FDI in Italy: Insights on the application of the Italian “Golden Power” regime

In 2023, the Italian Government actively exercised its foreign direct investment (FDI) authorization powers, commonly referred to as "golden power," to safeguard national interests across various strategic sectors. This activity is governed by the legislative framework established by the Decree-Law 15 March 2012, n. 21, and its subsequent amendments, as well as the EU Regulation 2019/452, which provides a framework for controlling FDI within the European Union (FDI Regulation).

Legislative Developments

2023 was marked by significant legislative changes, including the partial consolidation of the temporary FDI regime introduced during the COVID-19 pandemic and new procedural rules for assets covered by intellectual property. These changes aimed to streamline the notification process and enhance the government's ability to protect critical sectors.
 

Statistical Data on Notifications and Pre-notifications

The annual report on the exercise of special powers in 2023 – which was published in July 2024 - confirms, once again, an increase in the number of transactions reported to the Presidency of the Council of Ministers. 

Despite this, the timing of the review procedure was among the fastest in Europe (with the vast majority of the cases approved within 40 – 45 calendar days).

In 2023, the Government screened a total of 727 transactions, including 577 notifications and 150 pre-notifications, an 11.7% increase from the previous year. The majority of these transactions were in the sectors of energy, transport and communications and in the other sectors provided for by art. 4 of the FDI Regulation, with 508 notifications and 140 pre-notifications, representing 88% and 90% of the total, respectively. The defense and national security sector accounted for 55 notifications, close to 10% of the total.
 

Government Decisions and Outcomes

The notification process can result in various outcomes, including non-applicability, non-exercise of powers, and exercise of powers with specific conditions or vetoes. In 2023, the Government exercised special powers in 30 cases, including 2 prohibitions and 20 cases with conditions or prescriptions. A substantial number of notifications (222) concluded with a decision not to exercise special powers, and 317 were deemed not applicable under the relevant law. 

The majority of notifications (70%) were related to the acquisition of corporate shares, with a smaller portion (12%) involving intra-group reorganizations.

The Italian Government's interventions spanned various industrial sectors, including:

1. Energy Sector:
   • Petro Mat FZCO and FBM Hudson Italiana S.p.a.: The Government opposed the acquisition due to the strategic importance of the assets and potential dual-use products;
   • G.O.I. Energy Ltd and ISAB S.r.l.: Specific conditions were imposed to ensure the continuity of ISAB S.r.l.'s operations, crucial for national energy autonomy;
   • Achernar Assets AG and ERG Power S.r.l.: Conditions were imposed to mitigate threats to the national energy supply.
2. Technology and Communications
3. Manufacturing and Industrial:
   • Jiangsu Dingsheng New Materials Joint-Stock Co. Ltd. and Slim Aluminium S.p.a.: Conditions were imposed due to risks in the supply of critical production factors in the steel industry;
   • Montanstahl SA and Siderval S.p.a.: Similar conditions were imposed to address supply chain risks in the steel sector;
4. Pharmaceuticals:
   • Molecule (BC) HoldCo S.r.l. and F.I.S. - Fabbrica Italiana Sintetici S.p.a.: Conditions were imposed to mitigate risks associated with dual-use products and ensure national interest protection;
5. Agriculture:
   • PSP Verisem Luxembourg Holdings S.à r.l. and Syngenta Crop Protection AG: Conditions were imposed to ensure the retention of agricultural know-how within Italy.
6. Software and Automation:
   • Robox S.p.a. and Efort Intelligent Equipment Co. Ltd.: Conditions were imposed to ensure the strategic use of software assets within the EU.
      

Conclusions

Overall, the Italian Government's activity in exercising its FDI authorization powers in 2023 was marked by a proactive stance in monitoring and regulating foreign investments to protect national security and strategic interests. The detailed procedural and legal framework ensured that each case was thoroughly evaluated, and appropriate measures were taken to mitigate any identified risks. 

The Government's decisions were guided by principles of proportionality and adequacy, with the exercise of powers occurring in 10% of applicable cases and 4% of the total operations.

If you need more information or further guidance in this area, please contact Simone Cadeddu & Jacopo Nardelli.

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