On July 11, 2019, the Italian Government adopted Law Decree No. 64/2019 ("DL 64/2019") which amends the law known as the "Golden Power Legislation" (Law Decree No. 21 of March 15, 2012, as subsequently amended) enshrining measures governing the State's powers of intervention in deals involving companies operating in the sectors of defence, national security, communications, energy and transport (the "Strategic Sectors"). DL 64/2019 entered into force on July 12, 2019, also for notification procedures currently ongoing, but will lapse if not converted into law by the Italian Parliament by September 10, 2019.

With DL 64/2019, the Italian Government principally aims to strengthen protection of national security in the Strategic Sectors, recently amplified to include the new area of 5G Technology Transactions. At the same time, DL 64/2019 has broadened the powers granted to the Italian Government by the Golden Power Legislation and now allows the relevant authorities a significant amount of time for evaluation of the risks posed to national security by transactions, potentially delaying completion of such deals.


DL 64/2019 marks the second legislative intervention on the Golden Power Legislation in less than 6 months, following that introduced by Article 1 of Law Decree No. 22 of March 25, 2019 (known as the "Brexit Decree") which extended the Italian Government's right to veto or dictate conditions for transactions involving broadband electronic communications services based on 5G technology, now added to those activities of strategic importance in the sectors of defence and national security requiring prior notification.

The Brexit Decree entitles the Italian Government to exercise its "golden powers" on the completion of commercial contracts for the purchase of goods or services relating to the design, construction, maintenance and operation of networks for 5G communication services, as well as the acquisition of technology-intensive components for their implementation or operation (collectively, "5G Technology Transactions"), where these are carried out with entities outside the European Union. Severe sanctions apply for failure to comply with these notification requirements or any conditions imposed in relation to 5G Technology Transactions, including the Italian Government's power to order the deal to be unscrambled, restoring the previous status quo at the expense of the parties involved.


The most significant changes provided for by DL 64/2019 involve:

For all Strategic Sectors

  • a significant extension of the time limits and investigation powers granted to the Italian Government for the exercise of "golden powers": the Italian Government now has a much longer period - 45 days (instead of 15) - within which it may consider notifications and exercise its "golden powers" and is expressly entitled to make specific inquiries of any third party (e.g. public or regulatory authorities, a company's officers, shareholders, auditors etc.) to retrieve additional information. If the Italian Government requests any information regarding the envisaged transaction, this will now need to be provided within 30 days of the request (instead of 10). These new time limits risk extending significantly the period between exchange and closing for a deal in a Strategic Sector where clearance is required, increasing delay and deal uncertainty;
  • enhanced cooperation between the regulatory authorities and the "Coordination Group" established by Presidential Decree of August 6, 2014 for the purposes of coordinating preparatory activities concerning the golden powers and composed of representatives from the major Italian Ministries. The aim is to facilitate the exercise of "golden powers" by ensuring a flow of information between the Government and regulatory authorities such as the Bank of Italy, the Italian Supervisory Authority on Financial Markets (CONSOB), the Italian Supervisory Authority on Pension Funds (COVIP), the Italian Insurance Supervisory Authority (IVASS), the Authority for the New Rules of Transport (ART), the Antitrust Authority (AGCM), the Italian Communications Authority (AGCom) and the Italian Regulatory Authority for Electricity Gas and Water (ARERA). In such cooperation, the authorities are expressly prevented from withholding information from the Coordination Group on grounds of confidentiality.

Communications, energy and transport

  • clarification of the meaning of "purchasing entity outside the European Union" for the purposes of M&A transactions involving the transfer to non-EU purchasers of interests in companies owning strategic assets. The new definition not only includes any legal entity clearly incorporated outside the territory of the European Union, but also entities formally established in a EU member State (or having their principal place of business or place of management in the EU) that are controlled – either directly or indirectly – by non-EU individuals or companies, and when the establishment of the EU vehicle is made by one of the parties only for purposes of evading application of the Golden Power Legislation. The new provision offers better guidance for non-EU investors interested in Italian entities as they evaluate the location, and substance, of an acquisition vehicle for the envisaged transaction, but also seeks to limit attempts to circumvent the correct application of the Golden Power Legislation;
  • voting proxies lead to attribution of third party shareholding interests. The Golden Powers Legislation provides that notification requirements apply when entities outside the European Union acquire a controlling interest in a company operating in these sectors. For the purposes of calculating whether these thresholds have been met, DL 64/2019 requires that the interests held by third parties who gave a proxy to the purchasing entity outside the European Union following a specific solicitation involving over 200 shareholders will be attributed to such purchasing entity. Purchasers will need to evaluate this provision carefully in calculating whether their proxy solicitation activities risk triggering the legislation;
  • introduction of new criteria in determining whether an investment by an non-EU entity might be prejudicial to national security or public order and thus challenged by the Italian Government. For non-EU purchasing entities aiming to acquire strategic assets in the communications, energy and transport sectors, the evaluation criteria will now include:
    • whether the relevant purchasing entity outside the European Union is controlled, directly or indirectly, by way of ownership or substantial financing, by a non-EU Government through any of its public administrations - including its armed forces;
    • whether the purchasing entity outside the European Union was previously involved in activities affecting national security or public order in one of the Member States of the European Union;
    • whether there is a substantial risk that the purchasing entity outside the European Union engages in illegal or criminal activities.

Defence and national security

  • general extension of the Government's veto right. The Italian Government can now exercise its veto rights not only on resolutions adopted by the shareholders or the board of directors on certain transactions (including, for example, the company's merger or de-merger, the transfer of business and/or of other assets, the creation of encumbrances over such assets and the transfer of the registered office abroad), but also on actions and transactions carried out by the same bodies (or their representatives) and having the same purpose and effect. Moreover, in exercising its veto rights on these transactions, the Italian Government may also consider whether the relevant company is subject to insolvency proceedings;
  • extension of the Government's power to object to the acquisition when entities outside the European Union acquire a level of shareholding with voting rights which is capable of jeopardising defence and national security. Where, following a proxy solicitation of more than 200 shareholders, third parties have given proxies for votes attached to their shareholdings to the purchasing entity, these third party interests will be attributed to the purchaser, thus complicating the evaluation of whether the Golden Powers Legislation may be triggered, as noted above;
  • addition of a new 50% threshold for the disclosure of significant shareholding interests acquired in Italian companies, whether listed or not, aimed at increasing transparency in their ownership structure. Prior notification will now therefore be required for investors acquiring interests in any Italian company active in the sectors at stake, when the shareholding interest acquired exceeds the thresholds of 3%, 5%, 10%, 15%, 20%, 25% and 50%.


Further action from the Italian Parliament is awaited with interest. Indeed, we understand that the Government may not push for conversion, in the light of current plans to introduce a more orderly regulation of national cybersecurity interests.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.