Financial Guarantees for the Public Administration

The following issues have been identified in the Italian market of financial guarantees: in some cases, financial guarantees and suretyship policies have been issued by subjects not authorised to do so or were subsequently found to be counterfeit; in other cases, they have been issued by subjects appropriately authorised but that turned out to be insolvent when it was necessary to enforce the guarantee; other times, it was difficult if not impossible to put the guarantees into effect because the guarantor invoked ambiguous contract terms.

IVASS, the Bank of Italy, ANAC (the National Anti-Corruption Authority) and the Antitrust Authority have set up a technical panel to address these issues in a coordinated manner. The first initiative of the panel is the publication of a set of suggestions that public administrations can follow to reduce the risk of accepting financial guarantees that are not valid.

These suggestions are useful also for private individuals seeking financial guarantees to the benefit of the public administration or other private individuals.

Here are some of the suggestions provided: check if the guarantee is issued by an authorized subject; how to understand if the proposed guarantee is fake, the checks to be made on the financial soundness of the guarantor, compliance of the contract terms with the regulations and/or the tender notice.

IVASS has been collaborating for some time with the investigating authorities to combat counterfeiting of suretyship policies. This activity has been the subject of a hearing of IVASS Secretary General at the Parliamentary Committee of Inquiry on illegal activities linked to the waste cycle and on the related environmental crimes on 3 February 2020.