The Italian Ministry of Infrastructure and Transport (MIT) issued a legal opinion on February 5, 2026, clarifying the complex interplay between advance payments to contractors and the transfer of credit rights in public works projects. The ruling, detailed in opinion number 4010, addresses a common scenario where companies seek liquidity by ceding credit derived from contracts, and whether this impacts their eligibility for anticipated payments.
The core question presented to the MIT concerned whether a contracting authority could deny a 20% advance payment, as stipulated in Article 125 of Legislative Decree 36/2023 (the Public Contracts Code), if the contractor had already assigned the credit to a third party. Conversely, the inquiry asked if a contracting authority, having already disbursed the advance, would be bound by a subsequent notification of credit assignment.
According to the MIT, advance payments and credit assignments are distinct instruments impacting the same underlying credit. An advance payment is intended to provide immediate liquidity to the contractor during project execution, predicated on the contractor retaining ownership of the credit. A credit assignment, however, transfers that right to a third party, removing it from the contractor’s control. If a credit has already been assigned, it cannot simultaneously be advanced, as the prerequisite of ownership no longer exists.
The opinion further addresses situations where an advance has already been paid. It stipulates that if the credit assignment encompasses future receivables distinct from the already-paid advance, the contracting authority cannot automatically reject the assignment, but must provide justification for doing so. However, if the assignment includes the credit related to the advance payment, the contracting authority can legitimately object, asserting that its obligation has already been partially fulfilled. The advance payment constitutes a partial settlement of the contractual debt, and is therefore enforceable against the assignee under Article 6 of Annex II.14 to Legislative Decree 36/2023, which allows the contracting authority to raise any objections it could have made against the original creditor.
The MIT emphasized that it wasn’t establishing new regulations, but rather clarifying the consistent application of existing laws, focusing on credit ownership and the effects of assignment. An advance payment doesn’t create a new credit; it’s merely an early disbursement of a portion of the contractually owed amount. A credit assignment, conversely, transfers that credit to a third party to the extent it exists at the time of transfer.
The guidance offers practical implications for both contracting authorities and companies. If a credit has been assigned and properly notified, a contractor cannot then claim an advance on the same amount. Similarly, once an advance has been made, the contracting authority can invoke the payment against any subsequent claim by an assignee for that portion of the credit. However, assignments covering future receivables not yet advanced are subject to review, not automatic rejection.
The Ministry’s opinion underscores that a contract’s credit can be subject to either advance payment or assignment, but not both simultaneously. Determining the actual ownership and remaining value of the credit is therefore crucial to avoid disputes between the contractor, the contracting authority, and any assignee, particularly given the importance of liquidity management in project execution.
