Our contributing writer Alessandra Marson explores the real meaning behind the “Made in Italy” label. In this new articles series called IP.101, we will be decoding the legal issues behind the business of fashion.
It is written “Made in Italy” and it is read as elegant dresses and sophisticated design. 94.1% of small medium-sized enterprises involved in the process. 0.2% of the Earth’s land. The Italian fashion-luxury market is valued billions of euros and it’s by far one of the most valuable luxury markets in the world. But what does “Made in Italy” really mean?
It is, as a matter of fact, a Country-of-origin labelling. Every Country in the world has one, and depending on the structure of the national market we tend to associate the Country-of-origin labelling to specific values and traditions. Italy’s appeal, for example, is deeply linked to his history, art, centuries-old architecture, culture and elegance, landscapes and – of course – his charismatic inhabitants. The result is that “Made in Italy” in 2017 overcomes the concept of country-of-origin labelling, to represent the endpoint of the entire evolutionary path of Italian civilization.
The “four A” of Made in Italy, areas in which this label secures his success, are the following: Food (“Alimentazione), Clothes and fashion (“Abbigliamento e moda”), Design (“Arredamento”) and Automation and mechanics (“Automazione e meccanica”).
In the face of the success of the low-quality-products market, the protection of this heritage is one of the most ambitious challenges of the Italian legislature, which is called upon to deal with conflicting and often incompatible interests: on one hand, large companies (taking advantage of the delocalization of their productions – they would rather go for a less rigorous use of the Made in Italy label), on the other hand, the interests of small-scale producers, who have always been advocates of a fair use discipline of the “Made in Italy” label in order to enhance the craftsmanship of their manufactures.
We also recall that Italy, European Union Member State and Civil Law system, is governed by a threefold system of rules which interact according to a precise hierarchy: international agreements and treaties in primis, European legislation in secundis, and legislation national. The role of jurisprudence is secondary. This means that if, for example, there is a Regulation of the European Union handling civil and commercial matters, the italian legislator will have to refer to that regulation first, and only if not applicable or expressly allowed by one of his articles he might refer to the national legislation.
The main junctions of the Made in Italy regulatory framework will be analyzed in the following article with the ambition to make them understandable for a public which is unfamiliar to legal issues.
I. When it all began: Agreement of Madrid, 14 April 1891
On the international level, the Madrid Agreement of 14 April 1891, revised in Lisbon on 31 October 1958, requires the “clear indication in evident characters of the country or place of manufacture or production, or another indication sufficient to avoid any error on the actual source, under penalty of confiscation of the products. “
The italian legislator transposed the Convention only in part, and confiscation is only foreseen in case of circumvention of indication of the origin.
On this basis, since 2004 the legislation on Made in Italy has undertaken interesting developments.
II. Redesigning “Made in Italy”, in light of the new European Measures: Legge finanziaria 2004
The Law no. 350 of 24 December 2003 (so-called “Legge finanziaria 2004”) provides, with reference to European law, that “Made in Italy” may be a product:
- a) Completely made in Italy;
- b) Made partly in Italy and partly abroad. This is the case when, on a par with the Community Customs Code (that Italy needs to apply as a Member State), the last substantial processing or working took place in Italy. So basically the product, in order to be considered Made in Italy, should acquire its own properties and a composition of its own after the importation in Italy (CJUE 26 January 1977, C-49/76).
III. Not just a matter of source, but origins: Decreto Competitività 2005
The Decreto Competitività 2005, converted into Law No. 80 of 2005, aims to better define the scope of the Legge Finanziaria 2004.
This law not only tightened up the penalties previously provided for the sale of industrial products with “misleading signs” (2 years imprisonment and fine up to 20k euros), but also has the merit to attribute relevance, other than to the wrong or misleading indications of source, to the wrong or misleading indications of the origin.
Let’s make an example:
IV. Case study: Italian Supreme Court, Criminal Section, 20th january 2006, judgement n.2648
In the present case, a shipment of clothes from Moldova were seized because of their indication of origin, which stated “designed & produced by Alfa srl Rovereto Italy“.
The Court decided as follows: “Although the design and the fabric are Italian, the fact remains that the processing of the product has taken place abroad (…) by workers who do not have the same tradition as Italian ones in this specific sector“. Since this circumstance was not mentioned in the label, which implied that the production had taken place in Italy, the consumer of medium diligence could be deceived on the origin of the product.
V. The 100% Made in Italy: Law No.166 of 20 November 2009
2009 is an important year for Made in Italy. Among the Laws that have been enforced during the summer 2009, one is still applicable, Law No.166 of 2009. This text has the merit of reshaping Made in Italy as a tool for companies that maintain production strictly on the national territory.
According to this Law, “it is considered as entirely made in Italy the product or merchandise whose design, engineering, processing and packaging are completed exclusively on the Italian territory “.
As a consequence, only the products that comply these conditions can legitimately be entitled to “100% Made in Italy“, “100% Italy“, “all Italian” etc.
Let’s say that with this law, in Italy we establish a double track:
(a) Entrepreneurs whose production is carried out exclusively in Italy will be considered “Qualified Made in Italy”, “Made in Italy 100%” according to Law n.166/2009;
(b) Companies whose production has met in our country only the last substantial transformation or processing will be considered “Made in Italy” according to Law n. 350/2003.
And yes, we share the perplexity about the practical effectiveness of this normative. But we also need to understand that in such sensitive fields it is not easy for the national legislator to balance the interests of the European Union with the local manufacturers’. The challenge is evident when it comes to the Law Reguzzoni-Versace-Calearo, that will close our brief excursus.
VI. The unsuccessful protectionist attempt: Reguzzoni-Versace-Calearo Law (in force but not applicable)
Law no. 55 of 8 April 2010 (so called “Reguzzoni-Versace-Calearo” from the names of the Members of the Italian Parliament who proposed it) it is a very brave measure addressed to specific sectors: textiles, leather goods, shoe industry, sofas and tanning products.
In summary, this Law wants to impose a compulsory marking system that allows to track each production stage of a product. The tag should, according to this law, include an intricate list of specific information about the people, the materials and the know-how that have been employed. Once the tag is properly applied, only the following products will have the right to be recognized as Made in Italy:
(a) the products whose working phases have taken place mainly on the national territory;
(b) the products which have at least two working phases carried out on the national territory.
Glossing over how difficult would it be to fill all those information in a single tag, and the vagueness of option (a), it is evident that the forecast of “at least two stages of processing” on national territory is in conflict both with the supranational principle of free movement of goods, and with the Community Customs Code – discussed in point II – which makes this law unenforceable.
Is this european interventionism fair towards the specificity of Made in Italy label?
That might be a question for another day. It is true that, despite Italy being a Member State, the role and the personality of the Made in Italy brand do not lend itself to a uniform regulating system. It is equally true that the ineffectiveness of Italian legislation in this field is remarkable, and paradoxically, in the attempt to protect the small Italian (and honest) companies, these are the ones most affected by the adverse effects of such a situation.