ITALY Trends and Developments Contributed by: Maria Chiara Malaguti, Filippo Rossi and Roberto Longhi, PedersoliGattai
screening tool applied by Italy is worthwhile in making a complete assessment of an investment. Italy’s screening tool is known as the “Golden Power”. The Golden Power is a set of special powers held by the Italian government, first introduced in 2012 and further modified and widened in scope at different times, allowing it to intervene in transactions involving companies or assets in sectors deemed strategically important to national interests, such as: • defence, national security, energy, transport and communications; • processing, storage, access and control of sensi- tive data and information; • the financial sector, including credit and insurance, and financial market infrastructures; • artificial intelligence, robotics, semiconductors, cybersecurity, nanotechnology and biotechnology; • critical infrastructures; and • health (procurement of medicines, medical devices and equipment, and related research and develop- ment activities). Through this mechanism, the government can impose conditions, set requirements, or even block foreign direct investments and corporate operations to safe- guard national security and public order. Conditions and procedures vary according to the sec- tor, as the current screening tool is the result of a strat- ification of different sets of rules. Entities managing strategic assets, as well as those acquiring significant shareholdings in certain undertakings, are subject to an obligation to notify the Department for Administra- tive Co-Ordination. Failure to notify can result in the transaction being nul- lified, as well as administrative fines. A pre-notification mechanism was recently implemented to promote understanding on the part of operators as to their duties under the current regulation.
One example is illustrative in understanding the pos- sible interference by the Golden Power with the pro- tection of direct foreign investments: in 2023, the Italian government exercised the Golden Power in an operation concerning the renewal of the Pirelli (tire manufacturer) shareholders’ agreement between its Chinese and Italian shareholders. The Chinese partner had entered into the shareholding of Pirelli in 2015 by acquiring a relative majority stake, and signed a shareholders’ agreement with Pirelli for shared man- agement of the company. In 2023, the agreement was to be renewed for three years with some amendments. This was notified under the Golden Power. The government exercised its special power, since Pirelli’s strategic importance was justified by virtue of Pirelli’s development of special cyber-sensors for tires, capable of storing sensitive data for multiple uses. The government authorised the renewal under certain conditions meant to reinforce the management powers of the Italian shareholder, despite it being a minority shareholder. In particular, the new agreement mandates that the CEO be designated by the Italian shareholder. Furthermore, it entrusts the CEO with the proposal of any resolution concerning strategic assets, requiring a mandatory four-fifths majority for any adverse decisions, as well as for the appointment and dismissal of managers. In the assessment of the Italian Golden Power, it must be noted that this is consistent with the EU’s foreign direct investment screening policy. The latest (2025) EU measures in this area attempt to ensure that all member states have a screening mechanism in place, with better harmonised national rules, identifying a minimum sectoral scope where all member states must screen foreign investments, and extending EU screening to investments by EU investors that are ulti- mately controlled by individuals or businesses from a non-EU country.
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