes express reference to the concept of “shared responsibility”, providing that “Operators in the respective packaging supply chains as a whole shall ensure, in accordance with the principles of “shared responsibility”, that the environmental impact of packaging and packaging waste is minimised as much as possible throughout the life cycle”.Article 219, paragraph 2 of the TUA in turn provides that, in order to promote the transition to a circular economy in accordance with the “polluter pays” principle, economic operators shall cooperate according to the principle of “shared responsibility” by promoting measures to ensure the prevention, reuse, recycling and recovery of packaging waste.The objective pursued by said rules is to encourage the development of clean technology and to reduce upstream the production and use of packaging as well as to promote the production of reusable packaging and its actual reuse [2].For example, Article 219-bis of the TUA provides that, precisely in order to increase the percentage of reusable packaging placed on the market to contribute to the transition to a circular economy, economic operators are adopting - individually or collectively - deposit-return systems.A further relevant aspect is the setting of precise recycling and recovery targets for packaging waste for producers and users.Second paragraph of Article 220 of the TUA in this regard provides that the so-called National Packaging Consortium (hereinafter referred to as “CONAI”), in order to ensure the monitoring of the achievement of recycling and recovery targets, shall acquire from all entities operating in the packaging and packaging waste sector a set of recycling data, to be reported annually to the Waste Register.Such data relates to the quantities of packaging placed on (and recovered from) the market during the calendar year preceding the year in which the report is made[3].Furthermore, paragraph 6 of Article 220 of the TUA specifies how recycling and recovery targets for packaging waste are to be set[4].Finally, Legislative Decree No. 116/2020 also amended Article 221 of the TUA, which provides that “Producers and users are responsible for the proper and effective environmental management of any packaging and packaging waste produced by the consumption of their products”.In this respect, in order to ensure the achievement of the aforementioned recovery and recycling targets, Article 224, paragraph 1, of the TUA provides for producers and users to participate on an equal basis in CONAI.CONAI’s duties  include, inter alia, determining and placing on consortium members (i.e., producers and users) the contribution called “CONAI environmental contribution” [5].Such contribution represents the form of financing  whereby CONAI distributes  the cost for higher charges for separate collection, recycling and recovery of packaging waste among producers and users.As stated on CONAI’s website, the purpose is to encourage the use of more recyclable packaging, linking the contribution level to the environmental impact of the end-of-life/new-life phases[6].The sums due as CONAI environmental contribution are levied, based on specific indication in the invoice of the amount due, upon the so-called “first transfer.”“First transfer” means the transfer, even temporarily and for any reason, within the national territory:- of the finished packaging performed by the last producer or empty packaging trader to the first user other than the empty packaging trader;- of the packaging material carried out by a “producer of raw material (or semi-finished products)” to a “self-producer”[7].Finally, it should be pointed out that, also in relation to the technical measures required for the application of the new packaging rules ,it will be necessary to wait for the implementing Ministerial Decrees under Article 219, paragraph 4, of the TUA. 

2. Tyres, batteries and end-of-life vehicles

1. b) the weight of recycled packaging waste shall be calculated as the weight of packaging that has become waste and that, after undergoing all necessary screening, sorting, and other preliminary operations to remove waste materials that are not affected by subsequent reprocessing and to ensure high quality recycling, is fed into the recycling operation is actually reprocessed into products, materials, or substances;
2. c) for the purposes of a), the weight of the recycled packaging waste shall be measured at the time the waste is introduced into the recycling operation. By way of derogation, the weight of recycled packaging waste may be measured at output after any sorting operation, provided that:

1) such output waste is subsequently recycled;2) the weight of materials or substances that are removed by further operations prior to the recycling operation and are not subsequently recycled is not included in the weight of waste reported as recycled (…)”.[5] See Article 224, paragraph 3, h) TUA.[6] See https://www.conai.org/imprese/contributo-ambientale/.[7] Ibid.[8] “Manufacturer or importer of tyres: the natural or legal person who manufactures or imports tyres, placing them on the market for the purpose of sale” (see Article 2, paragraph 1(g) of Ministerial Decree No. 182/2019). On the other hand, the following are excluded from the scope of Ministerial Decree No. 182/2019: a) bicycle tyres; b) inner tubes, their protectors (flaps) and rubber seals; c) tyres for airplanes and aircraft in general (see Article 1, paragraph 3 of Ministerial Decree No. 182/2019).[9] M. LOCHE, A. CASTELLI, art. cit., page 100.[10] This obligation, according to the same Article 5, paragraph 3 of Legislative Decree No. 209/2003, does not concern cases in which a mandatory collection consortium is directly provided for by law.[11] It should be noted that Article 231 of the TUA lays down specific provisions in relation to the demolition, material recovery and scrapping of motor vehicles and trailers not covered by Legislative Decree No. 209/2003. The provisions contained in the latter Legislative Decree indeed apply exclusively to motor vehicles belonging to categories M1 and N1 in Annex II, Part A, of Directive 70/156/EEC and three-wheel motor vehicles as defined by Directive 2002/24/EC, excluding motor tricycles.[12] Vehicle batteries or accumulators, in particular, include batteries or accumulators used for starting, lighting and ignition of vehicles (see Article 2, paragraph 1(e) of Legislative Decree No. 188/2008).[13] Second paragraph of Article 7 also allows for the collection of industrial and vehicle batteries and accumulators to be carried out by independent third parties, provided this is done without additional charges to the waste producer or end user.[14] C. BOVINO, art. cit., page 785.[15] See Article 188 of the TUA. In addition, the second paragraph of Article 188 of the TUA specifies that organisations or companies collecting or transporting waste on a professional basis must be registered in the specific National Register of Environmental Operators.[16] The form referred to in the fourth paragraph of Article 188 of the TUA is the so-called FIR (waste identification form), governed by Article 193 of the TUA, which must contain the following data: name and address of the producer and holder; waste origin, type and quantity; destination plant; date and routing; name and address of the consignee.[17] The reference contained in Article 190 of the TUA to non-hazardous waste referred to in Article 184, paragraph 3, letters c), d) and g) relates to the following waste, insofar as different from the so-called “urban waste” (such category includes, by way of example only, household waste); waste produced during industrial processing; waste produced during craft processing; waste deriving from the recovery and disposal of waste; sludge generated from water purification and other water treatment and from the purification of waste water; waste from the reduction of fumes, septic tanks and sewerage systems.[18] See Article 190, first paragraph of the TUA.

1. Introduction: the Eu's push towards a "circular" economy

Directive 2018/851/EU introduced into Directive 2008/98/EC the definition of “extended producer responsibility regime”, meaning “a set of measures taken by Member States requiring producers of products to bear financial or financial and organisational responsibility for the management of the waste stage of a product’s life cycle including separate collection, sorting and treatment operations”[1].“Extended responsibility” can be defined as an environmental policy approach where the producer has also post-consumer responsibility for the product after it becomes waste[2].It appears from the definition introduced by Directive 2018/851/EU that extended producer responsibility involves the imposition of obligations on producers in order for them to be - financially or managerially - liable for the post-consumer phase of the life cycle of a product, when it becomes waste. Extended producer responsibility schemes are indeed essential elements of good waste management[3].The action of the EU’s lawmakers proved necessary especially in view of the fact that the efficiency and effectiveness of extended responsibility schemes vary significantly from one Member State to another: consequently, it was deemed necessary to set certain minimum requirements for the operation of such schemes.The objective pursued through the imposition of general minimum requirements is - besides reducing costs and improving the effectiveness of such schemes - to contribute to the incorporation of end-of-life costs into product prices, by providing  incentives for producers, when designing their products, to take better into account recyclability, reusability, reparability and the presence of hazardous substances at the design stage[4].Such innovations are part of the EU regulatory framework aimed at fostering the transition to a more “circular” economy. More specifically, such innovations are part of the so-called “Circular Economy Package” under Directives 2018/849/EU, 2018/850/EU, 2018/851/EU and 2018/852/EU of the European Parliament and of the Council of 30 May 2018, amending the EU’s key provisions on waste.The circular economy principle promotes sustainable waste management, in which waste, once recovered, re-enters the production cycle so that new resources are saved: this is an economic, production and consumption model in which waste, or what might generally become waste, is fed back into the production cycle to reduce human impact on the environment[5].In recent years, the European Union has strongly encouraged the adoption of a new model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible[6].The objective pursued is therefore to gradually depart from the current “linear” economic model, based on a “take-make-consume-throw away” pattern[7].In such context, Italian lawmakers worked on the TUA text, by - inter alia - rewriting Article 178-bis and introducing new Article 178-ter, amending the rules governing extended producer responsibility by introducing new paradigms for regimes that assign producers financial and managerial responsibility for the life cycle stage in which a product becomes waste.That said, before analysing the innovations under Articles 178-bis and 178-ter of the TUA, it is necessary to highlight two peculiar aspects of the “extended responsibility” regimes.First, Article 8, paragraph 1 of Directive 2008/98/EC – which was not amended by Directive 2018/851/EU – provides that, in order to “strengthen the re-use and the prevention, recycling and other recovery of waste, Member States may take legislative or non-legislative measures to ensure that any natural or legal person who professionally develops, manufactures, processes, deals with, sells or imports products (producer of the product) has extended producer responsibility”.Therefore, the establishment of EPR schemes continues to be a mere option for national lawmakers.However, Directive 2018/851/EU amends the following paragraphs of Article 8 of Directive 2008/98/EC, expressly providing that, where Member States decide to establish extended producer responsibility schemes, it will be necessary to apply the general minimum requirements under following Article 8-bis, precisely introduced by Directive 2018/851/EU.Consequently, Directive 2018/851/EU has not introduced a real obligation on Member States to establish EPR schemes, but has provided that, if national lawmakers decide to set them up, it will then be necessary to apply the general minimum requirements set out in new Article 8-bis of Directive 2018/851/EU, transposed into national law through new Article 178-ter of the TUA.The goal of the EU’s lawmakers is therefore to ensure greater uniformity of the schemes adopted by individual Member States in the area of extended producer responsibility [8].More specifically, in Italy, Directive 2018/851/EU was transposed by Legislative Decree No. 116 of 3 September 2020, which, on the one hand, rewrote Article 178-bis of the TUA by providing for the mandatory establishment - by special implementing Ministerial decrees - of extended responsibility schemes and, on the other hand, introduced new Article 178-ter, entitled “General minimum requirements for extended producer responsibility”, which, as mentioned, transposes the general minimum requirements set out in Article 8-bis of Directive 2008/98/EC, as amended by Directive 2018/851/EU.In other words, having imposed the mandatory establishment of EPR schemes at the national level involves the compulsory introduction of the general minimum EPR requirements set out by amended Article 8a of Directive 2008/98/EC.A further aspect to highlight is the circumstance that, for certain products or families of products, extended producer responsibility is already substantially provided for by the laws and regulations in force (reference is made, just by way of example, to the rules on end-of-life vehicles, batteries, tires, etc.)[9].However, as highlighted below,  newly amended Article 178-bis, paragraph 1, of the TUA provides for the establishment, by means of appropriate implementing Ministerial decrees, of additional extended producer responsibility schemes in order to strengthen reuse, prevention, recycling and recovery of waste.Furthermore, Article 6 of Legislative Decree No. 116/2020 expressly provides for an “adaptation deadline” for persons subject to extended producer responsibility schemes set up before the entry into force of  Legislative Decree No. 116/2020 (i.e., 26 September 2020).More specifically, such persons will be required  to comply with the provisions of  Legislative Decree No. 116/2020 on extended producer responsibility by 5 January 2023.To that end, Article 6 of Legislative Decree No. 116/2020 provides for a real adaptation mechanism, which required the entities subject to EPR schemes set up before 26 September 2020 to amend their bylaws to bring them into compliance with the new provisions of the TUA and, especially, with the requirements under Articles 178-bis and 178-ter, and notify such amendments to the Ministry of the Environment and Land and Sea Protection by 1 June 2022.The Ministry may in the sixty days following such notice specify further amendments to bylaws to be made within a further period of thirty days, and if such amendments are not adopted, may also introduce such amendments ex officio if deemed necessary. Finally, pursuant to Article 6, paragraph 4 of Legislative Decree No. 116/2020, any  amendments to bylaws shall be deemed approved if the Ministry fails to notify the amendments to be made or to amend them ex officio. 

2. Amendments to articles 178-bis and 178-ter of TUA - The general minimum requirements for extended producer responsibility

a) establishing the roles and responsibilities of all players in the different chains, including producers who place products on the national market, organisations that implement, on behalf of producers, the obligations arising from the latter’s EPR, public and private waste managers, Local Authorities and, where applicable, operators responsible for reuse and preparation for reuse and social economy enterprises (Article 178-ter, paragraph 1, a);

b) making provisions in accordance with the hierarchy of waste management targets, aimed at achieving at least the quantitative targets relevant for the EPR scheme and the achievement of the objectives set out in Legislative Decree No. 116/2020 and in the European Directives on packaging (Directive 94/62/ EC), batteries (Directive 2006/66/EC), end-of-life vehicles (Directive 2000/53/ EEC) and electrical and electronic equipment (so-called WEEE, Directive 2012/19/EC) and setting, where appropriate, further quantitative and/or qualitative objetives deemed relevant for the EPR scheme (Article 178-ter, paragraph 1, b);

c) adopting a system for reporting information about the products marketed and data on collection and treatment of waste resulting from such products, through the so-called “National Registry of Producers” (Article 178-ter, paragraph 1, c);

d) fulfilling administrative burdens on producers and importers of products in accordance with the principle of fairness and proportionality in relation to market share and regardless of their origin (Article 178-ter, paragraph 1, d);

e) causing producers to provide users and waste holders involved in EPR schemes with proper information on waste prevention measures, centres for reuse and preparing for reuse, waste take-back and collection systems and the  prevention of littering as well as  measures to incentivise waste holders to deliver waste to existing separate collection systems (especially, where appropriate, by way of financial incentives) (Article 178-ter, paragraph 1, e).

a) a geographical coverage of the waste collection network corresponding to the geographical coverage of product distribution, without limiting collection to those areas where the collection and management of waste are the most profitable, while providing adequate availability of waste collection systems even in the most disadvantaged areas;

b) suitable financial means or financial and organisational means to meet extended producer responsibility obligations;

c) adequate self-monitoring mechanisms, supported by regular independent audits, to assess the financial management and quality of data collected and reported through the National Register of Producers;

d) publicity of information on the achievement of waste management targets.

1. d) the remaining costs are borne by original waste producers or distributors.

Lastly, Article 178-ter, paragraph 5, expressly provides that such exemption should not be used to reduce the share of costs incurred by producers of products under extended producer responsibility schemes established before 4 July 2018 (i.e., the date of entry into force of Directive 2018/851/EU).[17] These are the data set out in paragraph 9 of Article 178-ter that, according to terms to be set out in a special implementing Ministerial Decree, producers shall report to the National Register of Producers (e.g., data on the placing of their products on the national market and how producers intend to fulfill their obligations; information on the systems through which producers fulfill their obligations, individually and in association, with bylaws and attached documentation relating to their project, etc.[18] It is specified that, in case of producers with registered offices in another EU Member State who place products on the national territory, for the purpose of fulfilling the obligations arising from the establishment of an extended liability regime, they shall designate a legal or natural person established on the national territory as an authorised representative for the purpose of fulfilling the obligations and registration in the National Register of Producers (see Article 178-ter, paragraph 8, last sentence).

(i) a production unit, i.e. an electricity production plant fuelled by renewable sources or operating in High Efficiency Cogeneration pursuant to Ministerial Decree of 4 August 2011(ii) a consumption unit, i.e. the set of plants for the consumption of electric power that normally correspond to the individual real estate unit (but exceptions apply^[1]) and that is directly connected to the production unit by means of a private connection;(iii) a connection to the public grid

(iv) the owner of the production unit may or not be the final customer consuming the energy produced; and(v) the production unit is built entirely within the area owned by, or fully available to, the final customer and is, partly, made available by the final customer to the producer or the owner of the production unit (if different from the final customer).

(i) Article 1, paragraph 504 of Law No. 234/2021 (Budget Law 2022) provided that ARERA was to cancel, for the first quarter of 2022, rates relating to general system charges applied to household customers and to low voltage non-household customers, for other uses, with available power up to 16.5 kW. ARERA implemented such provision by Resolution 635/2021/R/com of 30 December 2021;(ii) Article 14 of Decree-Law No. 4/ 2022 (the so-called “Sostegni ter” Decree) provided that ARERA was to cancel, for the first quarter of 2022, rates relating to general system charges applied to customers with available power equal to or greater than 16.5 kW, including those connected at medium and high/very high voltage or for public lighting or electric vehicle charging in places accessible to the public. ARERA implemented such provision by Resolution 35/2022/R/EEL of 31 January 2022;(iii) Article 1 of Law Decree 17/2022 (the so-called “Bollette” Decree) provided that ARERA was to cancel, for the second quarter of 2022, rates relating to general system charges applied to household customers and low voltage non-household customers, for other uses, with available power up to 16.5 kW (paragraph 1) as well as rates relating to general system charges applied to customers with available power equal to or greater than 16.5 kW, including those connected at medium and high/very high voltage or for public lighting or electric vehicle charging in places accessible to the public (paragraph 2). ARERA implemented such provision by Resolution No. 141/2022/R/com of 30 March 2022.

(i) the creation of an energy production plant (e.g. a photovoltaic or cogeneration plant) at the site of the Customer, who, to that end, grants the Producer a personal or proprietary right to use a certain portion of the site, such as, for example, the solar panel of the facility; and(ii) its subsequent management, operation and maintenance, for the purpose of supplying the energy produced to the Customer, at a lower cost than that which the Customer should pay to take energy from the national electricity grid.

(i) for plants with a capacity of up to 1 MW: the sworn works commencement notice shall apply for all works to be carried out in the areas available to the applicant;(ii) for plants with a capacity exceeding 1 MW and up to 10 MW: the simplified authorisation procedure shall apply;(iii) for plants above 10 MW: the unified authorisation procedure shall apply^[2].

(iv) for small plants with a capacity of less than 1 MW, the incentive shall be awarded according to the following mechanisms (Article 5.3):(v) for plants with generation costs closer to market competitiveness, through an application to be submitted directly on the date of commissioning, subject to compliance with technical and environmental protection requirements;(vi) for innovative plants and plants with higher generation costs, in order to control expenditure, the incentive shall be awarded through calls for tenders whereby power quotas are made available and selection criteria are set based on compliance with technical, environmental and land protection and cost-efficiency requirements;(vii) plants with a capacity equal to or less than 1 MW that are part of “renewable energy communities” or of “collective self-consumption systems” (see paragraph 3.2 above), are eligible for a direct incentive, as an alternative to the one indicated above, which rewards, through a specific tariff, scalable also on the basis of the capacity of the plants, energy that is self-consumed instantaneously. The incentive shall be awarded directly, through and application to be submitted on the date of commissioning (Article 5.4).

• the so-called hardship clauses;
• the so-called force majeure clauses;
• the so-called “MAC - material adverse change” or “material adverse effect” clauses, which regulate the consequences of the occurrence of events with significant adverse effects.

Such clauses, despite having different characteristics and effects, share certain features: (i) the general function of protecting the party that, due to the occurrence of an unforeseeable situation, finds itself in a position of “weakness” with respect to the proper performance of its contractual obligations; (ii) adaptability to different (domestic or international) contexts and to different contracts; (iii) the effect of re-allocating business risk ([26]).2.2.1 Hardship and force majeure clausesFocusing for a moment only on force majeure and hardship clauses, it should first be noted that such two clauses operate in different ways. Force majeure relates to the performance of the obligation that is prevented by the event mentioned in the contract (in more or less specific terms) and hardship relates to the aspect concerning the economic balance between performance and counter-performance. Accordingly, the resulting effects are different: (i) force majeure generally implies the suspension of the obligations of one of the parties, excusing it from the performance and, only at a later stage, the termination of the contract (if the obligation cannot be performed or the other party is no longer interested in it); (ii) hardship clauses, on the other hand, are typically intended to trigger a renegotiation aimed at reshaping the bilateral agreement to adapt it to the effects arising from the event.At international level, hardship and force majeure are outlined in the Unidroit Principles of International Commercial Contracts ([27]) (“PICC”).It must be pointed out that PICCs are non-binding “soft law” instruments intended to address the issue of sectoral harmonisation of international commercial law. It is customary in international commercial contracts to regulate precisely and in detail circumstances that may amount to force majeure and hardship, as well as their consequences on the validity of the contract.In particular, according to Article 6.2.2 of the PICC hardship is a situation where the occurrence of events fundamentally alters the equilibrium of the contract, either because of an increase in the cost of performance of one of the parties, or because of a decrease in the value of the performance received by one party. In order to establish a cause of hardship, it is necessary that: (i) events occurs or becomes known to the disadvantaged party after conclusion of the contract; (ii) events could not reasonably have been taken into account by disadvantaged party at the time the contract was concluded; (iii) events are beyond the control of the disadvantaged party; (iv) the disadvantaged party had not assumed the risk of such events.As to the effects of hardship, Article 6.2.3 provides for the right of the disadvantaged party to request renegotiation of the contract. The request for renegotiation, which in itself does not entitle the disadvantaged party to withhold performance, must be made without undue delay and must indicate the grounds on which it is based. Upon failure to reach an agreement within a reasonable time, either party may resort to the court and, if the court finds hardship, it may (i) terminate the contract, or (ii) adapt it with a view to restoring its original equilibrium.Force majeure is regulated by Article 7.1.7 PICC, which, first of all, assumes the general principle that non-performance by a party is excused if that party proves that (i) the non-performance was due to an impediment beyond its control; and (ii) it could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.With regard to the consequences of the occurrence of a force majeure event, when the impediment is only temporary, the excuse shall have effect for such period as is reasonable having regard to the effect of the impediment on the performance of the contract.In any event, in order to invoke the exemption from liability, the non-performing party must comply with certain procedural requirements, namely it must give notice to the other party of the impediment and its effect on its ability to perform. Indeed, if the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, it is liable for damages resulting from such non-receipt.Finally, it is made clear that such provision shall not prevent the parties from exercising the right to terminate the contract or to withhold performance or request interest on money due.In accordance with the combined provisions regarding the definitions of force majeure and hardship laid down in Articles 6.2.2. and 7.1.7. PICC, there may be events falling into both categories. In such case, it is up to the obligor to decide which remedy to apply: by invoking force majeure, the obligor may seek exemption from the consequences of non-performance; by invoking hardship, the obligor may seek to renegotiate the contract in order to keep it in force although with altered terms and conditions.Therefore, whenever there is a possibility - either based on a specific contractual clause or on a reference to a foreign law or international treaty - to invoke force majeure, there are at least three remedies that may be adopted by the party affected by the force majeure event, namely suspension of performance, renegotiation of the contract or termination of the contract.As concerns the suspension of the contract, it should be noted that international contracts often regulate such remedy having regard to a maximum term beyond which, if the circumstance persists, the contract is terminated or its term and conditions must be renegotiated by the parties in good faith.The remedy of contract renegotiation, which may be adopted, for example, by entering into a written agreement amending the original contract, will consist in laying down new terms and conditions concerning the performance or, in cases of greater difficulty, in establishing a new balance in the parties’ performance given the changed circumstances. As to the remedy of contract termination, the “force majeure” clause contained in the contract may rarely operate as a cause for automatic termination, although such a remedy would be unavoidable in all those cases where performance has become impossible or no longer practicable for an indefinite period of time or for a period of time frustrating the requirements set out in the contract.2.2.2  Material adverse changes – MAC clausesIn contrast to what has been outlined with respect to hardship and force majeure clauses, there is no international definition of MAC: the content of MAC clauses is therefore entirely left to the negotiating autonomy of the parties and depends on the outcome of negotiations between them.First of all, it should be noted that, in contractual practice, MAC clauses have different characteristics from force majeure and hardship clauses in terms of risk allocation: in fact, they allocate the risk of negative events to only one party to the contractual relationship (which may, therefore, merely mitigate the effects thereof through an adequate negotiation) and entitle, in such a case, the other party to seek termination of the contract. Consequently, the tenor of the clause runs counter to the principle of preservation of the contract even though some formulations contain a so-called “right to cure”, which provides the party bearing the risk of the occurrence of the event with the right to remedy its occurrence.In addition, the operation of the clauses in question is often limited to a short period of time, and it is precisely the limitation in terms of duration that somehow protects also the position of the party bearing the risk of non-performance and of possible termination of the contract.*With regard to the contractual imbalance resulting from the significant increase in commodities costs, it is first of all necessary to verify whether or not hardship, force majeure or MAC clauses exist and whether the circumstance in question is one of those triggering them.With respect to current contracts - also taking into account the provisions of the PICC and without prejudice to any agreements to the contrary between the parties - it may be reasonably assumed that significant increases in commodities costs following the post-pandemic recovery may amount, at least in the most affected product sectors, to an unpredictable, extraordinary circumstance beyond the control of the relevant parties for the purposes of the most common clauses of international commercial practice.If the foregoing clauses have not been agreed upon, the remedies provided for by the law applicable to the contract shall apply to the relationship.Should the parties fail to expressly choose the law applicable to the contract, the same shall be determined in accordance with the rules of private international law of the country of the court having jurisdiction to settle the dispute. 3. Legal aspects of the European energy crisis                 3.1. Foreword: the European energy crisis and the impact on commercial contractsIn a nutshell, the current acute commodity price crisis had its origin in the natural gas sector for reasons mainly external to Europe, and subsequently spread to the European electricity sector, amplified by several factors, among which the low production of renewables in Europe and the shutdown for maintenance of several French nuclear power plants ([28]).To give an idea of the imbalance affecting many contractual relationships, it is worth noting that in Italy net electricity prices for industry in January were the second highest in Europe ([29]): Euro 225 per megawatt hour compared to Euro 60/MWh nine months ago. A value that is 34% higher than prices in Germany Such starting point, higher than in several European countries, was then accompanied by one of the most significant increases in Europe: indeed, it was estimated that Italian electricity prices have risen by a factor of 3.7 since March 2021. This means that the cost of energy for Italian companies could reach 37 billion Euro in 2022: almost 5 times more than in 2019, and even higher than the already exorbitant 21 billion Euro in 2021. Hence, the total costs for businesses projected for 2022 would exceed the entire amount of funds allocated by the NRRP to the Ministry of Ecological Transition (34.9 billion Euro). If prices do not fall, Italy’s GDP growth could be 0.8 per cent lower than expected in the first quarter of 2022, and almost a third of jobs in the most energy-intensive sectors (500,000) would be at risk ([30]).The energy crisis is further exacerbated by the effects of sanctions imposed on Russia in connection with the conflict in Ukraine, Russia being the European Union’s largest energy supplier ([31]). It was calculated that since May last year, Russia has reduced its supplies to European countries by 25% with a peak of -40% in January 2022 ([32]).On the basis of the above data, it was observed ([33]) that the current energy crisis in Europe is not only extraordinarily intense and long-lasting, but it is also characterised by an additional component, namely the presence of a “combo” price crisis, with unprecedented tensions affecting both the gas and electricity markets, moreover in an interconnected way.As a result of such an economic situation, the repercussions on business relations are as follows: one of the two parties of the producer-consumer pair finds itself in a position of semi-permanent distress (users) while the other (producers) - due to its own resources and contracts - may even find itself in a situation of unexpected profit from its activity ([34]).Still from a legal point of view, in general terms, in the reference market, the considerations outlined in the preceding paragraphs are of particular relevance, given the peculiar structure often adopted for energy supply contracts (in particular, natural gas); indeed, the contracts in question are often structured as long-term contracts containing so-called take-or-pay clauses, whereby the purchaser undertakes to receive a minimum quantity of raw material for each contractual period, or to pay the price for it even if it is not taken ([35]). Hence, as a result of such clauses, producers transfer the risk associated with price and demand variations to their buyers.3.2. Conclusions: legal solutions to regulate the effects of the energy crisis on commercial contracts As mentioned, the current energy crisis has such peculiarities that it deserves a specific examination compared to the broader case of commodity price crisis.When investigating the legal consequences of the current energy crisis, it is first necessary to ascertain whether existing contracts contain hardship, force majeure or MAC clauses: in fact it can be presumed that should this be the case, then the current tensions in the energy market would fall within the scope of application of the clauses in question as formulated in international commercial practice, without prejudice in any case to the need for a case-by-case investigation of the contractual data.Otherwise, in the absence of the above clauses, the only remedies available will be those provided for by the law applicable to the contract.As regards Italian law, reference has already been made to the limited applicability of the remedy of supervening impossibility of performance in the case of mere economic difficulties connected with the procurement of raw materials.However, such conclusion must be re-evaluated taking into account the unprecedented geopolitical situation related to reduced supplies from Russia.Given the European market’s heavy dependence on Russian exports, it cannot be ruled out that the situation in the coming months may evolve in the sense of taking on the connotations of supervening impossibility, in the form of a temporary impossibility.Without prejudice to the foregoing, the remedy offered by the institution of supervening hardship seems however applicable to a larger number of cases.Indeed, it might be reasonable to argue that the conditions of extraordinariness and unpredictability required by Article 1467 of the Italian Civil Code are satisfied.This is supported not only by the extent of the increase in costs but also by the rapidity of such an increase and the anomalies arising from the lack of Russian supplies.In this regard, it should be stressed that the institution of hardship inevitably results in the breaking of the contract and not in its preservation. Indeed, the party burdened by the increased onerousness is entitled only to terminate the contract. The possibility to take the contract back to equity could only result from an initiative of the party taking advantage of the supervening contractual imbalance in order to avoid termination of the contract.However, a possible request to renegotiate the contract could be based on the provisions on supplementary equity (pursuant to Article 1374 of the Italian Civil Code) and on the obligations to interpret and perform the contract in good faith (pursuant to Articles 1366 and 1375 of the Italian Civil Code).Indeed, from this perspective, the totally extraordinary and anomalous trend of the energy market in recent months represents a contingency that may amount to a valid prerequisite for claiming, pursuant to performance and interpretation of the contract in good faith, the existence of an obligation to renegotiate the agreed contractual regulation given the presence of a significantly different economic scenario (especially in the case of long-term contracts).Having clarified this, it should be recalled that the existence of a regulatory obligation to renegotiate has not yet been unanimously recognised by legal theory and case law.As a matter of fact, given the reasonable existence of the requirement of unpredictability of the energy crisis as currently shaped, a price revision pursuant to Article 1664 of the Italian Civil Code might be feasible with respect to procurement contracts: where the quantitative conditions laid down by the rule are met (i.e. an increase in the cost of raw materials resulting in an increase of more than one-tenth of the price), the contracting party suffering the imbalance may avail itself of the right to obtain a revision of the price, although within the statutory limit of the mere difference exceeding one-tenth of the price. The content of this article is for information purposes only and is not, and cannot be intended as, professional advice on the matters dealt with. For further information please contact your counsel or send an email to the following address: corporate.commercial@advant-nctm.com.  ^[1] G. Bortoni, op.cit.[2] The first place goes to Spain with 243 €/MWh.[3] See more extensively “Crisi energetica: l’Italia è diversa?” (Energy Crisis: is Italy different?), by ISPI Data Lab, published on 16 February 2022; for further insights into rising commodity prices see also “Petrolio e gas senza freni: gli Usa vogliono colpire l’export russo e il mercato trema” (Oil and gas without control: the US wants to hit Russian exports and the market is quaking) by Sissi Bellomo, published in Il Sole24Ore on 7 March 2022.[4] A. Ciò, “Venti di Guerra sul fuoco della crisi energetica” (Winds of War on the fire of energy crisis), in Quotidiano Energia, 24 February 2022.[5] ISPI Data Lab, cit[6] G. Bortoni, op.cit.^[7]  See, on this topic, G. Bortoni, op.cit.[8] F. Macario, op.cit.[9] In this respect, M. L. VITALI, Clausole di forza maggiore, di hardship e di assenza di effetti sfavorevoli: riflessioni ai tempi della “grande epidemia” (Force majeure, hardship and no adverse effect clauses: reflections at the time of the “great epidemic”), in Rivista di Diritto Bancario, October/December 2020.[10] Available at: https://www.unidroit.org/wp-content/uploads/2021/06/Unidroit-Principles-2016-Italian-bl.pdf.[11] See ex multis, F. Macario, op. cit., R. Sacco, G. De Nova, op.cit.[12] Ex multis, see Court of Bologna, bankruptcy division, 26 April 2013, available on Pluris, where the Court acknowledged a real obligation of renegotiation, based on the general principle of good faith in the performance of the contract. Along the same lines, Court of Bari, 14 June 2011, available on Dejure.^[13] R. Sacco, De Nova op.cit., 1708 et seq..^[14] R. Sacco, De Nova op.cit., 1708 et seq.[15] See Court of Bologna, bankruptcy division, 26 April 2013, available on Pluris.[16] Page 24 of the Report[17] See in this respect page 25 of the Report.[18] In this respect, see also R. SENIGALLIA, Le attuali sopravvenienze contrattuali tra diritto vigente e diritto vivente, in Jus Civile, No. 3, 2021.[19] See: (i) in favour of the existence of the obligation to renegotiate because of COVID-19, Court of Rome, 27 August 2020, available on DeJure, with comment by M. Di Marzio, “COVID-19: il giudice riduce il canone delle locazioni ad uso di ristorante “(COVID-19: the court has reduced the rent for restaurant leases), in Ilprocessocivile.it, 28 September 2020; (ii) in favour of the existence of the obligation to renegotiate the contract, excluding, however, that a specific form of enforcement may be requested pursuant to Article 2932 of the Italian Civil Code, Court of Rome, 26 July 2021, No. 10161, available on DeJure; (iii) in relation to a business lease contract, the court intervened directly on the contract, ruling that, taking into account the fact that the assignor’s performance that had not been performed was the one with the greatest economic significance, the rent for the lockdown period had to be reduced by 70%, Court of Rome, 29 May 2020. To the contrary, along the line that in our legal system there is no obligation to renegotiate arising from the general principle of good faith in the performance of the contract, see: (i) Court of Rome, 30 September 2021, No. 15763, available on DeJure; (ii) Court of Rome, 19 February 2021, No. 3114, available on DeJure.[20] See Court of Bologna, bankruptcy division, 26 April 2013 (decr.)[21] In this regard, F. MACARIO, Rischio contrattuale e rapporti di durata nel nuovo diritto dei contratti: dalla presupposizione all’obbligo di rinegoziare, in Rivista di Diritto Civile, No. 1, 1 February 2002, page 10063.^[22] By way of example, the provisions aimed at regulating contingencies include Article 1623 of the Italian Civil Code on leases and Article 1710(2) of the Italian Civil Code on mandates.^[23] Pursuant to Article 1655 of the Italian Civil Code, a procurement contract is defined as “A contract whereby one party undertakes, with the organisation of the necessary means and with management at its own risk, the performance of a work or service in return for a monetary consideration”.[24] Supreme Court, 31 December 2013, No. 28812.[25] See Civil Cass., 11 July 1990, No. 7208.[26] We speak of acute crises with reference to situations that are “apparently irreversible or that struggle to end, almost always caused by triggers, sometimes multiple and concomitant, having an external origin and a jurisdiction that is ill-defined in that it is very extensive or even globalised. During such crises, the game of roles comes to a sort of standstil and plastic effects of structural adjustment begin to occur. Today’s energy crisis in Europe is one of such crises, extraordinarily intense and long-lasting due to a variety of factors, but with an added complexity: we have entered into a, so to speak, combo price crisis, i.e. with unprecedented tensions in both the gas and electricity markets, which are to a great extent interconnected”. See, on this topic, G. Bortoni, Caro-energia ‘21-’22/ una crisi dagli effetti plastici (High energy prices ‘21-’22/ a crisis with plastic effects), 23 December 2021.[27] The impact on the food industry, for example, is also affected by the increase in wheat prices, which rose by 5.7% in one day, reaching the highest value in nine years at USD 9.34 per “bushel” (international unit of measurement equal to about 35 litres, equivalent to slightly more than 27.2 kg of wheat and 24.5 kg of maize), see “La guerra in Ucraina fa balzare i prezzi di grano e mais: l’allarme del settore agroalimentare” (War in Ukraine has escalated a surge in wheat and maize prices: the alarm of the agri-food sector), article by Emiliano Sgambato, in Sole24Ore of 24 February 2022. Such a situation is likely to adversely affect the Italian agri-food market, also in view of the fact that Italy is the tenth largest purchaser with a value of 496 million and the second largest supplier of products with a 7% share amounting to 415 million, see, in this respect, “Guerra in Ucraina e alimentare: a rischio forniture di mais, frumento e olio di semi” (War in Ukraine and food: corn, wheat and seed oil supplies at risk), article published in Sole24Ore of 21 February 2022.[28] An estimated double rebound in GDP of 6.5% realised in 2021 and an OECD estimate of 4.1% for the current year (however under revision due to the current international events related to the conflict in Ukraine), after the slump in 2020. See A. Sganzerla, Aumento del costo delle materie prime, rinegoziazione del contratto di durata e clausole di hardship (Rising commodity costs, renegotiation of fixed term contracts and hardship clauses), in Norme e Tributi, in Sole24ore, 7 February 2022.^[29] See in this regard F. Macario, Regole e prassi della rinegoziazione al tempo della crisi (Rules and practice of renegotiation in times of crisis), in Giustizia Civile, No. 3, 2014; R. SACCO, G. DE NOVA, Il contratto, Milan, 2016, p. 1710 et seq.^[30] Although the subject is not covered by this memorandum, it should be noted that the conclusions drawn on monetary obligations could be revised in the light of the effects of the sanctions approved against the Russian Federation in connection with the ongoing conflict in Ukraine.^[31] Page 2 of the Report.^[32] Also with regard to such circumstance, it should be noted that said conclusions could be reconsidered in the light of the effects of the sanctions approved against the Russian Federation in connection with the ongoing conflict in Ukraine.[33] In this regard, it should be taken into account that case law, in practice, tends to assess the excessive onerousness of the imbalance in strict terms, giving weight to (upward or downward) variations in the value of the economic elements originally underlying the contract to the extent of one half and, in any event, never less than one third. On this point, F. RUSCELLO, Istituzioni di diritto privato, Milan, 2011.[34] See Civil Cassation No. 12235 of 25 May 2007; Civil Cassation No. 22936 of 19 October 2006.[35] For this reason, the Italian Civil Code - in Article 1469 - provides that the institution in question shall not apply to contracts that are aleatory by their nature (e.g. insurance contracts) or that have been made such by the will of the parties.

The admissibility in our legal system, and the scope, of a “Russian Roulette” clause have been the focus of debate in the most recent legal literature and case law. This paper intends to analyse the most interesting aspects related to such clause, with particular reference to its legitimacy and validity, regardless of the provision for a mechanism of pre-determination of the price of the shareholding being transferred. 

2. Definition and scope of a Russian Roulette Clause 

A Russian Roulette Clause represents the most popular remedy to solve any deadlock (empasse, stalemate) that may occur during the life of a company.Such clause can be either contained in bylaws or in shareholders’ agreements and, in practice, anti-deadlock clauses are very common in case of an equal shareholding in a company (the typical case is that of an equally-owned joint venture) or where high quorums are envisaged for certain decisions.The purpose is, in any event, to prevent the situation of paralysis that has occurred from resulting in the dissolution of the company, according to the provisions of Article 2484, first paragraph, of the Italian Civil Code. 

3. Deadlock Cases

“Deadlock” means that situation where a company’s Board of Directors and/or Shareholders’ Meeting are unable to adopt a resolution as a result of a disagreement occurring among the shareholders’ representatives or the members of the Board of Directors.The risk of a deadlock is higher in equally-owned companies or in companies in respect of which the parties have in any event contractually identified a number of resolutions, deemed particularly important for the life of the company, stipulating that they can only be adopted by unanimity or, in any event, by a qualified majority[1]. 

4. Function and structure of the clause

Once the event causing the deadlock (“trigger event”) has occurred, the activation of a Russian Roulette Clause involves one of the two partners (“offeror”) being entitled to make an irrevocable offer to the other party (“offeree”) to purchase the offeree’s shares, at the same time fixing the value of the same even in the absence of pre-determined quantification criteria.The offeree, on receiving the aforementioned “purchase offer,” obtains the right to end the deadlock, within a certain period of time, either by accepting the offer and selling his shares at the price thus determined by the other party who implemented the procedure (offeror), or by purchasing the offeror’s shares himself, assuming as a price the same exact value notified by the other party.As a rule, the clause also includes provisions to prevent the procedure being in turn blocked due to obstructive behaviour on the part of the offeree not replying to the offer. Thus, a mechanism of consent by silence is usually provided, which allows the translative effect of the proposed purchase to take place on the expiry of the period agreed for the exercise of the option, thus in lieu of the offeree’s acceptance[2]. 

5. Determination of the price of the stake

The price determination mechanism is one of the most controversial aspects of the clause under examination.The issue of concern lies in the fact that, in most cases, the clause does not provide preestablished criteria for determining the price at which the partner’s stake may be sold or purchased. In essence, the offeree is subjected to the offeror’s sole discretion, as the valuation of the shares is done “in the dark.”This might lead to arguing either that the mechanism described amounts to breach of Article 1349 of the Civil Code, resulting in an unilateral determination of the price on a purely discretionary basis, or that it represents a merely potestative and, therefore, void condition under Article 1355 of the Civil Code.Case law[3] has however confirmed and reaffirmed[4] the validity, in principle, of Russian Roulette clauses.More specifically, case law held that, in Russian Roulette clauses, the advantageous position of the offeror - involving, if anything, the possibility of determining the value of the offeree’s stake  - does (or should) not result in an undue advantage for the offeror.The determination of the price, though not being subject to limits or notification criteria, that is, “in the dark” would in the words of the court[5] give rise to an “inherently balanced” mechanism.Indeed, even disregarding the fact that the activation of the procedure aimed at determining the value/price is not without costs for those who activate it, the balance would lie in the risk, taken by those who propose the same value/price, of “getting the valuation wrong”. Since the choice of whether or not to purchase the shares is left to the party who did not determine the price, any undervaluation of the share capital would advantage the potential buyer (who would pay a price lower than the market value of the stake), while - on the contrary - any overvaluation would result in the offeror disbursing an amount higher than the market value, with obvious unfavourable effect for the party that is active in both and opposite scenarios.As concerns the other critical issue, i.e., the potential breach of the prohibition of providing for merely potestative conditions, this is overcome on the basis of the assumption that the mechanism of the clause, while giving one of the partners the advantage of determining the price, finds a limit in the alternative obligation arising on the part of the offeree.Therefore, the clause cannot be deemed null and void based on Article 1355 of the Italian Civil Code, as the existence of that absolute freedom that marks the merely potestative condition is not recognisable.According to case law, such freedom can only be found in cases where the party’s activity is based on mere discretion “unrelated to any rational assessment of opportunity and expediency”[6].Such assessments, on the other hand, in the context of the clause under consideration, are necessarily made by the offeror, keeping well in mind the right of choice given to the offeree[7], which causes the valuation of the offeree’s stake to be true and thoughtful.Another issue that has come to the attention of case law[8] and legal literature[9] is whether the pricing mechanism of the Russian Roulette Clause conflicts with the general principle of equitable valuation of shareholdings, taken from the drag along clauses and possibly applicable to Russian Roulette Clauses as well.Again, however, it was held to rule out any breach of the general principle of fair valuation of shareholdings for two reasons:(i) first, the two clauses serve a different function. Drag along clauses are covenants that provide a right in favour of the majority shareholder, who, where wishing to dispose of his shareholding, acquires the right to negotiate with third parties (under the same economic conditions) the sale of not only his shares, but of the entire share capital (including also minority shareholdings). Such clause therefore involves a right of the selling shareholder who “drags” the minority shareholder’s stake into the project of selling his stake. The minority shareholder is therefore forced to dispose of his stake at a price imposed at the initiative of the majority shareholder.The Russian Roulette Clause has on the other hand the function of resolving deadlock situations by reorganizing the corporate structure.In a nutshell, the protection of the minority shareholder is made necessary, in case of a drag along clause, because of the situation of subordination in which the minority shareholder finds himself with respect to the majority shareholder and results in providing criteria for determination that ensure compliance with the principle of fair valuation of shareholdings. In the presence of a Russian Roulette Clause, such a mechanism is missing, because there is no subjection of the offeree, who has the option, where deemed appropriate, to purchase the shareholding of the offeror rather than sell his own;(ii) second, the distinction between bylaws and shareholders’ agreements must be borne in mind. Even assuming that the provision of pricing criteria is a condition for the validity of a Russian Roulette Clause contained in by-laws, this could not be argued with such clause being contained in a shareholders’ agreement, which, by definition, is based solely on the autonomy of the parties. In other words, while a Russian Roulette Clause contained in by-laws should provide for criteria that ensure fair valuation, the relevant case law holds that this cannot be said when the clause is included in a shareholders’ agreement, as it is not possible to “place regulatory limits on the parties’ freedom of negotiation to arrange the economic terms of a contract of exchange that binds the parties only”.[10] 

6. Compatibily of the clause with the prohibition of Leonina Societas Covenants

Among the main criticisms raised against the lawfulness of a Russian Roulette Clause relates to the potential breach of the prohibition of leonina societas covenants.In this case too, case law[11] and legal commentators[12] ruled out the aforementioned breach, noting how deadlock clauses such as Russian Roulette clauses are not  suitable, either  for their purpose or for their structure, to allow a shareholder to take advantage of the exit right, which can only take place in the face of a decision deadlock.So, as long as the company remains operational, each partner will earn profits and incur losses according to the standard rules.On the other hand, it could not happen that a shareholder takes advantage of the exit possibility by remaining neutral with respect to profits or losses, after he himself having caused the deadlock and activated the buy-sell procedure, since evidently, even if the other shareholder has not paralyzed the abusive conduct upstream by an exceptio doli generalis, in any case the determination of the price will be based on the current value of the shareholding, taking into account the higher value or the depreciation of the shareholding that has occurred in the meantime. 

7. The Russian Roulette Clause as a Shareholders' Agreement

Article 2341 bis of the Italian Civil Code provides that shareholders’ agreements cannot have a term of more than five years and are considered to be entered into for such term even if the parties have agreed upon a longer term.Thus, case law has been dealing with the possible indirect violation of this rule, if shareholders’ agreements provide that failure to renew them constitutes a deadlock that  may trigger a Russian Roulette Clause procedure. In particular, the issue was raised as to whether the activation of the procedure under the clause under consideration may be considered as a real sanction for non-renewal of shareholders’ agreements, thus involving their potentially unlimited duration since either the agreement is renewed (thus assuming a term of more than five years) or the corporate relationship is dissolved limited to an individual shareholder.However, case law held that “the clauses linking the non-renewal of the covenant to the start of the anti-deadlock procedure - giving one of the parties the power to determine the price and the other the alternative between the purchase and sale of the shareholding - are not a priori invalid, since they do not appear to be aimed at conditioning the will of the parties to the covenant for the purpose of “crystallising” the balances (ownership and governance) reflected in the covenant. On the contrary, they are aimed at “rearranging” such balances precisely for the case that the shareholders’ agreement is broken as a result of non-renewal and, thus, at preventing the dissolution of the company”[13].In other words, the Russian Roulette clause represents a typical example of a “teleologically atypical” shareholders’ agreement, whereby the shareholders aim to resolve management and decision-making deadlocks by means of a new and different company structure, and not by consolidating or “stabilising” the existing ownership structure or  governance of the company.Case law emphasized that the mechanism whereby the parties regulate in advance the terms and conditions for setting up the ownership and governance features of a company, for the event that the shareholders’ agreement ceases to exist, is not intended to crystallise the agreement beyond the statutory time limits but is aimed at preventing a decision-making deadlock from occurring among shareholders following the dissolution of the shareholders’ agreement[14]. 

8. Concluding remarks

As a result of this examination, it can be concluded that Russian Roulette Clauses can be considered ex se lawful and worthy of protection under the Italian legal system.At the same time, it cannot be kept silent about the fact that, even if it passes the test of lawfulness and legitimacy for the species, the clause might in practice be deployed in such a way as to obtain a result prohibited by the legal system.Any abuse committed, however, would not be such as to undermine the aforementioned principles enshrined in case law, but would reasonably be a sign of invalidity of the individual clause in the specific case, which could - consequently - be declared invalid, without this affecting the matter in general terms. This article is for information purposes only and neither is nor can be considered as a professional opinion on the topics covered. For more information, please contact Sara Dameri and Luca Dettori.  [1] Luigi A. Stabile, La Validità della russian roulette clause nei patti parasociali, Il Corriere giuridico 11/2021.[2] M. Facci, La Clausola di Roulette Russa, in Le nuove Leggi Civili Commentate 3/2020.[3] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[4] Court of Appeal of Rome No. 782 of 3 February 2020.[5] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[6] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[7] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[8] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[9] Luigi A. Stabile, La Validità della russian roulette clause nei patti parasociali, il Corriere giuridico 11/2021.[10] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[11] Court of Appeal of Rome No. 782 of 3 February 2020.[12] Giuseppe de Falco, Commento sulle clausole statutarie russian roulette (orientamento Consiglio notarile di Firenze n. 73/2020), in La rivista delle operazioni straordinarie No. 1/2022.[13] Court of Rome, Special Business Division No. 19708 of 19 October 2017.[14] Giuseppe de Falco, Commento sulle clausole statutarie russian roulette (orientamento Consiglio notarile di Firenze n. 73/2020), in La rivista delle operazioni straordinarie No. 1/2022.

• confidentiality breach, where there is an unauthorised or accidental disclosure of, or access to, personal data;
• availability breach, where there is an accidental or unauthorised loss of access to, or destruction of, personal data; and
• integrity breach, where there is an unauthorised or accidental alteration of personal data.

There are two main obligations that the GDPR imposes on a data controller in the event of a personal data breach.The first one, under Article 33(1) of the GDPR, is that of notifying the breach to the competent supervisory authority;  the second one, under Article 34(1) of the GDPR, is that of communicating the breach to data subjects.Data breach notification to  supervisory authorities is always mandatory, unless the breach is “unlikely to result in a risk for the rights and freedoms of individuals”.There is a risk for the rights and freedoms of individuals when the breach is even only potentially capable of causing material or immaterial damage to the data subject.As concerns the notification timeframe, notification must be made “without undue delay and, where feasible, within 72 hours after [the controller] having become aware of it”, that is to say, from the time when it is reasonably certain that a security incident resulting in compromising the personal data has occurred. In case of notifications made after 72 hours, the controller shall be under an obligation to give reasons for the delay. A processor who becomes aware of a breach shall on the other hand notify the controller without undue delay and, therefore, as soon as possible.As for the form, content and methods of transmission of the notification to the supervisory authority, it is the supervisory authority itself that establishes the relevant requirements, which may also go beyond the minimum requirements set out in the GDPR.More specifically, from 1 July 2021, the notification to the Authority may be made exclusively via the online procedure available in the Authority’s online services portal and accessible at https://servizi.gpdp.it/databreach/s/.Notification may be made directly by the controller, through a legal representative, or a proxy acting on the controller’s behalf, authorised by a power of attorney to act in the procedure in the name and on behalf of the controller.The notifying person (whose identity is established at the time of accessing  the service via SPID (Public Digital Identity System), CIE (Electronic Identity Card) or CNS (National Service Card), or at the time of signing the notification by digital signature) is required to provide a certain amount of information. The information requested can be classified as follows:A) Data of the notifying person;B) Type of notification;C) Data controller;D) Contact details for information relating to the breach;E) Any further persons involved in the processing;F) Information concerning the breach;G) Likely consequences of the breach;H) Measures taken to address the breach;I) Assessment of risk to data subjects;L) Communication of the breach to data subjects;M) Other information;N) Information on cross-border violations;O) Information on breach concerning processing carried out by a controller established outside the European Economic Area.Communication to data subjects is, on the other hand, mandatory “when the  breach of personal data is likely to result in a high risk to the rights and freedoms of natural persons”. The risk threshold required for disclosure is therefore higher than that required for notification; not all breaches notified to the supervisory authority therefore need to be communicated to data subjects.As concerns the timeframe for communication, communication must be made “without undue delay”, i.e. as soon as possible.The main purpose of such requirement is to provide data subjects with detailed information as to the measures they can take to protect themselves against any detrimental consequence of a breach.There are no specific procedures or formalities for making the communication.Article 34 (2) GDPR requires only that the communication, besides identifying the name and contact details of the Data Protection Officer (DPO) or other contact point, describe, in clear and simple terms, the nature of the personal data breach, the likely consequences of the breach and the measures taken or proposed to be taken to address the breach.There is, however, no obligation to communicate when:

• the data controller has implemented, in relation to the data breach, appropriate technical and organisational measures, in particular those that render the data unintelligible to anyone who is not authorised to access it (such as encryption or tokenization);
• immediately after the breach, the data controller has taken steps that ensure that the high risk to the rights and freedoms of data subjects is no longer likely to materialise (e.g., the data controller has taken prompt action against the individual who gained unauthorised access to the data before the latter being able to use it); or when
• contacting data subjects would involve a disproportionate effort (e.g., contact information was lost due to the breach); in such case, a public communication or similar measure may be taken.

In consideration of the above, it is clear that the assessment of the existence of a risk (or a high risk), as soon as one becomes aware of a breach, is essential to understand whether to make the notification to the competent supervisory authority and the communication to data subjects as well as, of course, to take effective measures to limit and resolve the breach.In this regard, the WP29, with its “Guidelines on Personal data breach notification under Regulation 2016/679 (WP250)”, subsequently adopted by the European Data Protection Board, lists and describes seven risk factors to consider, referring to the document of December 2013 “Recommendations for a methodology of the assessment of severity of personal data breaches” adopted by ENISA, containing a methodology for data breach severity assessment, as a useful tool allowing controllers to prepare an action plan. Such factors include:

• type of breach;
• nature, sensitivity and volume of personal data;
• ease of identification of individuals;
• severity of consequences for individuals;
• special characteristics of the individual;
• special characteristics of the data controller;
• the number of affected individuals.

By way of example, based on the aforementioned guidelines, a cyber-attack making a hospital’s medical records unavailable for a period of 30 hours should be notified to the Authority and communicated to the data subjects, involving a high risk for the patients’ health and privacy.By contrast, a brief power outage lasting a few minutes at a controller’s call centre,  preventing customers from calling the controller and accessing their records, would not amount to breach subject to notification or communication.There is, moreover, a further requirement placed on the data controller in case of breach, regardless of whether or not the breach is notified and communicated to the authority and to data subjects.The data controller is indeed required to document any personal data breach, including the circumstances surrounding the breach, its consequences and any remedial action taken. Also in respect of such activity, there are no specific procedures or formalities; in practice, companies have set up a data breach register completed with the above information. This is obviously a tool that allows the controller to demonstrate for accountability purposes (and the authority to verify) compliance with the applicable legislation.It should be noted that the rules described above, introduced and fully regulated by the GDPR, now also apply, pursuant to the Authority’s order of 30 July 2019, also to personal data breach notification obligations imposed on providers of electronic communication services under Directive 2002/58/EC (so-called “e-Privacy Directive”) and the relevant national implementing legislation (Legislative Decree 69/2012, which in turn amended, in that regard, Legislative Decree 196/2003), as well as to communication obligations regarding health records, biometrics, circulation of information in the banking sector and the exchange of personal data between public administrations.Finally, a few pieces of statistical information.In terms of breaches notified to the Authority, 1,443 cases were recorded in 2019 and 1,387 cases in 2020; by contrast, in 2018 there were 650 cases only (see 2020 and 2021 annual reports, respectively).Out of the approximately 60 measures published by the Authority on the matter in the last year (April 2021-January 2022), almost all of them targeted actions connected with internal incidents (e.g., incidents of erroneous transmission/sharing of data with unauthorised parties), while in the other cases said measures addressed external intentional actions associated with ransomware attacks.With regard to the type of sanctions applied, the Authority issued warnings or administrative fines to the persons involved.Among the highest sanctions, the Authority sanctioned a credit institution for EUR 1,650,000, not for a specific breach under Articles 33 and 34 of the GDPR, but for its failure to adopt  technical and organisational measures capable of ensuring a level of security adequate to the risk, a circumstance that in fact emerged in the course of the Authority’s investigation.The next contribution will focus on the Electronic Communications Code and the obligations of providers of public communications networks and publicly available electronic communications services. The electronic communications code and the obligations imposed on providers of public communications networks and publicly available electronic communications services The third contribution on Italian legislation on cybersecurity. This contribution focuses on the obligations laid down in the Electronic Communications Code for providers of public communications networks and publicly available electronic communications services in relation to security measures to be adopted and reporting of major incidents.Certain companies have IT security obligations beyond those imposed on them under the GDPR.This is the case, for example, of companies providing public communications networks or publicly accessible electronic communications services. These include telecommunications operators, providers of Internet messaging services and of VoIP services and providers of other Internet communications services.There are two obligations for providers of public communications networks or publicly available electronic communications services.The first obligation is to take the (technical and organisational) measures identified by the Agency to manage the risks posed to the security of publicly accessible electronic communications networks and services (e.g. the use of encryption technologies).Furthermore, the Agency may issue binding instructions to providers of public communications networks or publicly available electronic communications services to remedy a security incident or prevent one from occurring when a significant threat has been identified.To date, the Agency has not yet established such measures. Therefore, reference must still be made to the measures set out in Article 4 of the Ministry of Economic Development’s Decree of 12 December 2018 in relation to critical assets.The measures identified by the Decree include, in particular:

• definition and updating over time of security policies, approved by the company Management;
• identification of the main risks to the security and integrity of networks and services and definition of the methods for managing them;
• definition of roles and assignment of responsibilities to employees, whose availability in the event of security incidents must be ensured;
• definition (and verification of compliance) of the requirements to be met by services and products provided by third parties and definition of the methods for managing security incidents relating to or caused by third parties and affecting the network or the service provided;
• provision of training courses to staff, rotation of staff with positions of responsibility and definition of intervention procedures in case of breach of security policies;
• adoption of physical and logical security measures (e.g. procedures for assigning and revoking access rights; authentication mechanisms gauged on the basis of the type of access; protection mechanisms against unauthorised physical access or unexpected events; monitoring and recording of accesses, etc.);
• implementation of protection systems and malware detection systems and adoption of measures to prevent the tampering or alteration of software used in the network and in information systems, as well as the disclosure of critical security data, such as passwords and private keys;
• adoption (and verification of compliance) of operating procedures relating to the operation of critical systems and preparation and updating over time of a database of system configurations to enable their possible recovery, as well as an inventory of critical assets;
• assignment of a technical structure with adequate competence and availability to manage security incidents, as well as adoption of procedures for the detection, management and resolution of incidents;
• development of a contingency plan and adoption of disaster recovery procedures;
• periodic performance of tests, checks and other monitoring activities.

The second obligation is to notify the Agency and the CSIRT of security incidents that are considered significant for the proper functioning of networks and services.The identification of significant security incidents is the responsibility of the Agency, the law only indicating the parameters that the Agency must consider in order to identify them, namely:a) the number of users affected by the security incident;b) the duration of the security incident;c) the geographical spread of the area affected by the security incident;d) the extent of the impact on the operation of the network or service;e) the extent of the impact on economic and social activities.While waiting for the Agency to identify significant security incidents, the criteria set out in Article 5 of the Ministry of Economic Development’s Decree of 12 December 2018 shall apply, whereby a security incident – meaning “a breach of security or loss of integrity that results in a malfunction of electronic communications networks and services” – is significant when:a) its duration exceeds one hour and the percentage of users affected is higher than fifteen percent of the total number of domestic users of the service concerned;b) its duration exceeds two hours and the percentage of users affected is higher than ten percent of the total number of domestic users of the service concerned;c) its duration exceeds four hours and the percentage of users affected is higher than five percent of the total number of domestic users of the service concerned;d) its duration exceeds six hours and the percentage of users affected is higher than two percent of the total number of domestic users of the service concerned;e) its duration exceeds eight hours and the percentage of users affected is higher than one per cent of the total number of domestic users of the service concerned.Pending the transfer of cybersecurity functions from the Ministry of Economic Development to the Agency, the relevant notification must be made to the CSIRT and ISCTI (Istituto Superiore delle Comunicazioni e delle Tecnologie dell’Informazione – Higher Institute for Communications and Information Technologies).The deadline for notification is 24 hours from the detection of the incident. The notification made within 24 hours must include at least information about:a) the service concerned;b) the duration of the incident, if concluded, or the estimated conclusion if still ongoing;c) the estimated impact on the users of the service concerned expressed as a percentage of the national user base for said service.In addition, within 5 days of notification, a report must be submitted which contains:a) a description of the incident;b) the cause of the incident such as, by way of example only and without limitation, human error, failure, natural phenomenon, malicious action, failure caused by a third party;c) the consequences on the service provided;d) the infrastructures and systems affected;e) the impact on interconnections at national level;f) the response actions to mitigate the impact of the incident;g) the actions to reduce the risk of recurrence of the incident or similar incidents.In order to verify compliance with the obligations described above, the Agency may request from network and service providers any and all information necessary for assessing the security of networks and services (in particular, documents relating to security policies), as well as carry out audits and inspections, either directly or through an appointed third party.Sanctions in case of breach of the obligations described above are quite high.Failure to comply with security measures shall be punished with an administrative fine between Euro 250,000 and Euro 1,500,000 and failure to report significant security incidents with an administrative fine between Euro 300,000 and Euro 1,800,000. Finally, failure to provide the information necessary to assess security shall be punished with an administrative fine between Euro 200,000 and Euro 1,000,000.However, sanctions may be reduced by up to one-third, taking into account the minor nature of the breach, any efforts made by the party in question to eliminate or mitigate the consequences of the breach, and the economic importance of the operator.The next contribution will focus on the NIS Directive and the obligations of operators of essential services and of suppliers of digital services. The NIS Directive and the obligations of essential services operators and digital services providers This fourth contribution on Italian cybersecurity legislation deals with the obligations imposed by the NIS Directive on security of network and information systems upon essential services operators and digital services providers.Directive (EU) 2016/1148 on security of network and information systems (the “NIS Directive”), transposed in Italy by Legislative Decree No. 65/2018, provides for measures for a high common level of security of network and information systems used by essential services operators (“ESOs”) and digital services providers (“DSPs”).ESOs are those operators that provide a service essential to the maintenance of key social and/or economic activities in the areas of energy, transport, banking, financial market infrastructure, health, drinking water supply and distribution  as well as digital infrastructure. They are identified by NIS authorities by their own measures. The list with the names of ESOs is kept at the Ministry of Economic Development and is updated every two years.DSPs include entities providing digital e-commerce, cloud computing and search engine services, having their principal place of business, registered office or appointed representative in the national territory.Pursuant to Article 12 of Legislative Decree No. 65/2018, ESOs are required to:a) take appropriate and proportionate technical and organisational measures to manage the risks posed to the security of network and information systems which they use in their operations;b) take appropriate measures to prevent and minimise the impact of incidents affecting the security of the network and information systems used for the provision of such essential services, with a view to ensuring the continuity of such services;c) notify the CSIRT (Computer Security Incident Response Team) of any incidents having a significant impact on the continuity of the essential services they provide.Similar obligations are provided for by Article 14 of Legislative Decree No. 65/2018 on the part of DSPs, which are required to:a) identify and take appropriate and proportionate technical and organisational measures to manage the risks posed to the security of network and information systems which they use in the context of offering services within the Union;b) take measures to prevent and minimise the impact of incidents affecting the security of their network and information systems on the services offered within the Union, with a view to ensuring the continuity of such services;c) notify the CSIRT of any incident having a substantial impact on the provision of a service offered by them within the Union.Notifications of the relevant incidents must be made “without undue delay”, according to the terms set out by the CSIRT and, where appropriate, by each sectoral NIS authority by its own guidelines.Furthermore, any entities that cannot be classified as ESOs or DSPs are entitled to make notifications on a voluntary basis according to the terms of Article 17 of Legislative Decree No. 65/2018.Finally, both ESOs and DSPs are required to provide the information necessary to assess the security of their network and information systems and to remedy any failure or deficiency identified.The Agency (in whose structure the CSIRT is included, as mentioned above)  is the authority responsible for monitoring the application of the NIS Directive, designated by Article 7 of Legislative Decree No. 65/2018 as the national competent NIS authority and single point of contact for network and information systems security. The following authorities (cooperating with the national competent NIS authority) are on the other hand  designated as sectoral authorities:a) the Ministry of Economic Development for the digital infrastructure sector, IXP, DNS, TLD sub-sectors, and for digital services;b) the Ministry of Infrastructure and Sustainable Mobility, for the transport sector, air, rail and road sub-sectors;c) the Ministry of Economy and Finance, for the banking and financial market infrastructure sectors;d) the Ministry of Health, for health assistance activities provided by the operators employed, appointed or entrusted by, or having an agreement with, the same, and the Regions and the Autonomous Provinces of Trento and Bolzano, either directly or through the competent local health authorities, for health assistance activities provided by operators authorised and accredited by the Regions or Autonomous Provinces in the respective local areas of competence;e) the Ministry of Ecological Transition for the energy sector, electricity, gas and oil subsectors; andf) the Ministry of Ecological Transition and the Regions and the Autonomous Provinces of Trento and Bolzano, either directly or through the competent local authorities, for the drinking water supply and distribution sector.In case of non-compliance with the obligations under the NIS Directive, administrative sanctions of up to EUR 150,000 shall apply, to be imposed by the competent national NIS authority.Remarkably, in response to certain issues of concern that have emerged in these first years of implementation of the NIS Directive, the European Commission submitted a proposal for its revision (commonly referred to as “NIS2 Directive”), which provides, inter alia, for: notification of major accidents within 24 hours; the broadening of the scope of the Directive to cover medical device manufacturers, waste management operators and postal and courier services operators; identification of ESOs directly by the Directive and not by Member States; obligation on Member States to impose administrative fines, in any event  increased up to €10 million or 2% of the total worldwide annual turnover of the undertaking concerned. The national cyber security perimeter Fifth and last contribution on Italian cybersecurity legislation. This contribution focuses on the national cyber security perimeter and the obligations imposed on those included in the perimeter with regard to notification of incidents and to the award of contracts for the supply of ICT goods, systems and services.The national cyber security perimeter was established by Article 1 (1) of Decree Law No. 105/2019 “in order to ensure a high level of security of the networks, information systems and IT services of public administrations, public and private bodies and operators headquartered in the national territory, that are instrumental to the exercise of essential functions of the State, or the provision of a service essential for the maintenance of civil, social or economic activities that are fundamental to the interests of the State, and whose malfunctioning, interruption, whether partial or not, or improper use, could be prejudicial to national security”.The Decree Law in question delegates to subsequent Decrees of the President of the Council of Ministers the function of defining:a) the criteria and methods for identifying the entities included in the national cyber security perimeter and the rules governing the obligations resulting from the inclusion in the national security perimeter;b) the procedures for reporting incidents occurring on networks, information systems and IT systems included in the perimeter and the relevant security measures;c) the procedures, methods and deadlines to be complied with by public administrations, national bodies and operators, both public and private, included in the national cyber security perimeter, planning to award contracts for the supply of ICT goods, systems and services to be used on the networks, information systems and for the performance of the IT services identified in the list sent to the Presidency of the Council of Ministers and the Ministry of Economic Development.Moreover, the Decree Law identifies the tasks of the National Assessment and Certification Centre (Centro di Valutazione e Certificazione Nazionale, “CVCN”), with reference to the procurement of ICT products, processes, services and associated infrastructures – if intended for networks, information systems, IT systems included in the national cyber security perimeter. The CVCN is entrusted with the task of ensuring security (and the absence of vulnerabilities) of products, hardware and software intended to be used in networks, information systems and IT services of the entities included in the perimeter.Moving on to the analysis of the implementing decrees, Decree of the President of the Council of Ministers No. 131 of 30 July 2020 (the so-called “DPCM 1”) laid down the criteria and procedural methods for the identification of the entities included in the national cyber security perimeter and defined the criteria for the preparation and updating of the list of the networks, information systems and IT services relevant to them.The entities included in the perimeter are identified in Article 2 of DPCM 1, which distinguishes between entities exercising “essential functions” of the State and entities exercising “essential services” for the maintenance of civil, social or economic activities fundamental to the interests of the State.The first category includes all those entities entrusted by law with tasks aimed at ensuring continuity of government action and of constitutional bodies, internal and external security and defence of the State, international relations, security and public order, administration of justice and functionality of economic, financial and transport systems.The second category includes those (public or private) entities carrying out: activities instrumental to the exercise of essential State functions; activities necessary for the exercise and enjoyment of fundamental rights; activities necessary for the continuity of supplies and the efficiency of infrastructures and logistics: research activities and activities relating to production environments in the field of high technology and in any other sector, where they are of economic and social importance, also for the purposes of ensuring national strategic autonomy, competitiveness and development of the national economic system.Article 3 defines the sectors of activity included in the perimeter: priority is given to entities operating in the government sector, which concerns the activities of the CISR (Interministerial Committee for the Security of the Republic) administrations; it also includes other entities engaged in activities related to the interior, defence, space and aerospace, energy, telecommunications, economy and finance, transport, digital services, critical technologies, and social security/labour institutions.The list of entities included in the perimeter is contained in an administrative act, adopted at the proposal of the CISR by the President of the Council of Ministers.On the other hand, Decree of the President of the Council of Ministers No. 81 of 14 April 2021 (the so-called “DPCM 2”) defines the modalities for the notification of incidents affecting networks, information systems and IT services related to the national cyber security perimeter.In particular, Article 2 of DPCM 2 provides for the obligation, for entities included in the perimeter, to notify security incidents affecting their ICT goods.The taxonomy of incidents is provided by Tables 1 and 2 of Annex “A” to DPCM 2, which classify events on the basis of their severity. Less serious incidents are listed in Table 1, and can be classified in the following categories: i) infection; ii) failure; iii) installation; iv) lateral movements; v) actions on targets, including cases of unauthorised exfiltration of data. The most serious cases are instead identified by Table 2, which identifies the following categories: (i) “actions on targets”, which include cases of inhibition of response functions, impairment of control processes and intentional disservice; (ii) “disservice”, which includes cases of breach of the expected service level, defined by the entity included in the cyber security perimeter pursuant to the provisions of the security measures contained in Annex B, especially in terms of availability of ICT goods, as well as cases of breach of corrupted data or execution of corrupted operations through the ICT good and unauthorised disclosure of digital data related to ICT goods.Said distinction is functional to the different timing established by DPCM 2 for fulfilling the notification obligation: incidents indicated in Table 1 must be notified to the CSIRT within six hours, whereas most serious incidents – indicated in Table 2 – must be notified within one hour, starting from the moment in which the entities included in the Perimeter became aware thereof, including by means of monitoring, testing and control activities.Notification to the CSIRT shall be made through appropriate communication channels, in the ways published on the CSIRT website. At the specific request of the CSIRT, the entity included in the perimeter shall update the notification within six hours of such request.Once the plans for the implementation of the activities to restore ICT goods affected by the notified incident have been defined, the entity included in the perimeter that made the notification shall promptly notify the CSIRT and shall submit, at CSIRT’s request and within 30 days, a technical report illustrating the significant elements of the incident, including the consequences of the impact of the incident on ICT goods and the remedial actions taken, unless the relevant judicial authority has previously communicated the existence of specific investigation secrecy requirements.Entities included in the perimeter may also notify, on a voluntary basis, incidents relating to ICT goods not included in the tables under Annex A or incidents included in said tables but relating to non-ICT networks and systems.The body in charge of managing notifications received by the CSIRT is the Security Intelligence Department (Dipartimento delle informazioni per la sicurezza – DIS), which forwards them to the competent authorities (to the office of the Ministry of the Interior in charge of security and regularity of telecommunication services; to the department of the Presidency of the Council of Ministers in charge of technological innovation and digitalization, if notifications come from a public entity; to the Ministry of Economic Development, if notifications come from a private entity; to the competent NIS Authority if the notification is made by entities falling within the scope of the NIS legislation).DPCM 2 also identifies the security measures that entities included in the perimeter are required to adopt with respect to the relevant ICT goods and services.Said measures are listed in Annex B to DPCM 2, with respect to the categories identified by Decree Law No. 105/2019, and must be implemented according to a specific timeline. At each update of the list of ICT goods, entities included in the perimeter shall adjust the security measures, with the same timing provided for the first adoption.Finally, the third decree implementing the Decree Law establishing the security perimeter is the DPCM of 15 June 2021 (in Official Gazette No. 198 of 19 August 2021) – the so-called “DPCM 3” – which, together with Presidential Decree No. 54 of 5 February 2021, identifies the categories of ICT goods, systems and services to be used in the national cyber security perimeter and the methods and procedures relating to the functioning of the CVCN.In particular, DPCM 3 defines the procedures, methods and deadlines to be complied with by public administrations, national bodies and operators, both public and private, included in the perimeter of national cyber security, planning to award contracts for the supply of ICT goods, systems and services, intended to be used on networks, information systems and for the performance of IT services identified in the list sent to the Presidency of the Council of Ministers and the Ministry of Economic Development.Of significant importance is the obligation for entities included in the cyber security perimeter to notify the CVCN of their intention to initiate procurement procedures in relation to such ICT goods, systems and services.DPCM 3 identifies, on the basis of the technical criteria set out in Article 13 of Presidential Decree 54/2021, four categories of ICT goods, systems and services subject to prior assessment by the CVCN, namely (i) hardware and software components providing telecommunications network functionalities and services (access, transport, switching); (ii) hardware and software components providing functionalities for the security of telecommunications networks and the data processed by them; (iii) hardware and software components for the acquisition of data, monitoring, supervision, control, implementation and automation of telecommunications networks and industrial and infrastructure systems; (iv) software applications for the implementation of security mechanisms.The same DPCM provides that the categories identified be updated at least once a year by decree of the President of the Council of Ministers, taking into account technological innovation and changes in technical criteria. 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 Paolo Gallarati, Giulio Uras, Virginia Paparozzi, Marco Cappa and Cecilia Moioli.

a) take appropriate and proportionate technical and organisational measures to manage the risks posed to the security of network and information systems which they use in their operations;

b) take appropriate measures to prevent and minimise the impact of incidents affecting the security of the network and information systems used for the provision of such essential services, with a view to ensuring the continuity of such services;

c) notify the CSIRT (Computer Security Incident Response Team) of any incidents having a significant impact on the continuity of the essential services they provide.

a) identify and take appropriate and proportionate technical and organisational measures to manage the risks posed to the security of network and information systems which they use in the context of offering services within the Union;

b) take measures to prevent and minimise the impact of incidents affecting the security of their network and information systems on the services offered within the Union, with a view to ensuring the continuity of such services;

c) notify the CSIRT of any incident having a substantial impact on the provision of a service offered by them within the Union.

a) the Ministry of Economic Development for the digital infrastructure sector, IXP, DNS, TLD sub-sectors, and for digital services;

b) the Ministry of Infrastructure and Sustainable Mobility, for the transport sector, air, rail and road sub-sectors;

c) the Ministry of Economy and Finance, for the banking and financial market infrastructure sectors;

d) the Ministry of Health, for health assistance activities provided by the operators employed, appointed or entrusted by, or having an agreement with, the same, and the Regions and the Autonomous Provinces of Trento and Bolzano, either directly or through the competent local health authorities, for health assistance activities provided by operators authorised and accredited by the Regions or Autonomous Provinces in the respective local areas of competence;

e) the Ministry of Ecological Transition for the energy sector, electricity, gas and oil subsectors; and

f) the Ministry of Ecological Transition and the Regions and the Autonomous Provinces of Trento and Bolzano, either directly or through the competent local authorities, for the drinking water supply and distribution sector.

1. INTRODUCTION

On 21 February 2022, Russia recognised the independence of the separatist regions of Donetsk and Luhansk in the Donbass area of eastern Ukraine and, on the night of 23-24 February 2022, launched a military operation on the Ukrainian territory.In response to such events, (also) the European Union ordered a number of economic and financial sanctions[1] designed to hit Russia[2], the two mentioned separatist regions and multiple natural and legal persons belonging (or close) to the Russian political leadership.The scenario briefly outlined above has major implications for everyone, including from an economic, financial and legal perspective.Given the exceptional nature of the dramatic international situation of these days and the complex legal framework, the question has been raised as to what the consequences of the aforementioned sanctioning measures might be on existing business relations with Russian entities (whether natural or legal persons)[3].This document focuses on the relevance of SWIFT Sanctions (as defined below) within the Italian reference regulatory framework, with a view to starting thinking – although the situation is constantly evolving – about possible remedies to maintain the contracts governed by Italian law that were in place before the adoption of the above-mentioned SWIFT Sanctions.

2. THE SWIFT BANKING SYSTEM

The Society for Worldwide Interbank Financial Telecommunication (or SWIFT) system was created in 1973 to provide a standardised and secure method of making payments abroad.Specifically, SWIFT is an international consortium of banks headquartered in Belgium that connects some 11,000 financial institutions in over 200 countries around the world via a computer network.In essence, the SWIFT system is a messaging network that allows banks to exchange information electronically.SWIFT uses an alphanumeric combination - the so-called BIC code - which allows precise identification of the bank of the sender of the payment and of the recipient in case of international transfers and identifies the country of origin of the payment, avoiding confusion between banks located in different countries and making payments simpler and faster.As SWIFT only communicates the identity of the sender and the beneficiary, without, however, carrying out the transaction, it is an extremely secure method of handling international payments, allowing the exchange of standardised instructions between financial institutions and thus reducing possible errors between banks in international money transfers.The alternatives to SWIFT SWIFT is today the most widespread international system, but not the only one.In particular, China and Russia have in the last few years developed alternative systems, although (much) less integrated into the international economy than SWIFT.The Chinese system is the CIPS (Cross-Border Interbank Payment System)[4], managed by the People’s Bank of China and based on the Chinese currency; it is supported by some 1,280 financial institutions worldwide, including some Japanese, Russian and African ones, as well as some Western banks.The main limitation of CIPS is precisely the use of the Chinese currency as opposed to the US dollar, which is central to SWIFT and therefore does not have the same nominal value in international trade.In order to have an international reach, CIPS signed an agreement with SWIFT in 2016 so that even banks that do not have a direct stake in CIPS could complete their transactions.In contrast, Russia’s system, called SPFS (System for Transfer of Financial Messages)[5], is mainly used in the Russian domestic market, where it accounted for 20% of transactions in 2021.400 banks participate in the system, and over time foreign banks from a number of countries have also joined the system, including Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland.

3. THE SWIFT SANCTIONS

As part of the sanctions against the Russian military operation in Ukraine being considered by the main Western countries, the European Union (together with the USA, the UK and Canada, among others) has adopted certain restrictive measures, including those aimed at excluding some of the main Russian banks from the SWIFT system (the “SWIFT Sanctions”)[6].More specifically, on 1 March 2022, the Council of the European Union adopted Regulation (EU) 2022/345 (the “Regulation”) amending Regulation (EU) No 833/2014 concerning restrictive measures in relation to the annexation by Russia of Crimea and Sevastopol in 2014.By such Regulation, the Council of the European Union has inter alia prohibited the following:

(i) to provide specialised financial messaging services, which are used to exchange financial data (SWIFT), to the following seven Russian banks[7]: Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VNESHECONOMBANK (VEB) and VTB BANK[8]. It should be noted that such prohibition also applies to legal persons, entities or bodies established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by said banks;

(ii) to invest, participate or otherwise contribute to future projects co-financed by the Russian Direct Investment Fund - RDIF [9]; and

(iii) to sell, supply, transfer or export euro denominated banknotes to Russia or to any natural or legal person, entity or body in Russia, including the government and the Central Bank of Russia, or for use in Russia[10].

4. THE CIVIL CODE INSTITUTIONS

As mentioned above, the adoption by, inter alia, the European Union of the SWIFT Sanctions entails the need to investigate the extent of the impact of such measures on the existing legal relationships between Italian and Russian business operators.SWIFT Sanctions, as well as any further extraordinary and urgent measures that may be adopted by the European Union and/or by the Italian Government in order to face the Ukraine crisis, might indeed be relevant with respect to the performance of commercial contracts and the fulfilment of the relevant obligations, including, in particular, payment obligations.In this context, without prejudice to the specific clauses provided for in the relevant contract from time to time, and given the fact that the contract is subject to Italian law, the legal institutions that might be relevant are those of force majeure and factum principis.The Italian Civil Code does not provide a proper definition of force majeure, although it contemplates certain institutions whose application presupposes the occurrence of situations referable to such concept, i.e. natural and human events which, after occurring, due to their impetuosity, cannot be overcome with the effort that can be legitimately required from the obligor.In particular, the two characteristics that an event must have in order to be considered as force majeure are its extraordinary nature and its unforeseeability[12], this category only including the event preventing due performance of the contract and making ineffective any action by the obligor aimed at eliminating it, it being understood that the impediment must not have been caused by the direct or indirect actions or omissions of the obligor.In the event that an event qualifying as force majeure occurs as above, without prejudice to the desirability of a case by case assessment in order to activate the most appropriate remedy also in the light of the relevant contractual (cont)text[13], reference should be made, inter alia, to the institution of the supervening impossibility of performance for reasons not attributable to the obligor[14].Supervening impossibility “Supervening impossibility” means a situation preventing performance which was not foreseeable at the time the obligation was formed and which cannot be overcome by any effort that may be legitimately required from the obligor.Supervening impossibility may be[15]:

• permanent, i.e. impossibility caused by an irreversible impediment, that is to say, whose end is uncertain; it automatically extinguishes the obligation (Article 1256(1) of the Italian Civil Code); or
• temporary, i.e. impossibility caused by a temporary impediment. Temporary impossibility determines 1) the extinction of the obligation only if it lasts until when, in relation to the kind of obligation or the nature of its object, the obligor can no longer be considered liable to perform or the beneficiary is no longer interested in its performance; or in the other cases, 2) the mere exemption of the obligor from liability for delay in performance; however, performance shall have to be fulfilled as soon as the cause preventing it has ceased to exist (Article 1256(2) of the Italian Civil Code); and

• total, i.e. impossibility fully precluding the satisfaction of the beneficiary’s interest. In case of permanent impossibility, the obligation is extinguished (Article 1256(1) of the Italian Civil Code); or
• partial, i.e. impossibility precluding only in part the satisfaction of the beneficiary’s interest. Final impossibility implies the extinction of the obligation for the part that has become impossible, with the consequence that the obligor must perform the part of the obligation that has remained possible, without the beneficiary being entitled to refuse partial performance (Article 1258(1) of the Italian Civil Code).

Factum principisForce majeure also includes the so-called factum principis or legal impossibility, i.e. such a situation in which the performance is prevented by the introduction of a rule or a measure of a public authority that cannot be overcome in any way, no matter how much effort the obligor puts in[16].This includes orders or prohibitions or measures of (legislative, administrative or judicial) authorities imposed subsequently to a given contractual regulation, and grounded on general interests, which prevent performance, irrespective of the obligor’s conduct.In a nutshell, such circumstances operate as exemptions from the obligor’s liability.According to the Supreme Court[17], this exemption from liability does not operate “automatically”, since the obligor has nevertheless the burden of proving that the authority’s order or prohibition had a decisive role in causing the non-performance and that it can be considered as a fact totally unrelated to the obligor’s will and to any of its duties of due diligence[18].Indeed, faced with the authority’s intervention, the obligor must not remain inactive, nor place itself in the position of being bound thereby without remedy, but must, within the limits of due diligence, consider and exploit all the possibilities available to it to overcome the situation preventing performance of the obligation.Without prejudice to the foregoing, since this is a case of impossibility, the above rules on supervening impossibility shall apply.

5. CONCLUSIONS

In the light of the foregoing, if contract reciprocity is altered as a result of legislative measures - such as sanctions adopted by the European Union, including in particular the SWIFT Sanctions - there would be a case of so-called supervening impossibility (but not of factum principis).While - in principle - the termination by factum principis of commercial contracts having as their subject-matter imports into Russia of so-called dual-use items is unavoidable due to supervening impossibility[19], SWIFT Sanctions pose a number of interpretative problems in respect of pecuniary obligations which, as such, never become (or should never become) impossible, since they are not subject to a material or legal objective impossibility, but only to a subjective unfeasibility, due to the unavailability of the SWIFT system payment mechanisms to the obligor[20].Indeed, as has been seen several times in the context of the Covid 19 pandemic, the concept of impossibility of performance should not include financial impotence since money is a generic, fungible and imperishable asset (genus numquam perit) [21]. It follows that the greater difficulty of the obligor in obtaining financial resources should not constitute in itself an impossibility of performance since performance is always possible[22].Hence, the obligor may not invoke said circumstance in order to discharge its obligation.However, without prejudice to the foregoing, sanctions imposed (also) by the European Union on certain Russian banks[23], including in particular the SWIFT Sanctions, could open up a new scenario in which even payments should be considered impossible[24]  - according to an evolutionary interpretation that takes into account the operational impact of the aforementioned sanctions -, thus discharging the obligor’s liability for the relevant payment obligations.In any case, this would be a temporary impossibility due to a hopefully transitory impediment[25].Therefore, in such context, it is necessary to understand - on a case-by-case basis - whether SWIFT Sanctions should be considered, also from an operational point of view, as a) supervening (at least temporary) impossibility which exempts the obligor from liability or b) an event which only causes an increased difficulty of payment. So, from this perspective, it will be necessary to assess whether and what, if any, legitimate alternative instruments to the use of the SWIFT payment circuit may be available to the parties (and in particular to the obligor).In particular, since the preservation of the contract represents a preferable solution[26] compared to its termination, attention must be paid to the identification of possible efforts to “maintain” the contract that are aimed, in any event, at not jeopardising balanced reciprocity in terms of time and resources.In the first place, and without prejudice to a concrete evaluation[27], in order to activate the most appropriate or even only feasible instrument in the light of the context and of the relevant contractual relationship, at least the following possible remedies (i.e. efforts) are - currently - available:

• turn to banking institutions that use alternative circuits, such as the Chinese (CIPS) or Russian (SFPS) circuits: such a solution suffers from the severe operational limitations of said systems, which are still in the expansion phase since they have been adopted by a limited number of financial institutions;
• where possible[28], use performance bonds, first demand guarantees and/or letter of credit issued by banks in the SWIFT circuit and/or, if applicable, by banks using payment circuits other than SWIFT: in such case, the main difficulty could be the reference bank’s unwillingness to guarantee the performance due to the current geopolitical situation;
• resorting to crypto-currencies[29]: the main risks associated with this method of payment are undoubtedly the fluctuation of the market value of virtual currencies and the poor regulation, from a legal and financial point of view, of the sector in question (with significant consequences also on the traceability of funds for obligors in the event of a request for exchange in current currency pursuant to Legislative Decree No. 231/2007).

However, in view of the exceptional nature of the Ukrainian crisis and the continuous evolution of the sanctions adopted against Russia, a ratione temporis and case-by-case assessment of the individual commercial relationships affected by the SWIFT Sanctions is crucial. 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 Paolo Gallarati, Filippo Federici, Martina Da Re and Valentina Molinari.  [1] A preliminary overview of the sanctions imposed, and in the process of being imposed, against Russia, with particular focus on the sanctions adopted by the European Union and some other countries including the United States, can be found in the note “Ukraine Crisis: sanctions” of 7 March 2022, available at https://www.advant-nctm.com/news/articoli/crisi-ucraina-le-misure-sanzionatorie.[2] And, with the additional sanctions package adopted by the EU Council on 9 March 2022 being published in the EU Official Journal, also to Belarus: https://www.consilium.europa.eu/it/policies/sanctions/restrictive-measures-against-belarus/belarus-timeline/[3] The considerations in this document should be regarded as relevant for Russia and Belarus by reason of what is stated in footnote 2 above.[4] This is the link to the CIPS website: https://www.cips.com.cn/cipsen/7052/7057/index.html[5] This is the link to the relevant page of the Bank of Russia: https://www.cbr.ru/eng/psystem/fin_msg_transfer_system/[6] For a preliminary overview of the various sanctions imposed and in the process of being imposed on Russia, see also the memorandum “Ukraine Crisis: sanctions”, cit.[7] The additional measures referred to in footnote 2 limit, inter alia, the provision of specialised financial messaging services (SWIFT) to three Belarusian banks.[8] In accordance with the provisions of Article 1 of Regulation (EU) 2022/345, the following Article 5-nonies is included in Regulation (EU) No 833/2014, which reads: “It shall be prohibited as of 12 March 2022 to provide specialised financial messaging services, which are used to exchange financial data, to the legal persons, entities or bodies listed in Annex XIV or to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIV”.[9] In accordance with the provisions of Article 1 of Regulation (EU) 2022/345, the following paragraphs are included in Article 2-sexies of Regulation (EU) No 833/2014, which read: “3.   It shall be prohibited to invest, participate or otherwise contribute to projects co-financed by the Russian Direct Investment Fund. 4. By way of derogation from paragraph 3, the competent authorities may authorise, under such conditions as they deem appropriate, an investment participation in, or contribution to, projects co-financed by the Russian Direct Investment Fund, after having determined that such an investment participation or contribution is due under contracts concluded before 2 March 2022 or ancillary contracts necessary for the execution of such contracts”.[10] In accordance with the provisions of Article 1 of Regulation (EU) 345/2022, the following Article 5-decies is included in Regulation (EU) No 833/2014, which reads: “1. It shall be prohibited to sell, supply, transfer or export euro denominated banknotes to Russia or to any natural or legal person, entity or body in Russia, including the government and the Central Bank of Russia, or for use in Russia. 2. The prohibition in paragraph 1 shall not apply to the sale, supply, transfer or export of euro denominated banknotes provided that such sale, supply, transfer or export is necessary for: a) the personal use of natural persons travelling to Russia or members of their immediate families travelling with them; or b) the official purposes of diplomatic missions, consular posts or international organisations in Russia enjoying immunities in accordance with international law”.[11] This is what the European Commission stated: ec.europa.eu/info/strategy/priorities-2019-2024/stronger-europe-world/eu-solidarity-ukraine_it[12] See Civil Cassation, No. 12235 of 25 May 2007, in which the Supreme Court gives a precise description of both terms. In particular: extraordinary nature, according to the Supreme Court, has an objective character, in the sense that it must be an anomalous event, measurable and quantifiable on the basis of elements such as its intensity and size. On the other hand, unforeseeability is subjective in nature, as it concerns the cognitive capacity and diligence of the contracting party. The assessment of such characteristic must however be carried out in a totally objective manner, taking as a model the behaviour of an average person in the same circumstances.[13] The limit placed on the obligor’s liability by Article 1218 of the Italian Civil Code is not the “objective and absolute” impossibility of the performance as was already assumed under the Italian Civil Code of 1865, but rather an objective impossibility but at the same time not absolute but relative. See F. Realmonte in Caso fortuito e forza maggiore, Wki, 1988 who also argues that it is necessary to have regard to the individual contract in order to know the obligations referrable to it to assess in concrete terms to what extent the effort required from the obligor to remove any obstacles that may have arisen (and been created by others) to proper performance may go. In this respect, see also L. Mengoni, La responsabilità contrattuale, Jus – Rivista di scienze giuridiche, 1986, pages 87 et seq., according to whom supervening impossibility is to be assessed “in the same way as the contractual terms on the basis of which the obligation was created. Thus, in the same type of relationship, the intensity of the obligation, i.e. the extent of the obligation assumed by the obligor to satisfy the beneficiary’s interest, may differ depending on the individual circumstances in which the promise was made”.[14] Reference is made, in particular, to Articles 1218 “Obligor’s liability”, 1256 “Permanent and temporary impossibility”, 1258 “Partial impossibility”, 1463 “Total impossibility” and 1467 “Contracts with reciprocal obligations” of the Italian Civil Code. In particular, the institution of supervening excessive onerousness (Article 1467 of the Italian Civil Code) allows termination of contracts whose balance is altered by supervening events - extraordinary and not reasonably foreseeable at the time of entering into the contract - which do not fall within the scope of the normal contractual contingency and which make one of the performances underlying the contract excessively onerous or objectively debased in its value and/or usefulness.[15] In this respect, see A. Torrente and P. Schlesinger, Manuale di Diritto privato, Nineteenth edition, 2009, Giuffrè, pp. 450 et seq.[16] See, A. Torrente and P. Schlesinger, op. cit., pp. 402 et seq.[17] See, Civil Cassation, No. 6594 of 30 April 2012, in De Jure.[18] See, Civil Cassation, No. 14915 of 8 June 2018, in De Jure, according to which: “In the event that the obligor has not fulfilled its obligation within the contractually agreed time, it may not invoke supervening impossibility with respect to a subsequently imposed order or prohibition of the administrative authority (factum principis) that was reasonably and easily foreseeable, on the basis of due diligence, at the time the obligation was assumed, or in respect of which it has not, still within the limits set by the due diligence criterion, tried all the possibilities available to it to overcome or remove the public authority’s resistance or refusal”. See also Civil Cassation, No. 11914 of 10 June 2016 and Civil Cassation, No. 12093 of 28 November 1998.[19] On this point, see again the preliminary overview “Ukraine Crisis: sanctions”, op.cit.[20] On the irrelevance of the subjective condition of the financial impotence of the obligor and of the cause, even if not attributable to it, see the Minister of Justice’s Report accompanying the Italian Civil Code, which provides that “the impossibility of fulfilling the obligation, due to causes inherent in the person of the obligor or its economy, which are not objectively connected to the performance due, cannot be taken into consideration for discharging purposes”. On this point, see the Supreme Court’s Thematic Report No. 56 of 8 July 2020 “Substantive regulatory innovations of the ‘emergency’ anti-Covid 19 law in the field of contracts and insolvency”. On a more dubious perspective, see instead: P. Perlingieri, Commento all’art. 1256 c.c., in Commentario del Codice Civile, A. Scialoja and G. Branca (edited by), 1975, Zanichelli, Bologna, p. 484.[21] On this point see the Supreme Court’s Thematic Report No. 56, op. cit. Along the same lines also C. M. Bianca, in Diritto Civile, IV, L’obbligazione, Milan, 143 et seq. according to which “after all, the performance of obligations to pay money is always possible because of the normal possibility of converting all present and future goods into money. The cornerstone rule of Article 2740 of the Italian Civil Code, in providing that the obligor is liable for the performance of the obligations with all its present and future assets, finds its scope of application in the possibility of having the value of the obligor’s assets transformed into money through the forced expropriation procedure”.[22] See Civil Cassation No. 25777 of 15 November 2013 in De Jure, which in its reasoning states that: “It should be recalled that, according to this Court’s case law, the impossibility which, pursuant to Article 1256, extinguishes the obligation, is to be understood in an absolute and objective sense and therefore cannot be identified as a simple difficulty in performing, i.e. with any cause that makes performance more onerous, but consists in the occurrence of a cause, not attributable to the obligor, that definitively prevents performance; which, in accordance with the principle according to which genus nunquam perit, can only occur when the performance has as its object a fact or a thing that is determined or of a limited kind, and not a sum of money”.[23] And Belarusian, see footnote 2 above.[24] As a result of a relativistic assessment (see footnote 13 above) to be carried out on a case-by-case basis.[25] In this respect, as already mentioned, Article 1256, second paragraph, of the Italian Civil Code provides that if the impossibility is temporary, the obligor is not liable for the delay but is nevertheless obliged to perform until when “in relation to the kind of obligation or the nature of its object, the obligor can no longer be considered liable to perform, or the beneficiary is no longer interested in its performance”. It follows that, once the reason for the impediment has ceased to exist, the obligor will nevertheless be bound to perform. However, it is likely that, in a critical situation such as the one described in the introduction, the prolonged state of impossibility could result in the obligor’s obligation to perform or the beneficiary’s interest in performing ceasing to exist and, consequently, lead to the extinction of the obligation.[26] In accordance with the principle of preservation of the contract under Article 1372 of the Italian Civil Code, also referred to and emphasized by the Supreme Court in its Thematic Report No. 56, op. cit., to extend the maintenance remedy under Article 1467 of the Italian Civil Code also to the party affected by the supervening event, with the direct consequence that it would, in turn, be entitled to invoke equity for the unbalanced contract which in contracts for consideration, would be due only to the counterparty.[27] From a purely operational point of view, it is advisable, first of all, to

1. make sure that the contract is governed by Italian law (otherwise reference should be made to the different applicable law)
2. check whether there are specific contractual clauses aimed at regulating at least similar situations

• investigate whether the obligor or the beneficiary holds exclusively accounts with the above-mentioned seven Russian banks which are addressees of the SWIFT Sanctions

1. ascertain whether the beneficiary has an interest in obtaining performance despite the unavoidable delays in payment caused by the SWIFT Sanctions.

[28] The so-called third EU sanctions package also prohibits financial assistance for trade with or investment in Russia, with the exception of prior binding financing commitments, trade in foodstuffs or for agricultural, medical or humanitarian purposes. On this point, see again “Ukraine Crisis: sanctions”, op. cit.[29] Such ‘‘solution’’ has already been widely and recently adopted also to finance humanitarian aid in Afghanistan. In relation to cryptocurrencies, in addition to the risks mentioned above, particular caution is recommended also given the increasing attention paid to them by Western countries and the EU’s clarification of yesterday, 9 March 2022 - concomitant with the adoption of a package of sanctions that, among other things, extends the scope of SWIFT sanctions to a number of major Belarusian banks, bans the export of naval technology to Russia, and expands the list by 160 additional persons (Russian and Belarusian oligarchs and senior government officials) - according to which cryptocurrencies and, in general, all cryptoassets are to be affected by the previous sanctions imposed by the EU.

In order to deal with the state of emergency related to the spread of the COVID-19 virus (extended, as of today, until 31 March 2022), Italian lawmakers have adopted a series of rules which, if on the one hand are aimed, inter alia, at limiting movements and large gatherings, on the other hand have allowed, notwithstanding social distancing measures, the regular holding of shareholders' (and board of directors') meetings, thus preventing the risk of paralysis of Italian companies' corporate bodies.This is the framework for Decree Law No. 18 of 17 March 2020, converted into Law No. 27 of 24 April 2020 (the "Cura Italia Decree"), which, in paragraph 2, contains a specific provision allowing any company, as an exception to any other provision (whether of laws, regulations or by-laws), to hold shareholders' meetings exclusively by means of telecommunications.Given the exceptional nature of the emergency regime, the question has therefore arisen as to the temporary effectiveness of such rules, or rather the advisability of introducing the procedures prescribed in the Cura Italia Decree into the "general" company law.In this scenario, Maxim No. 200 of 23 November 2021 of the Board of Notaries of Milan is certainly relevant, whereby the Board expressed its opinion on the "legitimacy of clauses in the by-laws of joint stock companies (s.p.a.) and limited liability companies (s.r.l.) which, by allowing participation in the shareholders' meeting by means of telecommunication, pursuant to Article 2370, paragraph 4, of the Italian Civil Code, expressly attribute to the administrative body the power to establish in the notice of call that the meeting be held exclusively by means of telecommunications, omitting the indication of the physical location of the meeting[1]" even after the end of the emergency period.

2. SHAREHOLDERS' MEETINGS HELD FULLY BY AUDIO AND/OR VIDEO DURING THE EMERGENCY REGIME

Article 106, paragraph 2, of the Cura Italia Decree introduced new rules on the methods of participation and exercise of the voting right in both ordinary and extraordinary shareholders' meetings, extending the possibility of resorting to the instruments, already provided for by company law, which allow the performance of such activities without the participants being physically present in the same place.Indeed, Article 2370, paragraph 4, of the Italian Civil Code expressly provides that "By-laws may allow for participation in the shareholders' meeting by means of telecommunication", thus considering said method of holding shareholders' meetings as a natural and legitimate evolution of the collegial method in the light of modern telecommunication means[2].Through the Cura Italia Decree, lawmakers have chosen to widen the range of methods of holding shareholders' meetings by allowing: (i) on the one hand, the use of telecommunication means even in the presence of clauses in the by-laws preventing or limiting it, or even in the absence of clauses in the by-laws providing for it, as required by the aforementioned Article 2370, paragraph 4 of the Italian Civil Code; (ii) on the other hand, the possibility for shareholders and other eligible persons to participate in shareholders' meetings exclusively by telecommunication means without the need to convene the meetings in a specific physical location provided that the identification of the participants, their participation and the exercise of their voting rights is guaranteed.It follows that, within the emergency framework, shareholders' meetings can be held in three different ways[3]:

1. with all participants physically attending, albeit in compliance with social distancing measures;
2. by means of audio and/or video conference, regardless of whether said method is permitted by the by-laws, but with the chairman and/or secretary physically attending at the place where the meeting is convened;
3. exclusively by means of telecommunications, with the consequence that the shareholders, to be able to exercise their right to take the floor, are required to use the telecommunications means provided for in the notice of call.

However, the question has been raised by legal scholars as to whether, if the shareholders' meeting is held exclusively by audio and/or video conference, it is still necessary to indicate a physical location for the meeting, or such indication can be considered superfluous and replaced by the virtual location where the meeting is held[4].In this respect, some legal scholars[5], highlighting the exceptional and temporary nature of the emergency regulations, had argued the need to interpret such provisions in accordance with the standard approach of the legislator on the holding of shareholders' meetings which, even in the cases referred to in Article 2370, paragraph 4 of the Italian Civil Code, provides for shareholders' meetings to be convened in a physical location.In this regard, the Board of Notaries of Milan, in the grounds for its Maxim No. 187/2020[6], expressed an opinion to the contrary, pointing out, as a direct consequence of the provisions of Article 106, paragraph 2, of the Cura Italia Decree, the fact that in such cases the meeting shall not be convened in a physical location[7].In the opinion of the Board of Notaries of Milan[8], a direct consequence of said rule is the fact that whenever the notice of call provides exclusively for participation by means of telecommunications, without indicating a specific physical place where the meeting is to be held (or indicating it for other purposes or in any event without anyone being able to access it), the presence of any person in any specific place is not required[9].It further follows that the "minimum and necessary" physical presence of the chairman and secretary at the place where the meeting is convened as a consequence of the provision in Article 2370 of the Italian Civil Code is no longer required[10].

3. SHAREHOLDERS’ MEETINGS HELD FULLY BY AUDIO AND/OR VIDEO AFTER THE EMERGENCY REGIME

The emergency rules mentioned above and the resulting virtual meeting tools have undoubtedly made the exercise of business activities easier during the emergency situation.With a view to the end of the emergency regime, operators and scholars - as mentioned above - wondered about the possibility that, regardless of the framework of Article 106, paragraph 2 of the Cura Italia Decree and apart from the cases of plenary meetings, shareholders' meetings may be convened without indicating any physical location, but only by means of telecommunicationsThe issue, already addressed by some legal scholars[11], was recently dealt with by the Board of Notaries of Milan in its Maxim No. 200/2021.In particular, the Board of Notaries of Milan makes its considerations based on the assumption that the temporary effectiveness of the rules set out in Article 106, paragraph 2, of the Cura Italia Decree does not reduce its relevance but, as a matter of fact, confirms and reinforces the ability of the new means of communication to protect the principles that regulate the formation of the will in the collegiate bodies and the shareholders' rights.Even if at a first reading several provisions of the Italian Civil Code would appear to run counter to the conclusion accepted in the Maxim, according to the notarial interpretation they should be read in an evolutionary perspective in consideration of the opportunities made available by modern technology, and namely:

• Article 2363, paragraph 1, of the Italian Civil Code, according to which "the Shareholders’ Meeting shall be convened in the municipality where the company's registered office is located", leaves open the possibility that the company's by-laws provide otherwise, without however providing - as the only possible exception - for the indication of other physical locations where the meeting may be convened;
• Article 2366, paragraph 1 of the Italian Civil Code, in the part where it provides that the notice of call shall specify, inter alia, the "place where the meeting is to be held", can be interpreted consistently with the current regulatory and social context, since it is reasonable to believe that the notion of "place" is to be no longer necessarily interpreted as a "physical place" but rather as a (possibly even only) "virtual" place, namely, IT or telecommunications platforms being used to attend the meeting;
• Article 2370, paragraph 4, of the Italian Civil Code, in its current wording, does not seem to preclude in itself the possible use of telecommunications as the only way for shareholders to take part in the meeting, in the absence of a physical location in which the meeting can take place[12].

In the grounds for Maxim No. 200/2021, the Board of Notaries considered also the systematic and functional aspects of the issue, pointing out that the holding of the shareholders’ meeting exclusively by means of telecommunications does not in itself amount to a potential infringement of the principles of collegiality, good faith and equal treatment of shareholders[13].On the contrary, if the rationale of the rules in question is precisely that of favouring the exercise of corporate rights, it can certainly be stated that such rights are more effectively safeguarded in a meeting to be held exclusively by videoconference rather than in a meeting convened anywhere (in Italy or in Europe under the specific terms of the by-laws)[14].In consideration of the above, the Board of Notaries came to the conclusion – on which we agree - that "in the presence of a clause in the by-laws that generically allows participation in the meeting by means of telecommunications, the administrative body (or, in any event, the person calling the meeting) may lawfully state in the notice of call that the meeting will be held exclusively by means of telecommunications, omitting details of the physical location of the meeting while specifying the connection methods” [15].It should also be pointed out that, according to the interpretation of Notaries, the above-mentioned conclusions concerning the procedures for holding the Shareholders' Meeting must be deemed a fortiori also applicable to the meetings of other corporate bodies, especially the Board of Directors and the Board of Statutory Auditors, even in the absence of a clause in the by-laws expressly providing for the possibility of convening the Board only by telecommunication means (provided that there is a generic provision in the by-laws which, pursuant to Articles 2388, paragraph 1, and 2404, paragraph 1, of the Italian Civil Code, allows participation by such means).Maxim No. 200/2021 does not deal with the possibility that the Chairman and the Secretary (or the Public Official) may be in different places when participating in the meeting by means of telecommunications, while referring to the considerations previously made in its Maxim No. 187/2020[16].Although such Maxim is set in the exceptional context of the emergency regime, the underlying rationale seems to be the same as that underlying the grounds for Maxim 200/2021, i.e. the evolutionary interpretation of the place to be stated in the notice of call, no longer only as a "physical" place but also as a "virtual" place [17].In light of the above, it does not seem unreasonable to believe that, also in a post-Covid context, the Shareholders' Meeting (and the meetings of the Board of Directors and the Board of Statutory Auditors) should be deemed legitimately held even if the Secretary and the Chairman are not in the same place, precisely due to: (i) the fact that there is no longer a need to convene the Shareholders' Meeting in a specific physical location and (ii) the legitimacy of the notices of call providing for  Shareholders' Meetings to be held exclusively by means of telecommunications.Despite the convincing arguments of the authoritative Board of Notaries referred to herein, some scholars[18] have, however, expressed a contrary view, emphasizing the temporary nature of the provisions of Article 106, paragraph 2, of the Cura Italia Decree - involving the cessation of their effect upon termination of the emergency situation - which explains the recourse to emergency lawmaking[19].Therefore, we can only wait for the hoped-for end of the epidemic emergency to carry out more in-depth assessments based on the evolution of the interpretation of legal scholars and case law and the practical follow-up. 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 Paolo Gallarati, Filippo Federici and Martina Da Re. [1] See Board of Notaries of Milan, " Clausole statutarie che legittimano la convocazione delle assemblee esclusivamente mediante mezzi di telecomunicazione (artt. 2363, comma 1; 2366, comma 1; 2370, comma 4; e 2479-bis c.c.)", Maxim No. 200, 2021.[2] See F. Magliulo, Article 2370, in Commentario romano al nuovo diritto delle società, edited by F. D'Alessandro, II, 1, Padua, 684, who points out that "The use of telecommunications must be considered in any case as a form of participation in the shareholders' meeting, albeit at a distance, provided that the collegial method and the principles of good faith and equal treatment of shareholders are fully complied with".[3] See F. Magliulo, Article 2370, in Commentario romano al nuovo diritto delle società, edited by F. D'Alessandro, II, 1, Padua, 684, who points out that "The use of telecommunications must be considered in any case as a form of participation in the shareholders' meeting, albeit at a distance, provided that the collegial method and the principles of good faith and equal treatment of shareholders are fully complied with".[4] In this regard, it is also interesting to note the change of view of Assonime, which in Faq No. 1, "Place of the meeting and participation - Is it necessary to indicate the place of a meeting held exclusively through telecommunication means?", first stated that " [...] lawmakers do not consider the meeting held by telecommunication means as a real virtual meeting on the network, but rather as a form of remote participation with respect to a specific physical place. Consequently, even if the meeting is held exclusively by telecommunications means, the company should still be required to indicate, in the notice of call, the physical location of the meeting, pursuant to Article 2366 of the Italian Civil Code” and in a version updated on 10 March 2021 of the same Faq: " [...] According to the interpretation of the Board of Notaries of Milan (see the grounds for Maxim No. 187 of 2020), if the company establishes that participation in the shareholders' meeting may take place exclusively through telecommunication means," the meeting, as in the case of a plenary meeting, will not be convened in a physical location.  The same applies in cases where the company, although availing itself of the possibility of establishing that those eligible to attend the meeting may do so only by means of telecommunications, nevertheless indicates a specific physical location in the notice of call. Indeed, besides having no significant legal relevance, said indication is not such as to involve the existence of the place of the meeting in the proper sense, since it will not be possible, even in theory, for anybody to physically attend the meeting".  According to such interpretation, one may assume that, in the case of meetings held exclusively by means of telecommunications, it is not necessary to indicate in the notice of call the place where the meeting is to be held.".[5] See Assonime and its Faq No. 1 mentioned above (original version).[6] See Board of Notaries of Milan, "Intervento in Assemblea mediante mezzi di telecomunicazioni (Articles 2366, paragraph 4, 2370, paragraph 4, 2388, paragraph 1, 2404, paragraph 1, and 2479-bis, c.c.; Article 106, paragraph 2, d.l. 18/2020)", Maximum No. 187, 2020.[7] See Board of Notaries of Milan, Maxim No. 187, 2020, cit, in whose grounds it is stated that “The same applies in cases where the company, although availing itself of the possibility of establishing that those eligible to attend the meeting may do so only by means of telecommunications, nevertheless indicates a specific physical location in the notice of call. Indeed, besides having no significant legal relevance, said indication is not such as to involve the existence of the place of the meeting in the proper sense, since it will not be possible, even in theory, for anybody to “physically” attend the meeting”.[8] See Board of Notaries of Milan, Maxim No. 187, 2020, cit, in whose grounds it is stated that “Even in such circumstances, therefore, the secretary taking the minutes attends the meeting only by telecommunications means and records the entire decision-making process on the basis of what is so perceived , it being understood that, in cases where minutes are drawn up as a public deed, the notary certifying the minutes must in any event be in a place within his or her territorial area under the Notary Law”.[9] See in the same sense also Atlante - Maltoni – C. Marchetti - Notari - Roveda, “Le disposizioni in materia societaria nel Decreto-legge COVID-19 (Decreto legge 17 marzo 2020, n. 18). Profili applicativi”, in Federnotizie, 30 March 2020 and A. Busani, “Assemblee e Cda in audio-video conferenza durante e dopo COVID-19”, in Le Società 04/2020.[10] In the grounds for Maxim No.  187/2020, the Board of Notaries of Milan on the other hand resolved in the affirmative the question of the necessary physical presence in the place where the meeting is convened of the Chairman and/or the Secretary when intervention in the meeting is permitted also by means of telecommunications and, therefore, in case of a meeting convened in a physical place: “It follows that, while there is nothing to prevent the chairman from not being physically present at the place where the meeting is convened - with him or her being able to assess his or her capacity to conduct the meeting also by means of telecommunications, depending on the specific factual circumstances - it seems that a shareholders' meeting cannot be properly conducted without the physical presence of the secretary or notary at the place where the meeting is convened (except in cases where there is no physical place to convene the meeting)”. Maximum No. 187, 2020, cit. See in the same sense also A. Busani, “Assemblee e Cda in audio-video conferenza durante e dopo COVID-19”, cit.[11] A. Busani, “Assemblee e Cda in audio-video conferenza durante e dopo COVID-19”, cit..[12] See Board of Notaries of Milan, Maxim No. 200, 2021, cit, in whose grounds it is stated that “Indeed, if lawmakers had intended to fully exclude the legitimacy of provisions in the by-laws allowing for participation in the meeting only by remote means, the provision should have specified that the clause "may allow participation in the meeting also by means of telecommunication”.[13] See Board of Notaries of Milan, Maxim No. 200, 2021, cit, in whose grounds it is stated that “This does not seem to be the case with regard to the principle of collegiality, which is in any event guaranteed by current technological solutions, which allow - and indeed to a certain extent encourage - dialogue between participants and the exchange of documents in near real time. Similarly, both the principle of good faith and that of equal treatment of participants can be considered respected whenever the company makes the necessary electronic connections available to all those entitled, without discriminating between shareholders and without compromising their right to participate, discuss and cast their vote”.[14] See Board of Notaries of Milan, Maxim No. 200, 2021, cit, in whose grounds it is stated that “Between a shareholder (if any) "forced" to go to any of the physical locations falling within the geographical perimeter of said clauses and a shareholder (if any) "forced" to use a telephone or a videoconference platform, which have now become commonplace in all areas of the company, it seems possible to say that it is the former, and not the latter, who risks a greater compression of its administrative rights and of its right to participate in the meeting's decision-making process”.[15] See Board of Notaries of Milan, Maxim No. 200, 2021, cit.[16] See footnote in paragraph 2.[17] See Board of Notaries of Milan, Maxim No. 200, 2021, cit., where it is stated that  “In other words, what matters is the circumstance that the shareholders' meeting is not convened at a physical location and that participation by means of telecommunications is allowed. If such conditions are met (...), the location of the various participants is not relevant, it being understood that, in cases where the minutes are drawn up in a form as a public deed, the notary drawing up the minutes must in any event be in a place within his or her territorial jurisdiction under [Italian] Notarial Law”.[18] See in particular A. Luciano in “La riunione assembleare virtuale tra diritto societario comune e disciplina emergenziale: a proposito di una recente Massima del Consiglio Notarile di Milano” in Il Societario, focus of 13 December 2020.[19] See in particular A. Luciano in “La riunione assembleare virtuale tra diritto societario comune e disciplina emergenziale: a proposito di una recente Massima del Consiglio Notarile di Milano”, cit.,  where it is stated: “[…] if a merely virtual shareholders' meeting could always be freely convened (under a provision in the by-laws allowing remote participation pursuant to Article 2370, paragraph 4, of the Italian Civil Code), it would be difficult to understand why emergency lawmakers felt it necessary to specify that, during the pandemic crisis, companies are endowed with such a power and that such power is bound to cease at the end of said crisis.”.

• 59,838 communications  of DPO contact details,
• 27,192 complaints and reports, and
• 3,873 personal data breach notifications were received.

Three years after its entry into application, the GDPR can be considered to be an overall success, though there is still a long challenge ahead: the focus must continue to be on the improvement of implementation and on actions to strengthen the enforcement of data protection laws, and there is a need for strict and effective enforcement of the GDPR and increased awareness of the management of personal data and its fundamental importance in the information society, as well as for increased "digital maturity" on the part of data subjects and increased accountability on the part of owners of large digital platforms, integrated companies, and other digital services, particularly in the areas of online advertising, micro-targeting, algorithmic profiling, science and genomics, and the ranking,   dissemination and amplification of content.In conclusion, the GDPR has garnered considerable interest and attention in light of the   digital marketplace and big data boom. The EU Institutions have foresightedly overcome the – to say the least – jagged legal system governing data protection among Member States. The GDPR certainly represents a revolution in European data protection law. This article is for information purposes only and neither is nor can be considered as a professional opinion on the topics covered. For further information, please contact Marco Cappa and Claudia Colamonaco.

As is known, on 12 November 2020 the European Commission published the draft new standard contractual clauses (hereinafter, the "SCCs"), which according to Article 46.2 of the GDPR can constitute appropriate safeguards for transfers of personal data to non-EU countries [1]. The draft SCCs are, in accordance with the usual procedure, subject to public consultation until 10 December 2020, which is why the European Commission will hopefully adopt the final version in the next few months [2].The new SCCs are intended to replace the clauses adopted by the Commission in implementation of Directive 95/46/EC and, therefore, to update the existing versions to bring them in line with the principles and requirements under Regulation (EU) 2016/679 (hereinafter, the "GDPR"), in order to adapt them also to new technological developments.At the same time, the new SCCs arise from the need to more appropriately reflect the use of new and more complex processing operations often involving multiple data importers and exporters, as well as to regulate cases where the laws of the country of destination impact compliance with the clauses, particularly in  case of binding requests from public authorities for disclosure of personal data.It is not by chance, however, that the European Commission started the work for the adoption of the new SCCs only a few months after the well-known "Schrems II" judgment, whereby  the Court of Justice of the European Union invalidated the decision relating to the Privacy Shield^[3][4], emphasising, in particular, the need to undertake an assessment of the conformity of the legislation of the third country to which data is transferred to the rules and principles imposed by the GDPR.Well, the new draft SCCs are marked by a greater number of regulatory elements compared to the former SCCs and include a set of general clauses, to be supplemented with one of the four modules attached thereto, in order to allow, from time to time, the data importer and the data exporter to adapt the SCCs to each specific transfer of personal data.More specifically, the modules concern:

(i) controller to controller transfer of personal data;(ii) controller to processor transfer of personal data;(iii) processor to processor transfer of personal data;(iv) processor to controller transfer of personal data.

2. The EDPB-EDPS Joint Opinion

The draft SCCs were the subject of a joint opinion from the European Data Protection Board (hereinafter, the “EDPB”) and the European Data Protection Supervisor (hereinafter, the “EDPS”)[5].In Joint Opinion 2/2021 (hereinafter, the “Joint Opinion”)[6], the two European bodies have highlighted how the standard contractual clauses proposed by the Commission are, in some respects, still unclear, thus inviting the European Commission  to further amend them in order to ensure their practical usefulness for market players in their day-to-day operations.The purpose of this document is therefore to illustrate the main innovations introduced by the European Commission with the publication of the draft SCCs, in the light of the observations shared by the EDPB and the EDPS in their Joint Opinion.

2.1 The different SCC modules

2.2 The “docking clause”

2.3 The assessment of third country laws and the relationship with the EDPB Recommendations 1/2020

3. Conclusion

In the light of the above considerations, it would be desirable that the final version of the SCCs, which can reasonably be expected to be published in the next few months by the European Commission, will clarify all the grey areas identified by the EDPB-EDPS Joint Opinion and incorporate, before anything else, the comments and proposals for integration made by the two bodies, so that the new SCCs can actually and practically become an unequivocal guide for economic operators in step with the times and cross-border market dynamics. 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 Ilaria Todaro.  [1] SCCs consist of a set of template contract clauses that exporters and importers of personal data execute in order to ensure, through contractual obligations in accordance with the provisions of the GDPR, an adequate level of protection for personal data that leaves the European Economic Area. The European Commission had approved, pursuant to Directive 95/46/EC, up to three sets of standard contractual clauses: two for transfers of data from data controllers established in the EU to data controllers established outside the EU or EEA and one for transfers of data from data controllers established in the EU to data processors established outside the EU or EEA. No SCCs had yet been issued relating to transfers from processors established in the EU to controllers established outside the EU or relating to transfers from processors established in the EU to processors (or sub-processors) established outside the EU.[2] The draft SCCs subject to public consultation until 10 December 2020 are available at the following link:https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12741-Commission-Implementing-Decision-on-standard-contractual-clauses-for-the-transfer-of-personal-data-to-third-countries.[3] Decision (EU) 2016/1250 on the adequacy of the protection provided by the EU-U.S. Privacy Shield.[4] The full text of the judgment is available at the following link: http://curia.europa.eu/juris/documents.jsf?num=C-311/18.[5] It should be noted that the EDPB and the EDPS are independent European bodies whose role is, inter alia, to advise the European Commission on the format and procedures for the exchange of personal data among market players in order to protect the rights of data subjects.[6] “EDPB - EDPS Joint Opinion 2/2021 on the European Commission’s Implementing Decision on standard contractual clauses for the transfer of personal data to third countries for the matters referred to in Article 46(2)(c) of Regulation (EU) 2016/679”, available at the following link: https://edpb.europa.eu/our-work-tools/our-documents/edpbedps-joint-opinion/edpb-edps-joint-opinion-22021-standard_it.[7] Clause 6 of the general section of the draft of the new SCCs, entitled “Docking Clause”, reads: “(a) An entity that is not a Party to the Clauses may, with the agreement of the Parties, accede to these Clauses at any time, either as a data exporter or as a data importer by completing Annex I.A [List of Parties], Annex I.B [Description of the transfer(s)] and Annex II [Technical and organisational measures]. (b) Once Annex I.A. is completed and signed, the acceding entity shall be treated as a Party to these Clauses and shall have the rights and obligations of a data exporter or data importer in accordance with its designation in Annex I.A. (c) The acceding Party shall have no rights or obligations arising from the period prior to the date of signing Annex I.A.”.[8] For that purpose,  the EDPB  Recommendations 01/2020  contain a roadmap of the steps that data exporters must take in order to comply with the accountability principle, namely: (i) mapping all transfers of personal data to third countries; (ii) verifying the transfer tool your transfer relies on, amongst those listed under Chapter V GDPR; (iii) assessing if there is anything in the law or practice of the third country that may impinge on the effectiveness of the appropriate safeguards of the transfer tools one is relying on; (iv) identifying and adopting supplementary measures that are necessary to bring the level of protection of the data transferred up to the EU standard of essential equivalence; (v) taking any formal procedural steps the adoption of supplementary measures may require; (vi) monitoring at appropriate intervals the level of protection afforded to the data  transferred.

1. The entities bound by the obligations

To identify the bound by the obligations reference must be made to Article 1 (2) of the Regulation, according to which it "This Regulation shall apply to online brokerage services and online search engines provided, or offered to be provided, to business users and corporate website users, respectively, that have their place of establishment or residence in the Union and that, through those online brokerage services or online search engines, offer goods or services to consumers located in the Union, irrespective of the place of establishment or residence of the providers of those services and irrespective of the law otherwise applicable".There are therefore two categories of obliged entities: providers of online brokerage services and providers of online search engines.

1.1. Providers of online brokerage services

• information company services (i.e. any service normally provided for remuneration, remotely, electronically and at the individual request of a recipient of the services) [2];
• enabling commercial users to offer goods or services to consumers, with the aim of facilitating direct transactions between said commercial users and consumers, regardless of where the transactions are concluded; and
• which are provided on the basis of contractual relationships between the provider of such services and commercial users offering goods and services to consumers.

As specified in the same Regulation, the place where the online brokerage service provider is established is indifferent for the purposes of applying the rules, it sufficing for the commercial user to whom the services are provided to be resident or established in the Union or for the goods or services to be offered by the latter to consumers in the Union.In light of the definition of online brokerage services provider, the obligations described below are binding on all managers of marketplace platforms operating in Italy, whether they are general marketplaces (e.g. Amazon, Ebay, Etsy, Facebook) or sector-specific (Yoox, Farftech, Zalando, Privalia for clothing; Deliveroo, Glovo, Uber Eats, Just Eat for food delivery; IBS for publishing; Eprice for electronics and IT; Booking for travel, etc.). Similarly, platforms offering online brokerage services on the secondary ticketing market (already subject to the supervision of the Italian regulator) should be considered as included.

1.2.Online search engine providers

2. Obligations for online brokerage and online search engine providers introduced by the 2021 Budget Law 

As anticipated above, in order to render application of the Regulation effective, paragraphs 515 to 517 of Article 1 of Law No. 178/2020 (known as the 2021 Budget Law) adapted the provisions of Law No. 249/1997, establishing the Autorità per le garanzie nelle comunicazioni [Authority for guarantees in communications] (hereinafter “AGCOM” or the “Authority”) to the contents of the Regulation, providing in particular for:

• the inclusion of “providers of online brokerage services and online search engines, even if not established in but offering services in Italy” among the entities obliged to register with the Communications Operators Register (“ROC”) [3];
• the assignment to AGCOM [4] of the task of ensuring adequate and effective application of the Regulation, including by the adoption of guidelines, the promotion of codes of conduct and the collection of relevant information; and
• the power to impose administrative fines of no less than 2% and no more than 5% of the sales revenue achieved by the party in breach in the last financial year ended prior to notification of the dispute [5] (which obviously entails the power to request information and documents from the parties involved and to order inspections) [6].

2.1. The obligation to register with the ROC

2.1.1. Registration

2.1.2. Requirements subsequent to registration

2.1.3. Contributions

1. The Expansion Agreement

In its original formulation, Article 41 of Legislative Decree No. 148 of 14 September 2015 known as the Expansion agreement was introduced, for the two-year period 2019-2020 through Article 26-quater of the "Growth Decree" (Decree-Law No. 34 of 2019, converted with amendments into Law No. 58 of 2019).In particular, it is an instrument aimed at large companies, with a payroll exceeding one thousand, affected by re-industrialisation and re-structuring initiatives, and also by changes to corporate procedures.Specifically, in the context of processes for re-industrialisation and re-structuring of businesses which involve, in whole or in part, a structural change in business processes aimed at progress and the technological development of operations, as well as the consequent need for a workforce with different professional skills and their more rational deployment and, in any case, providing for the recruitment of new professionals, the company may initiate a consultation procedure with a view to entering into an agreement with the Ministry of Labour and Social Policies and with trade unions that are comparatively more representative at national level or with the company or individual trade union representatives.Therefore, by signing an expansion agreement, the employer can access a series of measures to simplify and reduce labour costs and to promote the replacement of professionals, in particular:

i. The special State scheme to subsidise wages (“CIGS” in the Italian acronym), with a reduction for currently employed staff who cannot access the “early retirement” of their scheduled working time, up to an aggregate percentage of 30% of working hours for staff impacted by the expansion agreement;

ii. possibility of early exit for workers who are no more than 5 years from the normal pension entitlement date.

2. The new provisions introduced by the Budget Law on early retirement

i. are not more than sixty months from the first effective retirement pension start date

ii. have accrued the minimum contribution requirement or early retirement requirement

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. 2019/452https://www.gazzettaufficiale.it/eli/id/2020/12/30/20G00199/sgSecondly, 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.

1. The Health Emergency and the Art Market: new business models for galleries

2. The requirements of the written form for distance contracts

3. Online reproduction of images of the works

4. International Trade

5. Final considerations

1. Foreword

2. Relevant regulatory interventions to manage the Coronavirus emergency

2.1. The DPCM of 10 April 2020 on the shutdown of commercial retail activities

2.2 The DPCM of 26 April 2020 on industrial activities and on wholesale commercial activities

• increased the number of activities included in the Table by introducing, for instance, certain wholesale commercial activities; and
• deleted the references to production chains and activities with a continuous production cycle due to the extension of the activities listed in the Table.

Finally, please consider that activities for which suspension is not provided (both retail and industrial activities) shall be, in any case, carried out in compliance with the

• the "Shared protocol for the regulation of measures to combat and contain the spread of the COVID-19 virus in the workplace" signed on 24 March 2020 between the Government and the social partners (set out in Annex 6 of the DPCM);
• the "Shared protocol for the regulation to the containment of the spread of the COVID-19 at construction sites" signed on 24 April 2020 between the Minister for Infrastructure and Transport, the Minister of Labour and Social Policy and the social partners (set out in Annex 7 of the DPCM); and
• the "Shared protocol for the regulation to the containment of the spread of the COVID-19 in the transport and logistic sector", signed on 20 March 2020 (set out in Annex 8 of the DPCM).

Failure to implement the above protocols which does not ensure adequate levels of protection shall result in the suspension of the activity until safety conditions are restored.

2.2.1 Focus: shipment of goods in stock

2.2.2 Companies which may resume their business activities

1. Interventions in Italy to support culture

2. Support for artists and galleries

3. Initiatives abroad

4. COVID-19: Cancellations, postponements. The available contractual remedies.

[1] https://www.compagniadisanpaolo.it/ita/News/Emergenza-Coronavirus-l-impegno-delle-Fondazioni[2] See Article 27 of “Cura Italia” Decree.[3] https://www.siae.it/it/iniziative-e-news/emergenza-covid-19-le-misure-adottate-dal-consiglio-di-gestione-siae-favore-degli[4] https://www.siae.it/it/iniziative-e-news/emergenza-sanitaria-coronavirus-%E2%80%93-tutti-i-provvedimenti-di-siae[5] https://www.nuovoimaie.it/fondo-speciale-nuovoimaie-fai-domanda-online-dal-23-marzo-al-23-aprile-2020/[6] https://www.artscouncil.org.uk/covid19[7] https://www.cnap.fr/actualites/evenements/voir/mesures-exceptionnelles-de-soutien-et-plan-de-continuite[8] See Taylor Dafoe, After Dubai’s Biggest Art Fair Was Cancelled, the UAE Government Swiftly Purchased More Than $400,000 of Work by Local Artists, on Artnet, 25 march 2020 (visited on 4 April 2020).[9] See Kate Brown, Berlin’s Senate Is Rolling Out Up to $320 Million in Emergency Grants for Freelance Cultural Workers and Artists, on Artnet, 20 march 2020 (visited on 3 April 2020).[10] https://news.artnet.com/art-world/helen-frankenthaler-foundation-getty-trust-relief-funding-1823466 (visited on 3 april 2020).[11] https://www.nyfa.org/Content/Show/Emergency%20Grants.[12] https://creative-capital.org/2020/03/13/list-of-arts-resources-during-the-covid-19-outbreak/.[13] https://www.artistrelief.org.[14] https://www.magazzino.art/magazzinodacasa/homemade.[15] https://www.davidzwirner.com/viewing-room/platform-new-york.[16] https://www.axisweb.org/thinking-and-ideas/2020/03/hardship-fund/.[17] Cfr. Gabriella Angeleti, Artists and galleries help raise coronavirus relief funds through print edition sales, on The Art Newspaper, 25 march 2020.[18] https://artreview.com/power_100/.[19] Cfr. the article The impact of Coronavirus (i) on commercial agreements and (ii) on certain corporate law aspects for companies, by the Corporate & Commercial team of Nctm Studio Legale.

1. Introduction and regulatory framework

• • by Decree Law no. 18 of 17 March 2020 («Decreto Cura Italia»), which has, inter alia:
    • automatically extended the approval of the financial statements of joint-stock companies to the longer period of 180 days; and
    • provided for the possibility to held audio/video conference meetings also by way of derogation from legal and statutory provisions; and

• by Decree Law no. 23 of 8 April 2020 («Decreto Liquidità»), which, among other things, temporarily provided:
  • i. the disapplication of the obligation to provide (with the adoption of appropriate measures) for losses;
  • new approaches of assessing the business continuity; and
  • the disapplication of the subordination in shareholder’s loans.

2. Decreto Cura Italia

3. Decreto Liquidità

- Losses’ neutralization [1]

• the company’s liquidation, in the absence of a reduction in share capital and, if necessary, an increase of capital to an amount not less than the minimum; and
• the liability’s risk for the non-conservative management of the companies they manage pursuant to Article 2486 of the Italian Civil Code.

- Assessment of the business continuity [2]

- Disapplication of the subordination in shareholder’s loans [3]

1. Foreword and applicable regulatory framework

2. Issues of concern to businesses in the field of personal data protection

• measurement of body temperature before accessing company premises (if higher than 37.5°, access is not allowed), with the legal grounds for that being identified in the obligation to implement the security protocols against the spread of COVID-19 pursuant to Article 1, No. 7, d) of the Decree of the President of the Council of Ministers of 11 March 2020 and the end of the state of emergency being referred to as the conservation period. Temperature data should not, as a rule, be recorded, but it is permitted to identify the person and record such data if the temperature exceeds the threshold set out in order to document the reasons for preventing access to the company's premises. In any case, the relevant information must be provided to the person concerned. The relevant data shall not be disclosed or communicated to third parties, unless expressly provided for by law (for example, if so requested by the health authority for the reconstruction of the chain of close contacts of any person tested positive for COVID-19);
• request for a statement whereby one confirms that he/she is not coming from at-risk areas and that in the last 14 days has not been in contact with individuals tested positive for COVID-19. Such processing is likewise based on the obligation to implement the security protocols against the spread of COVID-19 pursuant to Article 1, No. 7, d) of the Decree of the President of the Council of Ministers of 11 March 2020. It is also clarified that only the data that is necessary, adequate and relevant for the purpose of preventing the spread of the virus shall be collected and processed (for example, if information is requested on contacts with people tested positive for the virus, it is necessary to refrain from requesting additional information regarding the person tested positive);
• request for a self-declaration by a person who has developed COVID-19 symptoms while at the company premises by reporting to the personnel department. Following such reporting, the person must be temporarily isolated and the company must notify the competent authority thereof, cooperating with the latter to identify any person who may have had “close contact” with the isolated person. For the duration of the investigation period, the company may ask possible close contacts to leave the premises, as a precautionary measure.

It should be noted that the above provisions are supposed to apply to external visitors too.Following the adoption of the Protocol, Confindustria prepared an explanatory note aimed at assisting companies with the application of the same; in such context, further indications are specified regarding the role of the competent doctor, who is inter alia required to notify the employer of any situations of particular “fragility” and current or past underlying pathologies of employees and, accordingly, the employer shall procure their protection in accordance with privacy requirements.Finally, for the sake of completeness, it is also worth mentioning the “Statement on the processing of personal data in the context of the COVID-19 outbreak”, adopted by the European Data Protection Board (“EDPB”) on 19 March 2020.First, the EDPB confirms the principle that data protection rules do not hinder the measures taken in the fight against the coronavirus pandemic. Nevertheless, data controllers and processors must ensure the protection of the personal data of the data subjects, the general principles of law must in any event be respected and, finally, any measure taken in such context must not be irreversible. In other terms, emergency may legitimise restrictions of freedoms provided that such restrictions are proportionate and limited to the emergency period.That being said, concerning data processing in the employment context, the EDPB confirms that the employer may process specific health information concerning employees and visitors, in the COVID-19 context, only to the extent allowed by national law.Concerning, in general, the processing of location data, compliance is required with the provisions of Directive 2002/58/EC (known as the “e-Privacy Directive”), which in principle allows the use of location data by the operator when made anonymous or with the consent of individuals. However, Article 15 of said Directive enables Member States to introduce legislative measures to safeguard public security insofar as they are necessary, appropriate and proportionate measures within a democratic society.More specifically, the Authority seems to allow the use by Member State governments of mobile location data as a possible way to monitor, contain or mitigate the spread of COVID-19, which may imply, for instance, the possibility to geolocate individuals or to send public health messages to individuals in a specific area. Nevertheless, public authorities should first try to process location data in an anonymous way, processing data aggregated in a way that individuals cannot be re-identified. When data anonymisation measures are not adopted, the Member State concerned will be required to put in place adequate safeguards such as providing individuals of electronic communication services the right to a judicial remedy. In any event, the Member State should always prefer the least intrusive solutions that are sufficient for prevention purposes.This paper 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 your reference lawyer or send an email to the following address: corporate.commercial@advant-nctm.com or to the following lawyers: Paolo Gallarati or Francesca Bonino.The following associates contributed to the drafting of this memorandum: Virginia Paparozzi, Giulio Uras and Lucrezia Lorenzini.

1. Foreword

2. Brief general overview: employer’s obligations with regard to safety at work

• carry out the assessment of the risks to which workers are exposed by drawing up the Risk Assessment Document (“DVR” - Documento di Valutazione dei Rischi). Indeed, pursuant to Article 29, paragraph 3 of Legislative Decree 81/08, the risk assessment must be “immediately revised when there are changes in the production process or work organisation that are significant for the health and safety of workers, or in relation to the degree of technical development, prevention or protection or as a result of significant accidents or when the results of health surveillance show the need to do so”[2];
• proceed with the planning and implementation of prevention and protection measures, for the implementation of which he can (or, in some cases, must) establish a specific prevention and protection service, with the appointment of a Prevention and Protection Service Manager, the so-called “RSPP”;
• provide the health surveillance by appointing a competent occupational doctor in companies where workers carry out activities exposing them to particular health risks;
• regular clean workplaces, installations and equipment so as to ensure adequate hygienic conditions;
• where risks cannot be avoided through collective protective measures, the employer must provide workers with Personal Protective Equipment (“PPE”)[3]. Pursuant to Article 77 of Legislative Decree 81/08, “in choosing the PPE, the employer shall: a) carry out the analysis and assessment of the risks that cannot be avoided by other means; b) identify the characteristics of the PPE needed so that they are suitable for the risks referred to in letter a), taking into account any additional sources of risk represented by the same PPE; c) assess, on the basis of the information and rules of use provided by the manufacturer accompanying the PPE, the characteristics of the PEE available on the market and compare them with those identified in letter b); d) update the choice whenever there is a significant change in the assessment factors”[4] ;
• provide workers with adequate information and training (including in relation to the use of DPIs);
• take all the necessary measures for handling emergencies, with particular regard to first aid and fire prevention.

The employer may, for organisational reasons, delegate its functions (except for his duties to carry out the risk assessment and to appoint the RSPP) to another person, while maintaining the obligation of supervision and control. Specific obligations concerning the management and control of aspects related to the health and safety of workers are also assigned by law (and therefore cannot be derogated from or waived) to “managers” and “supervisors”.

3. Relevant regulatory interventions to manage the Coronavirus emergency

• quarantine with active surveillance of individuals who have had close contact with confirmed cases of widespread infectious disease (referred to in Article 1 of D.L. 6/20) does not apply to employees of companies engaged in the production and dispensing of drugs and medical and diagnostic devices as well as in the related research activities and the integrated supply chain for subcontractors. Workers referred to in the previous sentence shall suspend their activity in case of respiratory symptoms or if they have tested positive for COVID-19 (Article 14 of D.L. 18/20);
• with regard to DPIs, it is specifically provided that:
  • without prejudice to the provisions of Article 34 of D.L. 9/20, it is permitted to produce, import and place on the market surgical masks and personal protective equipment in derogation from the provisions in force; in this regard, INAIL’s ruling on the compliance of personal protective equipment with the regulations in force is in any case required (Article 15)[10];
  • for workers who are objectively unable to maintain the interpersonal distance of one meter in the course of their working activity, the surgical masks available on the market[11] are to be considered as PPE, pursuant to Article 74, paragraph 1, of Legislative Decree 81/08. To this end, people present on the entire national territory are authorized to use filtering masks without the EC mark and produced in derogation from the current regulations on marketing (Article 16)[12];
• the Coronavirus infection is expressly considered equivalent accidents: “in cases of confirmed coronavirus infection (SARS- CoV-2) at work, the certifying doctor shall draw up the usual accident certificate and send it electronically to INAIL, which, in accordance with the provisions in force, shall ensure the relevant protection of the injured person”[13] (Article 42, paragraph 2);
• the obligation to provide training for theoretical updating courses is confirmed for the personnel who must carry out the work necessary to restore the electricity service on the national territory: “in order to guarantee the continuity of the activities that cannot be postponed for the performance of the work necessary to restore the electricity service on the entire national territory, the qualifications already held by the relevant workers shall remain valid until 30 April 2020, even in cases of temporary impossibility to carry out the practical updating courses. This is without prejudice to the employer’s obligation to provide theoretical updating courses, also by distance learning in compliance with the containment measures adopted for the epidemiological emergency due to COVID-19" (Article 45).

In addition, the DPCM of 22 March 2020 has expressly not affected (and has extended to 3 April 2020) the Ordinance of the Minister of Health of 20 March 2020; in so far as it is interest here, it provides, that “food and beverage services located inside railway stations and lakes facilities, as well as in the service and refuelling areas shall be closed, with the exception of those located along motorways, which may only sell take-away products to be consumed outside the premises; those located in hospitals and airports remain open, with the obligation to guarantee in any case the interpersonal safety distance of at least one metre”.Finally, Decree Law No. 19 of 25 March 2020 (“D.L. 19/20”) has established a new framework of regulatory sources to manage the Coronavirus emergency, providing for the possibility to adopt – in specific parts of the national territory or, if necessary, on the whole of it - containment measures through DPCM and, to a limited extent, with measures of other authorities (prefects, mayors, regions, Ministry of Health), and almost entirely repeals D.L. 6/20. However, Article 2, paragraph 3, of D.L. 19/20 provides as follows: “This is without prejudice to the effects produced and acts adopted on the basis of decrees and ordinances issued pursuant to Decree Law No. 6 of 23 February 2020, converted, with amendments, by Law No. 13 of 5 March 2020, or pursuant to Article 32 of Law No. 833 of 23 December 1978. The measures already adopted by the decrees of the President of the Council of Ministers adopted on 8 March 2020, 9 March 2020, 11 March 2020 and 22 March 2020, as in force on the date of entry into force of this decree, shall continue to apply in accordance with their original terms. The other measures, still in force on the same date, shall continue to apply for a further period of ten days”.

4. The DPCM of 22 March 2020: permitted activities and suspended activities

• all industrial production and commercial activities are suspended, with the exception of those listed in Annex 1 of DPCM of 22 March 2020[14], (as last amended by the Decree of the Ministry of Economic Development – “MISE” of 25 March 2020[15]) (and subject to the provisions of the same DPCM of 22 March 2020 concerning by way of example professional activities, as well as commercial activities[16]);
• activities that are functional to ensure the continuity of the supply chains of the activities listed in Annex 1 are still allowed, subject to notification to the Prefect of the province where the production activity is located, in which the companies and administrations benefiting from the products and services related to the allowed activities shall be specifically indicated (it being understood that the Prefect may anyway suspend said activities);
• production, transport, marketing and delivery activities concerning pharmaceuticals, health technology and medical-surgical devices as well as agricultural and food products are still allowed. Any activity that is in any case functional to deal with the emergency is also permitted;
• activities of plants with a continuous production cycle whose interruption would result in serious damage to the plant itself or a danger of accidents are allowed, subject to notification to the Prefect of the province where the production activity is located (it being understood that the Prefect may anyway suspend said activities).

It should be noted, however, that production activities to be suspended pursuant to point a) may still continue if organised remotely or using smart working.On the other hand, companies whose activities are not suspended “shall comply with the contents of the common protocol for the regulation of measures to combat and contain the spread of the COVID-19 virus in the workplace signed on 14 March 2020 between the Government and the social parties” (in this respect, please see Paragraph 5 below). Therefore, said Protocol is binding on all employers.

5. The Protocol of 14 March 2020

1. the activities of business departments that are not essential to production must be suspended;
2. safety protocols against contagion must be implemented and, where it is not possible to respect the interpersonal safety distance of one metre as the main containment measure, individual protection devices must be adopted;
3. sanitation operations in the workplace must be encouraged, also using forms of social shock absorbers for this purpose;
4. for productive activities only, it is also recommended that movement within sites be limited as much as possible and access to common areas be restricted.

The additional measures envisaged relate to the following aspects:

• information for workers;
• how to enter the company;
• access modalities for external suppliers;
• cleaning and sanitation in the premises[18];
• personal hygiene precautions;
• PPE[19];
• management of common areas (such as canteens and changing rooms);
• company organisation (such as transfers and remodelling of production levels);
• management of entry and exit of employees;
• internal transfers, meetings, training;
• management of a symptomatic person in the company;
• health surveillance.

It should be noted that the measures provided for in the Protocol of 14 March 2020 are “to be supplemented with other equivalent or more decisive measures according to the peculiarities of one’s own organisation, after consultation with the company trade union representatives”.In this regard, companies must adopt a “regulatory protocol” and set up a Committee for the application and verification of the rules of the aforementioned regulatory protocol with the participation of the company trade union representatives and the RLS.

6. Further measures

• update the risk assessment under Article 29, paragraph 3, of Legislative Decree 81/08 due to changes in the production process and/or work organisation resulting from the implementation of the provisions referred to in the Paragraphs 3 and 4;
• adopt all the measures provided for in the Consolidated Act on Safety (taking into particular account the specific provisions mentioned in the previous paragraphs), particularly in relation to the provision of adequate PPE, the cleanliness and healthiness of workplaces, and the information and training of workers, including  by distance learning (under Paragraph 2).

7. Brief notes on risks for companies in case of breach of applicable law

1. “Cura Italia” (“Healing Italy”) Decree (Law Decree No. 18 of 17 March 2020)

2. Measures adopted by IVASS

3. EIOPA statement

4. Further EIOPA's declarations and subsequent IVASS's recommendations

• 8 weeks for Regular Supervisory Reports, both at individual and group level;
• 8 weeks for the Annual Quantitative Reporting Templates, for individual reporting, except for the following templates: Content of the Submission, Basic Information, Balance-sheet, Cash-Flow projections for life business, LTG, Own funds and SCR calculation, for which a 2-week extension is allowed;
• 8 weeks for Annual Quantitative Reporting Templates, at group level, except for the following templates: Content of the Submission, Basic Information, Balance-sheet, LTG, Own funds, SCR calculation and Undertakings in the scope of the group, for which a 2-week extension is allowed;
• 8 weeks for Solvency and Financial Condition Report (SFCR) at individual and group level, except for Balance-sheet, LTG, Own funds, SCR calculation, for which a 2-week extension is allowed;
• 1 week for Q1-2020 Quantitative Reporting Templates and Quarterly Financial Stability reporting, at individual and group level, except for the Derivatives Transactions template for which a 4-week extension is allowed;
• ORSA report: individual: 30 June 2020; group: 15 July 2020;
• 30 days for Quarterly report of the situation of controlling and significant shareholdings held; Information on the Reinsurance cession plan; transmission to IVASS of the annual report on the management of internal funds, which can be sent via PEC at vigilanzacondottadimercato@pec.ivass.it; letters to the market of 7 and 10 February 2020 - Request for data on non-life business products  broken down by intermediary; letter to the market of 7 February 2020 - Request for information on the insurance activity carried out in order to assess the risks of money laundering and financing of terrorism within the life business; prospectuses on assets covering actuarial reserves; transmission to IVASS of information on Card claims; IPER first quarter 2020;
• 60 days for Quarterly reports and new codes for the types of assets associated to unit-linked and index-linked policies; gross premiums accounted for in the non-life and life business, new insurance products issued in the life business and contributions to open and negotiated pension funds relating to the first quarter of 2020; direct and indirect business premiums acquired by Italian companies abroad and by foreign subsidiaries relating to the end of 2019; report on anti-fraud activities pursuant to IVASS Regulation No. 44; transmission of the report on the organisation of claims settlement structure; information on medical malpractice insurance cover relating to risks within the Italian territory; transmission, for collective health insurance policies, of premiums accounted for in the year 2019; transmission, for collective health insurance policies, of claims charges for the year 2019 at the end of financial year 2019 and number of risk units for the year 2019.

 This article is for information purposes only and is not, and cannot be intended as, a professional legal opinion.For further information, please contact Anthony Perotto, Guido Foglia or Michele Zucca.

1. Foreword and reference framework

2. Commercial agreements

a. Commercial agreements subject to Italian law

b. International commercial agreements

3. Corporate law aspects for companies

• publish and maintain on their website information about their policies on the integration of sustainability risks in their investment decision‐making process and in their insurance advice (art. 3);
• include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks, and shall publish that information on their websites (art. 5);
• include in the pre-contractual information to be provided to the end investor information on how sustainability risks are integrated into their investment decisions and the results of the assessment of the likely impacts of sustainability risks on the returns of the financial products they make available or they advise on (art. 6);
• communicate, for each financial product, whether and, if so, how a financial product considers principal adverse impacts on so called "sustainability factors"; i.e. environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters (art. 7);
• publish and maintain on their website as well as in their periodic reports, a description of the environmental or social characteristics or the sustainable investment objective promoted by each financial product, as well as information on the methodologies used to assess, measure and monitor such characteristics (art- 10).

Art. 15 of the Regulation also requires insurance intermediaries to communicate information to the end investor in accordance with art. 23 of IDD (that is at least in a clear and accurate manner, comprehensible to the final investor, and free of charge).By 30 December 2020, the European Supervisory Authorities (ESAs) - namely the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA) – shall also develop draft regulatory technical standards to further specify the content of sustainability information.The provisions of the Regulation will be directly applicable in all Member States from 10 March 2021.  This article is for information purposes only and is not intended as a professional opinion.For further information, please contact Anthony Perotto, Guido Foglia, Michele Zucca or Valentina Barba.

1. The terms of the problem: artificial intelligence and law

2. Consequences of digital contracting: smart contracts and blockchain explained

3. Machines as “subjects of law”

4. The legal remedies: quid iuris?

5. Conclusions

1. Preamble. The course of events

2. Interest of a corporation in a partnership

3. Possibility to establish a de facto supercompany having a corporation as its member, and elements that may lead to its recognition

4. Bankruptcy of the de facto supercompany

5. Conclusions

1. Introduction

2. January - Law No. 3 of 9 January 2019 (“Measures to combat offences against the public administration, and concerning the statute of limitations of offences and transparency of political parties and movements”, better known as ‘Spazzacorrotti’ (Sweep Away Corruption) Law).

• (i) Article 25 has been amended and the list of predicate offences has been extended to include also “Trafficking in illicit influences” (Article 346 bis of the Italian Criminal Code);
• (ii) the disqualification sanctions for the offences referred to in Articles 317, 319, 319 ter paragraphs 1 and 2, 319 quater, 321, 322 paragraphs 2 and 4 of the Italian Criminal Code have been increased (at the same time, the possibility for shorter sanctions has been provided for in case of active restorative and mitigating cooperation by the Legal Entity involved);
• (iii) Articles 316, 317 bis, 318 and 322 bis of the Italian Criminal Code have been amended, also in the heading.

It is clear that these innovations will have a related impact on the organisation, management and control models adopted by Legal Entities, given that these changes, in practice, concern areas and procedures that are most likely already subject to adequate controls since they are inherent to the, ever-existing,  wide range of crimes against the Public Administration.Therefore, it is plausible to believe that, beyond an always useful update of the sections of the model dedicated to the in-depth analysis and description of the various types of offences, such legislative intervention is unlikely to have a substantial impact with regard to the principles of conduct that top management and subordinates will be required to comply with on the basis of the models pursuant to Legislative Decree No. 231/2001 that may be adopted by the Legal Entity to which they belong.

3. July - Law No. 39 of 3 May 2019 (“Ratification and implementation of the Council of Europe Convention on the manipulation of sports competitions, concluded in Magglingen on 18 September 2014”).

• (i) fraudulent misrepresentation by other means (Article 3);
• (ii) issue of invoices or other documents for non-existent transactions (Article 8);
• (iii) concealment or destruction of accounting documents (Article 10);
• (iv) fraudulent evasion of tax payments (Article 11).

The impact of said provisions, contrary to what has been observed in relation to the abovementioned regulatory innovations, is likely to be disruptive. In fact, there is no doubt that following the formal inclusion of tax offences into the administrative liability system, Legal Entities shall have to implement their models - after careful risk assessment activities - by providing appropriate measures to manage the new tax risks that may arise. In particular, future organisation, management and control models shall provide, inter alia: the adoption of an adequate accounting system, supported by an equally effective management system; adequate information flows to the Supervisory Board, such as to allow the latter to identify anomalies requiring further investigation; the introduction of procedures for the detection and management of tax risk, whose compliance shall be guaranteed at all levels of the company organisation.

5. Conclusions

Statistics on complaints: annual data 2018

Coverage denials of insurance policies

Natural disasters and insurance cover: risk assessment and policy options for Italy

Criminal Supreme Court en banc, judgment No. 30475 on filed 10 July 2019

The ambiguity of the text of the law has inevitably given rise to asymmetries in interpretation by courts.

The subject has been dealt with by the Joint Criminal Divisions of the Supreme Court, in judgment 30475, filed on 10 July 2019.

The Supreme Court first and foremost argues that that the discipline introduced by Law 242/2016 poses the problem of coordinating the new provisions with those contained in the Consolidated Law on Narcotic Drugs.

In light of the above considerations, the Supreme Court attaches mandatory nature to the seven categories of products set out in Article 2, paragraph 2 of Law No. 242/2016.

According to the Supreme Court, the exclusion of liability clauses in Article 4, paragraphs 5 and 7 of Law 242/2016 are provided for exclusively in favour of the farmer who develops the crops referred to in Article 1, in relation to legally grown crops, at the growth stage and with a THC content greater than the permitted threshold values.

The case

The application and the decision of the Court of Rome

The appeal and the decision of the Court of Appeal of Rome

Conclusions

Share capital increase and reduction of quorum for passing resolutions

The appeal against the order of the Court of Milan

Comments on the judgment of the Court of Milan

Conclusions

By a judgment of 25 May 2017, the Court of Milan ruled on the non-fulfilment of a mixed potestative condition applying to the company Beta, stating that the failure by the purchaser company Alfa to take the necessary actions required for the satisfaction of such condition is relevant to the fictio whereby a condition is assumed to be fulfilled under Article 1359 of the Italian Civil Code. 

Preamble. The fact of the case.

The disputed contractual condition and the conduct of Alfa

• a coincidental component, depending on the action of a third company (Gamma); and
• a (not merely) potestative component, depending on the conduct of the person in the interest of whom such condition is provided for (Alfa).

In mixed potestative conditions, particular relevance must be attached to the conduct of the party in whose interest the condition has been placed, considering that such party has a power to affect, as a matter of fact, the occurrence or not of the condition, which involves a risk of manipulation by such party in the event that, pending the condition, its interest were to become contrary to the fulfilment of the condition.The narrative section of the judgment of the Court of Milan sheds light on how Alfa failed to take any appropriate action to reach an agreement with Gamma and, therefore, to allow the fulfilment of the condition, namely:

• Alfa failed to submit a bid to Gamma to enter into the procurement contract;
• only after numerous meetings among the parties concerned, it became clear that Alfa was unable to provide the financial guarantees required for the performance of the procurement contract;
• Alfa failed to pursue its proposal of meeting financial requirements by setting up a joint venture with a third company, which was not done;
• against the proposal to extend the time limit for fulfilment of the condition, Alfa first gave a favourable opinion and, then, asked for termination of the contract with Beta’s shareholders even before expiry of the original time limit.

In relation to any manipulative conduct of the parties to a contract subject to condition, the Italian Civil Code provides for two corrective remedies.Article 1358 of the Italian Civil Code provides that “a party who is bound by, or has transferred a right subject to, a condition precedent, or acquired it subject to a condition subsequent, shall, pendente conditione, act in good faith to safeguard the interests of the other party”.The Code therefore provides for an obligation of good faith aimed at specifically safeguarding the interests of the other party. As a penalty for the non-performance of said obligation, Article 1359 of the Italian Civil Code provides for the fictio whereby a condition is assumed to be fulfilled: “a condition is considered fulfilled when it fails for a cause imputable to the party who had an interest contrary to its fulfillment”.

The preconditions for the fictio of fulfilment under Article 1359 of the Italian Civil Code

• an interest contrary to the fulfilment of the condition; and
• the non-fulfilment of the condition for reasons ascribable to such party.

As far as the first precondition is concerned, of no relevance is the circumstance that the condition was originally provided for in the interest of Alfa only. The Court of Milan indeed followed the approach of the Italian Supreme Court [1], according to which the fictio under Article 1359 of the Italian Civil Code may  well apply to the case in which the interest of a party changes to an extent of becoming contrary to the fulfilment of the condition.By contrast, in case of a potestative condition or of a mixed potestative condition, the party in whose interest the condition is placed and on whom its fulfilment is conditional, will enjoy the benefit of a special ius poenitendi, being entitled to impose its “change its mind” on the other party , preventing, by doing so,  the condition from being fulfilled.The Court of Milan clarifies that, pending a mixed potestative condition, both contracting parties are under a statutory obligation to act in good faith pursuant to Article 1358 of the Italian Civil Code and even “to take steps, each insofar as it is concerned, in order to trigger the action of the third party that is the subject of the condition”.Non-performance of such obligation of good faith shall involve the non-fulfilment of the condition being ascribable to the defaulting party, which allows the second precondition under Article 1359 of the Italian Civil Code to be met.

Conclusions

• Alfa’s general and continued inactivity in preparing the documents and material required for submitting a bid to Gamma and then entering into a procurement contract; and
• the circumstance that Alfa itself acknowledged its technical and financial inability to perform the procurement contract.

It follows from the above that the provision for a mixed potestative condition shall not at the same time involve any reservation in favour of the person on whom its fulfilment is conditional in such a way as to prevent stabilisation of the conditioned effects, if its interest in making the deal were to change.   This article is for information purposes only and is not intended as a professional opinion. For further information, please contact Marco Cosa.   [1]See Italian Supreme Court’s judgments No. 23014/2012, No. 7405/2014 and No. 16501/2014.

The case

• the freight train was owned by an Austrian company and made available to an Italian rail operator under a lease;
• the rail operator sent the freight train out for repair to an Italian company;
• a German company belonging to the same group as the Austrian owner provided spare part repair services to the Italian company;
• during inspection, the Italian company installed the defective components provided by the German company;
• the first tank car broke down due to such defective components.

The charges and the decision of the Court of Lucca

• a) provision and maintenance of the tank cars and the components thereof under the lease contract;
• b) assessment of the risk inherent in rail transport of dangerous goods.

In its decision, the Court of Lucca therefore established that the alleged offences under Articles 589 and 590 of the Italian Criminal Code were aggravated by the infringement of applicable occupational health and safety provisions. Such conclusion was reached having regard to the circumstance that the repairing company was provided with defective mechanical components by the foreign companies which, therefore, were in default of their obligations under a) and b).Consequently, the Court found that the preconditions for applying the provisions of Legislative Decree 231/2001 were met, finding against all the foreign companies while acquitting two of the Italian companies from the charge under Article 25-septies of Legislative Decree 231/2001, for having adopted an appropriate organisation and management model [4].

The position of foreign entities

Conclusions

Legal Case

The order of the Court of Review of Macerata

Appeal brought against the order of the Court of Review of Macerata

First ground of appeal

Second ground of appeal

Third ground of appeal

The judgement of the Supreme Court

  [1]Law no. 242/2016, at article 2 provides that from the cultivation of light hemp it is possible to obtain a certain type of products and activities (such as food, fabrics, biofuel, clothing and construction material) among which the cultivation aimed to floriculture is included

(A) Drugs and psychotropic substances.

(B) Medical Cannabis.

(C) The law of December 2nd 242/2016 and light hemp commercialization debate.

1. it has been issued for farmers growing industrial hemp, from which certain types of products can be obtained (included but not limited to: food, cosmetics, organic material for bioengineering, bio-building work, green manure or floriculture, crops used for educational activities or for nursery gardening);
2. no authorization of the Ministry of Health is required for cultivating light hemp plants with a maximum THC content of 0,2% with a tolerance level up to 0,6%;
3. the percentage of THC in the analyzed plants can fluctuate from 0,2% to 0,6% without any liability upon the farmer;
4. government’s funds of up to € 700k a year are foreseen to favour the improvement of production and processing conditions in this sector.

This law clearly does not regulate the use of cannabis flowers (inflorescences also known as buds) for recreational purpose (e.g. smoke), so it can be said that the Italian legal framework it is still not complete and exhaustive on this particular aspect.

The latest opinions rendered in Italy about light hemp.

1. the inflorescences are sold in anonymous packaging, from which it is not possible to understand the origins of the products;
2. the inflorescences are sold in packaging inappropriately sealed;
3. the inflorescences are sold in bulk form;
4. oil or other oily extracts obtained from the inflorescences sold without any evidence of the THC level;
5. plants are sold without any certification proving that the seeds cultivated are those reported in the official list of industrial hemp varieties admitted by the European Commission.

But there is more than that.In this document it is also affirmed that (i) law. no. 242/2016 does not provide the sale of light hemp inflorescences for personal and recreational use (e.g. to smoke), but only for food and cosmetic purpose; (ii) the exemption condition set forth for farmers (a tolerance level of THC up to 0,6%) is not valid for the sellers and/ or wholesalers, who, unlike the farmers, can test in advance the level of THC through lab tests before selling them.Notwithstanding these provisions, the regulatory framework has not been changed, remaining still full of misinterpretations and critical issues.It goes without saying that, all these doubts and misinterpretations, generated by a lack of regulation on this matter, can be overcome by issuing a law that clearly explains and provides all the terms and conditions of light hemp cultivation and commercialization.   This article is for information purposes only and is not intended as a professional opinion.For further information, please contact Paolo Quattrocchi, Guido Foglia o Michelle Pepe.

Two quota-holders belonging to the quota-holders’ minority of a limited liability company (“Alfa S.r.l.”), owners of a participation equal to the 45% of the corporate capital, challenged the resolution of appointment of the sole director because – in their opinion – the resolution has been taken by the quota-holders’ majority without any respect for the Company’s by-laws.Such defect did not concern the subject matter of the resolution, but the decision-making process: in the view of the quota-holders’ minority the resolution was meant to be adopted through an appropriate “general meeting resolution” and not through a “written consultation”, as in fact happened.It is worth reminding that, pursuant to the Italian Civil Code, such resolutions can be adopted through:

• a resolution approved within a quota-holders’ general meeting resolution, following the so called “metodo collegiale” (collective method), which requires the physical attendance of the quota-holders in the same meeting, the simultaneous discussion and the resolution on the agenda (Article 2479 bis of the Italian Civil Code);
• written consultation, expressing the consent with respect to a written text submitted by the proposing quota-holder (Article 2479, paragraph 3 of the Italian Civil Code).

The choice between the two methods described above was crucial for Alfa S.r.l. considering that:

• the resolution needs to be adopted through the general meeting’s decision-making process if it is required by a number of quota-holders that holds at least the 1/3 of the corporate capital (Article 2479, paragraph 3 of the Italian Civil Code); only in the case of the general meeting’s decision making process, Alfa S.r.l.’s by-laws require a participation of the 70% of the corporate capital, so as to deem always necessary the presence of the minority quota-holders for the validity of the meeting (the so called “meeting quorum”);
• the decision-making process for resolutions through written consultation requires the sole absolute majority of voting rights.

In the examined case, the majority of quota-holders decided to opt for the quota-holders’ general meeting in order to decide on the appointment of the sole director. The quota-holders’ minority did not participate to the meeting and in such a way the quorum of the 70% could not be reached. As a result of this behaviour, the shareholders’ majority decided to appoint the sole director through written consultation since at that stage they represented more than the half of the share capital of the company and they justified this resolution claiming that is was necessary to overcome a risk of paralysis of the company.The quota-holders’ minority challenged this resolution, claiming their right to demand that such resolution must be taken in accordance with the law, meaning in accordance with the quota-holders’ general meeting, without prejudice for the reinforced quorum (70%) set out in the by-laws. 

2. The decision of the Court of Milan

The Court of Milan, in the precautionary procedure, has held that the appointment of the sole director of Alfa S.r.l. has been adopted by the majority of the quota-holders in violation of the provisions contained in the Company’s by-laws.In fact, the decision taken by the majority of quota-holders to use the method of the written consultation was finalized to exclude the quota-holders’ minority from the decision (their 45% was not sufficient to impede the majority of the quota-holders from reaching the quorum of 50% + 1).The Court of Milan has then added that the minority of quota-holders have the right and not the obligation to participate to the quota-holders’ general meeting with the consequence that the exercise of such right (meaning the participation or not to the general meeting) cannot be defined as per se “instrumental”.Conversely, according to the Court of Milan, the abuse of right may take place when the non- participation of the quota-holders’ majority to the general meeting is intended to hinder the rights or the interests of the company or of the quota-holders’ majority.For all these reasons the Court affirmed that “the prejudice suffered by the quota-holders’ minority which consists in seeing the Company managed by a person which they do not trust (trust that is decisive according to the by-laws, given the provision of a particularly reinforced majority), prevails over the eventual prejudice that the company may suffer as a consequence of the suspension the resolution of appointment”. Such resolution has been declared invalid.This decision of the Court of Milan gives a chance to examine the matter in question, that has already been analysed by the Italian jurisprudence. 

3. Abuse of power and abuse of right

Until the fifties Italian judges have recognised that a resolution taken in a “fraudulent” manner and affecting the rights of the other quota-holders (mostly of the ones belonging to the quota-holders’ majority) could be considered legitimate, regardless of the violation of specific law provisions or for the ones set out in the by-laws.By way of example these are cases regarding the reduction and contextual reconstitution of the corporate capital, with consequent exclusion from the same of the quota-holder belonging to the quota-holders’ minority that was not able to take part in such reconstitution. Similarly, cases of repeated growth of share capital, can be taken in consideration, which bring to the progressive dilution of the participation of the quota-holder belonging to the quota-holders’ minority.Part of the Italian jurisprudence considered these behaviours as an abuse or an excess of power in all cases in which the quota-holder which belongs to the quota-holders’ majority pursues a personal interest or an interest contrary to the company’s interests or hinders in a fraudulent manner the rights of the other quota-holders.According to a second interpretation, prevailing nowadays, the abuse of the majority can be considered as a violation of the general obligation to perform the agreement under the principle of good faith pursuant to Article 1375 of the Italian Civil Code (Decision No. 27387, Italian Supreme Court of Cassation, 12 December 2005).The annulment of the resolution, then, may require the proof that the decisive power to vote of the quota-holder belonging to the quota-holders’ majority: (i) has been exercised in a fraudulent manner in order to hinder the interests of the other quota-holders; or (ii) was effectively intended to grant benefits of quota-holders’ majority without justification and hindering the rights of the quota-holders’ minority, in violation of the principle of good faith that should govern the performance of the agreement. 

4. Which mean of protection?

If a resolution has been taken on the basis of an abuse of company rights recognised to the quota-holder which belongs to the quota-holders’ majority, the quota-holder which belongs to the quota-holders’ minority can ask for the annulment of such resolution or for its “removal”.The same cannot be stated with certainty if the abusive behaviours are related to the quota-holder belonging to the quota-holders’ minority, because such behaviours have undoubtedly hindered, from a practical point of view, the adoption of the resolution.In these latter cases the Italian jurisprudence states that the only mean of protection may be the possibility to obtain a compensation for the damages suffered as a consequence of the non-adoption of the resolution.   The content of this essay has only an informative value and does not constitute, nor could be interpreted, as a professional essay on the matter.For any further information please contact your Professional of reference or send an e-mail to corporate.commercial@advant-nctm.com. Download the PDF

In order to obtain the payment of the commission allegedly due to it by reason of the brokerage activity carried out, the owner of a consulting firm in the industrial sector sued a corporation. The defendant replied objecting in the first place that the agreement on consideration was invalid since the plaintiff was not enrolled in the list of brokers provided for by Law No. 39/1989.In the first instance proceeding the Court of Verona ordered the company to pay, classifying the activity carried out by the owner of the consulting firm as mere procurement of business and, as such, not subject to the provisions of Law No. 39/1989. In the appeal proceeding, the Court of Venice overturned the decision due to the plaintiff’s failure to prove its registration with the register of professional brokers, which the Court considered as an essential requirement in order to obtain the right to commission.Following the plaintiff’s appeal to the Supreme Court, the second division of the Supreme Court, in light of the case-law conflict on atypical brokerage activity, deemed it necessary for the Court to sit en banc to consider the possibility to apply the rules and regulations governing brokerage also to business procurement, thus deciding whether or not those carrying out said activity need to be registered in the specific registers or lists in order to claim payment for their services. 

2. Brokerage, business procurement and agency relationships: introductory references

In order to properly understand the issue under examination, one should briefly refer, as introduction, to the main key points of the rules and regulations on brokerage, the so-called atypical (or unilateral) brokerage and business procurement, in other words all type of contracts – with the exclusion of agency agreements – having as their subject-matter the provision of services aimed at the conclusion of contracts between the parties.

• Brokerage, governed by Articles 1754 and the following of the Italian civil code, is characterised by the duty of impartiality imposed on the broker in the carrying out of his/her activity and by the obligation to register in the specific Register of enterprises or in the Economic and Administrative Index (R.E.A.), which is an essential element to give rise to the right to receive a commission for the activity carried out.
• The so-called atypical brokerage is, instead, that particular type of brokerage resulting in the setting up of relationships with only one of the party, whose interests are looked after by the broker.
• Business procurement is a contractual scheme not governed by the Italian civil code partially similar to both brokerage and agency relationships. The business developer undertakes, in exchange for a consideration, to promote the conclusion of businesses between the entity which appointed him/her and in whose interest he/she acts, and third parties. Contrary to agency relationships, business procurement is characterised by the absence of subordination and lack of stability.

3. Positions adopted in case law on business procurement

As mentioned above, the decision submitted to the Supreme Court in the case at issue concerned the possibility to include business procurement within the rules and regulations positively established on brokerage, in particular with regard to the invalidity of the agreement on commission should the persons acting as brokers not be registered in the register of enterprises or in the Economic and Administrative Index (R.E.A.).Previous positions adopted by case law on the mater follow two main trends.According to the first view, the essential core of brokerage is represented by the duty of impartiality: a business developer, who is not subject to said duty, would consequently not be subject to the application of Article 6 of Law No. 39/1989. The registration in the specific registers or lists does not represent, for this category of professionals, a requisite to give rise to the right to commission.According to the second view, the real essential core of brokerage is represented by the activity aimed at bringing two or more parties together for doing business. In this perspective, for the purpose of fighting the performance of unregulated activities by morally and professionally unqualified persons, business procurement is classified as a form of atypical brokerage and therefore included within the scope of applicability of Law 39/1989. 

4. The decision of the Supreme Court en banc of 2 August 2017

The Supreme Court en banc, which was required to settle the case-law conflict, deemed that the second position should be adopted.The reasoning of the Supreme Court is based on the observation that the so-called intermediaries’ role is divided in four sections, respectively dedicated to: (i) real estate brokers; (ii) commodities brokers; (iii) brokers with an agreement for valuable consideration (encompassing atypical brokers); (iv) brokers for various services.Article 2, fourth paragraph, of Law No. 39/1989 establishes that the registration in the so-called roll of brokers with an agreement for valuable consideration must be requested by those carrying out – even on an occasional or discontinuous basis – activities for the conclusion of transactions concerning real estate or companies: hence excluding atypical brokerage activities carried out occasionally in relation to movable property.Committing to the aforesaid second position, and thus considering business procurement as a form of atypical brokerage, the Court ruled that a business developer who (i) professionally performs his/her activity or (ii) performs his/her activity on an occasional basis in relation to real estate or companies, has the obligation to register with the register of enterprises or the Economic and Administrative Index (R.E.A.). 

5. Conclusions

In summary, in the light of such considerations the Supreme Court established that, should the activity be carried out on a professional basis, irrespective of the form of brokerage, and regardless of its subject-matter, typical or atypical brokers (and hence also business developers) must register in the register of enterprises or the Economic and Administrative Index (R.E.A.) with all consequences arising from the failure to register with respect to the right to commission.   This article is for information purposes only and is not, and cannot be intended as, a legal advice on the topics dealt with. For further information please contact your counsel or send an email to the following address: corporate.commercial@advant-nctm.com. Download the PDF

The case ruled upon by the Supreme Court involved a corporation whose corporate capital was originally held by two shareholders, holding respectively 60% and 40% of the company’s shares; moreover, the company’s by-laws provided for qualified majorities of two thirds of the capital on both first and second call. Such provision of the by-laws prevented amendment to the by-laws without the agreement of both shareholders, thus eventually involving an unanimity regime.On the death of the minority shareholder, the heirs of the deceased shareholder decided to dissolve their joint ownership of shares, splitting their shareholding into four lots, which could be disposed of autonomously. Following the change in the company’s shareholding structure, by virtue of an agreement between the majority shareholder and one of the shareholders-heirs, the meeting could amend the by-laws and reduce the quorums to pass resolutions, bringing them in line with the provisions of the Civil Code (Articles 2368 and 2369).The three dissenting shareholders exercised their right of withdrawal, invoking Article 2437, g), of the Civil Code, which allows withdrawal by shareholders dissenting from meeting resolutions involving “amendment to by-laws in respect of voting or profit-participation rights”. The company resisted, challenging the applicability of such provision to the case.The Court of Bergamo upheld the application of the three dissenting shareholders but, at a later stage, the Court of Appeal of Brescia reversed the decision, denying the right of withdrawal enforced, and the losing parties then submitted the case to the Italian Supreme Court. 

2. Article 2437 of the Italian Civil Code and the discipline of withdrawal

As a preliminary remark, it should be noted that the provision under examination must be examined in the context of the general review of the discipline of shareholders’ withdrawal under Legislative Decree No. 6 of 17 January 2003. The reform was aimed at extending the enforceability of the right of withdrawal, making obsolete the interpretation approach followed by courts until then, based on the mandatory nature of statutory requirements and the idea that withdrawal involves the impoverishment of a company and adversely affects the interests of creditors.Indeed, under Article 2437 quater of the Civil Code, directors are entitled to liquidate a withdrawing shareholder by offering its shares on an option basis to the other shareholders or third parties, or by the Company purchasing the shares.Capital reduction or the company’s winding-up is only allowed if there are no profits or reserves available for purchasing the shares, which means that corporate capital reduction is only a possible consequence of withdrawal.Getting back to the wording of Article 2437, g), of the Civil Code, “amendment to by-laws in respect of voting or profit-participation rights” can be construed in different ways. Legal commentators are indeed divided between those advocating stricter interpretations and those holding more extensive views, while agreeing only with the fact that the wording of the provision is rather ambiguous.The Supreme Court holds that the resolution whereby the quorum for extraordinary meetings is switched back to the statutory quorum falls within the scope of Article 2437, g), of the Civil Code, for not even involving an indirect alteration of voting or profit-participation rights (these latter to be meant as economic rights only).The Supreme Court gives a few examples, clarifying that a direct alteration of voting rights would result from a resolution turning shares without voting rights into shares with voting rights, or from one changing the scope of the matters on which voting rights can be exercised. By contrast, a change in quorum involves no (direct or indirect) change in the by-laws structure of voting rights, which means the only change can be in voting “weight”, but the voting right attached to the shares does not change. The applicants were indeed basically alleging that the resolution had an adverse impact on the unanimity regime, preventing them from influencing the company’s decisions in the future.On the other hand, under Article 2437, g), of the Civil Code, the exercise of a shareholder’s right of withdrawal is not linked to the prejudice caused to the shareholder, rather being the consequence of a change being made to the voting right. In confirmation of this, the Supreme Court notes that lawmakers expressly disciplined the cases in which the right of withdrawal is the consequence of a more unfavourable treatment of the shareholder, such as under Article 2497 quater of the Civil Code, which provides for the shareholder’s withdrawal in the event of a significant alteration of the company’s economic-and-asset situation. 

3. Conclusions

1.     The case

2.     The interpretation of the provision

3.     The sacrifice of the dependent party’s interest  

4.     Conclusions