On March 21, 2022, the Italian Government enacted a law-decree (“Decree”) to address the economic and humanitarian effects of the ongoing Ukraine crisis.[1]
The Decree further broadens Italy’s foreign direct investments (“FDI”) regime, by giving the Government the permanent power to review (a) acquisitions of controlling stakes by European Economic Area (“EEA”) investors (including Italian persons) in the energy, transport, communications, financial, health and agri-food sectors, and (b) minority investments made by non-EEA investors, in every “strategic” sector.
Prior to the Decree, these transactions would be reviewable only until the end of 2022 pursuant to certain CoViD-19 emergency measures.[2]
The extension of the Government powers to acquisitions by EEA investors outside the defense and national security sector raises doubts of compliance with EU law.
Moreover, the Decree envisages an active role of the target company in the screening process, and mandates the Government to introduce rules for the pre-filing process, as well as a simplified screening procedure.
Finally, the Decree reforms the rules on 5G technology procurement.
The structural extension in the scope of transactions subject to the Government review, combined with the recent expansion of strategic sectors, corroborates the expectation that the number of FDI filings will continue its steady growth, after the spike observed after the CoViD-19 emergency measures were introduced in 2020.
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