6. State’s special powers

Decree-Law No. 21 of 15 March 2012, converted into law with Law No. 56 of 11 May 2012, contains rules concerning special powers on corporate ownership in the defence and national security sector, as well as for the activities of strategic importance in energy, transportation and communication sectors. The Decree-Law affects regulation of the so-called special powers, by re-writing conditions and modalities of exercise of the State’s special powers for privatized companies, in order to adequate the national regulation to the rules provided by Treaty on the Functioning of the European Union.

In summary, with regard to energy sector, the Decree-Law confers to the Government: (i) a power of veto in relation to resolutions, actions or operations adopted by companies that own strategic assets in energy sector, which involve a loss of control or availability of the assets as well as the change of their destination; (ii) a power to impose certain duties or to oppose the acquisition by non-EU persons, of controlling interests in said companies.

Pursuant to Decree-Law 21/2012, Snam is required to issue notification in the event of changes to the ownership, control, availability or purpose of networks, plants, assets and relations of strategic importance to the national interest (Significant Assets)¹⁸. This notification must be made by the Company to the Prime Minister within 10 days, and in any case no later than the implementation of the resolution, deed or transaction that affects the Significant Assets. Resolutions passed by the Shareholders’ Meeting or the management bodies concerning the transfer of Subsidiaries that hold the aforementioned Significant Assets must be reported within the same timeframe. Within 15 days of the notification, the Prime Minister may, by issuing a decree adopted pursuant to a resolution of the Council of Ministers:

1. declare a veto;
2. impose specific provisions or conditions, if this is sufficient to ensure the protection of the public interest.

If 15 days have passed since the notification and the Prime Minister has not adopted any measures, the operation may be carried out.

In accordance with the same procedures and time frames, notification must also be made if the acquisition of equity investments in companies that hold Significant Assets (such as Snam) by non-EU entities results in a stable holding for the acquirer, due to its assumption of control of the Company. If the acquisition poses the threat of serious harm to the fundamental interests of the state, the Prime Minister may:

1. make the validity of the acquisition conditional on the acquirer’s assumption of commitments intended to guarantee the protection of the aforementioned interests;
2. oppose the acquisition, in exceptional cases involving risks to the protection of the aforementioned interests that cannot be eliminated through the assumption of specific commitments.

The law also stipulates that such powers may be exercised “exclusively on the basis of objective and non-discriminatory criteria”.