The International Comparative Legal Guide to Securitisation 2016 Edition

The International Comparative Legal Guide to:
A practical cross-border insight into securitisation work
Published by Global Legal Group, with contributions from:
A&L Goodbody
Association for Financial Markets in Europe
Ali Budiardjo, Nugroho, Reksodiputro
Ashurst LLP
Baker & McKenzie – Santiago
Bell Gully
Brodies LLP
Caspi & Co.
Cervantes Sainz
Cuatrecasas, Gonçalves Pereira
Drew & Napier LLC
Elvinger Hoss Prussen
Estudio Beccar Varela
Freshfields Bruckhaus Deringer LLP
Frost & Fire Consulting
Gárdos Füredi Mosonyi Tomori Law Office
K&L Gates Studio Legale Associato
King & Spalding LLP
King & Wood Mallesons
Latham & Watkins LLP
LECAP
Levy & Salomão Advogados
Maples and Calder
McMillan LLP
Nishimura & Asahi
Pestalozzi Attorneys at Law Ltd
Roschier Advokatbyrå AB
Schulte Roth & Zabel LLP
Shearman & Sterling LLP
Sidley Austin LLP
Stibbe
Tsibanoulis & Partners
Verita Legal (K. Argyridou & Associates LLC)
Vieira de Almeida & Associados –
Sociedade de Advogados, R.L.
Wadia Ghandy & Co.
9th Edition
Securitisation 2016
ICLG

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© Published and reproduced with kind permission by Global Legal Group Ltd, London
Chapter 26
Andrea Pinto
Vittorio Salvadori di Wiesenhoff
Italy
of Italy, and are based on the average overall effective rate
(Tasso Effettivo Globale Medio) charged by banks and other
financial institutions during the quarter ending three months
before the relevant period.
(b) Under Italian law, and more specifically under article 1224
of the Italian Civil Code, a creditor may, in the event of non-
payment by the relevant debtor, demand the default interest
fixed by the law from the day of the default, even if it was not
due previously and even if the relevant creditor cannot prove
that it has suffered any damage. In any case, the relevant parties
may agree an interest rate higher than the legal interest rate.
(c) Under certain provisions of Italian law (e.g. article 182-septies
of Royal Decree no. 267, dated 16 March 1942, the “Italian
Bankruptcy Law”), the relevant debtor may obtain from its
creditor a so-called moratorium, which ensures the debtor
suspends its payment obligation for a period agreed with its
creditor.
(d) The European Union consumer protection legislation has
been recognised in a consolidated act called “Codice del
Consumo” according to the Legislative Decree n. 206, dated
6 September 2005 (the “Italian Consumers’ Code”). The
Italian Consumers’ Code provides for certain instruments in
order to protect the interest of consumers when they enter
into a contract with a professional entity.
According to the Italian Civil Code, certain provisions afford
consumers protection, such as those on transparency in
banking and consumer credit agreements, insurance contracts
and regulation of the retail trade.
Under articles 121 and ff. of the Legislative Decree no. 385,
dated 1 September 1993 (“Italian Banking Law”), consumer
protection legislation applies to personal loans that are
qualified as consumer loans. For example, under paragraph 2
of article 125-septies of the Italian Banking Law, the relevant
bank shall inform the consumer in relation to the assignment
of its loan agreement.
1.3 Government Receivables. Where the receivables
contract has been entered into with the government or
a government agency, are there different requirements
and laws that apply to the sale or collection of those
receivables?
The Royal Decree no. 2440, dated 24 November 1923 (the “2440
Royal Decree”) provides for a specific regulation on the assignment
of government receivables. According to article 69 of the 2440
Royal Decree, the assignment of government receivables shall be
effective only if the following requirements are fulfilled:
(i) the assignment must be executed as a public deed (atto
pubblico) or authenticated public deed (scrittura privata
autenticata);
1 Receivables Contracts
1.1 Formalities. In order to create an enforceable
debt obligation of the obligor to the seller: (a) is it
necessary that the sales of goods or services are
evidenced by a formal receivables contract; (b) are
invoices alone sufficient; and (c) can a receivable
“contract” be deemed to exist as a result of the
behaviour of the parties?
(a) Under a general principle of Italian law, a specific formality
is not required in order to execute contracts or give evidence
of such execution. However, it must be considered that,
according to certain provisions of Italian law (e.g. article
1350 of the Italian Civil Code) the written form is required
for the validity of certain contracts, in the absence of which
that contract shall be considered null and void. In addition,
the written form is needed for providing evidence before a
Court in such cases provided for under Italian law (e.g. article
1888 of the Italian Civil Code).
(b) Invoices can be mainly considered as written evidence of
trade between the parties. Nonetheless, according to article
633 of the Italian Civil Procedure Code, if a creditor has a
claim that can be considered as liquid, certain and payable,
the same creditor may use the invoice as instrument in order
to obtain from the relevant Court an injunction to pay against
the debtor.
(c) A sale of receivables contract cannot be deemed to exist as a
result of the behaviour of the parties. In any case, pursuant
to article 1362 of the Italian Civil Code, an Italian Court may
assess the behaviour of the parties only as criteria necessary
in order to understand the intention of the parties which shall
be compared with any other external elements of the contract
(including but not limited to the behaviour of the parties).
1.2 Consumer Protections. Do your jurisdiction’s
laws: (a) limit rates of interest on consumer credit,
loans or other kinds of receivables; (b) provide a
statutory right to interest on late payments; (c) permit
consumers to cancel receivables for a specified
period of time; or (d) provide other noteworthy rights
to consumers with respect to receivables owing by
them?
(a) The rate of interest payable under any credit agreement
shall not be in breach of Law n. 108, dated 7 March 1996
(“Disposizioni in materia di usura” − Italian usury law),
which expressly sets the interest rate thresholds applicable
to receivables. The usury thresholds are updated quarterly
by the Italian Treasury Department, in agreement with Bank

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Italy
2.3 Freedom to Choose Foreign Law of Non-Resident
Seller or Obligor. If the seller is resident in your
jurisdiction but the obligor is not, or if the obligor
is resident in your jurisdiction but the seller is not,
and the seller and the obligor choose the foreign
law of the obligor/seller to govern their receivables
contract, will a court in your jurisdiction give effect to
the choice of foreign law? Are there any limitations
to the recognition of foreign law (such as public
policy or mandatory principles of law) that would
typically apply in commercial relationships such as
that between the seller and the obligor under the
receivables contract?
As a general principle of law, set forth also under the Rome I
Regulation, the parties to a contract may freely choose the law
applicable to the contract, also indicating the relevant jurisdiction
that can solve any dispute which may arise in connection with the
interpretation and/or the execution of the abovementioned contract,
provided that the choice of the jurisdiction shall not conflict with
any overriding mandatory provision under Italian law. In addition,
please note that specific limitations to the recognition of foreign law
(such as public policy or mandatory principles of law) do not apply
to commercial relationships.
2.4 CISG. Is the United Nations Convention on the
International Sale of Goods in effect in your
jurisdiction?
Yes, it is in effect.
3 Choice of Law – Receivables Purchase
Agreement
3.1 Base Case. Does your jurisdiction’s law generally
require the sale of receivables to be governed by
the same law as the law governing the receivables
themselves? If so, does that general rule apply
irrespective of which law governs the receivables (i.e.,
your jurisdiction’s laws or foreign laws)?
In the case described above, article 14 of the Rome I Regulation
may apply, since it governs the voluntary assignment of contractual
(and non-contractual) obligations in conflict of laws. Therefore,
under article 14, paragraph 1, of the Rome I Regulation, the
validity of the assignment as between the assignor and assignee
shall be governed by the law that applies to the contract between
them under the Rome I Regulation. In addition to the above, the
law governing the assigned or subrogated claim shall determine its
assignability, the relationship between the assignee and the debtor,
the conditions under which the assignment or subrogation can be
invoked against the debtor and whether the debtor’s obligations
have been discharged.
(ii) the government receivables assigned are all vis-à-vis a single
debtor; and
(iii) the relevant assignment shall be accepted by the assigned
debtor with date certain in law or giving notice to the assigned
debtor by way of court bailiff (ufficiale giudiziario).
In addition, under article 117 of Legislative Decree no. 163, dated
12 April 2006, the assignment of the receivables arising from a
procurement agreement is allowed by a contractor towards banks
or other financial entities only if the following requirements are
fulfilled:
(i) the assignment must be executed as public deed (atto
pubblico) or authenticated public deed (scrittura privata
autenticata);
(ii) the relevant assignment shall be accepted by the assigned
debtor with date certain at law or giving notice to the assigned
debtor by way of court bailiff (ufficiale giudiziario); and
(iii) the assignment is valid and effective towards the public entity
if it is not rejected by the public entity within 45 days from
receipt of the relevant notification.
Also in the context of a securitisation transaction, should an
assignment of government receivables be realised, according
to article 4bis of Law no. 130, dated 30 April 1999 (“Italian
Securitisation Law”), no further formalities than those set out
under the Italian Securitisation Law are required in order to make
the assignment enforceable against the Public Administration.
2 Choice of Law – Receivables Contracts
2.1 No Law Specified. If the seller and the obligor do not
specify a choice of law in their receivables contract,
what are the main principles in your jurisdiction that
will determine the governing law of the contract?
The EU Regulation no. 593, dated 17 June 2008 on the Law
Applicable to Contractual Obligations (the “Rome I Regulation”)
comes into force on 17 December 2009 and will be directly
applicable in all EU Member States (including Italy).
Pursuant to article 4, paragraph 1 of the Rome I Regulation, in the
absence of choice of law by the relevant parties, the law governing
the contract shall be determined as that which was most closely
connected to such contract, provided the contract does not fall
within one of the categories listed from letter (a) to (h) of the same
paragraph 1.
2.2 Base Case. If the seller and the obligor are both
resident in your jurisdiction, and the transactions
giving rise to the receivables and the payment of
the receivables take place in your jurisdiction, and
the seller and the obligor choose the law of your
jurisdiction to govern the receivables contract, is
there any reason why a court in your jurisdiction
would not give effect to their choice of law?
There would not be any reason why the Italian Courts would not
give effect to the choice of Italian law to govern the receivables
contract; in fact, the Italian Courts take into consideration the choice
of law made by the relevant parties of the contract.
K&L Gates Studio Legale Associato Italy

Italy
3.5 Example 4: If (a) the obligor is located in your
jurisdiction but the seller is located in another
country, (b) the receivable is governed by the
law of the seller’s country, (c) the seller and the
purchaser choose the law of the seller’s country to
govern the receivables purchase agreement, and
(d) the sale complies with the requirements of the
seller’s country, will a court in your jurisdiction
recognise that sale as being effective against the
obligor and other third parties (such as creditors or
insolvency administrators of the obligor) without
the need to comply with your jurisdiction’s own sale
requirements?
In accordance with article 11, paragraph 1, of the Rome I Regulation,
a contract concluded between persons who, or whose agents, are in
the same country at the time of its conclusion, is formally valid if
it satisfies the formal requirements of the law which governs it in
substance under the Rome I Regulation or the law of the country
where it is concluded, so that the Italian Courts would recognise
the relevant sale as being effective and the seller shall not need to
comply with the Italian sale requirements.
3.6 Example 5: If (a) the seller is located in your
jurisdiction (irrespective of the obligor’s location),
(b) the receivable is governed by the law of your
jurisdiction, (c) the seller sells the receivable to
a purchaser located in a third country, (d) the
seller and the purchaser choose the law of the
purchaser’s country to govern the receivables
purchase agreement, and (e) the sale complies with
the requirements of the purchaser’s country, will a
court in your jurisdiction recognise that sale as being
effective against the seller and other third parties
(such as creditors or insolvency administrators of the
seller, any obligor located in your jurisdiction and any
third party creditor or insolvency administrator of any
such obligor)?
Taking into account the answer given to question 3.2 above, and
also according to article 14, paragraph 2 of the Rome I Regulation,
in order for an Italian Court to recognise the relevant sale as being
effective in the case mentioned above, the requirements provided
for under the Italian law must be fulfilled together with those of the
law governing the sale and purchase agreement.
4 Asset Sales
4.1 Sale Methods Generally. In your jurisdiction what are
the customary methods for a seller to sell receivables
to a purchaser? What is the customary terminology –
is it called a sale, transfer, assignment or something
else?
The customary method for a seller to sell receivables to a purchaser
under Italian law is by means of a deed between the assignor and
the assignee. Pursuant to article 1260 of the Italian Civil Code, a
creditor may assign its receivable, gratuitously or for consideration,
even without the consent of the debtor, provided that it is not
forbidden by law and subject to certain limitations arising from the
specific characteristics of the receivables.
The customary terminology used in order to identify the transfer of
receivables is to “assign” (cedere) the relevant receivables.
3.2 Example 1: If (a) the seller and the obligor are located
in your jurisdiction, (b) the receivable is governed
by the law of your jurisdiction, (c) the seller sells
the receivable to a purchaser located in a third
country, (d) the seller and the purchaser choose the
law of your jurisdiction to govern the receivables
purchase agreement, and (e) the sale complies with
the requirements of your jurisdiction, will a court in
your jurisdiction recognise that sale as being effective
against the seller, the obligor and other third parties
seller and the obligor)?
In the case described above, article 11, paragraph 2 of the Rome I
Regulation may apply, since a contract concluded between persons
who, or whose agents, are in different countries at the time of its
conclusion, is formally valid if it satisfies the formal requirements of
the law which governs it in substance under the Rome I Regulation,
or of the law of either of the countries where either of the parties
or their agent is present at the time of conclusion, or of the law of
the country where either of the parties had his habitual residence at
that time. In such case, an Italian Court would recognise that sale
as being effective.
3.3 Example 2: Assuming that the facts are the same as
Example 1, but either the obligor or the purchaser
or both are located outside your jurisdiction, will a
court in your jurisdiction recognise that sale as being
effective against the seller and other third parties
seller), or must the foreign law requirements of the
obligor’s country or the purchaser’s country (or both)
be taken into account?
Taking into account the answer given to question 3.1 above,
according to article 14, paragraph 2 of the Rome I Regulation, the
law governing the assigned or subrogated claim shall determine its
assignability, the relationship between the assignee and the debtor,
the conditions under which the assignment or subrogation can be
invoked against the debtor, and whether the debtor’s obligations
have been discharged. In such case, an Italian Court would
recognise that sale as being effective.
3.4 Example 3: If (a) the seller is located in your
jurisdiction but the obligor is located in another
country, (b) the receivable is governed by the law
of the obligor’s country, (c) the seller sells the
receivable to a purchaser located in a third country,
(d) the seller and the purchaser choose the law of the
obligor’s country to govern the receivables purchase
agreement, and (e) the sale complies with the
requirements of the obligor’s country, will a court in
your jurisdiction recognise that sale as being effective
against the seller and other third parties (such as
creditors or insolvency administrators of the seller)
without the need to comply with your jurisdiction’s
own sale requirements?
Due to the fact that pursuant to the Rome I Regulation, the parties to
a contract can freely choose the governing law (including a foreign
law), in the case described above, the Italian Courts would recognise
the relevant sale as being effective and the seller would not need
to comply with the Italian sale requirements. In any case, please
note that the choice of law made by the parties may not prevent
the application by an Italian Court of the overriding mandatory
provisions provided for under the Italian law.

Italy
Pursuant to article 2021 of the Italian Civil Code, recorded
instruments are transferred by means of a double annotation (doppia
intestazione) recorded on the instrument and on the issuer’s register,
entitling the holder of a recorded instrument to exercise the right
mentioned therein.
Pursuant to article 2003 of the Italian Civil Code, bearer instruments
are transferable by delivery, so that the holder shall be entitled to
exercise the rights mentioned therein upon presentment of the
instrument.
Pursuant to article 2011 of the Italian Civil Code, the order securities
(titoli all’ordine) are transferred by endorsement, which ensures the
transfer of all the rights inherent in the instrument.
4.4 Obligor Notification or Consent. Must the seller or the
purchaser notify obligors of the sale of receivables in
order for the sale to be effective against the obligors
and/or creditors of the seller? Must the seller or the
purchaser obtain the obligors’ consent to the sale
of receivables in order for the sale to be an effective
sale against the obligors? Whether or not notice is
required to perfect a sale, are there any benefits to
giving notice – such as cutting off obligor set-off
rights and other obligor defences?
Taking into account the answer given to question 4.2 above, the
assignor shall alternatively notify the assigned debtor or receive an
acceptance of the assignment by the same assigned debtor, in order
for the sale to be effective against the obligors and/or creditors of the
seller, so that the assigned debtor’s consent is not required.
In any case please note that, according to article 1248, paragraph 2,
of the Italian Civil Code, there are benefits to giving notice; in fact,
if the obligor has expressly accepted the assignment made by the
creditor in favour of a third party, the obligor is not entitled to set-off
the debt he is owed by the assignor against the debt he owes to the
assignee, even if the debt owed by the assignor existed prior to the
transfer of the receivables.
In addition to the above, for the purposes of article 1248 of the
Italian Civil Code, in the context of a securitisation transaction, the
effects of the notification are produced by the relevant registration
of the transfer and the publication of the notice of the assignment in
the Italian Official Gazette.
4.5 Notice Mechanics. If notice is to be delivered to
obligors, whether at the time of sale or later, are
there any requirements regarding the form the notice
must take or how it must be delivered? Is there any
time limit beyond which notice is ineffective – for
example, can a notice of sale be delivered after the
sale, and can notice be delivered after insolvency
proceedings against the obligor or the seller have
commenced? Does the notice apply only to specific
receivables or can it apply to any and all (including
future) receivables? Are there any other limitations or
considerations?
Taking into account the answer given to question 4.2 above
− pursuant to article 1264 of the Italian Civil Code − in order
to perfect a valid assignment of receivables, the assignor shall
alternatively notify the assigned debtor or receive an acceptance of
the assignment by the same assigned debtor.
In relation to the possibility to have a time limit beyond which a
notice to obligors is ineffective, there is no specific provision
under Italian law. Nevertheless, pursuant to article 45 of the
Italian Bankruptcy Law, any formality that is necessary to make a
transaction enforceable vis-à-vis third persons shall have no effect
4.2 Perfection Generally. What formalities are required
generally for perfecting a sale of receivables? Are
there any additional or other formalities required for
the sale of receivables to be perfected against any
subsequent good faith purchasers for value of the
same receivables from the seller?
In order to perfect a valid assignment of receivables, pursuant to
article 1264, paragraph 1, of the Italian Civil Code, the assignor shall
alternatively notify to the assigned debtor or receive an acceptance
of the assignment by the same assigned debtor. In case the same
receivable has been assigned, through following assignments, to a
different assignee, then – pursuant to article 1265 of the Italian Civil
Code – the first assignment in respect of which the assigned debtor
has been notified, or which the assigned debtor has accepted and
having a date certain in law (data certa), shall prevail in respect of
the other assignments.
In the context of a trade receivables securitisation transaction,
the relevant assignment shall be perfected upon the filing of the
assignment deed with the relevant Companies’ Register and the
publication of a notice of the assignment in the Italian Official
Gazette. In addition, pursuant to article 4 of the Italian Securitisation
Law, the parties may decide to implement the less burdensome
regime provided for by Law no. 52, dated 21 February 1991 (the
“Italian Factoring Law”) in order to ensure that the assignment
of receivables is enforceable as against the third party creditors
of the assignor. In such case, the assignment may be perfected if
the relevant parties alternatively: (i) publish in the Italian Official
Gazette a short form notice indicating the assignor, the assignee and
the relevant transfer date; or (ii) apply the provisions set forth under
article 5, paragraphs 1,1bis and 2 of the Italian Factoring Law.
In case of the assignment of receivables, according to Legislative
Decree no. 170, dated 21 May 2004 (the “170 Decree”), which
sets forth the discipline for security over financial collateral, under
article 2, paragraph 1, letter (b) of the 170 Decree, in order to have a
date certain in law (data certa), shall be sufficient to record the cash
standing on the relevant account of the assignor.
4.3 Perfection for Promissory Notes, etc. What additional
or different requirements for sale and perfection
apply to sales of promissory notes, mortgage loans,
consumer loans or marketable debt securities?
Pursuant to articles 24 and ff. of the Royal Decree no. 1669, dated 14
December 1933, in order to assign promissory notes, the seller shall
endorse them in favour of the purchaser.
In relation to the perfection of the sale of a mortgage loan, through
an assignment agreement, pursuant to article 2843 of the Italian
Civil Code, the assignment must be recorded in the competent land
register offices, while for the sale of consumer loans no specific
formalities are required.
In addition, financial instruments negotiated in the market (including
debt securities), shall be issued in dematerialised form, according to
Article 83bis and ff. of the Legislative Decree no. 58, dated 24 February
1998 (the “Italian Consolidated Law on Finance”), and held by
a centralised securities management company (società di gestione
accentrata). In fact, pursuant to article 86 of the Italian Consolidated
Law on Finance, the transfer of rights attached to financial instruments
ondepositisallowed,sothatthepersondepositingfinancialinstruments
admitted to the system may, through the depositary and in accordance
with the methods indicated in the relevant services regulation, request
delivery of a corresponding quantity of financial instruments of the
same type on deposit with the central depository.

Italy
as effective against the assignee unless it is proved he knew of it at
the time at which the assignment was made.
In case a sale of the going concern of a company occurs, the
assignment of receivables relating to the going concern is valid
and effective vis-à-vis third parties, even without the consent of the
debtor, as from the date of the filing of the relevant notice with the
competent Companies Register.
4.8 Identification. Must the sale document specifically
identify each of the receivables to be sold? If so, what
specific information is required (e.g., obligor name,
invoice number, invoice date, payment date, etc.)?
Do the receivables being sold have to share objective
characteristics? Alternatively, if the seller sells all
of its receivables to the purchaser, is this sufficient
identification of receivables? Finally, if the seller sells
all of its receivables other than receivables owing by
one or more specifically identified obligors, is this
sufficient identification of receivables?
Under a general principle of Italian law, the contract must specifically
indicate the object (oggetto) of the same contract, which must be
identified or identifiable according to article 1346 of the Italian Civil
Code. However, pursuant to Article 1262 of the Italian Civil Code,
the assignor shall deliver to the assignee the documents evidencing
the receivables which are in his possession.
In the context of a securitisation transaction, there are specific rules
in order to carry out a valid assignment of receivables according to
the Italian Securitisation Law. In particular, the receivables may
be identified as a pool (in blocco), when they consist of a plurality
of claims identified as credits, debts and contracts which have a
common element of identification (rapporti giuridici individuabili
in blocco) as stated under the Bank of Italy regulations (istruzioni
di vigilanza di Banca d’Italia). In addition, according to article 58,
paragraph 2, of the Italian Banking Law, the assignee bank shall
give notice of the effected assignment, filing it with the Companies’
Register and via publication in the Italian Official Gazette.
4.9 Respect for Intent of Parties; Economic Effects on
Sale. If the parties describe their transaction in the
relevant documents as an outright sale and explicitly
state their intention that it be treated as an outright
sale, will this description and statement of intent
automatically be respected or will a court enquire into
the economic characteristics of the transaction? If the
latter, what economic characteristics of a sale, if any,
might prevent the sale from being perfected? Among
other things, to what extent may the seller retain:
(a) credit risk; (b) interest rate risk; (c) control of
collections of receivables; or (d) a right of repurchase/
redemption without jeopardising perfection?
Pursuant to article 1362 of the Italian Civil Code, an Italian Court
may assess the behaviour of the parties only as a criteria necessary
to understand the intent of the same parties, with the aim of carrying
out a specific transaction. In this respect, the intent shall prevail
over any other external element.
In addition to the above, according to article 1267 of the Italian Civil
Code, the assignor is not responsible for the solvency of the debtor,
unless he has undertaken to guarantee it. In this case the assignor is
liable within the limit of what he has received, and any agreement
directed toward increasing its liability shall be without any effect.
The seller may retain credit risk, interest rate risk, control of
collections of receivables, or a right of repurchase/redemption, but
it may jeopardise the perfection of the assignment.
against the creditors if completed after the date of adjudication in
bankruptcy. Should the assignment deed have been entered during
the hardening period (periodo sospetto) and the bankruptcy receiver
proves that the purchaser was aware, or should have been aware, of
the insolvency of the seller, the assignment may be subject to claw-
back. In the context of a securitisation transaction, the hardening
period (periodo sospetto) mentioned above is reduced from six to
three months.
The mechanism of notice also described in the paragraphs above
shall apply both to existing receivables and to any future receivable.
In case of future receivables, the relevant notice shall be delivered
once the relevant deed of assignment has been entered into and the
relevant receivables have arisen.
4.6 Restrictions on Assignment – General Interpretation.
Will a restriction in a receivables contract to the
effect that “None of the [seller’s] rights or obligations
under this Agreement may be transferred or assigned
without the consent of the [obligor]” be interpreted as
prohibiting a transfer of receivables by the seller to
the purchaser? Is the result the same if the restriction
says “This Agreement may not be transferred or
assigned by the [seller] without the consent of
the [obligor]” (i.e., the restriction does not refer to
rights or obligations)? Is the result the same if the
restriction says “The obligations of the [seller] under
this Agreement may not be transferred or assigned by
the [seller] without the consent of the [obligor]” (i.e.,
the restriction does not refer to rights)?
Pursuant to article 1260 of the Italian Civil Code, a creditor may
validly assign its receivables, gratuitously or for consideration, even
without the consent of the debtor, provided that it is not forbidden
by law and subject to certain limitations arising from the specific
characteristics of the receivables, and it being understood that it
would not be enforceable against the assigned debtor.
There may be a different result in case the restriction provides for
a prohibition on assigning the agreement; in fact, such provision
would not prevent the transfer of the receivables, unless the relevant
agreement contains clauses which provide for certain specific
conditions to be fulfilled in order to transfer the receivables.
4.7 Restrictions on Assignment; Liability to Obligor. If
any of the restrictions in question 4.6 are binding,
or if the receivables contract explicitly prohibits
an assignment of receivables or “seller’s rights”
under the receivables contract, are such restrictions
generally enforceable in your jurisdiction? Are there
exceptions to this rule (e.g., for contracts between
commercial entities)? If your jurisdiction recognises
restrictions on sale or assignment of receivables
and the seller nevertheless sells receivables to the
purchaser, will either the seller or the purchaser be
liable to the obligor for breach of contract or tort, or
on any other basis?
Under Italian law, an assignment of receivables may be
considered as valid if it is not forbidden by law, and subject to
certain limitations arising from the specific characteristics of the
receivables. For example, the assignment of receivables of a strictly
personal character is forbidden, and if there is a breach of a specific
prohibition provided for under the Italian law, an Italian Court may
state the invalidity of the relevant assignment.
In addition, according to article 1260, paragraph 2 of the Italian
Civil Code, the parties may exclude the possibility to assign the
receivables but, in any case, such agreement cannot be considered

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4.13 Set-Off; Liability to Obligor. Assuming that a
receivables contract does not contain a provision
whereby the obligor waives its right to set-off against
amounts it owes to the seller, do the obligor’s set-off
rights terminate upon its receipt of notice of a sale?
At any other time? If a receivables contract does
not waive set-off but the obligor’s set-off rights are
terminated due to notice or some other action, will
either the seller or the purchaser be liable to the
obligor for damages caused by such termination?
Pursuant to article 1248, paragraph 1, of the Italian Civil Code,
a debtor who has accepted purely and simply the assignment of
the rights of the creditor to a third party cannot claim against the
assignee the set-off right that he could have claimed against the
assignor.
In addition, pursuant to article 1248, paragraph 2, of the Italian Civil
Code, if the obligor has expressly accepted the assignment made by
the creditor in favour of a third party, the obligor is not entitled to
set-off the debt he is owed by the assignor against the debt he owes
to the assignee, even if the debt owed by the assignor existed prior
to the transfer of the receivables.
In addition to the above, for the purposes of article 1248 of the
Italian Civil Code, in the context of a securitisation transaction,
and pursuant to article 4, paragraph 2 of the Italian Securitisation
Law, the effects of the notification are produced by the relevant
registration of the transfer and the publication of the notice of the
assignment in the Italian Official Gazette. Consequently, from the
date of the publication of the notice or the date of the payment of
the purchase price, the assigned debtors cannot exercise any of the
set-off rights between the receivables which have been purchased
by the SPV and receivables owed by such assigned debtors to the
originator which have arisen after such date.
5 Security Issues
5.1 Back-up Security. Is it customary in your jurisdiction
to take a “back-up” security interest over the seller’s
ownership interest in the receivables and the related
security, in the event that an outright sale is deemed
by a court (for whatever reason) not to have occurred
and have been perfected?
This is not applicable.
5.2 Seller Security. If it is customary to take back-
up security, what are the formalities for the seller
granting a security interest in receivables and related
security under the laws of your jurisdiction, and for
such security interest to be perfected?
5.3 Purchaser Security. If the purchaser grants
security over all of its assets (including purchased
receivables) in favour of the providers of its funding,
what formalities must the purchaser comply with
in your jurisdiction to grant and perfect a security
interest in purchased receivables governed by the
laws of your jurisdiction and the related security?
4.10 Continuous Sales of Receivables. Can the seller
agree in an enforceable manner to continuous sales
of receivables (i.e., sales of receivables as and when
they arise)? Would such an agreement survive and
continue to transfer receivables to the purchaser
following the seller’s insolvency?
According to article 1322 of the Italian Civil Code, the parties
can freely determine the contents of the contract within the limits
imposed by law, so that the seller may agree in an enforceable
manner to continuous sales of receivables.
Pursuant to article 2, paragraph 3, letter e) of the Italian Securitisation
Law, where the securities subject to the securitisation transactions
are placed with professional investors, the purchasing company may
reinvest in other financial activities the amounts arising from the
management of the assigned claims which are not immediately used
to satisfy the obligations arising in connection with the securities.
In addition, the Italian Factoring Law admits the continuous sales of
receivables, provided that certain requirements are fulfilled.
In case of the seller’s insolvency, any agreement shall not survive
and would not be enforceable against the receiver.
4.11 Future Receivables. Can the seller commit in
an enforceable manner to sell receivables to the
purchaser that come into existence after the date of
the receivables purchase agreement (e.g., “future
flow” securitisation)? If so, how must the sale of
future receivables be structured to be valid and
enforceable? Is there a distinction between future
receivables that arise prior to or after the seller’s
insolvency?
Under Italian law, the seller may sell receivables that come into
existence after the date of the receivables purchase agreement only
if, when the sale is perfected, the receivables to be assigned have
come into existence.
Please note that the assignment of present and future receivables
is admitted both in the context of the securitisation and factoring
transaction. In case of a factoring transaction, according to article
3, paragraph 3 of the Italian Factoring Law, an assignment of future
receivables may be carried out only if the contracts from which such
future receivables will arise are executed no later than 24 months
after entering into the relevant assignment deed.
There cannot be any commitment to sell the receivables if they
have not yet come into existence after the seller’s declaration of
insolvency.
4.12 Related Security. Must any additional formalities
be fulfilled in order for the related security to be
transferred concurrently with the sale of receivables?
If not all related security can be enforceably
transferred, what methods are customarily adopted
to provide the purchaser the benefits of such related
security?
By effect of the assignment, pursuant to article 1263 of the Italian
Civil Code, the receivables are transferred to the assignee with any
privileges, real or personal guarantees, and other related security. In
any case, please note that different perfection formalities must be
fulfilled under Italian law in order to grant the effectiveness of the
sale of receivables.

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law of the jurisdiction where the asset is located (i.e. lex rei sitae) in the
event of a movable asset or real asset; or (ii) the law of the domicile
of the creditor, in the event of receivables. In this respect, according
to article 51 of the Italian Private International Law, the Italian Courts
would recognise a foreign law grant of security (for example, an English
law debenture) taken over a bank account located in Italy, provided that
all the relevant perfection formalities have been duly fulfilled.
5.8 Enforcement over Bank Accounts. If security over
a bank account is possible and the secured party
enforces that security, does the secured party
control all cash flowing into the bank account from
enforcement forward until the secured party is repaid
in full, or are there limitations? If there are limitations,
what are they?
Upontheoccurrenceofanenforcementeventandatanytimethereafter,
the proceeds of any and all monetary receivables (crediti pecuniari) of
the pledgor arising, or which will or may arise, from the balance of a
pledged account, shall be for the benefit of the secured creditor and
may be applied towards discharge of the secured obligations.
Upon a bankruptcy proceeding being opened in respect of the
pledgor:
(i) under a general principle of Italian law, the secured creditors,
although they may be considered as privileged creditors,
may recover their credit only at the end of the bankruptcy
proceeding; and
(ii) under article 4 of the Legislative Decree no. 170, dated 21
May 2004, the secured creditors may withhold the amount
standing on the pledged account in order to apply such
amounts in discharge of the secured obligations.
5.9 Use of Cash Bank Accounts. If security over a bank
account is possible, can the owner of the account
have access to the funds in the account prior to
enforcement without affecting the security?
In a standard financing transaction, the pledgor is entitled to utilise
the pledged amount – in accordance with the terms and conditions
provided for under the relevant deed of pledge and/or relevant
finance documents − until the occurrence of an enforcement event
(unless the credited amount constitutes a specific cash reserve).
6 Insolvency Laws
6.1 Stay of Action. If, after a sale of receivables that is
otherwise perfected, the seller becomes subject to
an insolvency proceeding, will your jurisdiction’s
insolvency laws automatically prohibit the purchaser
from collecting, transferring or otherwise exercising
ownership rights over the purchased receivables (a
“stay of action”)? If so, what generally is the length of
that stay of action? Does the insolvency official have
the ability to stay collection and enforcement actions
until he determines that the sale is perfected? Would
the answer be different if the purchaser is deemed to
only be a secured party rather than the owner of the
receivables?
Under the Italian Bankruptcy Law, there is no specific provision
which prohibits the purchaser from collecting, transferring
or otherwise exercising ownership rights over the purchased
receivables (i.e. a “stay of action”) if, after a sale of receivables that
is otherwise perfected, the seller becomes subject to an insolvency
proceeding.
5.4 Recognition. If the purchaser grants a security
interest in receivables governed by the laws of your
jurisdiction, and that security interest is valid and
perfected under the laws of the purchaser’s country,
will it be treated as valid and perfected in your
jurisdiction or must additional steps be taken in your
jurisdiction?
The security interest in receivables which is valid and perfected
in a foreign country may be perfected in Italy, upon the relevant
Italian perfection formalities being duly carried out. In any case,
the above security interest will be valid and perfected also in Italy,
if the formalities provided for under the foreign law have been duly
fulfilled and there is not a breach of any mandatory provisions under
Italian law.
5.5 Additional Formalities. What additional or different
requirements apply to security interests in or
connected to insurance policies, promissory notes,
mortgage loans, consumer loans or marketable debt
securities?
See the answer to question 5.3 above.
5.6 Trusts. Does your jurisdiction recognise trusts?
If not, is there a mechanism whereby collections
received by the seller in respect of sold receivables
can be held or be deemed to be held separate and
apart from the seller’s own assets until turned over to
the purchaser?
In Italy there is not a domestic set of rules on trust. However,
pursuant to the provisions of the 1985 Hague Convention on the
Law Applicable to Trusts and Their Recognition – which has been
ratified and implemented and is fully effective in Italy as part of
the Italian legal system – the trusts created under foreign law are
recognised and enforceable also in Italy.
In any case, please note that pursuant to article 3 of the Italian
Securitisation Law, there must mandatorily be a separation between
collections received by the seller and the corporate assets of the
purchaser. In addition to the above, the Law Decree no. 145,
dated 24 December 2013 (the “Destinazione Italia Decree”), has
introduced some provisions which relate to the segregation principle
that shall be applied to the current accounts opened in the context of
securitisation transactions. In fact, pursuant to article 3, paragraphs
2bis and 2ter of the Italian Securitisation Law, the “segregated
current accounts” of the securitisation vehicles are separated from
the depositary’s and the other depositors’ assets (paragraph 2bis)
and the servicer’s and sub-servicer’s assets (paragraph 2ter).
5.7 Bank Accounts. Does your jurisdiction recognise
escrow accounts? Can security be taken over a bank
account located in your jurisdiction? If so, what is
the typical method? Would courts in your jurisdiction
recognise a foreign law grant of security (for example,
an English law debenture) taken over a bank account
located in your jurisdiction?
An escrow account may be constituted in Italy through the creation of
a pledge over the sums credited on such account. In fact, pursuant to
article 51 of the Law no. 218, dated 31 May 1995, Italian Statute on
Private International Law (the “Italian Private International Law”),
the governing law required for the perfection and enforcement of a
security over collateral (as a pledge over the account) shall be: (i) the

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6.4 Substantive Consolidation. Under what facts or
circumstances, if any, could the insolvency official
consolidate the assets and liabilities of the purchaser
with those of the seller or its affiliates in the
insolvency proceeding?
In case an insolvency proceeding occurs, under Italian law a
consolidation of the assets and liabilities of the purchaser with those
of the seller or its affiliates cannot be carried out by the insolvency
official.
6.5 Effect of Insolvency on Receivables Sales. If
insolvency proceedings are commenced against
the seller in your jurisdiction, what effect do those
proceedings have on (a) sales of receivables that
would otherwise occur after the commencement of
such proceedings, or (b) sales of receivables that only
come into existence after the commencement of such
proceedings?
(a) Should the sale of receivables have not yet become effective
before the declaration of insolvency, the relevant assignment
shall not take place after such declaration.
(b) Please see also question 4.9 above.
6.6 Effect of Limited Recourse Provisions. If a debtor’s
contract contains a limited recourse provision (see
question 7.3 below), can the debtor nevertheless be
declared insolvent on the grounds that it cannot pay
its debts as they become due?
A limited recourse clause can be considered binding between the
relevant parties in those cases in which such provisions are included
in an agreement entered into by the relevant parties, however it is
debatable if such provisions can be considered enforceable vis-à-
vis third parties (e.g. a bankruptcy receiver). In any case, a limited
recourse provision shall be interpreted in order to evaluate the
existence of the relevant payment obligation.
7 Special Rules
7.1 Securitisation Law. Is there a special securitisation
law (and/or special provisions in other laws) in
your jurisdiction establishing a legal framework
for securitisation transactions? If so, what are the
basics?
The Italian Securitisation Law, as defined above, applies to
securitisation transactions involving assignment for consideration
of existing or future monetary receivables to SPVs (i.e. special
purpose vehicles which issue notes to be repaid using the cashflow
arising from collections of the receivables), where those receivables
are homogenous (in blocco) in the case of multiple receivables, and
where the requirements listed under article 1, paragraph 1 of the
Italian Securitisation Law are fulfilled.
In addition to the above, the Destinazione Italia Decree has added
a new paragraph 1bis to article 1 of the Italian Securitisation
Law, which ensures the application of such law also if there is a
securitisation transaction carried out through the subscription
and purchase of bonds and similar securities other than equity
instruments, hybrid securities and convertible bonds.
On the other hand, the Law Decree no. 91, dated 24 June 2014
has amended the Italian Securitisation Law in order to ensure the
In any case, please note that the bankruptcy receiver is also entitled
to manage and liquidate the assets of the bankrupt, also clawing-
back the transactions carried out during the hardening period
(periodo sospetto).
6.2 Insolvency Official’s Powers. If there is no stay
of action under what circumstances, if any, does
the insolvency official have the power to prohibit
the purchaser’s exercise of rights (by means of
injunction, stay order or other action)?
In case an insolvency proceeding occurs, Italian law does not
provide for specific measures in order to prohibit the purchaser’s
exercise of rights.
6.3 Suspect Period (Clawback). Under what facts or
circumstances could the insolvency official rescind
or reverse transactions that took place during
a “suspect” or “preference” period before the
commencement of the insolvency proceeding? What
are the lengths of the “suspect” or “preference”
periods in your jurisdiction for (a) transactions
between unrelated parties, and (b) transactions
between related parties?
Under the Italian Bankruptcy Law, certain transactions cannot be
considered as enforceable vis-à-vis creditors.
1. Pursuant to article 64 of the Italian Bankruptcy Law,
transactions without consideration for the benefit of the
bankrupt which were carried out in the two years prior to the
declaration of bankruptcy.
2. Pursuant to article 65 of the Italian Bankruptcy Law,
payments of debts which expire on the date of the bankruptcy
declaration or thereafter, if those payments have been made
in the two years prior to the bankruptcy declaration.
Pursuant to Article 67 of Italian Bankruptcy Law, the claw-back
action works in connection with the following transactions, unless
the other party of the transaction is able to prove that the debtor’s
state of insolvency was not known at that time:
1. transactions for consideration entered into in the year prior
to the declaration of insolvency in which the obligations
performed or undertaken by the debtor exceed by more than
a quarter what the debtor received;
2. payment of overdue monetary debts due and payable where
payment was not made by cash or other normal means
of payment, if made in the year prior to the declaration of
insolvency;
3. pledges, securities and judicially mortgages created in the six
months prior to the declaration of insolvency in respect of
obligations not already due; or
4. pledges, securities and judicially mortgages created in the six
months prior to the declaration of insolvency in respect of
overdue obligations.
In addition, the claw-back action shall apply also in relation to
payment of liquid and payable debts, transactions for consideration
and transactions where pre-emption rights are granted in respect of
debts towards third parties, which are effected in the six months
prior to the declaration of insolvency, if the bankruptcy receiver
proves that the other party of the transaction was aware, or should
have been aware, of the state of insolvency.
In the context of a securitisation transaction, according to article 4,
paragraph 3 of the Italian Securitisation Law, there is an exemption
pursuant to which, in case of payments made by the assigned debtors
to the SPV, articles 65 and 67 of the Italian Bankruptcy Law shall
not apply.

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7.2 Securitisation Entities. Does your jurisdiction have
laws specifically providing for establishment of
special purpose entities for securitisation? If so,
what does the law provide as to: (a) requirements for
establishment and management of such an entity; (b)
legal attributes and benefits of the entity; and (c) any
specific requirements as to the status of directors or
shareholders?
Pursuant to article 3, paragraph 1 of the Italian Securitisation Law,
the purchasing company (i.e. the SPV) or, where different from
the purchasing company, the company issuing the securities, shall
have as its sole corporate object the undertaking of one or more
securitisation transactions. In addition to the above, pursuant
to article 3, paragraph 3 of the Italian Securitisation Law, the
provisions contained in title V of the Italian Banking Law, together
with the sanctions contained in title VIII of the Italian Banking Law,
shall apply to the purchasing company and the issuer, so that the
special purchase vehicles may be incorporated both as joint stock
companies or limited liability companies.
The directors of the special purpose vehicles for the securitisation
shall fulfil the requirements of professionalism, respectability and
independence, provided for under articles 25 and 26 of the Italian
Banking Law, while the requirements for the shareholders are
indicated under article 19 of the Italian Banking Law.
7.3 Limited-Recourse Clause. Will a court in your
jurisdiction give effect to a contractual provision in
an agreement (even if that agreement’s governing law
is the law of another country) limiting the recourse of
parties to that agreement to the available assets of
the relevant debtor, and providing that to the extent
of any shortfall the debt of the relevant debtor is
extinguished?
Italian Courts may give effect to a limited recourse clause (even
if that agreement’s governing law is the law of another country)
limiting the recourse of parties to that agreement to the available
assets of the relevant debtor, it being understood that such provision
cannot − in any case − prevent the application of article 2740,
paragraph 2 of the Italian Civil Code.
7.4 Non-Petition Clause. Will a court in your jurisdiction
give effect to a contractual provision in an agreement
(even if that agreement’s governing law is the law
of another country) prohibiting the parties from: (a)
taking legal action against the purchaser or another
person; or (b) commencing an insolvency proceeding
against the purchaser or another person?
A non-petition clause (pactum de non petendo) may be recognised by
an Italian Court and the same may give effect to such a contractual
provision (pursuant to which a creditor undertakes to not enforce a debt
by way of taking legal action against the purchaser or commencing an
insolvency proceeding) only to the extent that, in case a breach of such
provision occurs, it shall give rise to a right of claim for damages.
7.5 Priority of Payments “Waterfall”. Will a court in your
jurisdiction give effect to a contractual provision in an
agreement (even if that agreement’s governing law is
the law of another country) distributing payments to
parties in a certain order specified in the contract?
Under Italian law, a contractual provision in an agreement (even
if that agreement’s governing law is the law of another country)
possibility for SPVs to grant loans to entities other than individuals
and micro-enterprises, subject to the fulfilment of certain conditions
set out under article 1ter of the Italian Securitisation Law and listed
below:
a) the borrowers shall be identified by a bank or a financial
intermediary registered with the register held by the Bank
of Italy as set forth under article 106 of the Italian Banking
Act, which can also carry out the activities mentioned under
article 2, paragraph 3, letter c) of the Italian Securitisation
Law;
b) the securities issued in order to grant loans to the
abovementioned entities are intended for qualified investors,
as defined pursuant to article 100 of the Italian Consolidated
Law on Finance;
c) the bank or financial intermediary, referred to under paragraph
a) above, retains a “significant economic interest” in the
transaction, in accordance with the implementing measures
set out by the Bank of Italy.
On 6 March 2016, the Bank of Italy published the implementing
measures, relating to the supervisory regulations for loans granted by
securitisation vehicles incorporated under the Italian Securitisation
Law, which have implemented, among others, the discipline related
to the retention requirements provided for under article 1ter, letter
c) of the Italian Securitisation Law.
The receivables may be identified as a pool (in blocco), when
they consist of a plurality of claims identified as credits, debts and
contracts which have a common element of identification (rapporti
giuridici individuabili in blocco) as stated under the Bank of Italy
regulations (istruzioni di vigilanza di Banca d’Italia). In addition,
according to article 58, paragraph 2, of the Italian Banking Law, the
assignee bank shall give notice of the effected assignment, filing
it with the Companies’ Register and through a publication in the
Italian Official Gazette.
In the context of a trade receivables securitisation transaction,
the relevant assignment shall be perfected upon the filing of the
assignment deed with the relevant Companies’ Register and the
publication of a notice of the assignment in the Italian Official
Gazette. In addition, pursuant to article 4 of the Italian Securitisation
Law, the parties may decide to implement the less burdensome
regime provided for by the Italian Factoring Law in order to ensure
that the assignment of receivables is enforceable as against the third
party creditors of the assignor. In such case, the assignment may
be perfected by the relevant parties alternatively choosing: (i) to
publish in the Italian Official Gazette a short form notice indicating
the assignor, the assignee and the relevant transfer date; or (ii) to
apply the provisions set forth under article 5, paragraphs 1, 1bis and
2 of the Italian Factoring Law.
Under the Italian Securitisation Law, there must mandatorily
be a separation between collections received by the seller and
the corporate assets of the purchaser. In fact, pursuant to article
3, paragraphs 2bis and 2ter of the Italian Securitisation Law, the
“segregated current accounts” of the securitisation vehicles are
separated from the depositary’s and the other depositors’ assets
(paragraph 2bis) and the servicer’s and sub-servicer’s assets
(paragraph 2ter).
In the context of a securitisation transaction, according to article 4,
paragraph 3 of the Italian Securitisation Law, there is an exemption
pursuant to which in case of payments made by the assigned debtors
to the SPV, articles 65 and 67 of the Italian Bankruptcy Law shall
not apply.
For the purposes of securitisation transactions governed by the
Italian Securitisation Law, the time limits of two years and one year
contained in article 67 of the Italian Bankruptcy Law are hereby
reduced to six months and three months, respectively.

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More specifically, according to the Decree 18/2016, EU AIFs may
lend to Italian borrowers, other than to Italian consumers, if the
following conditions are fulfilled: (a) the EUAIF must be authorised
to lend by the competent authority in its home Member State; (b) the
EU AIF must be a closed-end fund and its operating rules (including
those relating to its investors) must be similar to those applicable to
Italian AIFs; and (c) the rules on risk diversification and limitation −
including limitations on leverage − applicable to the EU AIF under
the regulations of its home Member State must be equivalent to
those applicable to Italian AIFs.
The answer does not change if the purchaser does business with
other sellers in Italy.
8.2 Servicing. Does the seller require any licences, etc.,
in order to continue to enforce and collect receivables
following their sale to the purchaser, including to
appear before a court? Does a third party replacement
servicer require any licences, etc., in order to enforce
and collect sold receivables?
Pursuant to article 2, paragraph 6, of the Italian Securitisation Law,
credit collection activities may be carried out by banks or financial
intermediaries registered with the register held by the Bank of Italy
as set forth under article 106 of the Italian Banking Act, having
obtained the relevant authorisation issued by Bank of Italy only.
8.3 Data Protection. Does your jurisdiction have laws
restricting the use or dissemination of data about or
provided by obligors? If so, do these laws apply only
to consumer obligors or also to enterprises?
In Italy, the Legislative Decree no. 196, dated 30 June 2003 (the
“Italian Data Protection Code”) provides that personal data are
processed by respecting data subjects’rights, fundamental freedoms
and dignity, particularly with regard to confidentiality, personal
identity and the right to personal data protection. The Italian Data
Protection Code applies both to consumers and to enterprises.
8.4 Consumer Protection. If the obligors are consumers,
will the purchaser (including a bank acting as
purchaser) be required to comply with any consumer
protection law of your jurisdiction? Briefly, what is
required?
The Italian Consumers’ Code provides for consumers’ protection
that shall be ensured through fairness, transparency and equity
in contractual relations with entrepreneurs. The consumer being
considered as the weaker party of the contract, entrepreneurs must
carry out the relevant transaction in compliance with the supply
of services according to standards of quality and efficiency, safety
and quality of services, and adequate information and correct
advertising.
8.5 Currency Restrictions. Does your jurisdiction have
laws restricting the exchange of your jurisdiction’s
currency for other currencies or the making of
payments in your jurisdiction’s currency to persons
outside the country?
Italian law does not provide for any specific provisions restricting
the exchange of currency.
distributing payments to parties according to an order of priority of
payments, pursuant to which a party accepts to subordinate its rights
to the rights of other creditors, would be valid between the relevant
parties and an Italian Court, subject to any overriding mandatory
provision under Italian law, may give effect to such contractual
provision.
7.6 Independent Director. Will a court in your jurisdiction
give effect to a contractual provision in an agreement
(even if that agreement’s governing law is the
law of another country) or a provision in a party’s
organisational documents prohibiting the directors
from taking specified actions (including commencing
an insolvency proceeding) without the affirmative
vote of an independent director?
Pursuant to article 2388, paragraph 4 of the Italian Civil Code, those
resolutions that have not been adopted in compliance with the law
and the by-laws may be challenged only by the board of auditors or
by those directors who were not present or were dissenting (e.g. an
independent director who has not expressed his vote) within 90 days
from the date of the resolution. In case of insolvency proceedings,
please note that directors (including the independent directors) shall
mandatorily comply with those duties provided for under the Italian
Bankruptcy Law.
8 Regulatory Issues
8.1 Required Authorisations, etc. Assuming that the
purchaser does no other business in your jurisdiction,
will its purchase and ownership or its collection
and enforcement of receivables result in its being
required to qualify to do business or to obtain any
licence or its being subject to regulation as a financial
institution in your jurisdiction? Does the answer to
the preceding question change if the purchaser does
business with other sellers in your jurisdiction?
Pursuant to the Italian Banking Act, financial activities in Italy −
also in the context of a securitisation transaction − may be carried
out on the market by certain financial intermediaries/banks (e.g.,
under article 106 of the Italian Banking Act, a financial intermediary
must be filed with a specific register held by the Bank of Italy) and if
certain conditions are fulfilled by them.
In addition to the above, please note that the Italian Government has
recently approved the Law Decree no. 18, dated 14 February 2016
(the “Decree 18/2016”) which sets out, inter alia, a direct lending
regime by EU and Italian AIFs (i.e. EU and Italian alternative
Undertakings for Collective Investment (UCI) falling within the
scope of application of Directive 2011/61/EU) to Italian borrowers.
The Decree 18/2016 entered into force on 16 February 2016 and
must be converted into law within 60 days of such date. Further
amendments may be introduced during the conversion process and
in any implementing rules promulgated by the Bank of Italy or the
Italian Ministry of Economy and Finance. In particular, the Decree
18/2016 states that:
■ EU AIFs may, subject to certain conditions, lend directly to
Italian borrowers;
■ Italian and EU AIFs are not permitted to lend to consumers;
and
■ Italian and EU AIFs are subject to the same transparency
obligations applicable to banks and financial intermediaries.

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required to adopt IFRS in their annual accounts. The de-recognition
of the receivables from the seller’s accounts will be driven by the
relevant set of accounting principles applicable to it (whether Italian
GAAP or IFRS).
For tax purposes, a seller should generally be allowed to deduct
the loss suffered on disposal of the receivables on condition that
the assets are de-recognised from its accounts and that the loss is
booked to the income statement.
If the purchaser is a Law130 Company, all assets and liabilities and
any other values, including those arising from derivatives and similar
transactions, attributed directly to the securitisation shall be treated,
based on the regulations issued by the Bank of Italy, as off-balance
sheet assets and liabilities in the issuer’s accounts. According to
the guidelines of the Italian tax authorities, a Law130 Company
should not generate any taxable income, and hence should not
incur any corporation tax charge, whilst any notes are outstanding.
Once all the payments to the noteholders and the other creditors
of the securitisation transaction have been fully discharged, the
issuer would be taxed in respect of the amounts (if any) that remain
available to it.
9.3 Stamp Duty, etc. Does your jurisdiction impose
stamp duty or other documentary taxes on sales of
receivables?
On condition that the sale of receivables constitutes an exempt
supply for VAT purposes, a flat and negligible registration tax
(currently EUR 200) would be due on the transfer deed. In addition,
a flat stamp duty (currently EUR 16) would be due for each four
pages of the relevant document.
If, on the other hand, the sale of receivables falls outside the scope
of VAT, the registration tax would be due at the rate of 0.5%.
However, if the transfer deed is executed by way of exchange of
correspondence or outside of Italy (which may not be possible in
relation to sales of government receivables), the 0.5% registration
tax would be due in the following circumstances only: (i) upon
filing of the transfer deed with any Italian Court in the course of
administrative proceedings; (ii) upon filing of the transfer deed
with Italian administrations or public bodies, unless such filing
is compulsory as a matter of law or regulations; (iii) in the case
of a cross-reference to the transfer deed in an agreement or other
document entered into by the same parties thereto and registered
with the competent tax authority; or (iv) in the case of a reference to
the transfer deed in any judicial decisions.
9.4 Value Added Taxes. Does your jurisdiction impose
value added tax, sales tax or other similar taxes on
sales of goods or services, on sales of receivables or
on fees for collection agent services?
Italian value added tax (“VAT”) is chargeable on supplies of goods
and services within Italy by “taxable persons” in the course of a
business. The standard rate of VAT is currently 22%, although
certain supplies (including the supply of certain financial services)
are exempt from VAT.
A sale of receivables can be regarded either as a VAT-exempt supply
or as a transaction falling outside the scope of the Italian VAT. In
both cases, no VAT is charged on the purchase price.
On condition that the place of supply is within Italy, debt collection
services should qualify for the VAT finance exemption, whilst
Italian VAT should be charged in respect of debt recovery services.
9 Taxation
9.1 Withholding Taxes. Will any part of payments on
receivables by the obligors to the seller or the
purchaser be subject to withholding taxes in your
jurisdiction? Does the answer depend on the nature
of the receivables, whether they bear interest, their
term to maturity, or where the seller or the purchaser
is located? In the case of a sale of trade receivables
at a discount, is there a risk that the discount will be
recharacterised in whole or in part as interest? In the
case of a sale of trade receivables where a portion of
the purchase price is payable upon collection of the
receivable, is there a risk that the deferred purchase
price will be recharacterised in whole or in part as
interest?
As a principle, when the purchaser is a company established
under the Italian Securitisation Law (a “Law130 Company”), no
withholding tax is levied from the payments made by the obligors,
regardless of the nature of the receivables.
In the case of a sale of trade receivables at a discount to a foreign
purchaser, a case-by-case analysis should be performed in order to
determine the Italian income tax regime applicable to the profits
realised by such purchaser. Indeed, depending on the relevant facts
and circumstances (including, but not limited to, the existence of a
deferred purchase price mechanism), such profits could be qualified
as capital gains (in which event they would generally not be taxable
in Italy) or as income from capital (in which event, Italian income
taxes would generally be due).
In the case of a sale of interest-bearing receivables to a foreign
purchaser, the latter would generally suffer Italian income taxes,
levied by way of withholding or otherwise, when collecting Italian
source interest. The taxes would be due at the domestic 26% rate or,
depending on the purchaser’s location and tax status, at the reduced
rate under an applicable double tax treaty.
On the basis of new rules enacted in 2014 and subsequently amended
in 2015, an exemption applies to interest and other proceeds deriving
from medium-to-long-term loans granted to Italian enterprises by:
(a) credit institutions established in EU Member States; (b) entities
falling under Article 2(5)(4) to 2(5)(23) of Directive 2013/36/
EU (these are development promotion institutions established in
different EU Member States); (c) insurance companies incorporated
and authorised under provisions issued by EU Member States; or
(d) foreign institutional investors, even if not liable to tax, that are
established in States with an adequate exchange of information with
Italy and which are subject to forms of supervision in the foreign
countries in which they are formed (these would include regulated
collective investment undertakings). In the absence of any guidance
on the matter, however, it is unclear whether the exemption would
also be applicable to secondary market transactions.
9.2 Seller Tax Accounting. Does your jurisdiction require
that a specific accounting policy is adopted for tax
purposes by the seller or purchaser in the context of a
securitisation?
An Italian seller shall draft its annual accounts, as the case may
be, under Italian GAAP or IFRS. In particular, Italian banks and
regulated financial intermediaries, Italian companies whose shares
are traded on regulated exchanges, and Italian companies issuing
financial instruments widely distributed among the public, are

Italy
9.6 Doing Business. Assuming that the purchaser
conducts no other business in your jurisdiction,
would the purchaser’s purchase of the receivables, its
appointment of the seller as its servicer and collection
agent, or its enforcement of the receivables against
the obligors, make it liable to tax in your jurisdiction?
In general terms, and subject to a more detailed case-by-case
analysis, the purchase of the receivables or the enforcement of the
receivables against the obligors do not create a taxable presence
(i.e., a permanent establishment) of a foreign purchaser in Italy.
Nor should the appointment of a servicer by the purchaser result in
the latter having an Italian permanent establishment, on condition
that the servicer meets the conditions for being treated as an
“independent agent”. In this respect, reference shall be made to the
servicer’s activities and to the terms and conditions governing its
involvement in the transaction.
9.5 Purchaser Liability. If the seller is required to pay
value added tax, stamp duty or other taxes upon
the sale of receivables (or on the sale of goods or
services that give rise to the receivables) and the
seller does not pay, then will the taxing authority
be able to make claims for the unpaid tax against
the purchaser or against the sold receivables or
collections?
As described above, a transfer of receivables would usually either
constitute an exempt supply for VAT purposes, or fall outside the
scope of VAT altogether. Accordingly, the seller should not be
required to account for VAT upon the sale of receivables. It may,
on the other hand, have to pay VAT on the sale of goods or services
that give rise to the receivables. However, if the seller fails to
account for the VAT due on such underlying transactions, the taxing
authority should not be able to make claims for the unpaid tax
against the purchaser.
The seller and the purchaser are jointly liable for the payment of any
registration tax and stamp duty that may be due on the transaction
documents (regardless of any different agreement between them as
to the allocation of the tax charge).

Italy
Andrea Pinto
Piazza San Marco
1 20121 Milano
Italy
Tel: +39 02 3030 291
Email: andrea.pinto@klgates.com
URL: www.klgates.com
Vittorio Salvadori di Wiesenhoff
Piazza San Marco
1 20121 Milano
Italy
Tel: +39 02 3030 291
Email: vittorio.salvadori@klgates.com
URL: www.klgates.com
OVERVIEW
Andrea Pinto is the partner responsible for the finance and banking
practice in the firm’s Milan office. He focuses his practice on
advising lenders and has significant experience in structured finance
transactions. He regularly represents Italian banks, together with their
financial advisors, on the sale of NPL portfolios. Andrea Pinto also
advises arrangers and originators on securitisation transactions in a
variety of asset classes, including non-performing credits.
Mr. Pinto has been named by Chambers Global 2015 as a leading
individual for debt restructuring / NPL.
PROFESSIONAL BACKGROUND
Prior to joining K&L Gates, Mr. Pinto practised at the most reputable
Italian independent law firm and at another international law firm in
Milan. Andrea has been seconded for one year with Barclays Bank
PLC in the international lending department (2007).
ADMISSIONS
Andrea is an Italian qualified lawyer registered with the Genoa Bar
membership.
EDUCATION
Law Degree, Università degli Studi di Genova, 1998 (110/110 magna
cum laude).
Postgraduate Master in Corporate Law, Anselmo Anselmi of Rome,
February 1999/January 2000.
Project Finance Workshop managed by International Faculty of
Finance (IFF) – London, January to February 2010.
LANGUAGES
English and Italian.
K&L Gates LLP comprises more than 2,000 lawyers who practise in fully integrated offices located on five continents: Anchorage; Austin; Beijing;
Berlin; Boston; Brisbane; Brussels; Charleston; Charlotte; Chicago; Dallas; Doha; Dubai; Fort Worth; Frankfurt; Harrisburg; Hong Kong; Houston;
London; Los Angeles; Melbourne; Miami; Milan; Newark; New York; Orange County; Palo Alto; Paris; Perth; Pittsburgh; Portland; Raleigh; Research
Triangle Park; San Francisco; São Paulo; Seattle; Seoul; Shanghai; Singapore; Sydney; Taipei; Tokyo; Warsaw; Washington; and Wilmington.
K&L Gates practises law on an integrated basis and indeed has the largest integrated network of offices of any global law firm. The Firm represents
leading global corporations, growth and middle-market companies, capital markets participants and entrepreneurs in every major industry group
as well as public sector entities, educational institutions, philanthropic organisations and individuals. Our practice is a robust full market practice −
cutting edge, complex and dynamic, at once regional, national and international in scope. Over each of the last five years, our revenues exceeded
$1 billion.
OVERVIEW
Vittorio Salvadori di Wiesenhoff is the partner responsible for the tax
practice in the firm’s Milan office. He focuses his practice, among
other issues, on the tax aspects of structured finance transactions. In
particular, he has significant experience in the area of securitisation
involving mortgage loans, receivables from leasing contracts and
consumer loans, leasing, trade receivables, receivables from the
public sector and tax credits.
He regularly assists many foreign institutional investors in the
structuring of investment transactions in performing and non-
performing loans.
Mr. Salvadori di Wiesenhoff is ranked in Legal 500, Chambers
Europe and Chambers Global. He graduated summa cum laude
from Università Commerciale Luigi Bocconi in Milan in 1994 and was
admitted as a Dottore Commercialista (chartered accountant admitted
to practice in tax courts) in 1995.
PROFESSIONAL BACKGROUND
Prior to joining K&L Gates, Mr. Salvadori di Wiesenhoff was a tax
partner in the Milan office of another international law firm. He focused
his practice on all tax aspects connected to corporate, banking and
finance, and real estate transactions.
PUBLICATIONS
Mr. Salvadori di Wiesenhoff has written several articles on “European
Taxation − IBFD” and “Derivatives and Financial Instruments − IBFD”.
PROFESSIONAL/CIVIC ACTIVITIES
Member of the Board and Treasurer, Plan Italy.
ADMISSIONS
Certified accountant admitted to practice in front of tax courts (Dottore
Commercialista e Revisore Contabile).
EDUCATION
Post Degree Advanced Course on Taxation, Bocconi University School
of Law, 1996.
Degree in Business Administration, Bocconi University, 1994.
LANGUAGES
English, French and Italian (mother tongue).

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