On July 14, 2016, the Italian Parliament approved Law n. 119/16  containing a set of provisions aimed at expediting the recovery of claims by creditors.

The new rules introduced several provisions aiming at reducing time and enhancing creditor’s chance of collection, among which:

(a) a non-possessory pledge over movable assets. In order to increase creditors’ ability to collect on their debt and – at the same time – to allow companies to continue to use their property, it is now possible for entrepreneurs to grant pledges on “movable property used for business purposes”, without the pledgor being dispossessed of the use of the collateral;

(b) the possibility to agree in advance on the foreclosure of collaterals. Banks and authorized entities may agree with companies that – in case of default – the debtor will transfer his or her ownership rights to the creditor:

(c) an electronic register of enforcement and insolvency proceedings. The register aims at increasing transparency of insolvency according to Regulation EU 2015/848.

The Law entered into force on May 4, 2016 — as Law Decree (03/05/2016 n° 59, G.U. 03/05/2016) — was ratified on July 14, 2016.

The Government’s Press release is available (in Italian) at http://www.governo.it/articolo/comunicato-stampa-del-consiglio-dei-ministri-n-115/4604

For more information, Francesca Giannoni-Crystal.