• LATEST NEWS & INSIGHTS 14 July 2023

    Posted on: 14/07/2023


    ITALIAN DPA FINES BENETTON FOR 240,000 EUROS.

     

    With an injunction order, the Italian Data Protection Authority fined the Benetton company for breaching some principles of the GDPR regarding data retention, minimization, and technical and organizational security measures.

     

    The Italian Data Protection Authority (“Garante” or “DPA”) fined the Benetton company for certain violations regarding privacy regulations. During the inspection, which began in 2019, a number of irregularities were found on the websites and in the management of customer data, both for fidelity card and promotional purposes.

     

    During a subsequent inspection, in 2021, to verify the implementation of additional security measures and the correction of the alleged violations, the Garante found additional circumstances, related to the retention of customer data indefinitely as well as the lack of security measures related to fidelity programs and the platform provided to retail stores.

     

    After analysing the company’s defenses, the DPA decided to archive some of the objections (such as those on the websites as well as those related to the management of consents for promotional purposes). However, the following violations were confirmed:

     

    (1) The retention of customer or former customer data with no time limit. The company’s proposal to keep them for 10 years was also deemed unacceptable, with regards to the Garante ‘s guidelines on Fidelity Cards;

     

    (2) The lack of adequate security measures in the management of the platform in stores. In fact, the system provides a single account for the entire store, with no need to change passwords. In addition, it was also accessible from the web and thus from any device. Finally, there was no control as to who could log in among employees;

     

    (3) In addition, this circumstance also implies a violation of the obligation for the data controller to have a procedure in place to test and verify the security measures implemented to ensure the security of the processing.

     

    The DPA also pointed out, as an aggravating factor, the massive amount of data involved (each store could access data from all over the world) as well as the variety of personal details acquired with the fidelity cards, which were used for profiling purposes.

     

    In conclusion, therefore, the Garante issued a fine of 240,000 euros, also ordering the company:

     

    – to delete or anonymize data of former customers older than 10 years, unless there is an ongoing dispute;

     

    – to adopt appropriate technical and organizational solutions to ensure that data storage is carried out in accordance with the principles of the GDPR, with particular reference to minimization and limitation of storage, as well as data security and safeguarding.

     

    Finally, as always, the Garante ordered the publication on its institutional channels.

     

    This sanction demonstrates once again how there is often a tendency to underestimate the internal procedures and systems to control and monitor compliance with the regulations and the work of employees and suppliers, in favor of a compliance that is more aimed at a mere documentary update.

     

    On the contrary, full compliance and the safeguarding of personal data can only come through robust and well-delineated procedures that can ensure the control, management and proper conduct of all data processing activities.

     

     

    f.montanari@macchi-gangemi.com
    l.laterza@macchi-gangemi.com

     

     

     

    TOWARDS A SIMPLER AND FASTER ENFORCEMENT?

     

    Enforcement proceedings, that is the possibility to enforce the recovery of the money owed from the debtor, is an essential aspect of the creditor’s tangible protection. Very often, however, compiling a list of the debtor’s assets necessary to search for assets to be attached is not easy, especially with regard to bank accounts and credits towards third parties.

     

    Some time ago the legislator had already provided for a cohesive procedure whereby the creditor, in possession of an enforceable order, could obtain extensive information on the debtor’s assets (Article 492-bis of the Code of Civil Procedure ): the creditor, ten days after notifying the writ of injunction, could submit a specific application to the President of the competent Court who, after verifying the regularity of the deeds, would issue an authorisation with which, in turn, the creditor could address a further application to the offices of the Revenue Agency to obtain the most accurate and complete information possible on his debtor’s assets (essentially: an indication of the bank accounts in his name).

     

    This procedure, however, was quite lengthy (the duration varied depending on the court and the offices of the Revenue Agency), with the result being that before all the information was obtained, more than 90 days could have passed, this is more than the validity period of the writ of injunction. And this meant that the creditor – before being able to initiate enforcement – had to serve a new writ of injunction, with further expenditure of time and effort.

     

    In order to simplify and speed up this procedure, the legislator – as part of the so-called Cartabia Reform – amended Article 492-bis of the Code of Civil Procedure by introducing three substantial amendments.

     

    (i) First of all, it is no longer necessary to request an authorisation from the President of the Court: it is sufficient to address an application to the competent court bailiff.

     

    (ii) It is then the same court bailiff who, after verifying the regularity of the documents, directly searches the tax administration’s databases and then provides the creditor with the relevant information.

     

    (iii) Finally, for the entire duration of such searches, i.e. during the time between the submission of the application to the court bailiff and the latter’s reply with the requested information, the 90-day time limit for the validity of the writ of injunction remains suspended.

     

    In the first months of the implementation of this new procedure, however, the court bailiffs were not able to carry out the necessary searches at the offices of the Revenue Agency. Consequently, they replied to creditors’ requests by explaining that they could not proceed, and it was always the creditors who had to request the information from the Revenue Agency.

     

    Well, on the 24th June 2023, the Ministry of Justice and the Revenue Agency announced that they had entered into an agreement to allow court bailiffs to directly search for assets to be attached and to transmit the information obtained to creditors.

     

    The agreement provides that the exchange of data will occur using specific IT tools which ensure traceability of access and full compliance with personal data legislation and has been approved by the Italian Data Protection Authority.

     

    Therefore, it seems that the provisions introduced by the Cartabia Reform are finally close to being fully and concretely implemented.

     

    In the subsequent attachment document, the creditor will only have to be careful to specify the date when the application was presented to the court bailiff and the date when the requested information was obtained: in this way, it will be obvious to the debtor and the third-party garnishee that the term of validity – during that period of time – remained suspended and, therefore, the writ of injunction has not lost its effectiveness (art. 492 (8) Code of Civil Procedure).

     

    On the basis of the information obtained, the creditor will thus be able to attach the debtor’s assets much more easily, thereby initiating enforcement proceedings to protect his own claim.

     

     

    a.gangemi@macchi-gangemi.com

     

     

    INTEREST RATE SWAP: THE JOINT DIVISIONS OF THE SUPREME COURT REITERATE THE JURISDICTION OF THE ITALIAN COURT.

     

    With the recent decision of 29 May 2023, the Joint Divisions once again ruled in favour of the Italian Court with regard to a dispute arising from derivative contracts signed by an Italian local authority. The Joint Divisions applied the consolidated case law according to which jurisdiction is determined exclusively on the basis of the principal claim, regardless of the content of the ancillary claims.

     

    On numerous occasions concerning similar disputes, the Joint Divisions have repeatedly stated that (i) only disputes of a contractual nature are attracted by the rule of the prorogation of jurisdiction clause (i.e. Article 13 of the ISDA Master Agreement), while disputes of a pre-contractual and extra-contractual nature remain under Italian jurisdiction and that (ii) jurisdiction is determined on the basis of the main claim presented by the plaintiff contract (see Joint Sections 11 June 2021, no. 16491; 18 December 2020, no. 29107; 27 February 2012, no. 2926; 20 February 2007, no. 3841).

     

    The order of the plaintiffs’ claims is therefore particularly relevant in this type of litigation. In this case, the Province of Pesaro Urbino had requested, only in the alternative, a declaration of the nullity of the derivative contracts, while, as a principal claim, it had formulated two alternative requests: (i) the first consisted of the verification of the breach by the bank counterparty of the consultancy contract entered inter-partes, for alleged breach of the obligations to provide information and the duty of adequacy of the contracts; (ii) the second claim requested compensation for the alleged damage caused by breach of the duties of fairness during negotiations. It is therefore with respect to these claims that the existence of jurisdiction must be assessed and not with respect to the claim for nullity of the swap contract, formulated in the alternative.

     

    The Joint Divisions further clarify that liability for breach of pre-contractual information obligations, by the intermediary or advisor, may exist “even when, …, a perfectly valid and effective, but inadequate (violation of the so-called … know-your-customer rule) contract is entered into “ and that if there is no link of a pre-judicial nature between two claims “the party who has proposed them remains free to determine which of the two actions to bring as a principal or subsidiary action, and such a choice – constituting the exercise of the right of defence – is not open to censure, nor can it be reviewed in this court”.

     

    The Joint Divisions do not apply the previous decision (Joint Divisions no. 3841/07) which stated the preliminary nature of the claims for contractual nullity with respect to the claims for damages because “…in that case the two claims were put forward alternatively, and not subordinately“. In essence, the principle seems to emerge whereby the preliminary nature of the request for nullity with respect to the request for compensation is relevant when the requests are made alternatively to each other, while it is not relevant when the requests are subordinated as a result of the party’s choice which is unquestionable by the Joint Divisions.

     

     

    m.divincenzo@macchi-gangemi.com
    a.buttarelli@macchi-gangemi.com

     

     

     

    THE ITALIAN SUPREME COURT OF CASSATION ADMITS THE APPEALABILITY OF A SELF-DEFENCE REFUSAL THAT IS CONTRARY TO A FINAL DECISION.

     

    With respect to the tax administration’s power of self-defence, the Italian Supreme Court of Cassation in its decision no. 18241 of 26th June 2023 declared null and void a self-defence refusal by the Italian Revenue Agency on the ground that it was in conflict with a previous final decision of the same Court.

     

    The dispute in the present case originated from a denial on a tax refund of some amounts paid by the taxpayer as “IRAP” (Regional Tax on Productive Activities) for the fiscal years from 2000 to 2004: the taxpayer appealed against this decision, claiming that the conditions for the application of the tax were not met. The dispute had been closed with a decision of the Italian Supreme Court of Cassation in favour of the taxpayer.

     

    Despite the Italian Supreme Court’s decision, the Italian Revenue Agency served tax bills on the taxpayer claiming the payment of the IRAP amounts for the above-mentioned fiscal years. The taxpayer did not appeal against such tax bills, but still proceeded to file a self-defence relief application, which was denied by the Office.

     

    The taxpayer then appealed even against the self-defence refusal and the appeal was rejected both at first and second instance. The Supreme Court, on the other hand, upheld the appeal: therefore, the refusal and the claim contained in the tax bills were cancelled.

     

    The Supreme Court’s decision clarifies, “(…) In the case of a previous Court decision, the taxable or executory act that would be contrary to the rule judicially and irretrievably affirmed would be null and void (…)”, and again “(…) it would be unreasonable that, notwithstanding a decision ordering the Irap reimbursement paid in relation to certain fiscal years by a taxpayer who could not be subject to that tax for those periods, that taxpayer could be compelled to pay that tax (by an enforcement act)”.

     

    An important issue (almost, a turning point) is that of the appealability of the self-defence refusal measure; in fact, the Court pointed out that “such a measure, although not included in the list of acts that can be challenged under Art. 19 of Legislative Decree no. 546 of 1992, is to be considered appealable on the basis of the applicable law”.

     

    To date, the self-defence refusal is not formally included in the list of appealable acts, and the Italian Supreme Court of Cassation, in order to avoid the challenge of “definitive” tax acts, has always adopted a restrictive approach, allowing appeals only where the taxpayer is entitled to invoke reasons of general interest in addition to the infringement committed by the Office.

     

    In this respect, it should be noted that the draft enabling act for tax reform approved by the Italian Council of Ministers (Chamber of Deputies Act no. 1038 submitted on 23th March 2023) allows the appealability of the refusal or silence also in the event the tax act has become final, if it is affected by evident mistakes.

     

     

    g.sforzini@macchi-gangemi.com
    d.michalopoulos@macchi-gangemi.com

     

     

     

    REGISTRATION TAX AT 15% ON PHOTOVOLTAIC PLANTS ON AGRICULTURAL LANDS: THE “STEP-BACK” INTERPRETATION OF THE ITALIAN TAX AUTHORITIES.

     

    The granting of surface right on agricultural lands is subject to registration tax at the rate of 15% and not 9%, as well as mortgage and cadastral taxes at the fixed amount of Euro 50: this was clarified by the Italian Tax Authorities by answer to Ruling no. 365 of 3rd July 2023, overruling (sic!) the interpretation adopted by the Italian Supreme Court in its decision no. 3461 of 2023.

     

    Art. 1 of the Tariff (part I), of Presidential Decree no. 131/1986 (Registration Tax Code), provides for the application of registration tax the following rates:

     

    Transfers of ownership of immovable properties in general and transfers or constitutions of rights in rem, (…): 9%.

    (…)
    If the transfer relates to agricultural lands and their annexes in favour of persons other than direct farmers and professional agricultural entrepreneurs, registered in the relevant social security and welfare administration: 15%. (…)”.

     

    According to the first paragraph registration at the rate of 9% is expressly provided for, as well as for deeds transferring ownership of immovable property in general, also for deeds transferring or constituting rights in rem, including granting of surface right.

     

    Therefore, based merely on the provisions of the law, granting of surface right (even on agricultural land) is subject to registration tax at the ordinary rate of 9%, as provided for in the first paragraph.

     

    The following paragraphs establish the taxation applicable to the “transfer”: among them, the third paragraph refers to the transfer of agricultural lands and sets the rate at 15%.

     

    According to the Italian Tax Authorities’ argument the tax treatment of the granting of surface right on agricultural land should be attached to the hypothesis of the “transfer” of agricultural lands, the rate of which is 15%, in place of the ordinary rate of 9%.

     

    This interpretation (already adopted by Resolution no. 92/E of 2000 and by Circular of the Italian Tax Authorities no. 18/E of 2013) was (fortunately!) overtaken by the legitimacy case-law (the latest: Italian Supreme Court, decision. no. 3461 of 11th February 2021). The latter, indeed, clarified that the granting of a surface right on agricultural lands was subject to registration tax at the ordinary rate of 9%, in place of the 15%, since it did not qualify as the constitution of a right in rem upon “transfer”.

     

    But sadly, the Italian Tax Authorities are taking a step-back. Will multiple litigations follow? We’ll keep you posted.

     

     

    a.salvatore@macchi-gangemi.com
    f.dicesare@macchi-gangemi.com
    d.michalopoulos@macchi-gangemi.com

     

     

    DISCLAIMER: This newsletter merely provides general information and does not constitute legal advice of any kind from Macchi di Cellere Gangemi. The newsletter does not replace individual legal consultation. Macchi di Cellere Gangemi assumes no liability whatsoever for the content and correctness of the newsletter.

     

     

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