Foreign investment control: Covid-19 related emergency rules are extended through December 31, 2021

A little over one year after issuing its first set of rules relating to foreign investment control matters aimed at handling the Covid-19 emergency (the “Emergency Rules”),[1] the Italian government has decided[2] to extend said rules through December 31, 2020.

Initially, the Emergency Rules were scheduled to elapse on December 31, 2020; at the end of 2020 they were extended through June 30, 2021, and now they have been extended once again through December 31, 2021.

As described in our previous article, the Emergency Rules significantly expand notification duties, providing, among other things, that with respect to target companies holding strategic assets in the energy, transportation, and communication sectors, as well as in sectors listed in Section 4 of the EU Regulation:

  1. acquisitions of controlling stakes must be reported even when the potential acquiror is an EU acquiror; and
  2. acquisitions of minority stakes must be reported (when certain thresholds are reached) if the potential acquiror is a non-EU acquiror.

The combination of the Emergency Rules and sectorial expansion triggered by other rules issued in the past 12 months (please see our previous article) has led, among other things, to a significant increase in the number of notifications in 2020 (over 340), and that number will likely increase further in 2021 (in light of the fact that the Emergency Rules were issued in April 2020 and therefore were applicable only during part of 2020, while as a result of the extension in question they will be effective for all of 2021).

[1] Law Decree No. 23 of April 8, 2020.

[2] Law Decree No. 56 of April 28, 2021.

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