The Italian Government has powers to intervene in certain transactions involving Italian defence companies under Italian Law Decree No. 21 of 15 March 2012, subsequently turned into law by Decree No. 56 of 11 May 2012 (the Decree). The powers apply to companies that carry out ‘strategic activities’ in the defence and national security sector and to ‘strategic assets’ in the energy, transport and communications sectors. 

Strategic activities’

The definition of ‘strategic activities’ in the defence sector has recently been updated by the President of the Council of Ministers Decree No. 108 of 6 June 2014. It covers activities such as the manufacture of weapons, missiles, radar equipment and other defence systems.

The powers

If an Italian company undertakes ‘strategic activities’, the Government’s powers are as follows:

  • Before any acquisition of shares in the company, the Government may impose conditions on it regarding the security of its supplies, the security of its information, technological transfers and the control of exports.
  • The Government may veto resolutions of shareholders or management bodies on subjects such as mergers, transfers of business, transfers of assets or a relocation of the company’s registered office abroad. Alternatively, it may impose conditions on a proposed transaction if this is sufficient to safeguard national defence interests.
  • The Government may prohibit an acquisition of shares in the company by any party that is not an Italian public entity if the shares would provide the purchaser with sufficient voting rights to jeopardize Italian defence interests.

Threat to defence or security

The Government may only exercise these powers if the proposed transaction poses a serious threat to Italian defence or security interests. In order to assess this in relation to a) and c) above, the Government considers factors such as whether there are any links between the purchaser of the shares and undemocratic countries, the economic, financial and technical capacity of the purchaser and the reason for the purchase. In relation to b) above, the Government assesses factors such as the strategic relevance of the goods or companies which are to be transferred, the appropriateness of any corporate structures to be created, the security of defence information, Italian international interests and border protection.

The Government must also comply with the general principles of proportionality and reasonableness when making this assessment. 

Procedures for compliance

In order to enable the Government to decide whether to exercise its powers under a) and c) above, the purchaser must serve a statement on the Government within ten days from the share acquisition. The President of the Republic Decree No. 35 of 20 March 2014 (the “PRD”) stipulates that the statement must contain a description of the transaction and its effect, detailed information regarding the purchaser and its business, the business plan to follow the acquisition including any financial plan and any other information that would allow the Government to assess whether to exercise the powers. 

The Government can exercise the powers within fifteen days from service of the statement. In relation to a) and c) above, during this 15 day period voting rights arising from the newly acquired shares are suspended and any resolution that is passed using the voting rights is void.

If a purchaser fails to serve the statement or comply with any conditions imposed on it by the Government, the Government may impose a fine of a sum proportionate to the value of the transaction or the turnover of the company.

In order to enable the Government to decide whether to exercise its powers under b) above, the company must serve a statement on the Government detailing the proposed resolution of the shareholders’ meeting or management body. The PRD states that the statement must include a copy of the resolution, copies of all the documents created by the company to adopt the resolution and any other information that would enable the Government to assess whether to veto the transaction or impose conditions on it. 

If the company fails to serve the statement on the Government for the purpose of b) above, the resolution is void and the Government may require the company to restore the previous situation at its own expense. The company may also receive a fine of a sum proportionate to the value of the transaction or the turnover of the company.


Under the general Italian principle of ‘reciprocity’, if a non-EU person or company proposes to purchase shares in an Italian company that operates in a ‘strategic sector’ (i.e. defence and security), the Italian Government may prohibit the transaction from proceeding if the country of the purchaser would not allow an Italian company access to its ‘strategic sectors’ in return. 

Companies from specified countries are also automatically prohibited from purchasing shares in Italian defence companies.


Parties that intend to acquire shares in Italian companies operating in the defence and security sector and parties that own or control such companies must ensure compliance with the Decree to prevent transactions from becoming void and receipt of a large fine.