Advantages of the new “rent to buy” versus a traditional lease combined with an option to sell

This memorandum outlines the framework of the “rent to buy” agreement and the lease agreement with option to sell, in order to highlight the advantages that this new type of contract presents compared with the traditional scheme[1]. This memorandum is comp...

Read
The role of the models of articles of association and corporate by-laws developed by the Ministry of Economic Development in the procedure for the incorporation of innovative start-ups in the form of limited liability companies (s.r.l.)

From 20 July 2016 it is possible to incorporate online without the intervention of a notary innovative start-ups in the form of limited liability companies (s.r.l.) through the website startup.registroimprese.it.

Read
China Immigration Reform

On 27 September 2016, the State Administration of Foreign Experts Affairs of the PRC issued the Notice on the Trial Implementation Plan for the System of Work Permits for Foreigners in China (the “Notice”).

The Trial Implementation Plan (the “Plan”) aims at merging the two...

Read
  • Articles
  • Press Releases
  • Press Clippings
  • Newsletter
21/03/2017

In this issue, we explore the new “Project Review” rule provided for by Article 202 of Italian Legislative Decree No. 50/2016, which allows the State to revoke funding previously granted for projects which – upon later and more in-depth review – are found no longer to meet the cost benefit ratio. What will the impact of this new rule be on port infrastructure projects in Italy? Are we at the beginning of a new era? We come back to the Italian port reform issue, this time to examine the ordinance power vested in the President of the Port System Authority. Analysing a judgment of the Regional Administrative Court of Liguria, we note how case law anticipated the reform when recognising the ordinance power of the President of the Port Authority even in the absence of an express statutory provision. We then deal with the need for prior review by the EU Commission of State funding projects involving upgrade works on EU ports. On 23 January 2017 the new EU Regulation on port governance was approved. We give a first insight on the main issues covered by the Regulation: financial transparency and the provision of port services. We examine the request to amend Directive 2009/13/EC, aimed at delivering better working conditions to seafarers in accordance with the amendments made in 2014 to the Maritime Labour Convention (MLC / 2014). We also provide some updates on maritime employment agencies. We then focus on a recent decision of the European Commission on State aid, which further helps improve the general understanding of the criteria to be met in order for State aid in port and airport matters to be deemed compatible with EU law. Finally, we draw our attention to an interesting decision of the Consiglio di Stato regarding the interruption of airport handling services, which is forbidden when deemed detrimental to the public interest in operation of scheduled air transport services.] We want to thank our colleagues at Nctm Brussels’s office for their contributions highlighting the most significant actions taken by EU institutions in the international shipping and trade sector. You will also find a list of our events taking place at our Milan and Rome offices, in addition to the usual update on our firm’s activities over the past two months.

21/03/2017

Following the entry into force of Regulation 596/2014/EU (“Regulation” or “MAR“) and the related Commission Implementing Regulation 347/2016/EU (“Implementing Regulation” or “IR“) on market abuse, the intention of this briefing is to provide an overview of the applicable provisions regarding the drawing up, organization and update obligations connected to the list of insiders and its precise format (“Insider List” or “List”).

MAR requires issuers of financial instruments traded on regulated markets and multilateral trading facilities to adopt specific corporate procedures regarding the protection of the confidentiality of inside information and the maintenance of a List, in order to minimize insider trading and to support supervision and inspection by the competent authorities. In particular, this procedure is intended to regulate the entire inside information recording and monitoring process and require the prompt insertion of details of individuals having access to inside information, even on an occasional basis.

An important change introduced by MAR concerns who has the duty to keep the Insider List. Such requirement lies normally with the issuer. The issuer may itself decide, however, to delegate to a third party, acting on its behalf or on its account, the drawing up and management of the Insider List. It is, nevertheless, important to note that, in these situations, the obligation to manage the Insider List shall necessarily regard all the List and cannot cover only a part of it (Article 18, par. 2, MAR). In any case, the issuer remains fully responsible for the Insider List.

Thus, third parties working on behalf of the issuer (i.e. legal or tax advisers, auditors, consulting firms, financial advisor, banks, etc.) are no longer required to maintain their own internal Insider List as the issuer (or the third person delegated) is solely responsible for the maintenance of the single List, which shall include details of all individuals, internal and external to the company, having access to the protected information. This implies that such third parties shall be required to communicate the details of all persons who will have to be included into the single Insider List.

As to the content and structure of the List, every issuer is required to draw up the Insider List and to promptly update it according to a precise format, laid down in the Implementing Regulation.

In particular, the data which enables the identification of persons having access to inside information shall be entered, including: (i) their identity (date of birth, personal address and, where applicable, the national identification number); (ii) the reason for including them in the List; (Iii) the date and time at which they obtained access to the information; and (iv) the date on which the List was drawn up.

In addition, it is necessary to identify precisely the specific pieces of inside information to which those included in the List have had access, since multiple pieces of inside information can exist within an entity at the same time. Thus, the insider list must be divided into sections, with a separate section for each piece of inside information, specifying its specific nature (i.e. contract, project, corporate or financial event, profit warning). Thus, upon the identification of each new inside information, a new section must be added to the Insider List and must  only include the data of those having access to the specific inside information referred to in the given section.

To avoid multiple entries within different sections but in respect of the same individuals, issuers may decide to draw up a supplementary section, containing the data of the insiders who, due to the nature of their function or position, have access at all times to all inside information concerning the company. This section, therefore, shall not be created upon the existence of a specific piece of inside information and data referred to the insiders inserted there shall not have to be repeated in other sections of the List. It should be noted that the number of persons whose details are included there should be particularly limited.

The new rules require, moreover, that the Insider List to be drawn up in electronic format, so as to ensure (i) the confidentiality of the information included therein; (Ii) the information to be complete and accurate; and (iii) the access to and the retrieval of previous versions of what has been entered in the List. Each update, must be carried out by the same electronic means, in order to ensure information is only added and that the existing information is neither deleted nor modified. The Insider List must be submitted to the competent Authority by electronic means.

In any event, issuers or those acting on their behalf or account shall take all reasonable steps to ensure that any person on the List acknowledges, in writing, the legal and regulatory duties entailed and is aware of the applicable sanctions.

Finally, the Regulation allows for exemption with regard to the requirement to keep the List, enabling cost savings to issuers which securities are traded on SME growth markets. However, it should be noted the provisions concerning such growth markets shall only be applicable as from January 3rd, 2018, the date set for the entry into force of MiFID II.

21/03/2017

This memorandum outlines the framework of the “rent to buy” agreement and the lease agreement with option to sell, in order to highlight the advantages that this new type of contract presents compared with the traditional scheme[1]. This memorandum is composed in two parts: defining the main schemes of both types of agreements in order to distinguish between them; highlighting the main advantages when using the “rent to buy” instead of the traditional lease with option to sell.

  1. The distinction between “rent to buy” and lease with option to sell.

The “rent to buy” is defined by law as “the contract, different from financial leasing, that provides the lessee with the immediate enjoyment of a real estate, and with the right to acquire the property of such asset at a certain deadline, against the payment of its price reduced by the part of licence fees indicated in the agreement”[2]. Accordingly, the operation is structured into two parts. In the first part, the lessor grants the enjoyment of the asset, and the lessee pays a periodic licence fee which includes an amount paid for the use of the asset, and an amount based upon the anticipation of its purchase price. In the second part the lessor purchases the asset, against the payment of its price reduced by the amount already paid as part of anticipated sale price under the lease.

Whereas, the lease agreement with option to sell is a contract of leasing which includes an option providing for a separate contract to sell. Therefore, leasing and selling are not a single unified economic transaction under one sole agreement, instead there are two separate transactions with two different agreements. First, there is a transaction that falls under the general provisions of the lease agreement. Second, there is a transaction that falls under the option agreement as a separate agreement to sell. The transactions are connected in the sense that they are interrelated if one selects the option to sell and then pursues that economic result.

While the distinction between the rent to buy and lease with an option to sell may not seem clear and immediate, in the abstract, the agreement should be considered as a “rent to buy” when the parties intend to establish a single unitary relationship characterised by leasing with an additional amount paid for the right to buy. Alternatively, an agreement should be construed as a lease when the parties intend to undertake two separate transactions: leasing and leasing with an option to purchase. In this latter agreement, only a leasing amount is paid and not an additional amount in anticipation of the intended purchase price.  In practice, the essential element to distinguish between the two contracts is represented by the composition of the licence fee. In particular, the agreement falls under the “rent to buy” scheme whenever the licence fee is split into two parts, a portion aimed to remunerate the enjoyment and a portion aimed to anticipate the price.

 

  1. First advantage of the “Rent to buy”: the freedom of negotiation

The contract of “rent to buy” presents many advantages compared with the lease with option to sell. The first advantage consists in the freedom of negotiation. Indeed, the lease with an option to sell is entirely subject to the restrictions provided by the Law 392/1978 and by the Law 431/1998, and all the consequent mechanisms mandating the imperative substitution of clauses which do not comply with such provisions[3]. In this agreement, each transaction remains governed by the regulation of the law for its respective type (lease, and option to sell). The mere connection between the transactions does not affect the applicable regulation.

Instead, the “rent to buy” is exempted by the application of the imperative provisions set by the law in relation to the lease. In this agreement, the parties shall remain entirely free to negotiate and agree upon the duration of the enjoyment, the early termination of the commitment, the amount and the raise of licence fees, the sublease and contract assignment, and all the mechanisms related to pre-emption, release, and indemnity for the loss of goodwill[4].

 

  1. Second advantage of “rent to buy”: the enforcement in case of non-fulfilment of the lessee

The second advantage consists in the timing of the enforcement in case of non-fulfilment of the lessee. In the lease with option to sell, the lessor is compelled to bring two different actions before two different judicial authorities. Previously, lessor needed to demand the verification of the entitlement and the breach of the contract in an ordinary trial, though this trial should be enough rapid, since it is regulated by the summary procedure of eviction stated in the article 658 c.p.c. Afterwards, once the judicial verification is obtained, lessor may proceed with the execution. Consequently, the satisfaction of the lessor’s interest requires two different proceedings, causing protracted time and costs[5].

Instead, the “rent to buy” represents itself an enforceable title for the release of the asset, providing that it is stipulated in the form of a notarial deed, and providing that it contains an express termination clause in relation with the failure to pay the licence fees due. Therefore, in case lessee does not fulfil all the lease to buy obligations, the lessor does not need to demand the verification of the entitlement and the breach of the contract, and can immediately proceed with compulsory execution. Nevertheless, this occurs only in case all the conditions previously mentioned are met. Indeed, on the basis of article 474 c.p.c. and on the basis of article 605 c.p.c., notarial deeds represent enforceable titles for the release of the asset only when they provide a right to restitution that is irrefutable, liquid and collectable. Consequently, it is not sufficient just to have a notarial deed, it also must vest the lessor with a right to restitution that is already certain and does not require any judicial verification. In this regard, it is necessary that the contract provides an express termination clause[6].

 

  1. Third advantage of “rent to buy”: the effectiveness against third parties

The third advantage consists in the possibility to claim the contract against third parties that have acquired rights on the asset after its registration. On the basis of the article 2643 c.c., the lease agreement could be registered only whether its duration would exceed nine years, and this does almost never happens in the economic practice. Since the acts subjected to registration in the land register are exhaustively stated by the mentioned norm, the lease that does not exceed the 9-year term limit cannot be registered. Consequently, the lessee bears the risk that, in the time between the conclusion of the agreement and the exercise of the option, another person makes a prejudicial registration(s).

This risk is resolved with the “rent to buy”, since it is always subject to registration, regardless of its duration. Furthermore, this registration produces the same effect of the preliminary agreement’s registration, that is to say a “booking effect” for the following transfer. In other words, the registration of the contract anticipates the effects of the registration of the following transfer. This neutralises the risks related to any later registration. However, this “booking effect” expires in case the lessee does not proceed to the registration after the transfer and, in each case, within ten years from the first registration[7].

 

  1. Conclusion

In conclusion, the new “rent to buy” contract, as regulated by recent law, represents an agreement extremely helpful economic practice. The new contract ensures: (i) the parties remain free to negotiate the deal that best fits their interests without any restrictions, (ii) the lessor can obtain the restitution of the asset without the necessity of a judicial verification, and (iii) the lessee can avoid the risk of any prejudicial registrations.

[1]The “rent to buy” agreement was created spontaneously in the economic practice. It has been typified only afterwards by the lawmaker with the Decree “Sblocca Italia” D.L. 133/2014 at the article 23.

 

[2]Decree “Sblocca Italia” D.L. 133/2014, article 23, paragraph 1.

[3]However, the restrictions to the freedom of negotiation provided by the Law 392/1978 is no longer applicable to the lease agreements whose licence fee exceed the amount of 250 k per year. In accordance with the recent D.L. 133/2014 article 18, the parties can freely derogate to all the imperative provisions set in the Law 392/1978.

 

[4]Cassazione, 23 marzo 1992, n. 3587.

[5]It should be pointed out that, in theory, even a lease agreement could be considered as an enforceable title for the release of the asset, provided that it is stipulated in the form of a notarial deed and contains an express termination clause. However, in practice, it does almost never happen.

[6]Fabiani, Rent to buy, titolo esecutivo per il rilascio dell’immobile ed effettività della tutela giurisdizionale, in Studio per il Consiglio nazionale del notariato n. 283 del 2015, 1 ss..

[7] Delfini, La nuova disciplina del rent to buy nel sistema delle alienazioni immobiliari, in Riv. Trim. dir. civ. e proc. civ. 2015, 817 ss..

21/03/2017

From 20 July 2016 it is possible to incorporate online without the intervention of a notary innovative start-ups in the form of limited liability companies (s.r.l.) through the website startup.registroimprese.it.

The new alternative incorporation procedure, as well as the preliminary examination of the most relevant aspects of the model of articles of association and of corporate by-laws developed by the Ministry of Economic Development (“MISE”) have already been the subject matter of two previous information notes, to which reference should be made for further details.

Please find below the second of the scheduled in-depth notes regarding the most relevant aspects of the new legislation on online incorporation of innovative start-ups in the form of limited liability companies (s.r.l.).

*****

  1. Foreword

One of the main innovations in the recent legislation concerning online incorporation of innovative start-ups in the form of limited liability companies (s.r.l.) is represented by the relevant models of articles of association and by-laws, adopted by decree of 17 February 2016 of the Ministry of Economic Development (hereinafter, respectively, the “Ministerial DecreeandMISE) ([1]), implementing the provisions of Decree Law no. 3 of 2015 (the so called  “Investment Compact Decree”) and by Decree Law no. 179/2012 (the so called “Decreto Crescita bis”).

However, in such respect, it is necessary to take into consideration the scope of application and “binding nature” of such models within the different procedures and methods whereby it is possible to incorporate innovative start-ups in the form of limited liability companies (s.r.l.).

  1. Scope of application of the ministerial models in the ordinary procedure of incorporation

Article 4, paragraph 10 bis, of the Investment Compact Decree establishes that the articles of association of innovative start-ups and their subsequent amendments “(…) be drawn up by public deed, or by deed executed with the procedures provided for by Article 24 of the digital administration code, pursuant to legislative decree no. 82 of 7 March 2005  [i.e. deed executed by digital signature, editor’s note]. The articles of association and their subsequent amendments are drawn up in compliance with the uniform model adopted by decree of the Minister of Economic Development and are transmitted to the competent office of the register of enterprises pursuant to article 8 of Law no. 580 of 29 December 1993, as subsequently amended”.

Analysing what the regulations say, it appears – at first sight – that the general provision on drafting in compliance with the uniform model adopted by the MISE would refer to both methods of incorporation of innovative start-ups mentioned in the above paragraph, including therefore the ordinary procedure of incorporation under article 2463 of the Italian Civil Code ([2]).

However, at the same time, it is necessary to highlight that the relevant MISE implementing decree, when adopting the models of articles of associations and by-laws for start-ups in the form of limited liability companies (s.r.l.), makes exclusive reference, with regard to their application, to the new electronic incorporation procedure ([3]).

Likewise, Ministerial Decree of 28 October 2016, approving the model for amendments to the by-laws of innovative start-ups in the form of limited liability companies (s.r.l.) regulates only the amendments to be made by electronic procedure ([4]).

Moreover, the clarifications given by the MISE in circular no. 3691/C of 1 July 2016 addressed to the Chambers of Commerce, Industry, Crafts and Agriculture should be taken into account. Said circular states that the standard model of articles of association and by-laws adopted by the Ministerial Decree is “aimed at the incorporation of start-ups, according to the procedure derogating from the provisions contained in the codes introduced by the abovementioned paragraph 10 bis” and that, therefore, the Ministerial Decree “in compliance with the normative delegation, has, obviously, regulated exclusively the alternative standard model, since the ordinary incorporation by means of public deed remains governed by the Italian Civil Code, by Law 89 of 1913 (…) and by the other system rules”.

So, apparently, such circular makes a clear distinction between the two procedures of – ordinary and electronic – incorporation, of which only the second one is expressly identified as the subject-matter of the Ministerial Decree.

In light of such inconsistency between the provision of the Investment Compact Decree and the provisions of the subsequent implementing legislation referred to above, one could wonder whether the models adopted by the Ministerial Decree are also binding when a start-up is incorporated with the intervention of a notary.

To answer such question, it is useful to take a step back and to identify the reasons that led the legislator to establish that the contents of the articles of association and by-laws of innovative start-ups must be bound to those of the models predetermined by the administrative authority, with the only possibility to select, during the compilation process, the options made available in the same models.

III.        Arguments that apparently confirm the binding nature of the models of articles of association and by-laws also within the ordinary procedure of incorporation.

The adoption of uniform models provided for within the new digital incorporation procedure is certainly the result of the legislator’s intention to combine, on the one hand, the possibility to reduce formal and economic obligations connected with the incorporation of corporations and, on the other hand, the need for a check on the legitimacy of companies (i.e. innovative start-ups in the form of limited liability companies (s.r.l.) incorporated online) that are registered in the register of enterprises without their articles of association and by-laws being subject to the close examination of a notary confirming their legitimacy.

In other words the notary’s intervention would be replaced by a preventive obligation (a sort of ex ante control) incumbent on the intending quotaholders with regard to the content of the articles of association and by-laws of one’s own innovative start up ([5]).

Should the purpose of ministerial models be only that of making up for the notary’s control, one may clearly assume that exactly the notary, as entity in charge of carrying out investigations on the legality of the deeds that are to be drawn up by the same may intervene on the model – amending and supplementing them – and, even, take them in no account.

However, the same article 4, paragraph 10 bis of the Investment Compact Decree, makes reference to two further objectives, that is “to favour the start-up of entrepreneurial activities” and “to assure a more uniform application of the provisions on innovative start-ups and certified incubators”.

Indeed, ministerial models prepared for limited liability companies (s.r.l.) reflect the special regulation that Decreto Crescita bis has specifically created for innovative start-ups, affecting (sometime to a relevant extent) general corporate law, with a view to remedy, through structural legislative interventions, the Italian competition deficiency in the field of technology and development, as well as to stimulate the national economy by the relaunch of innovative entrepreneurship.

Take, by way of example only, with reference to the model of by-laws:

  • clause 8.3 that, implementing article 26, paragraph 6, of Decreto Crescita bis, admits the possibility for the company to carry out transactions on its own holdings in derogation from the prohibition of article 2474 of the Italian Civil Code, should said transactions be carried out on the basis of incentive plans awarding quotas to employees, collaborators, members of the administrative body or workers and providers of services, including professional services;
  • clause 8.2 that, in compliance with the provisions of paragraphs 2 and 5 of article 26 of Decreto Crescita bis, in addition to ordinary quotas, provides for the possibility to issue, in derogation of article 2468, paragraphs 1 and 2, of the Italian Civil Code, particular classes of quotas with different rights, which may be offered to the public as financial instruments, even through online portals for the raising of capital;
  • clause 8.4, according to which the particular classes of quotas under letter (b) may be provided with quotaholders’ rights not proportional to the holding owned and hence, pursuant to article 26, paragraph 3, of Decreto Crescita bis, they may even have no voting rights at all, in derogation of article 2479, paragraph 5, of the Italian Civil Code;
  • clause 7.4, whereby, implementing article 26, paragraph 7, of Decreto Crescita bis, the company may issue specific financial instruments bearing property and administrative rights, (again) in derogation of article 2468, paragraph 1, of the Italian Civil Code.

In particular, (i) the removal of the prohibition to make transactions on own holdings (on the mentioned conditions) has the purpose to promote the involvement of skilled professionals in the life of start-ups;  (ii) the offer to the public of quotas and equity financial instruments issued by start-ups, even through online portals, widens funds raising channels, adding an option to financing alternatives for limited liability companies (the so called crowdfunding activity) (iii) the creation of a class of quotas with rights different from ordinary rights grants the possibility to “reserve” said quotas for potential investors and to differentiate them from founding partners/entrepreneurs, in a similar way as in stock companies ([6]).

So, the by-laws clauses under (a) – (d), together with the other ones provided for in the uniform model, should be used, as a whole, both to make the company specialised in the reference sector efficient and competitive on the market and to simplify the raising of financial resources, thus enabling the company to expand and achieve the set goals.

Hence, it may be inferred that uniform models were “custom made” for innovative start-ups in the form of limited liability companies (s.r.l.), in order to implement the derogations from general corporate law introduced by Decreto Crescita bis and to enable the intending quotaholders to pursue the objectives of the companies; objectives that, according to the literal provision of the Investment Compact Decree, should associate and put in the same “minimum starting conditions” all innovative start-ups, including those incorporated by public deed.

  1. Arguments questioning the binding nature of the models of articles of association and by-laws in the ordinary procedure of incorporation

It must be reminded, however, that the implementing legislation briefly recalled in paragraph II hereof does not incorporate the formulation illustrated in the previous paragraph, since, as said, it does not impose the adoption of uniform models in case of innovative start-ups incorporated with the ordinary procedure by public deed, or better, it does not mention said procedure at all ([7]).

In such respect, some scholars deem that the Ministerial Decree would not simply fail to contemplate the ordinary procedure of incorporation, but would go beyond, imposing, in article 1, paragraph 3, the use of IT methods only: “The deed executed in ways other than those provided for by paragraph 2 [that is in electronic form and with digital signature, editor’s note], cannot be registered in the register of enterprises” ([8]), thus excluding the possibility for innovative start-ups in the form of limited liability companies (s.r.l.) to be incorporated by public deed. Also for this reason ([9]), according to the mentioned legislation, the MISE decree would be unlawful ([10]).

Despite the fact that such latter opinion is, definitely, closer to a literal interpretation of the primary law, the MISE seems to have embraced the opposite theory:

  1. in the first place because, by circular issued on 1 July 2016, the MISE has made it clear that the digital signature procedures is discretionary and alternative to the ordinary one and, consequently, “ (…) these offices [that is the offices of the Chamber of Commerce, Industry, Crafts and Agriculture, editor’s note] may continue to register in the ordinary and special section, start-ups incorporated in the form of limited liability companies, pursuant to article 2463 of the Italian Civil Code, by public deed” ([11]);
  2. in the second place because, by note no. 411501 of 22 December 2016, the MISE has definitely clarified that “the legislator has introduced a simplified method of incorporation that does not replace, but exists alongside the ordinary one provided for by article 2463 of the Italian Civil Code”, that “implementing ministerial decrees (…) lay down the methods for the drawing up and compilation of the electronic file, obviously without the need to dictate criteria relating to the ordinary drawing up and incorporation of start-ups, since they are governed by the provision of the Italian Civil Code and by the Law on Notaries” and that “notaries may certainly continue to draft by public deed deeds of incorporation and amendment of limited liability companies (s.r.l.) having a start-up nature, according to the modalities indicated by the Italian Civil Code and by the Law on Notaries. Only when the notary is required to certify the electronic private deed of incorporation of start-ups pursuant to article 5, paragraph 1, of Ministerial Decree of 7 February 2016, then he will have to certify an electronic original drawn up on the basis of the standard approved by this Minister”;

Without prejudice to the (abovementioned) considerations that are based on the literal tenor of the primary law, the position so expressed by the MISE could be explained in light of the fact that – given the secondary nature of said source of law – the text of the Ministerial Decree, which always and only deals with the electronic incorporation procedure and never with the ordinary one, could anyway leave room to an interpretation compliant with the provision of the primary law, an interpretation that would, therefore, admit the possibility to maintain the ordinary procedure of incorporation alongside the electronic procedure of incorporation recently introduced (hence, the mentioned article 1, paragraph 3, should be read in this perspective: the deed of incorporation that, within the electronic incorporation procedure is executed in ways other than those provided for by article 24 of the digital administration code cannot be registered in the register of enterprises).

So, remaining faithful to the ministerial interpretation one may consider that the Ministerial Decree itself, in distinguishing the regulation applicable to start-ups incorporated online from the one applicable to start-ups incorporated by public deed (although not fully consistently reflecting the literal provision of article 4, paragraph 10 bis of Decree Law no. 3/2015) ([12]), has introduced a “compromise” solution, probably more in line with the complex of rules of corporate law of our system.

Indeed, the Ministerial Decree assures, on the one hand, the form of control on legality ex ante that the legislator contemplated for innovative start-ups incorporated by electronic procedure ([13]) and, on the other hand, it assures anyway the drafting autonomy of notaries in the ordinary procedure of incorporation, referring to their professional skill the usual legality investigation on articles of association and by-laws of innovative stat-ups, without binding notaries to the texts of the models prepared by the MISE that must instead by necessarily observed in the online incorporation procedure.

  1. Conclusive considerations

So, in the light of the foregoing, it is reasonable to deem that:

  • notwithstanding the literal tenor of article 4, paragraph 10 bis, of the Investment Compact Decree and the need for uniformity mentioned therein ([14]), the implementing decree would NOT impose the adoption of uniform models of articles of association and buy-laws approved by the MISE even in case of incorporation of innovative start-ups in the form of limited liability companies (s.r.l.) by means of public deed;

(2)         based on the Investment Compact Decree, on MISE circular no. 3691/C and MISE note no. 411501 of 22 December 2016, the incorporation of innovative start-ups in the form of limited liability companies (s.r.l.) is certainly permitted even through the ordinary procedure by public deed, which remains governed by the Italian Civil Code and by the other laws of the system;

(3)         in the procedure for the incorporation by public deed, in the absence of specific obligations to comply with the models, it can be assumed that the notary, as expert in charge of checking the legality of the deeds, may intervene supplementing or amending said models or even not take them into account, although, obviously, complying with the special regulation provided for innovative start-ups, as provided for by Decreto Crescita bis;

(4)         without prejudice to the foregoing, it is however reasonable to think that – upon the incorporation of innovative starts up in the form of limited liability companies (s.r.l.) in compliance with the ordinary procedure – it would be rather difficult for notaries to ignore the ministerial models of by-laws and articles of association; indeed, said models necessarily represent an excellent initial draft for operators in order to draw up the numerous clauses of the articles of association and of the by-laws that they will have to draft, given that the provisions contained in the ministerial models have been prepared and approved by the MISE and, therefore, may be considered as lawful by definition.

Therefore, in reply to the initial questions under point II, it could be concluded that, within the ordinary incorporation procedure involving a notary, the models of articles of association and by-laws of innovative start-ups in the form of limited liability companies (s.r.l.) approved by the MISE may, at most, be used as initial basis, reference point or mere “source of inspiration”, without however being in any way binding for the notary’s drafting activity.

 

[1] Following the approval of the technical specifications for the drawing up of such models (by directorial decree of 1 July 2016) and certain formal amendments made to the texts of the Ministerial Decree and of the annexes (by decree of 7 July 2016), the provisions of the Ministerial Decree became effective on 20 July 2016 (article 8 of the aforesaid directorial decree).

[2] Along the same lines, v. A. Carducci Artenisio, La start up innovativa s.r.l. costituita con firme digitali non autenticate, in Giustizia civile.com, 29 August 2016, http://giustiziacivile.com/printpage/1041, 21 November 2016, G. Ferri jr and M. Stella Richter jr, Decreto del Ministro dello Sviluppo Economico del 17 febbraio 2016, start-up innovative e diritto delle società: un parere, in  Riv. not., 2016, 609 ff.

[3] Starting from last recital, the decree states: “Considering that article 4, paragraph 10 bis, of decree law no. 3 of  24 January 2015, provides that in derogation of article 2463 of the Italian Civil Code, such deeds may be drawn up in electronic form with uncertified signature of the subscribers pursuant to article 24 of the Digital Administration Code; lays down: Article 1 – Formal obligation  – 1. In derogation of the provisions of article 2463 of the Italian Civil Code, contracts of limited liability companies, governed therein, having as their exclusive or prevalent object the development, production and marketing of innovative products and services with high technological value and which require the registration in the special section of start-ups under article 25, paragraph 8, of decree law no. 179 of 19 October 2012, are drawn up in electronic form and executed by digital signature pursuant to article 24 of the Digital Administration Code, by each of the subscribers, in case of multi-person companies, or  by the sole subscriber in case of single-member companies, in full compliance with the standard attached to this decree as Annex A, drawn up on the basis of the technical specifications of the model, pursuant to article 2, paragraph 1.”.

[4] Indeed, article 1 of Ministerial Decree of 28 October 2016 provides that: “1. In derogation of the provisions of article 2480, second paragraph, of the Italian Civil Code, deeds amending the articles of associations and by-laws of limited liability companies having as their exclusive or prevalent business scope the development, production and marketing under article 25, paragraph 2, of decree law no. 179 of 18 October 2012, are drawn up in electronic form and executed by digital signature pursuant to article 24 of the Digital Administration Code, by the Chairman of the meeting and by each of the quotaholders who approved the resolution, in case of multi-person companies, or by the sole quotaholder in case of single-member companies, in full compliance with the standard attached to this decree as Annex A, drawn up on the basis of the technical specifications of the model, pursuant to article 2, paragraph 1.

  1. Companies shall avail themselves of the provisions of this decree for amendments not implying the loss of the requisites under article 25, paragraph 2, of decree law no. 179 of 19 October 2012 and the cancellation from the special sections of the register of enterprises of innovative start-ups. To that effect, simultaneously with the filing of the amending minutes for the registration in the ordinary section of the register of enterprises, the start-up shall file a declaration certifying that the requirements under paragraph 15 of article 25 of decree law no.179 of 18 October 2012 are still complied with (…)”.

[5] This issue has been dealt with in the information note “Ministerial model of by-laws for innovative start-ups in the form of limited liability companies (s.r.l.): is it a valid substitute for the preventive administrative control provided for by the EU legislation?”.

[6] For comprehensive details of the purposes of the of the provision of Decreto Crescita bis please see S. Guizzardi, L’impresa start up innovativa costituita in forma di s.r.l., in Giurisprudenza commerciale, no. 4, 2016, 549 and ff., that, inter alia, brings into question that equity financial instruments can be offered through online portals.

[7] see above, paragraph II.

[8] Cit. G. Ferri jr and M. Stella Richter jr , op. cit., 609 and ff.

[9] Indeed the Ministerial Decree is considered unlawful for further reasons, for which reference should be made to G. Ferri jr and M. Stella Richter jr, op. cit., 609 and ff.

[10] Along the same lines, see G. Ferri jr and M. Stella Richter jr , op. cit., 609 and ff.

[11] The article at issue (see note no. 2), published in August 2016, was probably drawn up before the issue of circular no.3691/C.

[12] See paragraph II above.

[13] See paragraph III above.

[14] In such respect, reference should be made again to the expression “a more uniform application of the provisions on innovative start-ups”, contained in article 4, paragraph 10 bis.

16/03/2017

The UK is nothing if not pragmatic. The pragmatism has sometime been referred to as perfidiousness: perfidious Albion. What is sure is that the UK will approach the divorce with the EU in a very pragmatic fashion. It will seek to develop bi-lateral relations with its direct trading partners. It will seek to revive the trade pre erences in the Commonwealth. It will seek independent influence in all international bodies.

15/03/2017

Last 8 March 2017, the Revenue Agency issued order No. 47060 implementing the regime for new residents under Article 24-bis of the Consolidated Income Tax Code, introduced by the 2017 Budget Law.

Furthermore, the Revenue Agency declared that en explanatory circular would soon be issued providing all the necessary clarifications on the application of the new regime.

Article 24-bis of the Consolidated Income Tax Code provides for an optional favourable regime for new residents involving among the others a flat-rate tax of 100,000 Euro for non-Italian sourced income. Eligible for such regime are individuals who have been resident outside of Italy for at least nine tax years out of the ten preceding the beginning of the period of validity of the option.

The order concerns the terms for exercising the option for the new regime.

Eligible taxpayers can exercise the option when they file their tax return for the fiscal year during which they moved their residence in Italy, or during the immediately following year. A certain amount of information must be provided in the return, e.g. attesting foreign tax residence status for at least nine out of the previous ten tax years, the last jurisdiction where the taxpayer was resident before exercising the option and the foreign states where the taxpayer does not intend to use the new favourable regime.

The option for tax year 2017 must therefore be exercised by 30 September 2018.

Without prejudice to the necessity to meet the relevant requirements, the order confirmed the applicability of the favourable tax regime also to Italian citizens who in the past moved to States or territories with a favourable taxation regime and in respect of whom the presumption under Article 2, paragraph 2-bis of the Consolidated Income Tax Code applies.

The most important change introduced by the order is the optional nature of the request for a private letter ruling to be allowed to participate in the favourable tax regime.

In other words, the existence of the requirements for being allowed to participate in the regime is a matter for individual assessment by the person concerned, who may opt for making a request for a private letter ruling or not, it being understood, however, that the option is exercised upon filing the tax return.

The application can be filed with the Agency even before meeting the residence requirements under Article 2 of the Consolidated Income Tax Code.

Given the complex and delicate nature of this issue, in order to prevent any errors that may have adverse consequences, one should assess whether it may be appropriate to make a request for a private letter ruling to the Revenue Agency anyway, while in any event having himself/herself assisted by a trusted professional.

 

 

3/02/2017

On 27 September 2016, the State Administration of Foreign Experts Affairs of the PRC issued the Notice on the Trial Implementation Plan for the System of Work Permits for Foreigners in China (the “Notice”).

The Trial Implementation Plan (the “Plan”) aims at merging the two previously separate systems of the “Work Permit for Foreign Experts in China” (applying to certain categories of specialised foreign workers) and the “Foreigners Employment Permit” (applying to “common” employees) into one system, having at its core the “Work Permit for Foreigners in China” (the “Work Permit”).

The Plan is in place for trial implementation in the municipalities of Beijing, Tianjin and Shanghai and in the provinces of Hebei, Anhui, Shandong, Guangdong, Sichuan, Yunnan and Ningxia Hui from October, 2016 until March, 2017. The aim is to adopt the new system nationwide starting from April, 2017, after which working permits issued under the “old regime” will remain valid and will be converted into “new regime” permits on a voluntary basis.

The Plan splits the procedure to obtain a work permit into two main parts. Before entering China, the applicant must submit application documents through an online system for preliminary examination (the employer will need to register into the system by means of a specific procedure). Then, generally, the documents will be sent in printed format to the competent authorities in China, leading to the issuance of a “Notification Letter for Work Permit” (“Notification Letter”). The “Notification Letter” will then be presented to the PRC embassy or consulate of the applicant’s residence in order to obtain a visa; within 15 days of entry into China, the “Notification Letter”, along with the application documents in printed format, must be submitted to apply for a Work Permit. Finally, the Work Permit will be submitted to the local Public Security Bureau (police station) to obtain a residence permit.

The new system divides applicants into three categories. Category A (“outstanding foreign talents”) brings together, among others, persons having outstanding achievements in the fields of medicine, economics, technology, scientific research, architecture, industrial design, literature, sports, etc.; high-level personalities at certain international academic institutions, international financial institutions and international accounting firms; holders of high leadership posts in foreign government administrations, international organisations and NGOs; high level managers in foreign-invested enterprises in China belonging to the encouraged sectors of economy that fulfil certain standards in terms of revenue, employees, etc.; persons fulfilling certain remuneration standards and paying taxes for a certain amount (to be defined from time to time by the authorities); persons having invested in enterprises by means of own inventions, patents, etc.. Category B (“foreign professional talents”) mainly includes foreign professionals holding a bachelor’s degree or higher study qualification and having working experience of two years or more in the relevant field. Category C (“ordinary personnel”) groups foreigners hired based on a permit by the Chinese government or based on agreements between the Chinese government and a foreign government, trainees under intergovernmental agreements, etc..

In addition, the Plan provides for a (provisional) table that attributes a score to individuals according to parameters such as remuneration, study and professional qualification, working experience, age, etc.. Individuals meeting a certain threshold are admitted into category A or B, according to the number of points, even though they do not belong to the groups listed in the Plan a belonging to such categories.

No restriction on the number of permits is stipulated for category A, nor are there age or working experience requirements. A so-called “green channel” treatment applies, meaning that category A individuals benefit from an accelerated procedure for issuance of a Notification Letter and of a Work Permit. Moreover, individuals falling into category A do not need to submit application documents in printed format until after they have entered into China.

Category B individuals are granted work permits “based on market demand” and will need to fulfil the requirements of a “Guidance Catalogue for Foreigners Working in China” (not issued as of yet); they will generally need to be 60 or younger, to hold at least a bachelor’s degree and to have at least two years’ experience in the relevant working field.

Lastly, a so-called “quota administration” applies to category C workers, meaning that permits will be granted in the maximum number stipulated by the Chinese government from time to time. No privileged application channels apply to either category B individuals or category C individuals.

On one hand, the Plan brings unification, by merging the two previously existing regimes into one system for all foreigners working in China. This entails the obvious advantages of straightening out procedures and rationalising the use of administrative resources. On the other hand, the new system differentiates applicants based on the degree to which they meet the needs of Chinese economic policies. Notably, the introductory part of the Notice uses the expression “gather and put to use the talented of the world”: indeed, the Plan provides a privileged path for applicants whose skills and qualifications are especially valued.

1/02/2017

As we settle into 2017 the drama of Brexit and Trump seem to have eased somewhat. While the drama might have lifted it doesn’t mean that the complexities that these two phenomena have introduced and are introducing into the practice of law have gone away. In fact, the more we reflect on what needs to be done to achieve Brexit the less clear the situation is. This week President Trump will outline what he means by the Wall and taxes on imports of goods. From a WTO law point of view it can only be disruptive and even destructive. The drama might have gone but the work is only beginning. In this issue we have a range of contributions covering how the Russian constitutional court has reacted to the European Court of Human Rights rulings in favour of the owners of Yukos, the OECD’s review of its own bribery rules, the EU’s new proposed ePrivacy Regulation, how the European Court of Auditors confirms our understanding of the responsibilities and obligations of Port Authorities in relation to concessionaires. We explain the new Italian Save the Banks decree and show how the EU Commission has a strong role in every step of the process and look at how the Commission proposes disciplining insurance distribution agents.

23/01/2017

Over the last few years there have been cases, on the Italian financial markets, of so called highly-dilutive capital increases realized by some Italian listed companies.

These are cases where the shareholder is unable to exercise the option rights, sometimes discouraged from the modest performance of the share price. This determines a significant dilution of the shareholder participation.

 

The above described effect is the result of companies necessity to issue a significant number of shares, in order to capitalize the company. It is, in fact, a concrete economic need which requires a sacrifice of shareholder’s interest.

 

As part of financial market’s regulation, however, transactions with such characteristics does not affect much on the potential sacrifice of previous shareholder; it rather become a matter of share price. The significant amount of new shares affects the share’s price leading to significant volatility in the price itself.

 

In this perspective, from December 15, 2016 the “Rolling Model” has entered in force . It represents a technical solution designed to correct some distortive effects of the highly dilutive capital increases ([1]).

 

This model provides the introduction, for listed companies, of additional delivery windows for the distribution of the newly issued shares resulting from the right issue; therefore, in order to avoid a disruptive effect on the price of the shares, it is no longer reserved only a single delivery window at the end of the offering period.

 

Practice has, in fact, showed that the conditions of highly dilution of a right issue create shortage of titles during the subscription period, preventing the market dynamics to balance share’s prices until the end of the offering period. The Rolling model consists merely in an early issuance of the new shares in order to obtain a realignment of the share’s price and option rights on current values.

 

The model, however, will be applicable solely to transactions qualifying as capital increases “highly dilutive”: such cases determines (i) the subscription of newly issued shares price has a significantly lower level than the market price / or (ii) issuance of a large number of new shares, compare to existing ones.

 

Consob, in the document containing the results of the public consultations regarding the implementation of the Rolling model, issued on April 2, 2016, clarified the opportunity to identify highly-dilutive capital increases those who has a K coefficient equal to or less than the threshold of 0.3. The K factor is the ratio between the theoretical ex-rights price of the shares (following detachment of the option right) and the price of the last cum trading day (before the option rights detachment) and consists of an adjustment following the financial hypothesis that the capital increase has already occurred and has been fully subscribed.

 

Some recent examples of share issuance with K coefficient equal to or less than 0.3 are Saipem capital increase on January 2016 which amounted to 3.5 billion euros (k = 0.1) or Monte dei Paschi di Siena capital increase of May 2015 for an amount of 3 billion euros (k = 0.2). ([2])

 

In order to know in advance whether a right issue should be considered highly-dilutive, Borsa Italiana S.p.A., as the Italian stock exchange company, will determine a “conventional” K coefficient (based on the share price on the final price of the day when the issuer discloses final terms and conditions).

 

Consob has also specified that, as to allow Borsa Italiana S.p.A. to calculate the “conventional” K coefficient, in accordance with European standards requirements, the issuer should disclose final terms and conditions at least two trading days before the operation begins (while, instead, when no Rolling model is applicable, the issuer must publish final terms and conditions by the end of the second trading day before the operation begins). Such anticipation will further allow Borsa Italiana S.p.A. to calculate the “conventional” K coefficient one day ahead.

 

When Rolling model applies, Consob has clarified that it will be sufficient the deposit to the Registro delle Imprese of a single statement on the execution of the capital increase (pursuant to art. 2444 of the Civil Code) not being necessary a statement for each single and additional delivery window. In this regard, the Ministry of Economic Development (MISE), involved by Consob on the matter, considers as sufficient a single final deposit of the statement required under art. 2444 of the Civil Code, regardless of whether the subscription of shares takes place into multiple delivery window, provided that the statement is filed within 30 days of the first subscription window.

 

As far as reporting requirements of significant shareholdings are concerned, pursuant to art. 120 of the Consolidated financial Act, Consob clarified that significant shareholders should be compliant with reporting requirements only at the end of the capital increase, following the deposit of the statement, pursuant to art. 2444 of the Civil Code.

 

Consob will recommend intermediaries to provide for the delivery of the newly issued shares to investors in the last delivery window, lacking an express request of investors to take advantage of the early-delivery.

In this event the intermediary must inform the investors of the consequences in terms of loss of the right of revocation the early delivery may cause. The market will be warned as well on the consequences on the loss of revocation rights, arising from the exercise option rights in one of the multiple delivery windows.

 

In conclusion, Consob, in order to deal with a relevant economic phenomenon affecting shareholders of listed companies with significant capitalization needs and reducing high volatility in market prices of the shares, “imported” a now widely practice recognized among the so called “closed companies” (i.e. the gradual effectiveness of subscription of newly issued shares as part of a right issue). Generally, financial market regulation constitute a “breeding ground for innovations” made into ordinary law. Here is the opposite, although with an aim – the reduction of price volatility – which features the only world of listed companies.

 

 

 

([1]) See Consob Communication n. 0088305 of October 5, 2016 regarding highly dilutive capital increases and the subsequent implementation of the Rolling model.

The newly amended provisions of art. 2.6.6, paragraph 4, of the Regulations for Markets Organized and Managed by Borsa Italiana S.p.A. provides that “In the event of operations, other than the payment of dividends, involving the detachment of coupons representing rights from listed financial instruments or splits or reverse splits of financial instruments, issuers must make the start of such operations coincide with one of the coupon-detachment days established by Borsa Italiana in the market calendar and comply with the related requirements laid down in the Instructions

 

 

([2]) Consob, Capital increases with significant dilutive effect. Results of the consultations, April 2, 2016, 7, available on the corporate website.

9/01/2017

The 2017 Italian Budget Law introduces a tax relief for individuals transferring their tax residence to Italy, in accordance with similar regimes adopted by other countries such as the United Kingdom, Switzerland and Portugal.  The relief is part of a package of measures intended to facilitate investment in Italy and to attract high-net-worth people and highly-skilled workers or managers.

The relief involves the possibility to opt for the application of a substitute tax on all foreign-sourced income, as an alternative to ordinary worldwide taxation at progressive rates up to 43%.  The option can be exercised by any individual moving his/her tax residence to Italy, provided that he/she has not been tax resident in Italy for at least nine out of the ten tax years preceding the start of the option period.

The option, which is subject to advance clearance from the Revenue through a ruling procedure, allows the taxation of all foreign income through the application of a €100,000 lump-sum substitute tax. Only the capital gains arising out of significant interests generated in the first five tax years of the option period are excluded from the relief.  The option can be withdrawn at any time and ceases to have effect upon expiry of a period of 15 years.

The option for the special regime can be extended to one or more family members, provided that they in turn meet the conditions for its exercise. In such a case, the substitute tax will amount to 25,000 Euro per family member besides the above-mentioned €100,000 substitute tax.

Italy has one of the most favourable inheritance and gift tax regimes in Europe, rating as low as 4% for immediate relatives and spouses, with a 1-million exemption allowance.  In this regard, the 2017 Italian Budget Law provides for a further tax relief for individuals who decide to exercise the option.  For successions and gifts taking place throughout the election period, inheritance and gift tax is indeed levied only on assets and rights situated in Italy.  In other words, there is an exception to the principle of taxation on a worldwide basis in favour of the principle of taxation on a territorial basis.

The UK’s decision to leave the EU (Brexit) and the restrictions applicable from April 2017 to the so-called “resident non-domiciled” rules will make our country particularly attractive to UK individuals – especially those with significant assets – who decide to transfer their residence to Italy.

Nctm is able to provide specialist legal assistance to individuals wishing to establish their residence in Italy, thanks to its strong expertise in tax law and compliance, international civil law and family law, labour and immigration law, which allows addressing any aspect involved in such particular event in one’s life.

16/03/2017

Nctm Studio Legale advised BT Enìa Telecomunicazioni S.p.A., a company controlled by BT Italia S.p.A., in the purchase of a line of business relating to a telecommunication network extending for approx. 1,500 km in Emilia Romagna belonging to IRETI S.p.A. (a company of the IREN Group engaged in the field of public local grid services), which was advised by Studio Bettini Formigaro Pericu.

At the same time, an agreement was entered into between BT Enìa and IRETI, whereby the latter was granted the right to use, for a period of 30 years, renewable by further 10 years, 25% of the overall capacity of the purchased network; furthermore BT Enìa entered into an agreement with IREN Energia S.p.A. (another company of the IREN Group) whereby IREN Energia granted BT Enìa the right to use 25% of the physical space existing inside all service cable ducts of the district heating network owned by IREN Energia, for a period of 30 years, renewable by further 10 years .

16/03/2017

The Luxembourg Presidency of the EU Council of Ministers announced, on 7 December 2015, that it had reached an informal agreement with the European Parliament on the text of the proposed Directive on Network and Information Security Directive (‘the NIS Directive’). Once adopted, companies doing business in critical infrastructures, such as energy, transport, health and banking, will have to implement security measures and notify public authorities in cases of serious cyber incidents.
Rocco Panetta, Partner at NCTM Studio Legale, commented, “This last obligation seems to be the most innovative aspect, since currently, a large number of incidents do not reach the competent authorities, and go unnoticed. Should the proposed NIS Directive being approved, public authorities will be in a position to react, take the appropriate mitigating measures and set adequate strategic priorities. [Inadequacy in] security of network and information systems can compromise vital services and cause substantial financial losses for the EU economy, estimated in a range between €260 and €340 billion annually.”

The agreement was also welcomed by Andreas Schwab, member of the European Parliament (‘the Parliament’) and Rapporteur on the NIS Proposal, who told DataGuidance, “The EU becomes a common safe cyberspace in the offline and online world. Today a milestone has been achieved: for the first time, the NIS Directive introduces EU-wide cybersecurity rules, which the Parliament has asked for years. Member States (MSs) will now have to raise their resilience and capacities to a common level, and the Parliament has furthermore strongly pushed for a close, structured cooperation between them. This achievement is even more important in light of the current security situation in Europe.”

“Today a milestone has been achieved: for the first time, the NIS Directive introduces EU-wide cybersecurity rules.”

Although deeming the NIS Directive a big step in the development of a culture of risk management, Panetta noted, “We [still] have to wait for the final approval of EU institutions and the subsequent implementation in the legal framework by each MS, as the NIS Directive contains some ambiguous provisions and equivocal definitions. [In fact, it establishes that] only incidents that seriously compromise ‘the operation of network and information systems and thus having a significant impact on the continuity of services and supply of goods which rely on network and information systems’ will need to be reported to the national competent authority, and this is likely to require organisations to implement a level of capability deemed ‘appropriate’ to the risks that they face. [However,] neither the term ‘appropriate’ nor ‘incidents of significant impact’ are defined in detail by the NIS Directive.”

The provisionally agreed text will now need the formal approval by the Internal Market Committee and the Committee of Permanent Representatives, the latter likely to be sought on 18 December 2015. It will then require the formal approval of the Council of the European Union and the Parliament.

11/01/2017
London Times

Traduzione  del corrispondnte articolo in italiano

In this issue, we explore the new “Project Review” rule provided for by Article 202 of Italian Legislative Decree No. 50/2016, which allows the State to revoke funding previously granted for projects which – upon later and more in-depth review – are found no longer to meet the cost benefit ratio. What will the impact of this new rule be on port infrastructure projects in Italy? Are we at the beginning of a new era? We come back to the Italian port reform issue, this time to examine the ordinance power vested in the President of the Port System Authority. Analysing a judgment of the Regional Administrative Court of Liguria, we note how case law anticipated the reform when recognising the ordinance power of the President of the Port Authority even in the absence of an express statutory provision. We then deal with the need for prior review by the EU Commission of State funding projects involving upgrade works on EU ports. On 23 January 2017 the new EU Regulation on port governance was approved. We give a first insight on the main issues covered by the Regulation: financial transparency and the provision of port services. We examine the request to amend Directive 2009/13/EC, aimed at delivering better working conditions to seafarers in accordance with the amendments made in 2014 to the Maritime Labour Convention (MLC / 2014). We also provide some updates on maritime employment agencies. We then focus on a recent decision of the European Commission on State aid, which further helps improve the general understanding of the criteria to be met in order for State aid in port and airport matters to be deemed compatible with EU law. Finally, we draw our attention to an interesting decision of the Consiglio di Stato regarding the interruption of airport handling services, which is forbidden when deemed detrimental to the public interest in operation of scheduled air transport services.] We want to thank our colleagues at Nctm Brussels’s office for their contributions highlighting the most significant actions taken by EU institutions in the international shipping and trade sector. You will also find a list of our events taking place at our Milan and Rome offices, in addition to the usual update on our firm’s activities over the past two months.

As we settle into 2017 the drama of Brexit and Trump seem to have eased somewhat. While the drama might have lifted it doesn’t mean that the complexities that these two phenomena have introduced and are introducing into the practice of law have gone away. In fact, the more we reflect on what needs to be done to achieve Brexit the less clear the situation is. This week President Trump will outline what he means by the Wall and taxes on imports of goods. From a WTO law point of view it can only be disruptive and even destructive. The drama might have gone but the work is only beginning. In this issue we have a range of contributions covering how the Russian constitutional court has reacted to the European Court of Human Rights rulings in favour of the owners of Yukos, the OECD’s review of its own bribery rules, the EU’s new proposed ePrivacy Regulation, how the European Court of Auditors confirms our understanding of the responsibilities and obligations of Port Authorities in relation to concessionaires. We explain the new Italian Save the Banks decree and show how the EU Commission has a strong role in every step of the process and look at how the Commission proposes disciplining insurance distribution agents.

Trade features significantly in this first edition of Across the EUniverse for the year 2017. It cannot be otherwise. US President Trump has said that he will change US trade policy building barriers to market access and forcing US companies to manufacture at home. China President Xi has said that China promotes barrier free trade so long as the barriers are in third countries (not in China). The EU is in the process of reforming its trade defence instruments and digesting how a post Brexit world will look.

 

This change in trade is evidence of wider change that is taking place around us and which is likely to continue into 2017. There will be federal elections in Germany and national elections in France. If Italy gets to change its electoral law there may well be an election in Italy. Will the forces that backed President Trump in the US win in the EU as well. The country most likely to change is the Netherlands, once a bastion of openness but now toying with the idea of giving the most votes to an anti-Islam party.

 

In this issue we look at the legal debate concerning an Italian exit from the Euro; a comparison between Trump and Xi approach on the concept of trade; some consequences of the excessive length of court proceeding; we also examine the advantages of the new italian “rent to buy” agreement; as well as the Multilateral Investment Court; an overview of the service sector; a further examination of the trade consequences of Brexit and finally the advantages or disadvantages of enhancing the bilateral framework between EU and US in the field of energy.

Log in with your credentials

Forgot your details?