Italy


Authors:
Marco Gardino (Turin),

Giovanni Patti and Giuseppina Sepe (Rome) and

Ruggero Rubino Sammartano and Ludovica Peron (Milan)

Contacts:
marco.gardino@replegal.it - LinkedIn profile
gpatti@abbatescianni.eu - LinkedIn profile
ludovica.peron.brsa@lawfed.com - Linkedin Profile
ruggero.rubino.brsa@lawfed.com - LinkedIn profile
gsepe@abbatescianni.eu - Linkedin profile

Overview of legal measures as of Italy as response to the coronavirus updated to 20 April 2020.

Please note: Due to the extraordinary situation, the legislation is in continuous evolution and may change very fast.

Introduction

Italy has been the first Country in Europe hit by Covid-19 and certainly one of the most affected. Italian legislation has evolved over the days with significant and extraordinary decisions taken in order to fight the outbreak.

Even fields of law which traditionally require more time to adapt to circumstances, such as corporate law, evolved rapidly in order to allow companies to operate in an unprecedented scenario for contemporary era.



1. INTERVENTIONS AND RESTRICTIONS

1.1 Legal basis

MAIN PROVISIONS OF LAW related to COVID-19


Decree of the President of the Council of Ministers of 11 June 2020

Implementing provisions of Decree-Law No. 19 of 25 March 2020 on urgent measures to address the epidemiological emergency by COVID-19, and Decree-Law No. 33 of 16 May 2020 on additional urgent measures to address the epidemiological emergency by COVID-19.

G.U. General Series No. 147 (2020, 11/06).


Executive Decree, no. 33 dated 16 May 2020

Additional urgent measures to address the epidemiological emergency by COVID-19

G.U. General Series No. 125 (2020, 16/05).

Decree of the President of the Council of Ministers dated 17 May 2020

Implementing provisions of Decree-Law No. 19 of 25 March 2020 on urgent measures to address the epidemiological emergency by COVID-19, and Decree-Law No. 33 of 16 May 2020 on additional urgent measures to address the epidemiological emergency by COVID-19.

G.U. General Series No. 126 (2020, 17/05).

Decree of the President of the Council of Ministers dated 18 May 2020

Amendments to Article 1, paragraph 1, letter cc), of the decree of the President of the Council of Ministers 17 May 2020.

G.U. General Series No 127 (2020, 18/05).

Executive Decree no. 34 dated 19 May 2020

Urgent health measures, support for work and the economy, as well as social policies related to the epidemiological emergency by COVID-19

G.U. General Series No. 128 (2020,19/05).

Statute No. 35 dated 22 May 2020

Conversion into law, with modifications, of the executive decree of March 25, 2020, n. 19, on urgent measures to address the epidemiological emergency by COVID-19

G.U. General Series No. 132 (2020, 23/05).

Decree of the President of the Council of Ministers dated 26 April 2020

Further implementing provisions of Decree-Law No. 6 of 23 February 2020 on urgent measures for the containment and management of the epidemiological emergency from covid-19, applicable throughout the national territory.

G.U. General Series No. 108 (2020, 27/04).


Decree of the President of the Council of Ministers dated 10 April 2020.

Further implementing provisions of Decree-Law No. 19 of 25 March 2020 on urgent measures to address the epidemiological emergency by COVID-19, applicable throughout the national territory.

G.U. General Series No. 97 ( 2020, 11/04).


Executive Decree no. 23 dated 8 April 2020

Urgent measures on access to credit and tax compliance for companies, special powers in strategic sectors, as well as interventions on health and work, extending administrative and procedural deadlines.

G.U. General Series No. 94 (2020, 8/04).

Executive Decree no. 22 dated 8 April 2020

Urgent measures on the regular conclusion and orderly start of the school year and the conduct of state examinations.

G.U. General Series No. 93 (2020, 8/04).

Decree of the President of the Council of Ministers dated 1 April 2020

Implementing provisions of Decree-Law No. 19 of 25 March 2020 on urgent measures to deal with the epidemiological emergency by COVID-19, applicable throughout the national territory.G.U. General Series No. 88 (2020, 2/04).

Decree of the President of the Council of Ministers dated 28 March 2020

Criteria for training and allocation of the Municipal Solidarity Fund 2020.

G.U. General Series No. 83 (2020, 29/03).

Executive Decree no. 19 dated 25 March 2020

Urgent measures to deal with the epidemiological emergency by COVID-19.

G.U. General Series No. 79 (2020, 25/03).

Decree of the President of the Council of Ministers dated 22 March 2020

Further implementing provisions of Decree-Law No. 6 of 23 February 2020 on urgent measures concerning the containment and management of the epidemiological emergency by COVID-19, applicable throughout the national territory.

G.U. General Series No. 76 (2020, 22/03).

Executive Decree no. 18 dated 17 March 2020

Measures to strengthen the national health service and economic support for families, workers and enterprises related to the epidemiological emergency by COVID-19.

G.U. General Series No. 70 (2020, 17/03).


Decree of the President of the Council of Ministers dated 11 March 2020

Further implementing provisions of Decree-Law No. 6 of 23 February 2020 on urgent measures concerning the containment and management of the epidemiological emergency by COVID-19, applicable throughout the national territory.

G.U. General Series No. 64 (2020, 11/03).

Decree of the President of the Council of Ministers dated 9 March 2020

Further implementing provisions of Decree-Law No. 6 of 23 February 2020 on urgent measures concerning the containment and management of the epidemiological emergency by COVID-19, applicable throughout the national territory.

G.U. General Series No. 62 (2020, 9/03).

Executive Decree no. 14 dated 9 March 2020

Urgent provisions for the strengthening of the National Health Service in relation to the emergency COVID-19.

G.U. General Series No. 62 (2020, 9/03).

Decree of the President of the Council of Ministers dated 8 March 2020

Further implementing provisions of Decree-Law No. 6 of 23 February 2020 on urgent measures concerning the containment and management of the epidemiological emergency by COVID-19, applicable throughout the national territory.

G.U. General Series No. 59 (2020, 8/03).

Executive Decree no. 9 dated 2 March 2020

Emergency support measures for families, workers and enterprises linked to the epidemiological emergency by COVID-19.

G.U. General Series No. 53 (2020, 2/03).

Executive Decree no. 6 dated 23 February 2020

Urgent measures concerning the containment and management of the epidemiological emergency by COVID-19.

G.U. General Series No. 45 (2020, 23/02).

Decision of the Council of Ministers dated 31 January 2020

Declaration of state of emergency as a result of the health risk related to the onset of diseases resulting from transmissible viral agents.G.U. General Series No. 26 (2020, 1/02).


2.1 Measures to support companies’ cash flow – SACE Financial Guarantees

Article 1 of the Liquidity Decree enables SACE S.p.A.** to grant guarantees related to any form of financings, provided by banks, national and international financial institutions and other entities authorized to lend in Italy.

SACE S.p.A. will provide up to €200 billion of loan guarantees counter-guaranteed by the State.

Granting of SACE Guarantees is subject to the following conditions:

a) the guarantee request can be filed until December 31st 2020;

b) the duration of the SACE guarantee may not exceed six years. Pre-amortization (“preammortamento”) period of 24 months is permitted;

c) the borrower, as of December 31st 2019, was not classified as an "undertaking in difficulty" under EU Regulations: no. 651/2014, no. 702/2014 and no. 1388/2014, and its liabilities, as of February 29th 2020, were not classified as "deteriorated" by the lending banks;

d) the aggregate amount of all financings granted to the same entity backed by a state guarantee cannot exceed the higher of: 25% of the borrower’s 2019 annual revenue; or twice its 2019 employment costs;

e) the maximum loan percentage covered by a SACE Guarantee cannot exceed:
i) 90% of the principal amount of the financing, for companies with less than 5,000 employees in Italy and with annual revenues under 1.5 billion (By the way, these companies can access the SACE Guarantee through a simplified procedure involving only the lender and SACE);

ii) 80% of the principal amount of the financing, for companies employing more than 5,000 persons in Italy and with annual revenues between €1.5 billion and €5 billion;

iii) 70% of the principal amount of the financing, for companies with annual revenues higher than €5 billion;

f) €30 billion and special commission fees are reserved for SMEs, including sole proprietorships and VAT registered self-employed, provided that they have already benefited in full from the financings granted by the Central Guarantee Fund for SMEs mentioned in the next paragraph below.

** SACE S.p.A. is a Joint Stock Company, 100% owned by Cassa Depositi e Prestiti (or “CDP”), the giant public-private investment bank, controlled by the Italian Ministry of Economy and Finance (with a minority stake owned by Italian banking foundations which have equity participations in all Italian private banks) specializing in export credit support (guarantees and insurances). SACE also has a range of non-export credit projects, including the above detailed measures adopted by the Government to support

Italian companies liquidity during Covid-19 pandemic.

1.2 Border

Situations

The limitations referred to in article 6, paragraph 2, of the decree of the President of the Council of Ministers 11 June 2020 were extended until 14 July 2020. Travel is also allowed for proven reasons of study.

From 1 July to 14 July 2020, the entry into the national territory is permitted

- to citizens of the States referred to in article 6, paragraph 1, of the decree of the President of the Council of Ministers 11 June 2020, and

- their family members and

- the entry of third-country citizens who are long-term residents pursuant to the Council Directive 2003/109/EC of 25 November 2003.

It shall also be permitted the entry into the national territory of third-country citizens residing in the following States and territories: Algeria, Australia, Canada, Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda, Serbia, Republic of Korea, Thailand, Tunisia, Uruguay.

For those entering Italy from States or foreign territories different from those of which to article 6, of the same decree, there is an obligation concerning health checks and fiduciary isolation, as art. 4 and 5 of the above mentioned decree provide.

(Order of the Ministry of Health 30 June 2020, further urgent measures regarding containment and management of the epidemiological emergency by covid-19. (20a03561) (oj general series no.165 of 02-07-2020. Registered at the Court of Auditors on 1 July 2020).


SITUATIONS AS OF 26 JUNE 2020

Art. 5, Decree of the President of the Council of Ministers dated 11 June 2020 introduced changes with reference to the same article of the Decree of the President of the Council of Ministers dated 26 April concerning transits and short stays in Italy.

In fact, the 72-hour period is increased to 120 hours (5 days) for the maximum stay without the obligation of home quarantine for those who enter the national territory for business needs, as well as for urgency, health reasons or in further cases identified by measures adopted pursuant to Article 2 of Decree-Law No. 19 of 2020.


Transits and short stays in Italy (art. 5)

Pursuant to art. 5 of the decree of the President of the Council of Ministers of 11 June 2020, anyone who wants to enter Italian territory, only for proven business needs, urgency and health reasons or in further cases identified by measures adopted pursuant to Article 2 of Decree-Law No. 19 of 2020, for a period not exceeding 120 hours, must give a clear and detailed declaration to the carrier, in order to respect the scheduled checks.


Further travel provisions to and from abroad (Art. 6)

Art. 6 of the Decree of the President of the Council of Ministers of 11 June 2020 establishes “further provisions concerning travel to and from abroad”, and in particular provides that, with no prejudice to the limitations laid down for specific areas of the national territory, are not subject to any restrictions on travel to and from the following States:

a) Member States of the European Union;

b) States that are part of the Schengen Agreement;

c) The United Kingdom of Great Britain and Northern Ireland;

d) Andorra, Principality of Monaco;

e) Republic of San Marino and Vatican City State.

Until 30 June 2020, travel to and from different States and territories shall be prohibited, except in case of proven business needs, urgency or for health reasons. In any case, it is allowed to return to your home or residence.

Source: Decree of the President of the Council of Ministers of 11 June 2020, implementing provisions of Decree-Law No. 19 of 25 March 2020 on urgent measures to address the epidemiological emergency by COVID-19, and Decree-Law No. 33 of 16 May 2020 on additional urgent measures to address the epidemiological emergency by COVID-19. (G.U. General Series No. 147 (2020, 11/06).


PREVIOUS SITUATION

Schengen Agreement

To contain the spread of the virus, the European Commission invites the European Council to adopt a rapid decision on applying a travel restriction with immediate effect at all part of the Schengen external borders. For that purpose, the Commission recommended on 16 March that Member States apply a coordinated temporary 30-day restriction for non-essential travel from third countries to the EU, on 17 March 2020 the Schengen Agreement was suspended by the UE for 30 days.

On 8 April, the Commission extended the temporary restrictions within EU until 15 May 2020, except of indispensable staff (hospital doctors and health professionals, researchers, frontier workers and seasonal agricultural workers).

N.B. EU Member States and Schengen Associated States should also strongly encourage citizens and residents not to travel outside their territories in order to prevent the further spread of the virus to other countries.

Source: (Final Communication from the Commission “Covid-19 guidance on the implementation of the temporary restriction on non-essential travel to the EU, on the facilitation of transit arrangements for the repatriation of EU citizens, and on the effects on visa policy”. Brussels, 30.3.2020 c(2020) 2050).


Provisions regarding entering Italy (art. 4)

As provided for in art. 4 of the decree of the President of the Council of Ministers of 26 April 2020, anyone who wants to enter Italian territory must, at the time of embarking, give to the carrier a clear and detailed declaration in order to respect the scheduled checks. These people, although asymptomatic, are obliged to give immediate notice to the Department of Prevention of the health care company competent for the territory and are subject to health surveillance and fiduciary isolation for a period of fourteen days at the house or the residence.

The temperature of individual passengers shall be measured by prohibiting embarkation if they are feverish, and if the above-mentioned documentation is not complete.

The crew and passengers are also required to maintain an interpersonal distance of at least one meter from each other and the use of personal protective equipment.


From 3 June 2020, travel to and from abroad may be limited only by measures adopted pursuant to Article 2 of Decree-Law No. 19 of 2020, including in relation to specific States and territories, in accordance with the principles of adequacy and proportionality to the epidemiological risk and in compliance with the constraints arising from the European Union legal order and international obligations.

Source: Executive Decree, no. 33 dated 16 May 2020 Additional urgent measures to address the epidemiological emergency by COVID-19 (G.U. General Series No. 125 (2020, 16/05).

Transits and short stays in Italy (art. 5)

Pursuant to art. 5 of the decree of the President of the Council of Ministers of 26 April 2020, anyone who wants to enter Italian territory, only for proven business needs and for a period not exceeding 72 hours, unless justified extension for specific needs of a further 48 hours, must give a clear and detailed declaration to the carrier, in order to respect the scheduled checks.

In exceptional cases and, in any case, only in order to protect citizens abroad or for the purpose of fulfilling international and European obligations, specific and temporary derogations from the provisions of article 5 may be provided for.

Source: Decree of the President of the Council of Ministers of 26 April 2020. Further implementing provisions of Decree-Law No. 6 of 23 February 2020 on urgent measures for the containment and management of the epidemiological emergency from covid-19, applicable throughout the national territory. ( G.U. General Series No. 108 (2020, 27/04).


Foreigners in Italy

Foreigners in Italy are allowed to return to their residence abroad.

1.3 Visas

As part of the measures to contain the spread of COVID-19, most Schengen countries have suspended the processing of short stay visa applications for nonessential travel, but the general rules on the examination of visa applications should be applied. Schengen countries’ consular authorities are, however, invited to follow the guidelines on ‘minimum service’ for processing of visa applications from specific categories of visa applicants during the COVID-19 emergency period. Visa holders should systematically be reminded that they will be required to justify their travel purpose and present supporting documents at the border crossing point..

N.B. The stay of visa holders present in the Schengen area who cannot leave at the expiry of their short-stay visa may be extended up to a maximum stay of 90/180 days by the designated Member States authorities.

Executive Decree, no. 18 dated 17 March 2020

Pursuant to Art. 103, Executive Decree, no. 18 [2020] all certificates, permits and authorizations in Italy are extended until 15 June 2020.

Applications, inter alia, for citizenship subsequent to marriage and residency, for seasonal works, for conversion of study permits in working permits, for family reunification pursuant to Legislative Decree no. 286 [1998] are stayed until 15 april 2020.

1.4 Export control

COVID-19 related export provisions

1. EU Law

Commission Regulation (EU) 2020/402, dated March 15, 2020, made the exportation to non-EU countries of certain personal protection equipment (so-called PPE) subject to the provision of a prior export authorisation, given the increasing demand for such products in the European Union, and the shortages in certain Member States.

Commission Regulation (EU) 2020/426, dated March 19, 2020, excludes Norway, Iceland, Liechtenstein, Switzerland (which are member States of the EFTA), overseas countries and territories listed in Annex II of the Treaty, as well as the Faeroe Islands, Andorra, San Marino and the Vatican City from the scope of application of Regulation 2020/402.

According to Commission Decision (EU) 2020/491, dated April 3, 2020, goods shall be admitted free of import duties and exempted of value added tax (VAT) on the imports if they are:

a. distributed or made available to the people affected by or at risk from COVID-19 or involved in combating its outbreak;

b. imported for release for free circulation by or on behalf of State organisations or by or on behalf of organisations approved by the competent authorities in the Member States;

c. imported for release into free circulation by or on behalf of disaster relief agencies in order to meet their needs during the period they provide disaster relief to the persons affected by or at risk from COVID-19 or involved in combatting its outbreak.

Requirements laid down by Regulation (EC) No. 1186/2009 and Directive 2009/132/EC must be satisfied accordingly.

Whilst addressing this issue, Regulation n. 2016/425 of the European Parliament and of the Council shall also be considered on an intra-communitarian basis. In particular, the mentioned regulation ‘lays down requirements for the design and manufacture of personal protective equipment (PPE) which is to be made available on the market, in order to ensure protection of the health and safety of users and establish rules on the free movement of PPE in the Union’. In particular, the Regulation defines PPE as ‘equipment designed and manufactured to be worn or held by a person for protection against one or more risks to that person's health or safety’, and includes interchangeable components or connection systems for such an equipment. It also states the obligations of economic operators, and specifically of manufacturers (and authorized representatives), importers, distributors. Furthermore, the Regulation describes conformity of PPE (with emphasis on CE marking) and its assessment procedure, as well as union market surveillance, control of PPE entering the Union market and the Union safeguard procedure. The Annexes to the Regulation provide for risk categories of PPE, essential health and safety requirements, technical documentation needed, as well as internal production protocol, EU-type examination and related conformity procedures.

In terms of customs and taxation, the European Commission has provided some guidance (last updated April 8, 2020) ‘As regards possible payment facilities, while a blanket exemption is not possible, several provisions in the current legislation allow the customs authorities, on a case by case basis, to take account of serious economic or social difficulties in respect of the debtor, upon request by the operator and subject to the overall respect of the conditions foreseen by those provisions. It is up to the operator to document the likelihood of the economic and social difficulties’. Such provisions are Articles 45(2) and (3), 112(1) and (3), 114(3) UCC, and 89(3) and 91(2)(b) UCC DA.

The medical, surgical and laboratory equipment are not exempted from the obligation to lodge an entry summary declaration (ENS), even in emergency cases. However, Article 127(7) UCC provides for the possibility to use commercial, port or transport documents for this purpose, under the condition that these other documents contain the necessary particulars of the ENS and are available before a specific time-limit prior to the arrival of the goods in the EU’.

As the maximum time limit of 90 days for temporary storage cannot be prolonged without amending the UCC, a customs debt occurs for goods that are not declared for a customs procedure (or re-exported) within that period. If the goods fail to be placed under a customs procedure or re-exported due to circumstances related to the spread of COVID-19 disease, the economic operator may invoke force majeure. Customs authorities will assess each situation on a case-by-case basis. […] Another solution could be that the holder of the authorisation for temporary storage applies for an authorisation for customs warehousing for the same facilities’.

As for customs procedures, there is a possibility to use simplified declarations without prior authorization, under the condition that the simplified declaration constitutes a non-regular or occasional use, which however is not properly defined. The time limits for the submission of supplementary declaration provided for in Article 146 DA are determined by reference to the date of the entry into accounts, which do not apply in cases of unforeseeable circumstances or in cases of force majeure. Presentation of goods referred to in Article 139(1) UCC may be done directly at their premises, and pursuant Article 173(3) UCC a longer period to amend declarations applies.

The present exceptional situation should be considered as a ‘disaster’ in the terms of Article 221 UCC DA. Therefore, all goods brought to the customs territory of the Union to counter the effects of this ‘disaster’, i.e. COVID-19, such as ambulances or some support medical equipment, should be eligible to be declared for temporary admission with total relief from import duty. Article 139 UCC DA may allow these goods to be declared by any other act, e.g. by the sole act of crossing the border, according to Article 141(1)(d) UCC DA.

Another possibility would be to lodge an oral declaration according to Article 136(1) UCC DA. The provision of the form established in Annex 71-01 is mandatory in this case (see Article 165 UCC DA), but such provision could be postponed up to 120 days after the release of the goods if customs authorities allow it (see Articles 166(2) UCC and 147(2) UCC-DA). The same approach can apply for the temporary admission of medical, surgical and laboratory equipment referred to in Article 222 DA by any other act, in accordance with Article 139 DA or by an oral declaration based on Article 136(1)(d) DA’.

For further and more complete information, see also the guidance provided by the Commission.

In addition, the Commission Decision Information Note No. 1, dated March 31, 2020, concerning the submission of proof of preferential origin, states that during the emergency period ‘customs authorities in the EU and in the EU’s trading partner countries are invited to accept certificates issued for preferential purposes in the form of a copy, issued on paper or electronically’.

2. Italian Law

Implementing the Commission Regulations 2020/402 and 2020/426, the Ordinances of the Head of the Civil Protection Department (OCDPC) No. 639, dated February 25, 2020, and No. 641, dated February 28, 2020, provided for a ban on the export of PPE material and lung ventilators from the national territory to countries outside the EU without the prior authorisation of the MAECI.

With the Circular of April 3, 2020, the Head of the Department of Civil Protection clarified that under the EU regulatory framework, the sale of products within the EU area is not considered an export, and that therefore trade between EU countries is not subject to the prohibitions referred to in the aforementioned ordinances. With decision by the head of Civil Protection n. 667 dated 22/4/2020 confirms abrogation of art. 1, par 1, last paragraph of Ordinance n. 639/2020 which provided for the prohibition to intra-E.


Implementing the Commission Decision 2020/491, the Directorial Determination No. 107042/RU, dated April 3, 2020, provides that an exemption from customs duties and VAT shall be granted on imports of goods, necessary for combating the COVID-19 emergency, carried out by or on behalf of public organisations, or by and on behalf of first aid units in order to meet their needs for the duration of their intervention.

Furthermore, the Italian Customs Agency Communication No. 88470/RU, dated March 12, 2020, provided for an emergency extension of the procedures for the issue of movement certificates EUR 1,EUR MED, ATR.

Communication No. 93201/RU, dated March 17, 2020, offered some guidance on the emergency containment and emergency management measures for COVID-19 related epidemiological risks. In particular, it provides:

a. ban on the export of medical devices referred to in the Ministry of Health's Circular No. 4373, dated February 12, 2020;

b. authorization for cargo flights to and from China;

c. imports pending payment for USMAF clearance;

d. tax treatment for imports of emergency goods;

e. transitional and emergency customs clearance procedure for emergency devices in order to combat Covid-19;

f. limitation of physical checks on imports;

g. supply of alcohol for exempt use in small quantities.

In addition, Communication No. 92645, dated March 19, 2020, has provided further clarifications on the exact identification of the tariff codes, which PPE are classified under.

Also dated March 19, 2020, there is another Communication of the Director of the Italian Customs Agency that provides procedures for duty-free and VAT-free imports of goods intended to deal with the Covid-19 emergency.

Ultimately, the so-called Cura Italia Law Decree n.18/2020 introduced, among many others in several different legal areas, some important innovations in order to regulate the commercialization and use of PPE within the Italian territory during the Coronavirus outbreak. See par. 1.9


1.5 Prohibition of crowds

Executive Decree no. 19 [25 march 2020]

As provided for in art. 1 of the Executive Decree no. 19 [25 march 2020], the organization of meetings or gatherings in public or open to the public is limited or prohibited.

Moreover, all forms of gathering of people in public places or places open to the public are prohibited on the whole national territory pursuant to art. 1 of the decree of the president of the Council of Ministers of 10 April 2020.

1.6 Lockdown

Ermergency Status

On 31 January 2020 the Governement has declared the status of emergecny in Italy.

Local Lockdown

On 23 February 2020 the Italian Presidency of the Council of Ministers has taken the first material measures.

Step 1 Creation of the Red zone

In order to counter and contain the spread of the COVID-19 virus, in 11 Municipalities the following containment measures are adopted:

a) prohibition of leaving/departing from the Municipalities for all persons present in the Municipalities;

b) prohibition of access to Municipalities;

c) suspension of events or initiatives of any nature, of events and of any form of meeting in public or private places, including those of a cultural, recreational, sporting and religious nature, even if held in closed places open to the public;

d) suspension of educational services for children and schools of all levels, as well as the frequency of school and higher education activities, including university, except for distance learning activities;

e) suspension of educational trips in Italy or abroad organized by schools of the national education system;

f) suspension of the opening to the public of Museums and other cultural institutes and places;

g) suspension of the activities of public offices, without prejudice to the provision of essential and public utility services, according to the methods and limits indicated with the provision of the territorially competent Prefect;

h) suspension of public insolvency procedures;

i) closure of all commercial activities, with the exception of those of public utility and essential public services according to the methods and limits indicated with the provision of the territorially competent Prefect, including commercial establishments for the purchase of basic necessities;

l) obligation to access essential public services, as well as commercial establishments for the purchase of basic necessities by wearing Personal Protective equipment or by adopting particular precautionary measures identified by the Prevention Department of the healthcare companies competent for the territory;

m) suspension of freight and passenger transport services, land, rail, inland waters and local public, including non-scheduled ones, with the exclusion of the transport of essential and perishable goods and without prejudice to any exceptions provided for by the territorially competent Prefects;

n) suspension of all work/business activities for companies, with the exception of those that provide essential and public utility services, including veterinary activities, as well as those that can be carried out at home or remote mode. The Prefect, in agreement with the competent authorities, can identify specific measures aimed at guaranteeing the activities necessary for the breeding of animals and the production of food and non-deferrable activities as they are connected to the biological cycle of plants and animals;The Governement has declared on 31 January 2020 the status of emergecny in Italy.

On 1 March 2020 the Italian Presidency of the Council of Ministers extened the measures.

Step 2 Measures to contain spread of COVID19 for regions and provinces at risk

In order to counter and contain the spread of the COVID-19 virus, in the 3 Regions and 2 Provinces the following containment measures are adopted:

a. all organized events are suspended, as well as events in public or private places, including those of a cultural, recreational, sporting, religious events and fairs, even if held, in closed but open to the public places, such as, for example, major events, cinemas, theaters, pubs, dance schools, game rooms, betting rooms and bingo halls, discos and similar places; all activities are suspended in the aforementioned places

b. educational services for children, and didactic activities in progress in schools of all levels, as well as attendance of school and higher education activities, including Universities

c. the opening of places of worship is conditional on the adoption of organizational measures such as to avoid gatherings of people, taking into account the size and characteristics of the places, and such as to guarantee to the visitors the possibility of respecting the distance between them at least one meter

d. restaurant and bar services are allowed to operate from 6.00 to 18.00, with an obligation on the operator to establish the conditions to guarantee the possibility of respecting the interpersonal safety distance of at least one meter, with sanction of suspension of the activity in case of violation;commercial activities other than those referred to in the previous letter are permitted, provided that the operator guarantees access to the aforementioned places in a contingent manner or in any case suitable for avoiding gatherings of people, taking into account the size and characteristics of the open spaces to the public, and such as to guarantee visitors the possibility of respecting the distance of at least one meter, between visitors, with a penalty of suspension of the activity in case of violation. In the presence of structural or organizational conditions that do not allow observance of the interpersonal safety distance of one meter, the aforementioned structures must be closed;

e. ordinary leave of health and technical personnel, as well as of staff whose activities are necessary to manage the activities required by the crisis units set up at regional level, are suspended;

f. in all possible cases, while carrying out meetings, remote connection methods are adopted with particular reference to health and socio-sanitary facilities, public utility services and coordination activated in the context of the emergency COVID-19, however ensuring compliance with the interpersonal safety distance of one meter, and avoiding gatherings of people.

On 11 March 2020 the Italian Presidency of the Council of Ministers strengthen in certain territories the measures, by reating to protected zones.

Step 3 creation of two levels of Protection Zone in the regions and provinces most affected by COVID-19 and rest of the country

1) In order to counter and contain the spread of the COVID-19 virus in the Lombardy region and in the provinces of Modena, Parma, Piacenza, Reggio nell'Emilia, Rimini, Pesaro and Urbino, Alessandria, Asti, Novara, Verbano-Cusio-Ossola, Vercelli, Padua, Treviso and Venice, the following measures are taken:

a) avoid any movement of persons entering and leaving the territories referred to in this article, as well as within the same territories, except for movements motivated by proven work needs or situations of need or movements for reasons of health. It is allowed to return to one's dwelling, home or residence;

b) subjects with symptoms of respiratory infection and fever (greater than 37.5 ° C) are strongly recommended to stay at their home and limit social contacts to the maximum, by contacting their doctor;

c) absolute prohibition of mobility from one's home or dwelling for subjects subjected to the quarantine measure or positive to the virus;

d) sporting events and competitions of any order and discipline are suspended, in public or private places. The aforementioned events and competitions are allowed, as well as the training sessions of professional athletes and absolute category athletes who participate in the Olympic games or national or international events, inside sports facilities used behind closed doors, or outdoors without the presence of the public. In all such cases, the associations and sports clubs, through their medical staff, are required to carry out the appropriate checks to contain the risk of spreading the COVID-19 virus among athletes, technicians, managers and all attendants who participate;

e) public and private employers are recommended to promote, during the period of effectiveness of this decree, the opportunity by employees of ordinary leave and holidays;

f) ski resort areas are closed;

g) all organized events are suspended, as well as events in public or private places, including those of a cultural, recreational, sporting, religious events and fairs, even if held, in closed but open to the public places, such as, for example, major events, cinemas, theaters, pubs, dance schools, game rooms, betting rooms and bingo halls, discos and similar places; all activities are suspended in the aforementioned places;

h) educational services for children, and didactic activities in progress in schools of all levels, as well as attendance of school and higher education activities, including Universities and Institutions of Higher Musical Artistic Education and Dance, professional courses, masters , courses for the health professions and universities for the elderly, as well as professional courses and training activities carried out by other public bodies, including territorial and local and by private subjects, without prejudice in any case to the possibility of carrying out training activities remote courses, with the exception of courses for doctors in specialist training and specific training courses in general medicine, as well as the activities of trainees in the health professions. In order to maintain social distancing, any other form of alternative aggregation is to be excluded. Meetings of the collegial bodies in attendance are suspended. The managing bodies ensure the cleanliness of the environments and the administrative and accounting obligations concerning the educational services for children referred to, which are not part of educational circles or comprehensive institutions;

i) the opening of places of worship is conditional on the adoption of organizational measures such as to avoid gatherings of people, taking into account the size and characteristics of the places, and such as to guarantee to the visitors the possibility of respecting the distance between them at least one meter

j) civil and religious ceremonies are suspended, including funeral services;

k) Museums and other institutes and places of culture;

l) public and private insolvency procedures are suspended with the exception of cases in which the assessment of candidates is carried out exclusively on curricular basis or electronically;

m) Competitions for health personnel are also excluded from the suspension, including state and qualification examinations to practice the profession of surgeon, and those for civil protection personnel, which must preferably take place remotely or otherwise, guaranteeing the interpersonal safety distance of one meter.

n) restaurant and bar services are allowed to operate from 6.00 to 18.00, with an obligation on the operator to establish the conditions to guarantee the possibility of respecting the interpersonal safety distance of at least one meter, with sanction of suspension of the activity in case of violation;

o) commercial activities other than those referred to in the previous letter are permitted, provided that the operator guarantees access to the aforementioned places in a contingent manner or in any case suitable for avoiding gatherings of people, taking into account the size and characteristics of the open spaces to the public, and such as to guarantee visitors the possibility of respecting the distance of at least one meter, between visitors, with a penalty of suspension of the activity in case of violation. In the presence of structural or organizational conditions that do not allow observance of the interpersonal safety distance of one meter, the aforementioned structures must be closed;

p) ordinary leave of health and technical personnel, as well as of staff whose activities are necessary to manage the activities required by the crisis units set up at regional level, are suspended;

q) in all possible cases, while carrying out meetings, remote connection methods are adopted with particular reference to health and socio-sanitary facilities, public utility services and coordination activated in the context of the emergency COVID-19, however ensuring compliance with the interpersonal safety distance of one meter, and avoiding gatherings of people;

r) on festive and pre-holiday days, medium and large commercial stores are closed, as well as the shops inside shopping malls and markets. On weekdays, the manager of the aforementioned exercises must in any case establish the conditions to guarantee the possibility of respecting the interpersonal safety distance of one meter, with the sanction of suspension of the activity in case of violation. In the presence of structural or organizational conditions that do not allow compliance with the interpersonal safety distance of one meter, the aforementioned structures must be closed. The closure of drugstores, pharmacies and food outlets, whose manager is however required to ensure compliance with the interpersonal safety distance of one meter, with suspension penalty of the activity in case of violations) the activities of gyms, sports centers, swimming pools, swimming centers, wellness centers, spas (except for the provision of services falling within the essential levels of assistance), cultural centers, social centers, recreational centers are suspended.

2) Measures to fight and contain the spread of the COVID-19 virus throughout the Country

1. In order to counter and contain the spread of the COVID-19 virus, the following measures apply throughout the country:

a) conventions, meetings, gatherings and social events are suspended, in which healthcare personnel or personnel in charge of carrying out essential public services or of public utility are involved, any other meeting or congress activity is also deferred to a date subsequent to the term of effectiveness of this decree;

b) shows, events and shows of any kind, including cinema and theatrical performances, held in any place, both public and private, are suspended;

c) the activities of pubs, dance schools, game rooms, betting rooms and bingo halls, discotheques and similar clubs are suspended, with the sanction of suspension of the activity in case of violation;

d) the opening of Museums and other cultural institutes and places;

e) carrying out restaurant and bar services, with an obligation by the operator to enforce the interpersonal safety distance of at least one meter, with a penalty of suspension of the activity in case of violation;

f) it is strongly recommended at commercial establishments other than those of the previous letter, outdoors and indoors, that the manager guarantees the adoption of organizational measures such as to allow access to the aforementioned places with a quota or in any case suitable to avoid gatherings of people, respecting the interpersonal safety distance of at least one meter between visitors;

g) sporting events and competitions of any order and discipline, held in any place, both public and private, are also suspended; however, the aforementioned events and competitions are allowed, as well as the training sessions of competitive athletes, inside sports facilities used behind closed doors, or outdoors without the presence of the public; in all such cases, the associations and sports clubs, by means of their medical staff, are required to carry out the appropriate checks to contain the risk of spreading the COVID-19 virus among athletes, technicalstaff, managers and all persons who participate. The basic sport and motor activities in general, carried out outdoors or inside gyms, swimming pools and sports centers of all kinds, are allowed only if it is possible to respect the interpersonal safety distance of one meter;h) the educational services for children, and didactic activities in schools of all levels, as well as the attendance of school and higher education activities, including universities and institutions of advanced artistic, musical and dance training, professional courses, including regional ones, master, university for the elderly, and courses carried out by driving schools, in any case without prejudice to the possibility of carrying out distance learning activities; Post-university courses connected with the exercise of health professions, including those for doctors in specialist training, specific training courses in general medicine, the activities of trainees of the health professions, as well as the activities are excluded from the suspension. Schools of the ministries of the interior and defense and of the economy and finance, provided that the safety distance are guaranteed. In order to maintain social distancing, any other form of alternative aggregation is to be excluded;

i) educational trips, exchange or twinning initiatives, guided visits and school field trips, however named, scheduled by schools of all levels and levels are suspended;l) without prejudice to the provisions of letter h), the readmission to educational services for children and in schools of every order and degree for absences due to infectious disease subject to mandatory notification, lasting more than five days, takes place upon presentation of a medical certificate, also in derogation of the provisions in force;

m) school principals are responsible for the implementation, for the entire duration of the suspension of didactic activities inschools, remote teaching methods also with regard to the specific needs of students with disabilities;

n) in Universities and Institutions of high artistic, musical and dance training, for the entire duration of the suspension, didactic or curricular activities can be carried out, where possible, with remote modalities, identified by the same Universities and Institutions, with particular regard to the specific needs of students with disabilities; the Universities and Institutions, after the restoration of ordinary operability, ensure, where deemed necessary and in any case by identifying the relative modalities, the recovery of training activities as well as the curricular ones or any other test or verification, also intermediate, that are functional to the completion of the educational path;

o) for the benefit of students who are not allowed, due to the health emergency, object of this decree, to participate in the didactic or curricular activities of universities and institutions of high artistic, musical and dance training, such activities can be carried out, where possible, in remote mode, identified by the same Universities and Institutions, also with regard to the specific needs of students with disabilities, the Universities and Institutions ensure, where deemed necessary and in any case by identifying the relative methods, the recovery of training activities, as well as curricular ones, or any other test or verification, even intermediate, functional to the completion of the didactic path; the absences accrued by the students referred to in this paragraph are not counted for the purpose of admission to final exams as well as for the purposes of relative assessments;

p) persons accompanying patients are prohibited from staying in the waiting rooms of the emergency and reception areas and emergency rooms (DEA / PS), unless specifically indicated otherwise by the health personnel in charge;q) the access of relatives and visitors to hospitality and long-term care facilities, assisted healthcare residences (RSA), hospices, rehabilitation structures and residential structures for the elderly, self-sufficient and not, is limited to the cases indicated by the health management of the structure, which is required to take the necessary measures to prevent possible transmission of infection;

q) the smart working or home working, can be applied, for the duration of the state of emergency;

r) where possible, employers are recommended to encourage the use of periods of ordinary leave or holiday s) taking into account the indications provided by the Ministry of Health, in agreement with the coordinator of interventions implemented to overcome the COVID-19 emergency, the territorial divisions of the National Health Service ensure the Ministry of Justice’s suitable support for the containment of the spread of the infection of the virus, also through adequate safety measures suitable to guarantee, according to the health protocols developed by the Directorate-General for Health Prevention of the Ministry of Health, new entrances to penitentiary institutions and juvenile penal institutions. Symptomatic cases of new entrances are placed in isolation from other prisoners, recommending to evaluate the possibility of alternative measures of home detention. The face to face interviews are carried out in videophone mode, also in derogation from the duration presently foreseen by the current provisions. In exceptional cases, personal interviews may be authorized, provided that a distance of two meters is absolutely guaranteed. It is recommended to limit permits and supervised freedom procedures or to modify the relative regimes in order to avoid the exit and re-entry from prisons, considering the possibility of alternative measures of home detention;

t) the opening of places of worship is conditional on the adoption of organizational measures such as to avoid gatherings of people, taking into account the size and characteristics of the places, and such as to ensure that visitors can respect the distance between them at least one meter. Civil and religious ceremonies are suspended, including funeral and memorial services; z) absolute prohibition of mobility from one's home or dwelling for persons subjected to the quarantine measure or positive to the virus.

On 11 March 2020 the Italian Presidency of the Council of Ministers extended to the entire country certain measures.

Step 4 creation of 1 single Protection Zone for the entire national territory

Urgent measures to contain the contagion on the entire national territory

1. In order to counter and contain the spread of the COVID-19 virus, the measures referred to in art.1 of the Prime Minister's decree of 8 March 2020 are extended to the whole national territory.

2. All forms of gathering of people in public places or places open to the public are prohibited on the whole national territory.

3. Sports events and competitions of all types and disciplines are suspended, in public or private places.

The provisions of this Decree are effective from March 10, 2020 and are effective until April 3, 2020.

National Lockdown

On 11 March 2020 the Italian Presidency of the Council of Ministers extended the lockdown to the entire Italian Territory:

Step 5 Consolidation of 1 single Protection Zone for the entire national territory

In order to counter and contain the spread of the COVID-19 virus, the following measures are adopted throughout the national territory:

1) Retail commercial activities are suspended, with the exception of the food and basic necessities activities identified in Annex 1, both in the context of neighborhood businesses, and in the medium and large-scale distribution sector, also included in shopping centers, provided that access to the aforementioned activities is allowed. Regardless of the type of activity carried out, the markets are closed, with the exception of activities aimed at selling only foodstuffs. Newsagents, tobacconists, pharmacies and parapharmacies remain open. In any case, the interpersonal safety distance of one meter must be guaranteed.

2) The activities of catering services (including bars, pubs, restaurants, ice cream shops, patisseries) are suspended, with the exception of canteens and continuous catering on a contractual basis, which guarantee the interpersonal safety distance of one meter. Only catering with home delivery is allowed in compliance with hygiene and health standards for both packaging and transportation. Food and drink establishments located in the service and refueling areas located along the road, motorway and railway, airport, hospital stations and hospitals are also open, guaranteeing the interpersonal safety distance of a meter.

3) Activities relating to personal services (including hairdressers, barbers, beauticians) other than those identified in Annex 2 are suspended.

4) Banking, financial and insurance services as well as the agricultural, livestock and agri-food processing sector, including the supply chains that supply goods and services, are guaranteed, in compliance with hygiene and health regulations are guaranteed.

5) The President of the Region can arrange the programming of the service provided by local public transport companies, even if not scheduled, aimed at reducing and eliminating services in relation to the health interventions necessary to contain the Coronavirus emergency based on actual needs and for the sole purpose of ensuring the minimum essential services. The Minister of Infrastructure and Transport, in agreement with the Minister of Health, can arrange, with the aim of limiting the coronavirus emergency, programming with reduction and suppression of interregional automotive services and rail, air and sea transport services, on the basis of actual needs and for the sole purpose of ensuring the minimum essential services.

6) Public administrations ensure the ordinary performance of the working services of their employees in home working mode, and identify the indifferent activities to be made in attendance.

7) With regard to production activities and professional activities, it is recommended that:

a) maximum use is made by companies of remote /home working methods for activities that can be carried out at home or remotely;

b) holidays and paid leave for employees as well as other instruments provided for are incentivized;

c) the activities of the company departments not indispensable for production are suspended;

d) adoption of anti-contagion safety protocols and, where it is not possible to respect the interpersonal distance of one meter as the main containment measure, with the adoption of individual protection tools;

e) the sanitation of the workplace is encouraged, also by using forms of social safety nets for this purpose;

8) for production activities only, it is also recommended that movements within the sites are limited and access to common areas is limited;

9) in relation to the provisions of numbers 7 and 8, limited to production activities, agreements between employers' organizations and trade unions.

10) For all non-suspended activities, maximum use of home working methods is encouraged

Annex 1

RETAIL

Hypermarkets

Supermarkets

Discount of food outlets

Minimarkets and other non-specialized food shops

Retail sale of frozen products

Non-specialized retail trade in computers, peripherals, telecommunications equipment, audio and video consumer electronics, household appliances

Retail sale of food, beverages and tobacco in specialized stores (ateco codes: 47.2)

Retail sale of automotive fuel in specialized stores

Retail IT and telecommunications equipment (ICT) in specialized stores (ateco code: 47.4)

Trade to the detail of hardware, paintings, flat glass and electrical and plumbing /hydraulic material

Retail sale of sanitary equipment

Trade to the detail of articles for lighting

Retail sale of newspapers, magazines and periodical

Pharmacies

Retail sale in other specialized stores of medicines not subject to medical prescription

Retail sale of medical and orthopedic items in specialized stores

Trade to the detail of articles of perfumery, produced for toiletry and personal hygiene

Retail sale of small domestic animals

Retail sale of material for optics and photography

Retail sale of fuel for domestic use and for heating

Retail sale of soaps, detergents, polishing and related products

Retail sale of any type of product made via the internet

Retail sale of any type of television product

Retail sale of any type of mail order product, radio, telephone

Trade carried out by means of vending machines

Annex 2

Services for the person

Laundry and cleaning of textiles and fur

Industrial laundry activities

Other laundries, dry cleaners

Funeral services and related activities

1.7 Open Businesses, Industries and allowed Gatherings

Executive Decree, no. 33 dated 16 May 2020

Pursuant to art. 1 of the Executive Decree, no. 33 dated 16 May 2020, economic, productive and social activities must be carried out in accordance with the contents of appropriate protocols or guidelines to prevent or reduce the risk of contagion in the reference sector or in similar areas, adopted by the regions or by the Conference of Regions and Autonomous Provinces in accordance with the principles contained in the national protocols or guidelines.

Measures limiting economic, productive and social activities can be adopted, in compliance with the principles of adequacy and proportionality, pursuant to Article 2 of Decree-Law No. 19 of 2020 or paragraph 16.

Decree of the President of the Council of Ministers of 17 May 2020

Pursuant to art. 2 of the Decree of the President of the Council of Ministers of 17 May 2020, throughout the national territory, all industrial and commercial production activities, comply with the contents of the Joint Regulatory Protocol on measures to combat and contain the spread of the virus covid-19 in the working environments signed on 24 April 2020 between the Government and the social partners, as well as, for their respective areas of competence, the Joint Regulatory Protocol to limit the spread of Covid-19 in the shipyards, signed on 24 April 2020 between the Minister of Infrastructure and Transport, the Minister of Labour and Social Policies and the social partners, and the Joint Regulatory Protocol for the Containment of Covid-19 Deployment in Transport and Logistics signed on 20 March 2020.

Decree of the President of the Council of Ministers of 26 April 2020

Pursuant to art. 2 of the decree of the President of the Council of Ministers of 26 April 2020 all industrial and commercial activities are suspended throughout the national territory, with the exception of those listed in Annex 3.

Undertakings whose activities are not suspended must comply with the contents of the regulatory protocols for measures to contain the spread of COVID-19 virus, depending on the sector, whether it concerns the working environment, construction sites, transport and logistics.

For the suspended productive activities it is permitted, previous communication to the Prefect, the access to the business premises of employee or third party delegated in order to carry out activities of vigilance, conservative activities and maintenance, management of payments and cleaning and sanitation activities. It is allowed, after communication to the Prefect, the shipment to third parties of goods in stock and the reception in warehouse of goods and supplies.

In order to ensure that production activities are carried out safely, the Regions monitor on a daily basis the evolution of the epidemiological situation in their territories and the conditions for the adequacy of the regional health system.


Decree of the President of the Council of Ministers of 10 April 2020

Pursuant to art. 2 of said Decree all - non essential or functional to face the Covid-19 emergency - industrial and commercial activities are suspended throughout the national territory, unless they cannot be carried out with social distancing or smart work.

In order to counter and contain the spread of the COVID-19 virus, all forms of gathering of people in public places or places open to the public are prohibited on the whole national territory

Sports events and competitions of all types and disciplines are suspended, in public or private places.

1.8.1 Corporate: shareholder's meetings and other meetings of companies

Art. 106 of the so-called ‘Cura Italia’ Law Decree dated March 17, 2020, introduced some important innovations for corporate law in order to support companies corporate activities during the Coronavirus outbreak.

1. Term for approval of the financial Statements

In particular, by way of derogation to Articles 2364, second paragraph, and 2478-bis, of the Italian Civil Code and to the provisions of the companies’ by-laws, the ordinary shareholders' meeting for the approval of the financial statements shall be convened within 180 days after financial year end, instead of the ordinary 120 days term.

Hence, a longer period is granted by the law for the preparation of the financial statements and their approval.

2. Shareholders’ meetings

The second intervention concerns the possibility for ordinary or extraordinary shareholders' meetings of companies, as well as for cooperative and mutual insurance companies, to allow votes to be expressed by electronic means or by correspondence and to attend the shareholders' meetings by telecommunications, even in case the by-laws do not allow it.

The aforementioned companies may also provide for the shareholders meeting to be held exclusively, by telecommunications, as long as the identification of the participants, their attendance and the exercise of their voting rights can be verified and guaranteed.

Also, the chairperson, the secretary and, if necessary, the notary, do not have to be present in the same place. According to ordinary provisions of law, the chairperson and the secretary of the meeting (for certain decisions, for instance modifications to the bylaws or capital increases, the notary shall act as secretary) shall be in the same place. Such provisions follow the practical guidelines issued by the Milan Notary Association with the emergency resolution no. 187 of March 11, 2020.

The new legislation does not clarify whether it is possible to apply the same provisions also for the meetings of the administrative bodies.

Moreover, limited liability companies may allow voting to take place by written consultation or by express written consent, also in the case provided for by Article 2479, paragraph 4, Italia civil code and when the by-laws only provide for the possibility to hold physical meetings.

3. Public Companies

Specific provisions apply to listed companies (as well as to companies admitted to trading on an MTF and companies with shares widely distributed among the public), which may appoint, either for ordinary or extraordinary shareholders’ meetings, the representative provided for in Article 135-undecies of Legislative Decree no. 58 of February 24, 1998, even when the by-laws provide otherwise, stating that attendance at the shareholders' meetings shall take place exclusively through the designated representative.

People’s banks, cooperative banks, cooperative companies and mutual insurance companies, even as an exception to current regulations and the provisions of the by-laws which provide for limits on the number of proxies that can be given to the same individual, may appoint the representative provided for by Article 135-undecies of Legislative Decree no. 58 of February 24, 1998, for ordinary or extraordinary shareholders' meetings. Such companies may also provide that attendance at the shareholders' meeting shall take place exclusively through the aforementioned representative.

4. Companies under control of public entities

The above also apply also to companies controlled by public entities as provided for in Article 2, paragraph 1, letter m) of Legislative Decree no. 175 of August 19, 2016, within the limits of the resources available under the current legislation.

5. Duration of the provisions

The aforementioned provisions shall apply to shareholders' meetings convened by July 31, 2020 or, if later, by the date until which in Italy the emergency related to the health risk associated with the outbreak of COVID-19 is in force.

1.8.2 Other corporate provisions

Law Decree no. 23, dated April 8, 2020 (so-called ‘Decreto Liquidità’) introduces new provisions in terms of Company Law in order to support Italian companies within the current context of "exceptional emergency and economic crisis caused by the COVID-19 epidemic" (as stated in the Explanatory Report – comment on Art. 6 of the Liquidity Decree).


(a) Crisis. The entry into force of the new Code on company law crisis and insolvency (Legislative Decree no. 14/2019) is postponed to September 1, 2021. It should be noted that very relevant provisions, which affect the responsibilities of directors, such as the reformed Art. 2086 of the Italian Civil Code, are already in force, and the current decree does not postpone their effectiveness (‘The entrepreneur, whether operating in a corporate or collective form, shall establish an organizational, administrative and accounting structure adequate to the type and size of the company, in order to detect accordingly the crisis of the company and the loss of business continuity, as well as to take action without delay for the adoption and implementation of one of the legal tools provided by the law in order to overcome the crisis and for the recovery of business continuity’).

(b) Capitalisation of companies. As from the date of entry into force of the decree and until December 31, 2020, with regard to the subject-matters that occurred during the financial years closed by that date, (i) Art. 2446, paragraphs 2 and 3, do not apply to joint stock companies (spa) and Art.2482-bis, paragraph 4, 5 and 6 do not apply to limited liability companies (srl) (which provides for the obligation to reduce the share capital, in the event of a reduction in capital due to losses exceeding one third of the share capital, which continues until the financial year following the one in which the reduction occurred) and (ii) Art. 2447 does not apply to joint stock companies and Art. 2482-ter does not apply to limited liability companies (pursuant to such provisions , in the event of a reduction of the share capital below the legal minimum, the companies shall convene the shareholders' meeting to reduce the share capital and increase it to an amount not lower than the minimum. For the same period of time, the obligation to put the company into liquidation in case of reduction or loss of share capital pursuant Articles 2484, first paragraph, number 4), and 2545-duodecies of the Italian Civil Code (regarding cooperatives) shall not apply. Similar provisions were introduced even before the outbreak of Covid for innovative start-ups, albeit for different reasons.

(c) Drafting of financial statements. In addition to the provision regarding the postponement of the date of approval of the financial statements referred to in the "Cura Italia" Law Decree, the Government lays down rules in order to regulate the principles that shall be followed in the drafting of financial statements. In particular for financial statements having their end until December 31, 2020 (as well as for financial statements for years closed by February 23, 2020 and not yet approved), the valuation of the items in a continuity perspective referred to in Article 2423-bis, paragraph one, no. 1, of the Italian Civil Code) may in any case be carried out, continuity the last financial statements for the year ended before 23 February 2020 were approved with continuity.

(d) Financing of companies. Articles 2467 (in terms of limited liability companies) and 2497 quinquies (in terms of financing in the coordination management activity) of the Italian Civil Code do not apply to loans granted to companies from the date of entry into force of the decree and until 31 December 2020. Such articles substantially qualify as equity injection, providing for the deferral of repayment, loans granted by a shareholder in situations of excessive imbalance of debt with respect to shareholders' equity or in a financial situation in which an equity injection would have been reasonable.


1.9 Supply of essential medical goods and PPE

Personal Protection Equipments

EU Regulation 425/2016, governing manufacturing and marketing of Personal Protective Equipment (PPE). The Regulation provides that:

- PPE shall meet the essential health and safety requirements set out in Annex II (Art. 5);

- manufacturers shall be compile the technical documentation referred to in Annex III and carry out the conformity assessment procedure referred to in art. 19 which, in case of positive outcome, leads to the declaration of conformity and to the CE mark (Art. 8.2);

- appropriate usage instructions shall be enclosed to the PPE (Article 8.7);

- PPE in conformity with harmonised standards (UNI EN) shall be deemed to be in conformity with the essential health and safety requirements set out in Annex II;

- CE marking shall be subject to the general applicable regulations (EU Reg. 765/2008 and specific directives applicable to the product).

The rules for the national implementation of EU Regulation 425/2016 are contained in Legislative Decree 475/1992 (as subsequently amended and integrated), which clarifies the operation in Italy of conformity assessment procedures and provides for administrative and criminal sanctions in case of violation of the rules regarding the manufacturing and marketing of PPE (Art. 14).

Also at a national level, Legislative Decree 81/2008 (so-called ‘Code on Health and Safety at Work’) deals with PPE at length, with specific emphasis on use by workers.

During the Covid-19 outbreak, the Government intervened to simplify the regulatory framework and speed up the certification process and marketing of PPE. However, please note that there shall be no exemption of liability in favour of the companies that will produce PPE.

The above-mentioned simplification concerns the assessment procedures for PPE, and not their technical-qualitative requirements (as also clarified by INAIL, see infra).

Initially, Law Decree 9/2020 allowed the use of PPE with a protective effectiveness similar to the one provided for by the general regulations, following an effectiveness assessment carried out by the Technical-Scientific Committee set up for the emergency (Art. 34.2).

Law Decree 18/2020 (so-called ‘Cura Italia’) provided that:

- the Extraordinary Commissioner (Mr Arcuri) may grant non-repayable funding of up to Euro 50,000,000 in favour of companies producing PPE (Art. 5.1) (the criteria for the funds distribution have not been published yet);

- the production and marketing of PPE shall be permitted by a way of derogation to the provisions currently in force (Art. 15.1), with a procedure that requires to send to INAIL ( National Institute for Insurance against Accidents at Work) a self-certification stating the characteristics of PPE, along with all the technical documentation necessary for the evaluation. INAIL will decide within the next 3 days (Art. 15.3).

The operating procedures of this self-certification procedure ‘by a way of derogation’ have been clarified by INAIL – Circular 19/03/2020:

- such a derogation only concerns procedures and timing, not quality and technical standards;

- at the end of the emergency period, PPE will have to undergo the ordinary certification procedure;

- the companies concerned must send the self-certification of conformity via PEC (certified e-mail), according to the model prepared by INAIL, along with the relevant technical documentation.

In order to simplify the activities for the companies concerned by the above-mentioned provision, Polytechnic of Milan – following a request by the Region of Lombardy – has made itself available to carry out preliminary assessments of the suitability of PPE in order to identify any critical issues and mitigate the risk of waste by INAIL. PoliMi has clarified that:

- PPE are considered adequate and therefore eligible if complying with UNI EN 149:2001+A1:2009 (standards for the production of PPE

FFP2 filtering masks) and ISO 13485 (quality management system);

- in order to proceed with the preliminary assessment, 10 samples of PPE and 10 samples of material shall be sent.

1.10 Health care

Brief summary on recent measures applicable to the healthcare

1. ‘Cura Italia’ Law Decree No. 18/2020 (March 17, 2020)

Article 5 provides that in order to ensure the production and supply of medical devices and personal protection equipment at market values as of December 31, 2019, and given their limited availability during the COVID-19 emergency period, the Extraordinary Commissioner shall be authorised to provide financing through grants as well as subsidised loans, to the companies manufacturing such devices.

According to Article 6, until the end of the state of emergency, the Chief of the Department of Civil Protection (also upon request of the Extraordinary commissioner) can order the requisition, for a limited period of time (6 months, which may be postponed) and with an indemnification in favour of the owner, of medical and medical surgical facilities and goods of any kind (in use or owned by any public or private entity), which may be needed to deal with the emergency.

Article 7 allows the temporary recruitment of military doctors and nurses, whereas Article 8 rules the urgent recruitment of biology, chemistry and physics technical officers in military health facilities. Article 9 provides extra financing for such facilities.

According to Article 10, the so-called National Institute for Insurance against Accidents at Work (INAIL) is authorised to recruit 200 medical specialists and 100 nurses.

Article 11 ensures € 4 millions of extra financing for the next 3 years in order to ensure continuity in providing healthcare and research activities of the Higher Institute of Health.

Article 12 allows to keep in service medical and health care managers, as well as health care staff and social and health care workers, even in derogation to the limits provided for by the provisions in force for retirement, whereas Article 13 allows professionals who have obtained their qualification in a member State to exercise temporarily their health professional qualifications in the national territory.

Article 14 states that the employees of companies involved in the production and distribution of medicines and medical and diagnostic devices and related research activities as well as the integrated supply chain for subcontractors are not subject to the quarantine provisions, yet they shall suspend their working activity if positive to Covid-19 or similar respiratory symptoms.

Furthermore, Article 15 provides that it is permitted to manufacture, import and market surgical masks and PPE by way of derogation to the current provisions, and that manufacturers, importers and vendors of such products shall send to the Higher Institute of Health a self-certification in which, under their sole responsibility, certify the technical characteristics of the equipment and declare that they meet all safety requirements as provided for under current legislation. In addition, they shall also submit a self-certification to the INAIL, in which they certify that they comply with the current legislation in terms of safety at work. Both these two certifications also require whomever manufactures, imports or markets such products to undergo a validation procedure, which is compulsory.

Article 16 provides that surgical masks available on the market are deemed PPE for those workers who, while carrying out their activities, are objectively unable to maintain the interpersonal distance of one meter, and that individuals present on the entire national territory are authorized to use filter masks without the CE marking and produced by way of derogation to current trade law provisions..

2. ‘Decreto Liquidità’ Law Decree No. 23/2020 (April 8, 2020)

Article 38 recognizes an immediate adjustment of the wage for General Practitioners and Paediatricians to the economic content provided for in the Act of Guidance for the renewal of the National Collective Agreement on Medicine approved in summer 2019, which should be finalised in the next 6 months. In addition, such professionals shall acquire, at their own expense, digital platform systems that allow contacting with fragile and chronic serious patients, and collaborating remotely, if they are not equipped with suitable PPE for the clinical surveillance of patients in quarantine or isolation or in the healing phase discharged early from hospitals. Further financing forms by Regions are enabled.

Moreover, Article 39 provides simplified procedures for medical radiological practices and equipment, regarding the protection of workers and the general public from the risks of exposure to ionising radiation, as a result of new medical radiological practices commenced in order to manage the ongoing emergency.

Article 40 replaces the repealed Article 17 of the previously mentioned ‘Cura Italia’ Law Decree. In particular, without prejudice to the provisions in force on clinical trials of therapeutic products, the Italian Drugs Agency (AIFA) may access all data resulting from experimental clinical trials, observational studies and so-called ‘compassionate therapeutic use’ programs, in relation to COVID-19 patients. Until the end of such a state of emergency, the Ethics Committee of the National Institute for Infectious Diseases Lazzaro Spallanzani in Rome represents and expresses the national opinion on ethical matters. For non-profit experimental studies referred to the emergency period, a specific insurance policy is not required.


1.11 Persons with a higher risk

Elderly people or suffering from other diseases

Decree of the President of the Council of Ministers of 10 April 2020.

An express recommendation is made by art. 3 of the decree of the President of the Council of Ministers of 10 April 2020 to all persons who are elderly or suffering from chronic diseases or multi-morbidity or with congenital or acquired states of immune-depression, to avoid exiting their home or dwelling out of cases of strict necessity and to avoid crowded places in which it is not possible to maintain the expected interpersonal safety distance.


Prisoners

On February 29th 2020, Italian prisons numbered 61,230 prisoners compared to an overall capacity of 50,931.

Overcrowding makes the social distancing measures adopted by the Italian Government as an attempt to contain the epidemic a challenging issue.

Prisons overcrowding has contributed to the outbreak of several protests and riots by the prisoners due to the emergency caused by the spread of Covid-19 virus.

The measures adopted

Originally, following the declaration of state of emergency of January 31st 2020, all measures were adopted with secondary legislation, in particular by means of circular letters from the Department of Prison Administration and the Department for Juvenile Justice. The purpose of the circular letters was to contain and manage the epidemiological emergency, "closing" prisons to any possible sources of external transmission of the virus.

To this end, the treatment activities for which access by the external community is expected or necessary have been suspended; external and internal work activities have been limited; the entry of teachers, volunteers and trainers from outside interrupted.

With ministerial decree of March 8th 2020, the Council of Ministers ordered the total suspension of family visits and instructed all penal institutions to increase access to telephone calls for prisoners, in order to allow them to make video calls via electronic communication means where available.

As the spread of the virus increased, measures were also adopted for the use of masks and personal protective equipment by staff, as well as for setting up pre-triage tents at the entrance of the prisons, and provide for extraordinary supplies of disinfectants.

With Decree Law no. 18 of 17 March 2020 (so-called “Cura Italia”) the Government introduced the following two provisions that exclusively concern the prisoners with a final sentence (excluding, therefore, all detainees in pre-trial detention or waiting for their sentence to become final).

Home detention for sentenced up to 18 months’ imprisonment

The first provision set forth by art. 123 of Decree Law no. 18/2020 concerns “home detention” and provides that the prison sentence, if not exceeding 18 months, is enforced, on request and until June 30th 2020, in the house of the sentenced or in another public or private place of care, assistance and reception, as an exception to the limitations provided for by Law no. 199 of 2010.

Access to the alternative measure of home detention remains precluded for:

  1. persons convicted of any of the offenses defined by art. 4-bis of Law No. 354/1975 and following amendments and in arts. 572 (family abuse) and 612-bis (stalking) of the Penal Code;

  2. criminals declared persistent, professional or by tendency offenders, pursuant to arts. 102 to 109 of the Penal Code;

  3. prisoners without an effective and suitable domicile, also according to the needs of protection of persons offended by the crime;

  4. all those who have received, in the last year, a disciplinary measure as a result of the offenses referred to in art. 77, paragraph 1, numbers: 18 (participation in disorder or riots), 19 (promotion of disorder or riots), 20 (escape from prison) and 21 (facts provided by law as a crime, committed against cellmates, police officers or visitors) of the Implementing Regulation of the Penitentiary Law (Presidential Decree n. 230/2000);

  5. the prisoners subject of disciplinary report drawn up pursuant to art. 81, par. 1, of the Presidential Decree of 30 June 2000, n. 230, as involved in the disorders and riots to date from 7 March 2020.

Decree Law no. 18/2020 also provides for a "streamlining” of the investigation to obtain home detention: the prison director will no longer has to submit the “report on the prisoner behavior", thus shortening the time of the decision.

Special permits for prisoners on day release

The second provision provided for by art. 124 of Decree Law no. 18/2020 grants “special permits” for prisoners on day release without limits, until 30 June 2020. The aim is to reduce as much as possible the risk of infection for prisoners who carry out work activities out of prison and could be authorised to stay at home overnight.

Known issues

Potential beneficiaries of the measures adopted by the Government under Decree Law no. 18/2020 are divided into two categories: those who have to serve a sentence (even a residual one) less than 6 months as well as juvenile prisoners, and those serving a sentence between 6 and 18 months.

The former will have access to home detention without further limitations, whereas the latter will have access exclusively in case of availability of “electronic bracelets" pursuant to art. 123, par. 3, of Decree Law no. 18/2020.

However, supply of electronic bracelets is currently a critical issue in Italy.

On April 9th 2020 the National Bar Council (“Consiglio Nazionale Forense”) addressed to the Government a resolution on the prisons emergency and “the alarming increase of people tested positive for the virus Covid-19”, in order to request the immediate adoption of necessary legislative measures to reduce prison overcrowding and protect effectively the right to health, constitutionally guaranteed, of the prisoners and of all prison workers.


1.12 Sanctions

Executive Decree no. 19 [25 March 2020]

As the art. 4 of the Decree law of 25 march 2020 n. 19 explains, the failure to comply with the containment is punished with the administrative sanction of the payment of a sum from Euro 400 to Euro 3,000 (unless the fact constitutes a crime) and the penalties by article 650 of the Penal Code may not be applied. Moreover, if non-compliance with these measures is achieved by the use of a vehicle, the penalties shall be increased to one third and in case of repeated infringements of the same provision, the administrative penalty shall be doubled and the ancillary penalty shall be applied to the maximum extent.

The removal from home or residence for persons subject to quarantine because positive to the virus is punished pursuant to the Consolidated Text of the Health Laws (Article 260 of the Royal Decree of 27 July 1934, No. 1265).

Note: The provisions of this Article which replace criminal penalties with administrative penalties shall also apply to infringements committed before the date of entry into force of this Decree, but in such cases administrative penalties shall be applied to a minimum of one-half.


1.12 Sanctions

Executive Decree no. 19 [25 March 2020]

As the art. 4 of the Decree law of 25 march 2020 n. 19 explains, the failure to comply with the containment is punished with the administrative sanction of the payment of a sum from Euro 400 to Euro 3,000 (unless the fact constitutes a crime) and the penalties by article 650 of the Penal Code may not be applied. Moreover, if non-compliance with these measures is achieved by the use of a vehicle, the penalties shall be increased to one third and in case of repeated infringements of the same provision, the administrative penalty shall be doubled and the ancillary penalty shall be applied to the maximum extent.

The removal from home or residence for persons subject to quarantine because positive to the virus is punished pursuant to the Consolidated Text of the Health Laws (Article 260 of the Royal Decree of 27 July 1934, No. 1265).

Note: The provisions of this Article which replace criminal penalties with administrative penalties shall also apply to infringements committed before the date of entry into force of this Decree, but in such cases administrative penalties shall be applied to a minimum of one-half.

2. FINANCIAL SUPPORT OF BUSINESSES

Legal basis

  • On April 8th 2020, the Italian Government enacted Law Decree no. 23 of 2020 (s.c. “Liquidity Decree” - “Decreto Liquidità”). In combination with Law Decree no. 18 of March 17th 2020 (s.c. “Cure Italy Decree” - “Decreto Cura Italia”), it provides businesses affected by the Covid-19 pandemic with a financial assistance package designed to help Italian companies survive the dramatic short term effects of Covid-19. These measures are part of the framework outlined by the Communication from the European Commission of March 19th 2020 on "Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak ", as modified on April 4th, 2020.

  • The Italian government introducing additional significant tax measures with the so called “Decreto Rilancio - Law Decree no. 34 of May 19th 2020 - published in the Italian Official Gazette on May 19th 2020.

2.1 Measures to support companies’ cash flow – SACE Financial Guarantees

Article 1 of the Liquidity Decree enable SACE S.p.A.** to grant guarantees related to any form of financing, provided by banks, national and international financial institutions and other entities authorized to lend in Italy.

SACE S.p.A. will provide up to €200 billion of loan guarantees counter-guaranteed by the State.

Granting of SACE Guarantees is subject to the following conditions:

a) the guarantee request can be filed until December 31st 2020;

b) the duration of the SACE guarantee may not exceed six years. Pre-amortization (“preammortamento”) period of 24 months is permitted;

c) the borrower, as of December 31st 2019, was not classified as an "undertaking in difficulty" under EU Regulations: no. 651/2014, no. 702/2014 and no. 1388/2014, and its liabilities, as of February 29th 2020, were not classified as "deteriorated" by the lending banks;

d) the aggregate amount of all financing granted to the same entity backed by a state guarantee cannot exceed the higher of: 25% of the borrower’s 2019 annual revenue; or twice its 2019 employment costs;

e) the maximum loan percentage covered by a SACE Guarantee cannot exceed:
i) 90% of the principal amount of the financing, for companies with less than 5,000 employees in Italy and with annual revenues under 1.5 billion (By the way, these companies can access the SACE Guarantee through a simplified procedure involving only the lender and SACE);

ii) 80% of the principal amount of the financing, for companies employing more than 5,000 persons in Italy and with annual revenues between €1.5 billion and €5 billion;

iii) 70% of the principal amount of the financing, for companies with annual revenues higher than €5 billion;

f) €30 billion and special commission fees are reserved for SMEs, including sole proprietorships and VAT registered self-employed, provided that they have already benefited in full from the financings granted by the Central Guarantee Fund for SMEs mentioned in the next paragraph below.

** SACE S.p.A. is a Joint Stock Company, 100% owned by Cassa Depositi e Prestiti (or “CDP”), the giant public-private investment bank, controlled by the Italian Ministry of Economy and Finance (with a minority stake owned by Italian banking foundations which have equity participations in all Italian private banks) specializing in export credit support (guarantees and insurances). SACE also has a range of non-export credit projects, including the above detailed measures adopted by the Government to support Italian companies liquidity during Covid-19 pandemic.

***

Law Decree no. 34 of May 19th 2020 (so called Decreto Rilancio) introduced a number of measures aimed at providing financial support to the economic activities most affected by the COVID-19 pandemic.

The main measures adopted here below:

a) IRAP exemption
Pursuant to article 24 of the Decree, IRAP settlement payment for 2019 and first account for 2020 are not due from taxpayers with a turnover which did not exceed €250 million in the last fiscal year. This provision is not available, inter alia, to banks, financial institutions, insurance companies, governments and public authorities.

b) Non-repayable grants
Pursuant to article 25 of the Decree, entities carrying out business activities that are registered for VAT purposes, will be entitled to a non-taxable and non-repayable grants if the turnover of the entity in April 2020 is lower than two-thirds of the entity’s April 2019 turnover and if have registered an income in 2019 lower than €5 million. The grant is equal to a specific percentage of the difference between the April 2020 turnover and the April 2019 turnover amounts.

The amount of the grant is determined applying the following percentages to the difference between the amount of turnover for April 2020 and the same amount for April 2019:

  • 20% for revenues not exceeding €400 thousand;

  • 15% for revenues between €400 thousand and €1 million;

  • 10% for revenues exceeding €1 million.

In any case, the grants cannot be lower than €1 thousand for natural persons and €2 thousand for entities other than natural persons and does not contribute to the formation of the tax base for income taxes.

To benefit from this measure, a specific request needs to be filed with the Italian tax authorities, together with certain self-declarations.

c) Net equity increases for small-medium companies
Pursuant to article 26 of the Decree, Italian companies (Joint-stock companies, limited limited liability companies, including simplified limited liability companies, limited partnerships, cooperatives companies, European companies under Regulation (EC) No. 2157/2001 and European cooperative companies under Regulation (EC) No. 1435/2003) may benefit of certain measures aimed at supporting the Italian economic-productive system represented by (i) the granting of a tax credit for both investors and companies in relation to capital increases to be approved and fully paid-in by 31 December 2020 and (ii) the subscription of the financial instruments issued by such companies by a new fund, constituted €4 billion, named "Fondo Patrimonio PMI", where the following conditions are satisfied:

  • revenues (on a consolidated basis in case of companies belonging to a group) relating to the 2019 tax period exceeding €5 million for the tax credit or exceeding €10 million and up to €50 million to access the Fund;

  • reduction of the revenues (on a consolidated basis in case of companies belonging to a group) in the months of March-April 2020 not lower than 33% compared to the same period of the previous year;

  • capital increase approved and fully paid-in between 19 May 2020 and 31 December 2020. It is necessary that the relevant stake in the Italian company is held until 31 December 2023 and no reserves are distributed by the Italian entity until such date.

Shareholders making cash contributions in the context of the above-mentioned share capital increase(s) can benefit of a tax credit of 20% on the amount contributed.

The maximum amount of cash contribution relevant for the tax credit is equal to €2 million.

The companies - upon the approval of the 2020 financial statements - can benefit of a tax credit equal to 50% of the losses exceeding 10% of their equity and up to 30% of the amount of the above-mentioned capital increase. Tax losses carried forward in subsequent tax periods are reduced by the amount of the tax credit.

The Fund (”Fondo Patrimonio PMI”) is managed by Invitalia S.p.A. ("Invitalia") and is aimed at subscribing - by 31 December 2020 and within the Fund's capacity - bonds or debt securities issued by eligible companies for a maximum amount equal to the lower between (i) three times the amount of the capital increase referred to above and (ii) 12.5% of the revenues (on a consolidated basis in case of the company belongs to a group of companies) relating to the 2019 tax period.

The financial instruments may be issued as an exception to the limits set forth by article 2412 of the Italian Civil Code (i.e. for a total amount not exceeding two times the share capital, the legal reserve and the available reserves resulting from the last approved financial statements) and shall have the following features:

  • maturity date and relevant redemption after six years from subscription date;

  • early redemption can be exercised by the issuer only after three years from subscription date;

  • immediate redemption in the event of non-compliance with anti-mafia regulations;

  • in the event that the issuer is subject to any bankruptcy proceeding, the repayment shall occur after any other credit and before the repayment of any shareholder loan;

  • interests accrual on annual basis, to be paid upon redemption.

The issuers shall:

  • not, until the full repayment of the financial instruments, carry out any distribution of reserves, purchases of treasury shares or repayment of shareholder loans;

  • allocate the financing arising from the financial instruments to support personnel costs, investments or working capital of business activities located in Italy;

  • provide to Invitalia a periodic report in order to verify the compliance with the requirements and covenants set forth by the “Decreto Rilancio”.

d) Committed Fund (“Patrimonio Rilancio”)
Article 27 of the Decree enables “Cassa Depositi e Prestiti S.p.A.” («CDP», company participated by the Italian Ministry of Economy and Finance which supports the innovation and growth of Italian SMEs) to set-up a «Committed Fund» («Patrimonio Destinato»), pursuant to art. 2447-bis and seq. of the Italian Civil Code, amounting to €44 billion, called «Patrimonio Rilancio» and financed by assets provided by the Ministry of Economy and Finance ("MEF").

The Committed Fund is autonomous and separate from the assets of CDP, is responsible exclusively for its own obligations, within the limits of the resources available. No legal actions can be carried out vis-à-vis the Committed Fund by CDP's creditors and, conversely, no legal actions can be carried out vis-à-vis CDP's assets by Committed Fund's creditors.

The Committed Fund is managed by the Board of Directors of CDP and its resources shall be used to support - within the European Union regulatory framework on state aids adopted in the context of Covid-19 emergency or at arm's length conditions - Italian listed and non-listed joint stock companies:

  • having their registered office in Italy;

  • not operating in the banking, financial or insurance sector;

  • having an annual turnover exceeding €50 million.

The investments under the Committed Fund shall be preferably used to subscribe convertible bonds or capital increases and purchase of listed securities in case of "strategic" transactions.

The requirements, conditions and operating criteria of the Committed Fund shall be defined by a further decree of the Ministry of Economy and Finance to be enacted, taking into account, the relevance of the company with reference to critical and strategic infrastructures, strategic production chains, environmental sustainability and employment levels.

For the financing of the Committed Fund CDP is entitled to issue - as an exception to articles 2415-2420 of the Italian Civil Code as well as to the prohibition to collect savings from public pursuant to article 11 of the Legislative Decree no. 385/1993 and the related implementation regulations - bonds or other debt financial instruments. Such bonds or financial instruments benefit of the State guarantee up to €20 billion.

The income and production value of the Committed Fund is tax exempted and not subject to withholding taxes and substitute taxes on income. All the deeds, agreements, transfers, services and formalities relating to the operations carried out by under the Committed Fund as well as their execution, amendment or termination are excluded from any kind of taxation (including, by way of example, value added taxation, financial transaction taxation, registration taxation, stamp duty taxation). The interests and other proceeds of the financial instruments issued by CDP in order to finance the Committed Fund are subject to the substitute tax regime for income tax.

By specific Ministerial Decrees, the MEF will contribute to “Patrimonio Rilancio” its assets, holdings and legal relationships.

2.2 Measures to strengthen the support of the Central Guarantee Fund for SMEs

Both the “Cure Italy” and “Liquidity” Decrees include provisions aimed at strengthening the Central Guarantee Fund for SMEs ***.

More specifically, article 13 of Liquidity Decree provides the following special access conditions to the guarantees effective for each enterprise until December 31st 2020:

  • guarantees are granted for free, without commission fees;

  • guarantees can be issued up to a maximum overall amount of €5 billion;

  • SME guarantees are available to companies up to 499 employees;

  • any pre-existing guarantee issued by the Central Guarantee Fund for debts subject to suspension of payments or extension of the term due to the consequences of Covid-19 pandemic, shall be extended automatically;

  • SMEs can apply for guarantees covering pre-existing financing granted not earlier than three months before the application and, in any case, after January 31st 2020;

  • guarantees can be also issued for financing related to debt-renegotiation transactions, provided that an additional credit facility of at least 10% of the refinanced indebtedness is made available by the guaranteed institution to the SME;

  • guarantees cannot be granted with respect to bad liabilities (“sofferenze” - i.e.: classified as NPL);

  • maximum coverage:

  • 100% in case of new financing up to €25,000, with a repayment term up to 72 months commencing at least 24 months after lending;

    • 100% (90% from the State and 10% from other entities, such as “Confidi” - credit guarantee consortia) for financing up to €800,000, available for SMEs with annual revenues not exceeding €3,200,000;

    • 90% for financing between € 800,000 and €5,000,000;

    • in any case, the financing covered by the guarantee cannot exceed 25% of the SME’s 2019 annual revenues or any of the further thresholds set under article 13, paragraph 1, letter c).

*** Active since year 2000, the Central Guarantee Fund for SMEs has been established by art. 2, par. 100, letter a), of Law no. 662 of December 26th 1996 as a public fund controlled by the Ministry of Economy and Finance in order to facilitate access to credit for Small and Medium-sized Enterprises. According to said Ministry, a total number of 38,921 applications for guarantees have been filed between March 17th 2020 and April 28th 2020, for an overall amount of €3.6 billion..

3. FINANCIAL SUPPORT OF WORKERS

Measures

Executive Decree no. 18 [2020] "Cura Italia"

The Decree law n. 18 of March 17, 2020 “Cura Italia” contains various provisions that regard private employers and their employees, that we mentioned and grouped in this memorandum.

In particular, The Government enacted regulations about the use of masks (art. 16), provisions on income support (art. 19, 20, 21, 22), parental leave, general permits and the use of sick leave (artt. 23, 24, 26), adjournments of terms (artt. 33, 4, 42), the extension of smart working (art. 39), contributions for firms and funds for workers (art. 43,44), collective and individual dismissals (art. 46) and tax credit for the sanitization (art.64).

Sec. 46 (Stay of single and collective dismissal procedures)

From the date of entry into force of the Decree-Law in Comment (March 17, 2020) collective dismissal procedures are stayed for 60 days, also for the companies being previously admitted to the extraordinary salary integration treatment.

During the same period, pending collective dismissal proceedings, started after after 23 February 2020 are stayed. Until the expiry of that 60-day period, the employer, regardless of the number of employees, cannot fire single employees for justified objective reason.

4. LEGAL PROCEEDINGS

Measures

Executive Decree no. 18 [2020] "Cura Italia" - Art. 83

Hearings in civil and criminal proceedings pending before any Italian Court (from 9th March to 15th April 2020) were postponed ex officio after 15th April 2020.

The suspension of the judicial deadline from 9th March to 15th April 2020 concerns all activities related to civil and criminal proceedings (including the introductory writs and applications related to enforcement proceedings, appeals) and generally all procedural pleadings (including summonses and complaints, defence statements, memorandum, enforcements or bankruptcy procedures, deadlines for proof of debts and so on) and for the filings by judges (judgments, orders and any other measures).


Executive Decree no. 18 [2020] "Liquidità" - Art. 36

The suspension period for hearings and judicial deadlines was extended until 11 May 2020.

5. INSOLVENCY

Legal basis

  • Law Decree no. 23 of April 8th, 2020 ("Decreto Liquidità") adopted by the Italia Government, introducing “Urgent measures regarding access to credit and tax fulfillments for companies, special powers in strategic sectors, as well as interventions in health and work matters, the extension of administrative and procedural deadlines” (also called “Decreto Liquidità”), in order to contain the negative effects of Covid-19 on the Italian socioeconomic system.

  • Law Decree no. 34/2020 ("Decreto Rilancio")


Measures

Law Decree no. 23 of April 8th 2020 (s.c. "Decreto Liquidità") introduced the following measures with reference to bankruptcy applications, procedures of composition with creditors and debt restructuring agreements.

5.1 - Measures regarding the procedures of composition with creditors and debt restructuring agreement

The Government has adopted some specific measures in order to preserve the procedures of composition with creditors and debt restructuring agreements promoted before the insurgency of the epidemiological emergency from the risk of jeopardising their real chances of success, with potential adverse trickle-down effects on the preservation of large business complexes.

Particularly, article 9 of the Decreto Liquidità provides the following measures distinguishing between alternative to insolvency proceedings already homologated and those pending and waiting for final Court’s approval.

  • Procedures already approved as at February 23rd 2020:

The deadlines for the performance of the proposals to creditors and of the homologated agreements with creditors expiring between February 23rd 2020 and June 30th 2020 are ex lege extended by six months.

The Decree does not specify whether the above extension also applies to the deadlines following the extended time limits.

  • Procedures pending as at February 23rd 2020:

(i) the debtor can apply to the Court, until the hearing scheduled for the homologation (except for agreement proposals already been voted and rejected), in order to be granted an extension up to 90 days to submit a new plan and a new agreement proposal pursuant to art. 161 of the Italian Bankruptcy Law (Royal Decree no. 267 of March 16th 1942 and subsequent amendments, hereinafter also “IBL”) or a new debt restructuring agreement according to art. 182-bis IBL, detailing which events supervened justify said extension with specific reference to circumstances related to the Covid-19 pandemic.
The Decree does not specify whether a new attestation pursuant
to art. 161, paragraph 3, IBL, is required or not.
The above 90-day deadline cannot be further extended and runs from the date of granting of the extension itself by decree of the Court, which is issued after evaluation of the circumstances invoked by the debtor and, in case of composition with creditors, upon prior obtaining of a positive opinion from the Judicial Commissioner.
(ii) In case the debtor has already filed a petition for composition with creditors with rights reserved to file ancillary documents at a later stage (s.c. concordato preventivo in bianco” or “concordato prenotativo”) and the Court has already extended the deadline to file the relevant proposal, the debtor may request a further extension up to 90 days, providing also in this case grounds justifying the request due to circumstances related to Covid-19 pandemic.
(iii) Debtor willing to modify exclusively the time limits for the performance of composition with creditors or of debt restructuring agreement, shall file a request to this end within the hearing scheduled for homologation. The petition for the new deadlines shall not exceed 6 months over the original time limits and shall be accompanied by the documents attesting the grounds as specified above.
Also in this case, the Court shall verify grounds for the extension and grant it upon prior positive opinion from the Judicial Commissioner.

5.2 - Measures related to pending bankruptcy applications

The Decree also focuses on bankruptcy applications filed or to be submitted between March 9th and June 30th 2020, providing for their inadmissibility (c.f. art. 10 Decreto Liquidità). Inadmissibility also concerns banckruptcy applications within the context of extraordinary administration procedures of large firms (“amministrazione straordinaria di grandi imprese”) and compulsory administrative liquidation (“liquidazione coatta amministrativa”) procedures. This is without prejudice to the right for the public prosecutor to file a bankruptcy application with request for precautionary and/or cautionary measures.

5.3 - Postponement of the entry into force of the new Crisis and Insolvency Code

Article 5 of the Decree states the postponement to September 1st 2021 of the entry into force of the new Business crises and Insolvency Code (Legislative Decree n. 14 of January 12th 2019).

5.4 - Decreto Rilancio: consultants and experts to manage the crisis

In order to safeguard and reinforce activities and employment levels of large enterprises which are experiencing an economic and financial crisis, pursuant to article 39 of Law Decree no. 34 of May 19th 2020, the Ministry of Economic Development will be allowed, until 2022, to avail itself of consultants and experts - chosen by a comparative selection through public notice - to manage the crisis by ensuring the preservation and the reinforcement of activities and employment levels.


6. LEASES AND TENANCIES

Measures

6.1. - Leases of real estate for commercial use – tax credit measures

Pursuant to article 65 of Law Decree no. 18/2020 (now therefore also referred to as “Cura Italia” Law Decree) entrepreneurs running small shops and stores under lease contracts are granted, for the year 2020, a tax credit corresponding to 60 percent of the amount of the monthly fee paid for March 2020.

Such tax benefit is limited to buildings falling under commercial cadastral category (“C/1”) and it does not apply to the business activities listed in annexes 1 and 2 of the Decree of Prime Minister of March 11th 2020 (i.e. core activities that were not affected by the lock-down) and can only be offset with other lessees’ tax liabilities pursuant to article 17 of Legislative Decree no. 241 of July 9th 1997.

Therefore the law did not introduce any right to suspension or reduction of the fee.

The Government is working on extending the scope of these measures in order to include professional firms, restaurants, small shopping centers and industrial buildings.

Article 28 of Law Decree no. 34 of May 19th 2020 provides for individuals carryng out business activities, art or profession, with revenues not exceeding €5 million in the fiscal prior to the entry into force of the Decree, a tax credit equal to the 60% of the monthly amount of the rent deriving from non-residential building.

The tax credit is established also in favor of non-commercial entities - including third sector entities and recognized religious entities - limited to non-residential real estate used for their institutional activities.

The tax credit is proportionated to the amount of rents paid, in 2020, with reference to each of the months of March, April and May and under the condition that the potential beneficiaries have suffered a decrease of at least 50% of the business income in the month of reference compared to the same month of the previous fiscal year.

The tax credit may be used in the tax return relating to the tax period in which expense incurred or in compensation.

6.2 - Tenancies of real estate for residential use – ordinary measures available

Cura Italia Law Decree did not introduce any extraordinary measure (e.g. reduction or suspension of rent, tax benefits, etc.) to support the tenants struggling during Covid-19 pandemic.

However, the following ordinary measures may be invoked by tenants:

- article 91 of the above Cura Italia Law Decree providing exemption from liability of the obliged party for the purposes and within the meaning

of articles 1218 and 1223 of the Italian Civil Code (“ICC”), including as regards the application of any forfeiture or penalties related to late or non-performance;

- article 1467 ICC, giving grounds to terminate a contract when it becomes too difficult to perform its obligations (payment of rent for tenants) due to extraordinary and unforeseeable events (so-called “force majeure”). The party against whom termination is claimed can offer to modify the contract terms and conditions equitably in order to avoid termination. Therefore, tenants and landlords may try and reach an agreement, for instance, to temporarily reduce the rent. Such agreement shall be then registered with the Revenue Agency within 30 days (it is possible to proceed with such registration by electronic means) and the landlord will pay the tax on the updated lower rent.