Highway Code

Foreign number plate fraudsters, no foreign policy (but not right away)

In Naples, 35,000 Polish plates to escape the high cost of third party liability insurance with rents of convenience. But the contracts could be null and void. And in a year's time a possible squeeze

by Maurizio Hazan and Pasquale Picone

12 November 2024

3' min read

3' min read

Among the proxies for the reform of the Highway Code contained in Article 35, paragraph 3 of the bill that is about to become law, one touches on the worrying phenomenon of vehicles with foreign number plates habitually circulating in Italy (regularised by registering them in the Reve registry), evading the tax and insurance costs associated with Italian number plates.

The proof is that the phenomenon is especially widespread in the Naples area (over 35,000 registrations in the Reve, mainly with Polish number plates), where the Rc auto costs a lot.

How Circumvention Works

The evasive use mostly takes place by transferring the ownership of the vehicle from an Italian to a foreign rental company, which registers it in its own country and then leases it back to the former owner, who uses it as before, paying a rental fee including a low-cost third-party motor insurance contract with a local insurer.

The hole in the regulations

Registration abroad, per Article 13 of the Solvency II Directive and Article 1(1)(fff) of the Insurance Code, identifies the location of the risk in the EU country of registration, making it insurable only by a company established there (or operating under the freedom to provide services, Lps). And the Highway Code (Article 93-bis, paragraph 1), if the owner of the vehicle takes up residence in Italy, allows it to remain with a foreign number plate for three months, after which he must re-register it in Italy.

At that point, foreign cover is not possible, except with a company under establishment or Lps.

The case of a vehicle owned by a foreign subject and driven in Italy by an Italian by virtue of a title (such as hire or loan) is different: Article 93-bis, paragraph 2 only requires the registration of the foreign number plate with the Reve, after 30 days, even if not continuous. It says nothing about the insurance obligation, not even linking it to Article 125 of the Insurance Code, which does allow the vehicle to circulate in Italy with a green card, but only temporarily.

Null policy risk

If, on the other hand, the vehicle is habitually driven in Italy, registration with the Reve does not in itself seem to correctly discharge the insurance obligation through companies based in the EU State of registration. All the more so if the vehicle had Italian number plates and is leased to the previous owner: it would seem to be a transaction in fraud of the law, to be considered null and void (Article 1344, Civil Code).

Problems for the damaged

In any case, there is a vulnus to the mutualistic principle and to the rules and headmasters (including anti-fraud) of the Rc auto. With pitfalls for injured parties, who are forced to take more circuitous routes than those possible with 'Italian' companies.

Therefore, it is welcome that the reform bill provides for a maximum time limit after which the vehicle must be registered in Italy and after which it must in any case be covered by a policy complying with Italian regulations. Article 35 of the Bill contains the delegation to the Government to fix the details within a year. Starting with the maximum time for which it will be possible to remain with a foreign number plate and policy.