PUBLIC ADVISORY
Indian companies are advised to take due precaution while engaging in business transactions, particularly when dealing with new or unfamiliar companies.
A list of some check points to consider is given here below. It is not an exhaustive list.
1. Check the status of the Italian company by requesting a copy of the Company Registration Report, in English, from the business register of the Italian Chambers of Commerce. The service is on payment basis. Requests can be made at the following website:
http://www.registroimprese.it/web/guest/home
In case of very large transactions or mergers and acquisition operations it is advisable to consult an Italian business service company/firm which can provide a report on the business transparency, financial health, reputation, reliability and credential of the company.( Company’s Due Diligence)
2. Payment with Letter of Credit (L/C) is advisable when the contract is of a high value. In alternative, both the parties should operate through an “Escrow account” or “Bank guarantee” route.
3. In all business agreements an arbitration clause should be included, fair to both parties. A suggested formulation is:
“All disputes or differences whatsoever arising between the parties out of or relating to the construction, meaning and operation or effect of this contract or the breach thereof shall be settled by arbitration of the…... (insert name of arbitration body/council) and the award made in pursuance thereof shall be binding on the parties”.
4. For export of any product from India, the Indian exporter must ensure that all the procedural formalities for Italian/ European Union rules and regulations are followed.
European regulations for import/export may be consulted at the following link:
https://europa.eu/european-union/business/import-export_en
5. A number of Italian companies have gone bankrupt due to the recent world economic crisis. The Consulate has noted that Indian companies are rarely aware that the non-payment of the pending invoices is due to the fact that the Italian company has filed a bankruptcy petition.
To check if the Italian company has filed a bankruptcy petition, the following website may be consulted:
http://www.portalecreditori.it/index.php?altre=fallimenti
The Creditors' Portal provides information on the bankruptcy proceedings for the benefit of Creditors and Bankruptcy Trustees. Through the Portal, the Creditors can access the reserved area to see the documents made available by the Bankruptcy Trustees.
For an Indian company, creditor of an Italian company which has filed for bankruptcy, to be able to register as an official creditor and avail of the legal safeguards, it has to appoint an Italian lawyer to represent the company during the bankruptcy procedure.
Procedure to register a trade dispute complaint with the Consulate General of India in Milan
Indian enterprise intending to register a complaint against an Italian company may file Quality Control & Trade Disputes (QCTD) Module available at the following link:
https://www.dgft.gov.in/CP/?opt=quality-compaints#
and inform Commercial Office of the Consulate General of India in Milan.
Contact details of Commercial office are as follows:
Marketing Assistant,
Consulate General of India
Piazza Paolo Ferrari 8
20121 Milan, Italy
Tel: 0039-02-8057691
Email: enquiries[dot]milan[at]mea[dot]gov[dot]in
Website: www.cgimilan.gov.in
