AI (ARTIFICIAL INTELLIGENCE) MAY LEAD TO HUMAN EXTINCTION: THE CREATORS THEMSELVES ARE SAYING SO!
“Mitigating the risk of Artificial Intelligence extinction should be a global priority along with other societal-scale risks such as pandemics and nuclear war“.
This is the statement with which the letter published in the Center for AI Safety and signed by more than 350 prominent figures opens, including: Sam Altman (CEO of OpenAI); Demis Hassabis (head of Google DeepMind, Alphabet’s artificial intelligence development department); Audrey Tang (Taiwan’s Minister of Digital Affairs); Angela Kane (former UN High Representative for Disarmament Affairs); Geoffrey Hinton and Yoshua Bengio (two of the three researchers who won a Turing Award for their pioneering work on neural networks, considered the “godfathers” of modern artificial intelligence); Italians Roberto Battiston (physicist at the University of Trento) and Luca Simoncini (former professor of information engineering at the University of Pisa and former director of the National Research Council’s Institute of Information Technology); Dario Amodei (CEO of Anthropic); as well as computer experts, philosophers, jurists, and biologists from the world’s leading universities.
The purpose of this statement is not only to warn institutions about the most serious risks related to AI. The signatories also proposed some concrete solutions through which to ensure that advanced AI systems are managed responsibly. As an example, there was a call for greater cooperation among key players in the industry and the formation of a safety organization, similar to the International Atomic Energy Agency.
Further initiatives had already been taken on the issue in the past.
It is sufficient to recall: (i) last March’s open letter-signed by more than a thousand experts and researchers, -including Elon Musk- calling for a six-month halt on the development of the largest artificial intelligence program, but this letter went unheeded; (ii) OpenAI’s funding of $100,000 to set up a roundtable for experts to discuss possible measures to be put in place to prevent AI from causing existential dangers to humanity; (iii) the recent meeting between Altman, Hassabis and Amodei with U.S. President Joe Biden and Vice President Kamala Harris, during which Altman warned that the risks of advanced AI were serious enough to warrant government intervention and required timely regulation to prevent potential harm.
However, two opposing sides have been created on the issue. While there are those who endorse the concerns highlighted in the aforementioned letter (among them the so-called “doomers“- i.e. those who foresee an inauspicious future for the human race), on the other hand there are those who argue that fears that AI will wipe out humanity are unrealistic (among them we find Arvind Narayanan, a computer scientist at Princeton University, who told the BBC that: “Current artificial intelligence is nowhere near capable of making these risks materialize. As a result, it has diverted attention away from the short-term harms of AI”).
Despite the above splits, it cannot be denied that certain negative effects produced by misuse of AI are already evident.
One need only think of the risks of mass surveillance, interference in electoral processes, the spread of fake news, and the creation of news channels catering to specific disinformation interests.
In light of this, it becomes critical to raise awareness among ordinary and non-ordinary people about the risks implicit in AI, to train and inform them about how they will need to use such systems in their daily lives and work, as well as about the distorted uses that others might make of them to our detriment.
f.montanari@macchi-gangemi.com
l.laterza@macchi-gangemi.com
THE REVENUE AGENCY QUALIFIES DIRECTORS’ REVERSIBLE REMUNERATION FOR THE PURPOSES OF DOUBLE TAXATION AGREEMENTS.
In Ruling no. 330 of May 22, 2023 the Revenue Agency stated that directors’ fees paid by an Italian company in respect to the service of its director who is however under the obligation to pay them to his employer – a non-resident company belonging to the same group of the Italian company – (“repayable fees”) fall within the scope of art. 7 of the OECD Model. Therefore, in the absence of a permanent establishment in Italy of the non-resident company, such fees are not taxable in Italy.
This is an important statement from the Italian tax authority because in a previous Ruling (no. 167 of May 28, 2019) the Revenue Agency stated that – even if repayable fees shall not be taxed in the hands of the director due to the lack of entitlement to the income – the source state (Spain) may tax them pursuant to art. 16 of the OECD Model regarding directors’ fees.
In the case examined by ruling no. 330, Italy is the source state of the income. An Italian company has a director who is an employee of an EU associated company and the fee for the office of director is paid directly to the EU company.
The Revenue Agency states that (i) the remuneration is deductible on an accrual basis (and not on a cash basis as provided for standard directors’ fees), being a cost related to a provision of services and that (ii) for the purpose of double taxation conventions, in the Italian interpretation, repayable fees shall not fall under article 16, but under article 7 of the OECD Model. Therefore, in the absence of a permanent establishment in Italy of the non-resident company receiving the payment, the remuneration is not taxable in Italy.
It should be noted that this solution is only apparently contradictory to the one adopted in Ruling 167 of 2019. In that case, in fact, Italy just recognized that the taxation levied in Spain pursuant to Article 16 of the treaty with Italy could not be regarded as in breach of the treaty, with the result that Italy was obliged to allow the foreign tax credit. This solution is also in line with paragraph 32.3 of the Commentary in art. 23 of the OECD Model.
PROPOSAL FOR A SIMPLIFIED COMPOSITION AGREEMENT: THE ASSESSMENT OF THE ‘RITUAL’ OF THE APPLICATION.
The Court of Monza, finding that there were no requirements to pass the scrutiny of the validity of the proposal for a simplified composition agreement, recently rejected an application submitted by a company following the negative outcome of negotiations under the negotiated crisis procedure.
By a decree dated 17 April 2023, the Court of Monza ruled on an application for a simplified composition agreement submitted by a debtor at the end of a negotiated composition procedure pursuant to Article 12 et seq. of the Code of Corporate Crisis and Insolvency (“CCII“), which had been unsuccessful due to the impracticability of the solutions indicated in Article 23(1) and (2)(b) of the CCII.
The decree is very interesting because it contains some useful clarifications on the institution of the simplified composition with creditors and, in particular, on the extent of the assessment of the “rituality” of the application that the Court is required to carry out pursuant to Article 25-sexies, paragraph 3, of the CCII at the commencement of the procedure for the (possible) approval of the proposal of composition with creditors. As is well known, in fact, it is only upon the outcome of the assessment of the application’s validity, that the Court may appoint the auxiliary, and possibly, approve the proposal, at which point – having verified the regularity of the cross-examination and of the proceedings, as well as the compliance with the order of the causes of pre-emption and the feasibility of the liquidation plan – will it result that the proposal does not cause prejudice to the creditors with respect to the alternative of judicial liquidation and in any event will it ensure a benefit to each creditor.
In the case submitted to the Court of Monza, the College’s examination had a negative outcome and the simplified composition proposal submitted by the debtor was judged to be ‘irregular’, so that the actual approval phase of the application was not even opened.
In the course of the settlement procedure, the Expert had coordinated the negotiations, which consisted of a series of telematic meetings with the various groups of creditors, to whom the debtor had submitted a proposal providing for, among others, the payment in full of certain debts (including those accrued to social security institutions) and the ‘deduction’, i.e., the write-off, of others (including tax debts).
During the negotiations, only a few creditors expressed their position on the proposal, so that the Expert concluded by noting the negative outcome of the negotiations.
In the final report referred to in Article 18, paragraph 8 of the CCII, the Expert specified in particular that all the activities aimed at facilitating negotiations between the entrepreneur and the creditors had been unsuccessful and concluded that the other solutions provided for by the CCII, i.e. contracts, agreements, moratorium agreements pursuant to Article 62 CCII, debt restructuring agreements pursuant to Articles 57, 60, 61 CCII (i.e. the solutions identified by Article 23, paragraphs 1 and 2(b) CCII), were not feasible. 62 CCII, debt restructuring agreements pursuant to Articles 57, 60, 61 CCII (i.e. the solutions identified in Article 23(1) and (2)(b) CCII) were not practicable.
The debtor, therefore, given the negative outcome of the negotiations, decided to file a proposal for a simplified liquidation agreement pursuant to Article 25 sexies CCII.
The Court of Monza was called upon to rule on this proposal, and carried out an assessment of the validity of the request, verifying compliance with the deadline for submitting the proposal and the competence to rule on it, and then ascertained whether the Expert, in his final report, had actually certified (and in what terms) the following circumstances (i) that the negotiations with the creditors had in fact been carried out in accordance with fairness and good faith, (ii) that the negotiations had not been successful and (iii) that the solutions identified pursuant to Article 23(1) and (2) lett. (b) had not in fact been practicable.
With regard to the extent of such assessments of rituality, the Court of Monza, while not considering it an examination of the actual admissibility of the application, stated that it did not consider this first assessment to be purely formal. According to the Court of Monza, the assessment must not be limited to verifying that the Expert “has formally certified the existence of the conditions required by paragraph 1 of Article 25-sexies”, but must also be aimed at verifying the reliability and reasonableness of the Expert’s certifications, with the result that in the event that the latter are completely devoid of motivation, or are accompanied by motivations that are not reflected in the documentation in the file, the proposal must be considered “unritual“.
A first attestation of the Expert to be analysed related to whether the negotiations had indeed taken place in good faith and fair dealing. In the case at hand, the Expert’s final report only emphasised the correctness of the creditors’ conduct, and did not, on the contrary, dwell in any way on the debtor’s good faith and fair dealing during the negotiations within the negotiated settlement. The Court found this to be at odds with the rationale of Article 25 sexies CCII, which must be interpreted as meaning that the Expert’s attestation must focus primarily on the debtor’s conduct rather than on that of the creditors, given that “access to the simplified arrangement must be allowed to the entrepreneur precisely in cases where the negative outcome of the negotiated crisis settlement is attributable to unreasonably obstructive conduct of the creditors”. The Expert’s final report was therefore found to be deficient in this first respect.
The other aspect on which the Expert’s final attestation should focus concerns the impracticability of the solutions identified in Art. 23(1) and (2)(b) CCII.
Under this second profile, in order to consider the Expert’s final (negative) attestation as suitable and therefore to deem the application for a simplified composition agreement ‘ritual’, the Court of Monza clarified that it considers it necessary that (i) the entrepreneur has actually taken steps to pursue such instruments and objectives, (ii) the entrepreneur must have submitted a proposal that was not already impracticable at the time the negotiated settlement was initiated and that subsequently, for reasons not attributable to the debtor, including first and foremost the obstructive attitude of the creditors, was no longer feasible despite the entrepreneur having taken steps to that end.
Well, in the present case, the Court found that the above-mentioned conditions were not met. The Expert had merely acknowledged, in an apodictic manner, the impracticability of the alternative solutions without specifying the actual reasons for the impracticability. According to the Court, moreover, it should have been noted that from the very beginning of the negotiated settlement procedure the other solutions of Article 23 of the CCII were not feasible. With regard to the latter aspect, particular importance was attached to the treatment of tax debts: the appellant company, although it had proposed a tax debt write-off, had not resorted to the instrument of the debt restructuring agreement (an instrument that would have effectively allowed the write-off under the negotiated settlement) despite the fact that the Italian revenue agency itself had urged it to take that route (a route that would have led to a lesser sacrifice, for the creditor, than that envisaged in the proposal submitted by the appellant).
In conclusion, the Court found that the Expert’s attestation on the effective performance of the negotiations in accordance with fairness and good faith was “unritual”, that the impracticability of the solutions set forth in Article 23(1) and (2)(b) CCII had not been proven, and that the proposal for homologation was deficient with respect to the prerequisites for access to the procedure: this led the Court to conclude that the proposal for a simplified liquidation agreement was not valid.
OMNIA TEMPUS HABENT. MAKE WAY FOR NOTARIES!
What has changed since 28 February 2023 about voluntary jurisdiction and authorisations to protect the most vulnerable.
As is probably already well known, from 28 February 2023 notaries have become an alternative to the judge supervising a guardianship in respect of authorisations for the execution of public deeds and authenticated private contracts involving a minor, an interdicted person, an incapacitated person or a beneficiary of special assistance and for those deeds concerning succession property.
In the case of succession property (and subject to the legislation applicable on a case-by-case basis), the persons who could theoretically resort to the issuance of a “notarial” authorization are beneficiaries or heirs, the administrator of the estate in abeyance and the executor of the will.
In fact, article 21 of Legislative Decree No. 149 of 10 October 2022 provided that the notary authenticating the public deed or the notarised private deed involving one of the above-mentioned persons may issue the authorisation to execute the deed; until 28 February 2023, on the other hand, the authorisation was issued only by the judge supervising a guardianship following a procedure of voluntary jurisdiction.
The new updates are:
– the notary authorised to issue the authorisation is exclusively the authenticating notary (i.e., a notary shall not be able to execute the deed on the basis of an authorization issued by another notary);
– the notary may be freely chosen by the parties throughout the entire national territory (see Circular of the Ministry of Justice 02/05/2023);
– for the purposes of issuing the authorisation, the notary may be assisted by consultants, and may obtain information – without any formalities – from the spouse, relatives up to the third degree, and up to the second degree of affinity of the minor or of the person subject to a protective measure, or in the case of succession property, from the other beneficiaries and creditors resulting from the inventory, if prepared, and – in the case of a legacy – from the legatee;
– if as a result of the notarial deed a consideration shall be collected in the interest of the minor or the person subject to a protection measure, the notary shall establish – in the authorization – the necessary precautions for the money to be reused.
Regarding the procedural process:
– in order to obtain the authorisation, the parties’ prior written request is required either in person or through an attorney (but, as clarified in the Circular of the Ministry of Justice 02/05/2023, the payment of the stamp duty is not required, whereas it would be necessary if the party resorted to the judge supervising a guardianship);
– the notary’s authorisation is communicated, by the same notary, to the Court’s registry that would have been competent to issue the corresponding judicial authorisation and to the public prosecutor at the same Court;
– those who are entitled may challenge the authorisation by means of a complaint before the judicial authority according to the same rules applicable in the case of authorisations issued by the judge supervising a guardianship;
– the notarial authorisations become effective after twenty days from the above notifications, without any complaint having been filed. Authorisations issued by the notary may at any time be amended or revoked by the judge supervising a guardianship, but the rights acquired in good faith by third parties under agreements prior to the amendment or revocation shall remain unaffected.
Notaries will have a concurrent competence with the judge supervising a guardianship to grant authorisations for notarial deeds aimed at:
– accepting a property as a donation, selling/buying, exchanging or dividing it;
– accepting inheritance or legacies;
– cancelling mortgages or intervening in a mortgage deed as a mortgage giver.
In these cases, the authenticating notary must verify the need or evident utility of the extraordinary administration in the interest of the protected party.
Notaries, on the other hand, will not be able to issue authorisations to promote, renounce, settle or compromise in arbitration, as well as authorisations for the continuation of a commercial business, which remain within the exclusive competence of the judge supervising a guardianship.
CULTURAL HERITAGE SITES WITH RESTRICTIONS ON INTENDED USE: THE COUNCIL OF STATE ACKNOWLEDGES THAT THIS POWER LIES IN THE HANDS OF THE MINISTRY OF CULTURE.
Through an important decision, the Council of State’s Plenary Assembly no. 5 of 13 February 2023, admitted the possibility for the administration to impose, according to adequate justification, a “restriction on the use of the cultural heritage site” aimed at preventing situations of risk for the preservation of the material integrity of the cultural site itself or of the intangible value embodied therein even when the res is an expression of collective cultural identity. This is not only to ensure preservation from a material point of view, but to guarantee that “the sharing and transmission of the intangible cultural manifestation, which contributes to its testimony” shall endure over time.
In other words, based on the above decision it was finally clarified that the rules provided for by Legislative Decree No. 42/2004 regarding restrictions for the use of a cultural heritage site (Articles 7-bis, 10 paragraph 3 letter d), 18 paragraph 1, 20 paragraph 1, 21 paragraph 4, and 29 paragraph 2 of Legislative Decree no. 42 of 2004) shall concern not only its material preservation, but also the transmission of the values embodied in it, which make it a ‘living testimony‘ of these values and of the related intangible cultural manifestations.
It is worth reminding that before such decision, the administrative case-law had not unequivocally resolved the question of law on the admissibility of a “cultural use restriction”; thus, against contrary rulings, favorable decisions were made, which however – while accepting the obligation of a use restriction for preservation of the cultural site – have rather identified prerequisites on the basis of which the State administration could issue the restriction measure.
In a nutshell, there were three different perspectives adopted by case-law on the subject:
(i) a first perspective denying ab origine the admissibility of the use restriction since it was incompatible with and detrimental to the right of ownership;
(ii) a second perspective that accepted the imposition of a cultural use restriction, under exceptional and circumscribed circumstances linked to the particular transformation of the site with its specific use and close connection to a historical-cultural initiative of significant importance;
(iii) and lastly, a third perspective that permitted the imposition of a cultural use restriction, subject to adequate explanation of the underlying reasons.
Upon closer examination, the Plenary Assembly considers adhering to the third perspective above, based on the legislation in force and also deeming that such perspective is more in line with the objectives of general interest aimed at protecting cultural heritage, apart from being consistent with the constitutional framework of reference, in particular with Article 9 of the Constitution according to which the cultural interest shall prevail over any other interest, including economic interests, in evaluations concerning reciprocal relations (ex multis: Constitutional Court no. 151 of 27 June 1986).
As correctly observed, this decision is important because the cultural site can be protected not only in its “physical” dimension but also in the use that is imprinted on it and which can be exercised therein.
The Ministry of Culture holds very clear power deriving from the imposition of a cultural restriction that will prevent uses other than the one historically conducted on the site. Therefore, in these cases, cultural interest emerges from the relationship that exists between the site and the activity that has been present for some time. This is a combination of a tangible asset (the property) and an intangible one (the use) which – as noted by the Council of State – constitutes an inseparable element that gives shape to: “that peculiar artistic and historical expression recognized as being of particular cultural interest“.
For these reasons, on the basis of the abovementioned arguments, the Plenary Assembly of the Council of State enunciated the following principles of law:
“- pursuant to Articles 7 bis, 10, paragraph 3, letter d), 18, paragraph 1, 20, paragraph 1, 21, paragraph 4, and 29, paragraph 2, of the Legislative Decree no. 42 of 2004 (Cultural Heritage Code), a restriction on the use of the cultural site may be imposed when the measure is useful to preserve the material integrity of the asset or of its historical or artistic characteristics, according to adequate reasons clarifying the need to prevent situations of risk to preserve the material integrity of the cultural asset or of the intangible value incorporated therein”;
“- pursuant to Articles 7 bis, 10, paragraph 3, letter d), 18, paragraph 1, 20, paragraph 1, 21, paragraph 4, and 29, paragraph 2, of Code No. 42 of 2004, a restriction on the use of a cultural site may be imposed to protect property that is an expression of collective cultural identity, not only to provide for its preservation from a material aspect, but also to allow the sharing and transmission of the intangible cultural manifestation, which contributes to its testimony “.
In particular, the decision concerns the intended use of the immovable property and the constraints regarding its future and possible usage. Nonetheless, the principle expressed could theoretically also be applied to the protection of movable properties, the use of which are strongly imprinted in the property itself.
n.digiandomenico @macchi-gangemi.com
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