The Law Decree No. 21 of 15 March 2012, converted by
Law No. 56 of 11 May 2012, introduced a new set of special powers for the
Italian Government in relation to strategic sectors such as defence and national security, energy,
transport and communications.

The Law Decree No. 21 of 15 March 2012, converted by
Law No. 56 of 11 May 2012, introduced a new set of special powers for the
Italian Government in relation to strategic sectors such as defence and national security, energy,
transport and communications.

Contrary to the previous Italian legislation on the
“golden share”, which was applicable to companies operating in the defence,
energy, transport and communication sectors, directly or indirectly controlled
by the State, the new rules and special powers (a.k.a. “golden powers”) set
forth by the Law Decree no. 21/2012 apply to the companies, irrespective of
whether the State is their shareholder or not, which (i) carry out strategic activities deemed to be of strategic
importance in the defence and national security sectors, (ii) and in relation to companies holding assets deemed of
strategic importance in the fields of energy, transport and communications.

The Decree no. 21/2012 grants two distinct sets of
powers: one for the defence sector and one for the energy, transport and
communication sectors.

In both cases, the special powers attributed to the Italian Government and the conditions
under which such special powers may be exercised are now subject to stricter
and more objective limitations to comply with EU laws and to address the EU
Court of Justice’s proceedings against Italy. The conditions for the exercise
of the golden powers are, now, proportional, reasonable, clearly defined, non-discriminatory and objective.

Rules
applicable to the defence and national security sectors

In the defence and national security sectors, in
particular, when a company’s activities threaten serious damage to the
essential interests of defence and national security, the Italian Government may exercise the special powers in
the following cases:

a)       The
purchase, in any capacity, of shareholdings in a strategic business;

b)       The
adoption of shareholders’ resolutions
related to corporate transactions such as mergers, demergers, transformation
and dissolution of the company, transfer of business branches, amendment of
statutory provisions and changes to the business purpose of the company.

c)       The
acquisition of holdings by entities other than the Italian State or Italian
public bodies, should the acquiring party come to hold directly or indirectly a
level of interest in the capital with voting rights that is sufficient to
compromise the defence and national security;

In the first case, specific conditions may be imposed
in relation to the security of supply, the security of information,
technological transfers and the control of exports.

In the second case, a veto may be exercised by the
Italian Government.

In the third case, the right to oppose the purchase
may be exercised by the Italian Government.

To render possible the exercise of its veto power, the
company shall notify to the Italian Government a complete report about the resolution or the action to be
taken.

Within 15 days following the notification, either the
Italian Government exercises its veto or the transaction may be implemented.

Resolutions and actions adopted in breach of these
provisions are ineffective, a fine may be imposed and the Italian Government
may order the original conditions and status to be restored.

Any non-compliance with the order to restore the
original status quo is punishable
with a maximum fine of twice the value of the transaction, and in any case not
lower than the 1% of the revenues generated by the companies involved during
the most recent fiscal year for which
financial statements have been approved.

Rules
applicable to strategic assets in the communications, energy, transportation
sectors

The Law Decree No. 21/2012 defers to further ministerial decrees the
identification of assets, networks, plants and relationships of strategic
importance. With respect to them any resolution, act or transaction placed into
effect by a holding company, concerning changes in ownership, control or the
availability of the strategic assets, is to be reported to the Government in
advance. The Government may exercise its veto power in the event that:

(i)       Any resolution, actions or operations that may give
rise to serious and actual risks for the public interest in connection with the
operation of the energy transmission grids, energy plants and the consistency of
energy procurements;

The companies have to notify to the Italian Government
these acts, resolutions or transactions within 10 days with all details.

Not later than 15 days from the notification, the Italian Government have to
communicate the veto.

Any resolutions and actions adopted in breach of these
provisions are ineffective, and the Government may order the pre-existing
conditions and status to be restored. Also, in
this case, any non-compliance with the order to restore the original
status is punishable with a fine calculated with the same criteria mentioned
above.

Moreover, the Law-Decree 21/2012 provides a specific
procedure for the purchase of a shareholding by non-EU residents, in a company
that owns strategic assets, sufficient to cause this subject to have permanent
establishment as a result of the acquisition of the control of the company it
is acquiring.

In fact, this subject has
to notify to the Italian Government this purchase within 10 days with all relevant
information related to the operation and the
purchaser.

If this purchase is likely to give rise to serious and actual risks to the public
interests, the Italian Government, not later than 15 days from the notification,
can either impose specific undertakings to ensure the safeguard of the
interests at issue; in exceptional cases, when the aforementioned procedure is
not sufficient, the Government can exercise the right to oppose the purchase.

The Italian Government can exercise this right based
on objective and non-discriminatory criteria.

After the Law Decree No.
21/2012, the Prime Ministerial Decree 6 June 2014, n.
108 expressly identified the strategic assets and the Presidential Decree 19
February 2014, n. 35 sets out the procedural rules for the exercise of special
powers such as the content and validity requirements of the notification, the
parties responsible for the submission of the preventative notification, the
investigation procedure and the authorities involved.

Endnotes

(1) See the Law Decree No. 21 of 15 March 2012,
converted by Law No. 56 of 11 May 2012.

(2) See the Prime Ministerial Decree 6 June 2014, n. 108

(3)See the Presidential Decree 19 February 2014, n. 35