Omnibus Decree and New Golden Power Measures

Sottotitolo

By Francesca Tanzi Marlotti

The law decree of August 10, 2023, No. 104, containing urgent provisions to protect users in economic and financial activities and strategic investments (the “Omnibus Decree”), has been converted into law, expanding the government’s special powers to intra-group operations.

Key Changes Introduced by the Omnibus Decree:

On October 9, 2023, the Omnibus Decree was enacted, reinforcing the government’s special powers regarding Golden Power. This includes the authority to intervene within the same group, subject to verifying the conditions for exercising these special powers. The scope involves acts, operations, and resolutions related to intellectual property rights in artificial intelligence, semiconductor production, cybersecurity, aerospace technologies, energy storage, quantum and nuclear technologies, or food production, concerning one or more entities outside the European Union.

Understanding Golden Power:

Golden Power refers to the special powers granted to the government:

To oppose or dictate specific conditions for acquiring participations.
To veto or impose specific conditions and prescriptions on adopting certain corporate resolutions, acts, and operations.

The purpose is to safeguard (i) the proprietary assets of companies operating in sectors deemed strategic and of national interest and (ii) the ownership and availability of assets held by these companies.

These powers are primarily regulated by the law decree of March 15, 2012, No. 21 (the “Golden Power Regulation”), which, through references to secondary legislation, defines the scope, subject, extension, conditions, and procedures for the government’s exercise of these special powers in the case of share acquisitions in companies engaged in strategically relevant activities or corporate transactions involving such companies (e.g., mergers or spin-offs) that impact control or availability of strategic assets, posing a threat of serious harm or danger to national security or public order.

Strategic sectors include defense and national security, 5G technology broadband electronic communication services, energy, transportation, and communications, including sectors identified by Regulation (EU) 2019/452 on the control of foreign direct investments in the European Union.

Procedure:

In the case of significant operations identified by the Golden Power Regulation, the company is obligated to notify the Prime Minister’s Office (through the transmission of comprehensive information about the resolution, act, or operation to be adopted, with the deadline varying based on the strategic sector or the type of act or operation). Following this notification, within 45 days, the government can decide to adopt the envisaged measures, subject to any requests for additional information from the notifying party.

Implications of the New Legislative Intervention:

This legislative intervention has extended the scope of the Golden Power Regulation to operations conducted within the same corporate group, meeting two requirements: firstly, these operations must involve entities external to the European Union; secondly, they must relate to the sectors identified by the regulation.

Before the integration carried out by the Omnibus Decree, intra-group operations were subject to a specific exception regarding the exercise of special powers by the government, although the notification obligation remained. The government could exercise these powers only if such operations posed a “threat of serious harm to public interests related to the security and functioning of networks and facilities and the continuity of supplies or a danger to public safety and order.”