ITALY Trends and Developments Contributed by: Maria Chiara Malaguti, Filippo Rossi and Roberto Longhi, PedersoliGattai
consideration (and already applied in some legal orders). In parallel, in recent years, states have increasingly adopted incoming investment screening tools to generally protect national interests. Although these tools have often been considered unrelated to investment law (as they technically operate in the pre- investment phase), they have an impact on the general treatment of investments. Italy obviously plays a part in this debate. Not only does it participate in all international fora where the matter is considered and possible global solutions negotiated, but it has also made concrete decisions on how to regulate investments though its interna- tional instruments and in its own territory. Moreover, Italy is part of the European Union (EU). Since the Lisbon Treaty (2009), the foreign invest- ment policy of the EU is an exclusive competence of the Union (of its centralised institutions), although for some aspects (including ISDS) responsibility is shared with member states. To this end, a co-ordi- nation mechanism exists which ensures that member states’ bilateral investment agreements (so-called “Bilateral Investment Treaties” – BITs) follow common paths. The new Italian Model BIT, to be used for nego- tiations of any future BIT, as well as recently adopted concrete BITs are therefore the result not only of the most modern decisions adopted by Italy on regulation of direct foreign investments but also of the sharing of these decisions within the EU. The 2024 Italian Model BIT is one of those agreements usually defined as “last-generation BITs”, precisely because they contain provisions protecting the State’s power to regulate certain matters of national interest through exceptions, qualifications and a general prin- ciple establishing its general right to regulate, as well as requiring the respect of sustainability principles by investors. While many investments in Italy today still benefit from bilateral agreements signed in the past, the trend is moving towards different provisions, which significantly change the future framework for investments in Italy. The following pages will therefore analyse the two main trends in international investment law in Italy: the content of the latest Italian Model BIT – which influ-
enced the most recently adopted BIT by the country – and Italian regulations on the screening of incoming investments. The 2024 Italian Model BIT The most recent Italian Model BIT is from 2024. It contains some relevant provisions for the treatment of future investments, both for foreign investments in Italy and for investments by Italian companies abroad. Each BIT with a partner country is negotiated individu- ally and therefore may deviate from the Model, but the basic principles underlying each concrete BIT are considered consistent. This is primarily because the co-operation mechanism between the European Commission and the member states regarding the negotiation and signing of invest- ment agreements requires member states to obtain authorisation from the European Commission both before initiating negotiations and before final signa- ture. Regulation (EU) No 1219/2012 of 12 December 2012 establishing transitional arrangements for bilat- eral investment agreements between member states and third countries provides that the European Com- mission, which would have exclusive jurisdiction over the signing of investment agreements with third coun- tries, may delegate this function to member states if it has no immediate interest in negotiating with a specific third party. To date, the Commission has left member states a reasonable number of third coun- tries with which they can directly maintain a reciprocal agreement regarding the regulation and protection of investments. However, it has imposed authorisation mechanisms to verify that any bilateral treaty is con- sistent with EU policies. In this context, the European Commission has also adopted a non-paper with various model clauses that member states have used as inspiration for drafting national BITs, which includes Model BITs ( Non-Paper of Annotations to Model Clauses for Negotiation or Re-negotiation of Member States’ Bilateral Investment Treaties with Third Countries ). Therefore, the principles currently contained in the Italian Model BIT can be considered consolidated, or at least in the process of being consolidated, across the EU, although there remains room for flexibility – and, obviously, the nego- tiations under each circumstance may lead to different
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