In Italy, a draft law aiming at amending Italian Law No. 185 of 9 July 1990 is currently under discussion in the Senate. The draft act, presented on 11 August 2023 by the Minister of Foreign Affairs and International Cooperation of the Italian Republic, in agreement with all the other Ministers involved (i.e., the Minister of Defence, the Minister of Interior, the Minister of Justice, the Minister of Economy and Finances and the Minister of Enterprises and Made in Italy), constitutes an important news in the framework of the current Italian national law on the handling of military goods, which has remained almost unchanged over the last ten years.
The goal pursued by the Italian Government with this bill is to make national legislation more responsive to the challenges arising from the changing international environment, including by improving political coordination in the adoption of decisions on trade in military goods.
Main features of the bill
Inter-ministerial Committee for the exchange of defence-related military goods (CISD)
The main novelty concerns the role of the Inter-ministerial Committee for the exchange of defence-related military goods (“CISD”, according to the Italian acronym), a body originally established by Law No. 185/1990, but subsequently abolished.
In the Government’s intentions, the CISD would be composed by the President of the Council of Ministers and by all the other Ministers involved (see above). The functions of secretary, on the other hand, would belong to the Undersecretary to the Presidency of the Council of Ministers acting as Secretary of the Council of Ministers.
According to the provisions of the bill, the CISD would be assigned the following functions:
- Enforcement of the prohibitions set forth in Article 1 of Law No. 185/1990, also in relation to specific materials, recipients or operations;
- Definition of the general criteria for the application of the prohibitions set forth in art. 1 of Law no. 185/1990, except for the prohibitions deriving from embargoes decided by the UN, the EU or the OSCE, which are automatically applicable;
- Definition of the general orientations for the application of the law and for the exchange policies in the defence sector as well as the general directives for the transfers of military goods, the adoption of which is currently the responsibility of the Advisory Committee under art. 7 of Law no. 185/1990 (the so-called “CIPE”, according to the Italian acronym).
For the time being, the functions of the CIPE for the issuance of authorisations for the export of military goods provided for by Article 13 of the law in question would remain unaffected.
Simplification of burdens on companies
The bill in its current version also introduces important simplifications in the activities carried out by entities enabled to file to the Italian National Authority (“UAMA”, according to the Italian acronym) license applications for operations concerning military goods, as enlisted with the National Register of Companies (“RNI”, according to the Italian acronym).
In particular, ‘in consideration of the long periods of time ordinarily encountered in the issuance of the necessary certificates by the authorities of the countries receiving the transactions‘, the bill would amend Article 20 of Law No. 185/1990, extending the deadline for submitting the documentation proving the conclusion of the transfer of military goods from the current 180 days to 12 months. This extension of the deadline is associated with an increase of the minimum and maximum of the administrative sanction provided for by Article 25-bis, paragraph 4, for the failure to comply with the obligation of proof referred to in the aforementioned Article 20, which would increase the minimum from EUR 150.00 to EUR 500.00 and the maximum from EUR 1,500.00 to EUR 2,000.00.
Finally, the obligation to notify UAMA (and the subsequent need for its authorisation) at the beginning of contractual negotiations for the export, import, transit and brokering of military goods with European Union countries, which had already been de facto abolished by UAMA through the indications provided in UAMA’s Directive No 20468 of 19 June 2018 (the so-called Export Directive), would be formally eliminated.
Identification of entities subject to the Article 27 notification obligation
In the financial field, the bill specifies the entities that are subject to the obligation to notify all banking transactions concerning military goods under Article 27. In particular, this obligation would fall expressly on the banks and financial intermediaries referred to in Articles 13 and 106 of the Consolidated Law on Banking and Credit, referred to in Legislative Decree No 385 of 1 September 1993.
On 21 November 2023, the bill was assigned to the 3rd Standing Committee of the Senate (Foreign Affairs and Defence) for reporting, after having initially been assigned to the same Committee for drafting. This change is likely to result in a longer timeframe for the approval of the text, since, unlike the examination in a drafting capacity (in which the Commission deliberates on the individual articles and the Assembly only votes on the act), the debate in a reporting capacity provides for the possibility of further amendments to the text once it is transmitted to the Senate, where it is then voted on first article by article and finally as a whole.
As things stand, also in light of indications from ministerial sources, it appears likely that the final text will be approved and published in the Italian Official Journal around mid-2024. In the coming months, Studio Legale Padovan will continue to monitor the evolution of the legislative process in question and update you in the event of any developments.