Anti-Corruption 2019 Second Edition

Last Updated December 09, 2019

Italy

Law and Practice

Authors



Studio Legale Crippa Pistochini was founded in 2003 in Milan and has a team of 15 professionals, among them a full professor in criminal procedural law. The firm provides assistance in the area of corporate criminal law to Italian and international clients, liaising with leading Italian and international law firms. With experience in all criminal jurisdictions and post-graduate specialisations in criminal law, the lawyers advise companies and individuals on preventative steps and, in the judicial phase, regarding criminal business law issues. In light of this specialisation, Crippa Pistochini has been involved in many relevant cases concerning public administration crimes, tax and financial crimes, environmental crimes and the criminal liability of legal entities under Legislative Decree No 231/2001.

Italy is a signatory to several international conventions on bribery and corruption, including: 

  • the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (signed in Paris on 17 December 1997 and ratified on 15 December 2000);
  • the Convention drawn up on the basis of Article K.3 (2) (c) of the Treaty on European Union on the fight against corruption involving officials of the European communities or officials of member states of the European Union (signed in Brussels on 26 May 1997 and ratified on 6 March 2003); 
  • the United Nations Convention against Corruption (signed in New York on 31 October 2003 and ratified on 5 October 2010) which emphasises the preventative dimension of anti-corruption legislation and contributed to the adoption of a normative package in 2012, which marks a policy shift from punitive to preventative in the Italian approach to corruption;
  • the Council of Europe’s Criminal Law Convention on Corruption (signed in Strasbourg on 27 January 1999 and ratified on 13 June 2013), the scope of which is not limited to the criminalisation of active and passive corruption, both domestic and international, but includes corruption in the private sector, trading in influence and certain conduct considered instrumental to corruption offences, such as money laundering and tax and corporate offences; and
  • the Council of Europe’s Civil Law Convention on Corruption (signed in Strasbourg on 4 November 1999 and ratified on 13 June 2013). 

In the Italian legal system, legislation relating to corruption offences is provided in the section dedicated to offences against the public administration of the Criminal Code and in the Code of Criminal Procedure.

However, some fundamental provisions specifically applicable to bribery offences can also be found in Legislative Decree 231/2001 (referring to the administrative liability of legal entities – see 1.3.3 Corporate Liability) and in the Civil Code (which punishes bribery in the private sector – see 1.2 Classification and Constituent Elements).

The interpretation and enforcement of anti-corruption provisions is requested of Italian courts, whose activity is facilitated by the contributions of legal doctrine. Although Italy does not adopt a stare decisis principle, some important case-law rulings play a significant persuasive role in the interpretation of anti-corruption rules. 

On the administrative front, the National Anti-Corruption Authority has published numerous recommendations and guidelines, which, though many of them are not binding, help to provide important elements for the interpretation and enforcement of the rules on the prevention of corruption (eg regarding legal services or prevention of corruption in state-owned companies). 

Since 2012, Italy has embarked on a path of broad-ranging structural reforms directly or indirectly related to anti-corruption provisions, which have significantly amended the Criminal Code, the Code of Criminal Procedure and even the Penitentiary System. 

The so-called Anticorruption Law (Law No 190/2012) was subsequently enhanced in 2015 (Law No 69/2015) and 2017 (Law No 103/2017), notably by increasing criminal sanctions and limitation periods related to corruption offences, as well as by extending their scope. 

However, the most effective amendments to the anti-corruption measures were introduced in 2019 by Law No 3/2019 (the so-called “Bribe Destroyer Act”), which aims to take a significant step to further advance the repression of bribery. 

More specifically, its first part strengthens the prosecution and punishment of corruption, both in the public and private sectors, by providing for criminal offences committed after it came into force with: 

  • more severe sanctions for the offence of bribery in the exercise of official functions, by increasing the minimum sentence of three years’ imprisonment to up to eight years’ imprisonment; 
  • the opportunity to prosecute bribery offences committed by Italian or foreign citizens abroad, even in the absence of a request by the minister of justice or an application/complaint by the victim;
  • the prosecution of passive bribery of foreign officials working in international organisations or international courts (see 1.2 Classification and Constituent Elements); 
  • an extension of the scope of application and an increase in the accessory penalties resulting from a conviction for corruption crimes (ie the inability to contract with the public administration, and permanent disqualification from public office in the event of a sentence of more than two years' imprisonment); 
  • in the event of crimes against the public administration, suspension of sentence and plea-bargaining subject to the repayment of the amount of the bribe; 
  • an increase in the duration of disqualifying sanctions that may be imposed on convicted companies and legal entities, in the event of offences against the public administration;
  • the amendment of the crime of trading in influence; 
  • the introduction of a cause of non-punishment for a person who co-operates with the justice system through a spontaneous confession before having knowledge of the proceedings (and in any case, within four months of the criminal offence); and
  • the opportunity to punish bribery in the private sector ex officio. 

Furthermore, Anticorruption Law No 3/2019 provides crucial reform of the statute of limitations system, introducing the stopping of the time limit at the first-instance judgment. However, in consideration of its significant effect, this amendment will come into force only for crimes committed from 1 January 2020.

Definition of Bribery

The Italian legislator punishes corrupt offences by means of a complex regulatory system characterised by the presence of different types of crimes, which are provided for in Articles 318, 319, 319-ter and 320 (passive bribery) and Articles 321 and 322 (active bribery) of the Criminal Code. 

More specifically, the Criminal Code considers as a criminal offence the conduct of a public official or person performing a public service: 

  • who, to exercise their functions or powers, unduly receives, for themselves or a third party, money or another advantage, or accepts a promise for them (Article 318 – bribery for the exercise of a function);
  • who receives money or any other advantage, or the promise thereof, for themselves or a third party, to omit or delay, or for having omitted or delayed, acts relating to their office, or to perform or for having performed acts in breach of their official duties (Article 319 – bribery for performance of acts in breach of official duties); 
  • who commits the offences described in both points directly above in favour of or against a party to civil, criminal or administrative proceedings (Article 319-ter – bribery in judicial proceedings). 

Punishment for passive bribery also applies to whoever gives or promises money or any other advantage to a public official or person performing a public service if the promise is accepted (Article 321 – active bribery). 

Conversely, if the offer or promise of, or request for, a bribe is not accepted, the mere conduct of incitement to corruption is considered as a minor criminal offence (pursuant to Article 322, punishment provided for in Articles 318 or 319 is reduced by one third). 

Under Italian legislation, bribery offences include not only cases where the public official performs an act in accordance with or contrary to their official duties because of a previous agreement with the bribe giver. In fact, even the mere agreement (or the mere solicitation) to exercise the functions of the public official in return for a bribe also constitutes conduct punishable under criminal law. In other terms, there is no requirement that the results expected by the perpetrators actually occur.

Promotional Expenditure and Facilitation Payments

It is important to note that the Criminal Code does not distinguish between a bribe (money or other advantage) and gifts, promotional expenditures or other facilitation payments. For this reason, even a small amount of money can trigger criminal provisions concerning corruption if related to the exercise of a public function by the receiver. 

However, many companies and public authorities have adopted codes of conduct that specifically address this issue by regulating the conditions and extent of facilitation payments. 

For example, the Code of Conduct for Public Employees (Presidential Decree No 62/2013) allows the possibility of receiving gifts of modest value (not exceeding EUR150 or EUR250 for MPs) occasionally given as part of normal courtesy and international custom as long as they are not strictly connected to acts committed by the public official.

Failure to Prevent Bribery

The Italian criminal law system does not contemplate the conduct of individuals who fail to prevent bribery as an offence. In fact, the general provision set out in Article 40 of the Criminal Code for cases in which omission to avert a result is treated as an active act does not cover corruption offences. 

However, where bribery is perpetrated by a person associated with a legal entity subject to Legislative Decree No 231/2001, such legal entity may be deemed liable for not having adopted appropriate compliance programmes (see 4.1 National Legislation and Duties to Prevent Corruption).

Bribery of Local and Foreign Public Officials

The definition of “public official” is provided by Article 357 of the Criminal Code, as those who perform a legislative, judicial or administrative public function, ie, an administrative function that is:

  • regulated by public law provisions and the acts of an authority; and
  • characterised by the formation and statement of the public administration’s will or by its implementation by means of authority and certifying powers. 

In addition to this, anti-corruption provisions also cover acts committed by a “person performing a public service”, which, under Article 358 of the Criminal Code, is defined as whoever performs any activity that is governed in accordance with the same modalities as a public function, excluding the performance of simply ordinary tasks and exclusively manual work. 

According to Italian case law, the definition of public official covers a wide range of cases, including any person who carries out a public function even without formal appointment by a public institution. 

Moreover, according to international conventions ratified by Italy, Article 322-bis of the ICC extends the provisions applicable to domestic public officials to foreign public officials. More specifically, active and passive bribery of foreign officials is triggered in all cases when involving: 

  • members of European Union institutions; 
  • contracted officials and agents in accordance with either staff regulations applying to European Union officials or to the provisions applying to European Union agents; 
  • any person seconded to the European Union by the member states or by any public or private body, who carries out functions corresponding to those performed by the officials or agents of the European Union; 
  • members and servants of bodies created on the basis of founding Treaties of the European Union; 
  • those who, within European Union member states, carry out functions or activities corresponding to those performed by public officials or persons performing a public service; 
  • members of the International Criminal Court; 
  • persons exercising public functions or activities within the framework of international public organisations and members of international parliamentary assemblies or of an international or supranational organisation, and judges and officials of international courts (as amended by Law No 3/2019). 

Bribery Between Private Parties

In accordance with the Council of Europe’s Criminal Law Convention on Corruption, the Italian legislator criminalises bribery between private parties. 

More specifically, Article 2635 of the Italian Civil Code punishes directors, general managers or managers responsible for preparing a company's financial reports, statutory auditors, liquidators or any other employees of private entities who solicit or receive undue money or other advantages (or accept the promise thereof) to perform or omit an act in breach of their duties. 

The same sanctions also apply to whoever, even through an intermediary, offers, promises or gives money or other benefits not due to the persons mentioned above. 

It is important to note that Anticorruption Law No 3/2019 has introduced the opportunity to punish ex officio bribery in the private sector by eliminating the procedural requirement of a complaint by the victim. 

Influence-Peddling

In addition to corruption offences, the Criminal Code also punishes the conduct of active and passive trading in influence. 

In particular, under Article 346-bis ICC the conduct of any private person or official who, by exploiting or claiming a real or apparent influence on a public official or a person in charge of a public service, unduly receives money or other financial advantage, as the price of their own illicit mediation or for the payment of the public official, to act in contradiction to their duties or to omit or delay to act on their duties, is considered criminal. 

As a result of Anticorruption Law No 3/2019, Article 346-bis ICC has extended its scope to the influence-peddling of foreign public officials as defined by Article 322-bis ICC (see Bribery of Local and Foreign Public Officials, above). 

Financial Record-Keeping

As required by international conventions, the Italian legislator criminalises certain conduct deemed preparatory to bribery offences. 

For such reason, Article 2621 of the Civil Code punishes directors, general managers or managers responsible for preparing the company's financial reports, or statutory auditors and liquidators who, in order to obtain an undue profit for themselves or for others, falsify financial statements, reports or other corporate communications addressed to shareholders or the public, by misrepresenting the financial situation of the company (or group). 

It is important to underline that such criminal offence can be triggered even in the event of “evaluation”; if the author of financial statements intentionally departs from the evaluation criteria established by law without giving adequate supporting information (see Criminal Court of Cassation, Joint Sections, 31 March 2019, No 22474). 

More severe penalties are envisaged for accounting fraud regarding listed companies (Article 2622 of Civil Code).

Further Offences Perpetrated by Public Officials

In the Criminal Code there are several offences related to forms of:

  • misappropriation by a public official; or
  • unlawful request to pay undue sums originating from a public official.

With regard to the first hypothesis, the crime of embezzlement is ruled by Article 314 of the Criminal Code, with reference to a public official who, having possession of, or in any case having availability of, money or another thing by reason of their functions, makes it their own.

In this case, no unlawful request or order must arise from the public official, whose behaviour is limited to embezzling money or another thing of which they have possession.

No exception is provided by the law if the public official acted with the aim of using the money (or the thing) temporarily, after which, the money (or the thing) was immediately returned. In this case, the only leniency for the public official is a lower sanction.

Very different from this is the case of unlawful request or order to pay undue sums made by a public official.

The first crime is provided for by Article 317 of the Criminal Code (blackmail by a public official), according to which a public official who, abusing their functions, forces someone to give or promise money or other undue benefits to them or to a third person, is punishable. This crime concerns any undue sums or benefits and is not only related to public funds. 

The essential features of this crime – which, according to the Supreme Court interpretation, distinguish it from other similar offences – are the following:

  • the public official forces the victim through violence or threats;
  • as a consequence of this behaviour, the victim is forced to choose between the alternative of suffering the injustice arising from the public official or avoiding it by giving or promising them the undue benefit; or
  • no advantage or benefit (either direct or indirect) can result for the victim from the public official’s conduct.

The above crime differs from the offence described by Article 319-quater of the Criminal Code (undue induction to give or promise benefits), according to which a public official who, by abusing their powers, induces someone to give or promise money or undue benefits to them or to a third person, is punishable.

The essential features of the latter crime are the following:

  • the public official does not force the “victim” (actually, the “induced person”) through violence or threat, but persuades and influences them with a sort of “moral” pressure;
  • as a consequence of this behaviour, the induced person is not placed in a position to choose between the alternative of suffering the injustice or avoiding it by giving or promising the undue benefit, but, having freedom of choice, voluntarily decides to accept the request made by the public official;
  • the fact that a personal advantage or benefit can result for the induced person from the public official’s conduct.

Abuse in office

In the Italian law system, public officials have the general duty to abstain in the case of a personal conflict of interest (or in the event of a relative’s conflict of interest) and failure to do so may fall under the crime of abuse in office as set forth by Article 323 Criminal Code.

However, merely not observing the duty to abstain is sufficient to be deemed abuse in office (the other conduct described by the legal provision is breach of the law or regulations), but is not enough to trigger the offence under discussion.

Indeed, for the occurrence of the offence under Article 323 Criminal Code, the law also requires:

  • an undue financial advantage for the public official or others or, alternatively, cause unjust harm or damage to others;
  • the specific intention of the public official who acts in order to obtain an undue advantage for themselves or others, or to cause harm or damage to a third party.

According to this provision, the public official is punished whenever they act intentionally in breach of the law, or, otherwise, they fail to abstain in circumstances of conflict of interest (relevant even in the event of a third party’s interest), obtaining – in this way – an undue profit for themselves (or for others) or, alternatively, causing harm or damage to others. 

Endangerment of fairness of tenders

Conduct linked to favouritism by a public official who guarantees an undue advantage to a third party by acting in breach of the law ensuring free and equal access to bidders for the granting of contracts, is relevant from a criminal law perspective and is punishable by two different provisions included in the Criminal Code. 

Article 353 Criminal Code sets out that anyone who, by means of violence or threat, gifts, promises, collusion or other fraudulent means, prevents or disrupts the fair course of a tender, or prevents tenderers from competing in it, is committing an offence.

Moreover, in the event that such conduct is carried out by a person designated by law or public authority to manage the tender, the sanctions (fine and imprisonment) are increased. In this case, the designated person is considered to hold the office of a public official.

The second offence to be considered is the crime or offence of disrupting the fairness of the procedure for choosing a bidder as set forth in Article 353-bis Criminal Code.

This legal provision punishes anyone who, by means of violence or threat, gifts, promises, collusion or other fraudulent means, alters the administrative proceedings intended to determine the content of the call for bids, or any other equivalent notice, with the intention of influencing the methods adopted by the Tender Authority for choosing the successful bidder.

In other words, this legal provision is aimed at protecting the fairness of the tender, punishing behaviours intended to create a “tailor-made” invitation to tender in order to facilitate one of the bidders.

Lastly, both the above-mentioned offences are known as “endangerment crime” (reato di pericolo), and are triggered independently of the fact that the fair course of the tender may have been disrupted or the call for bids may have been modified. For these crimes to be perpetrated, it is required only that the conduct carried out by the agent is sufficient to endanger the fairness of the tender or the administrative procedure aimed at determining the content of the invitation to tender.

Role of Intermediaries

Some of the specific offences against the public administration (ie Articles 317, 318, 319, 319-quater, 323 Criminal Code) provide for the liability of a public official, both in the event the act is committed by them and in the event the advantage or money (as payment for the performance or omission of the due/undue act, or merely as a result of the position the public official holds) is received by a third party.

Furthermore, all the above-mentioned offences may hypothetically be committed through an intermediary, and the criminal system has a general rule, set forth in Article 110 Criminal Code, according to which any person who participates in the commission of a crime (through conscious behaviour or causally linked to the act) is liable for it. In this way, any third party who acts together with an agent is equally liable for the crime committed.

The statute of limitations of the aforesaid offences differs from crime to crime and must be calculated from the time the offence was perpetrated. 

According to Article 157 of the Criminal Code, the crime is extinguished in the period corresponding to the maximum prison term provided for each offence and, in any event, in a period not less than six years. 

For instance, considering that the crime of misappropriation under Article 314 of the Criminal Code is time-barred after ten years and six months of imprisonment, the statute of limitations is therefore ten years and six months; on the other hand, as the offence of misconduct by a public official under Article 323 of the Criminal Code is punishable by a maximum of four years' imprisonment, the statute of limitations is six years. 

Furthermore, according to Articles 160 and 161 of the Criminal Code, this term can be suspended by one of the suspending acts provided for by the law (eg the request for committal to trial) and may be extended by up to one quarter of its ordinary duration. Note that the term of extension is one half of the ordinary duration for the crime under Articles 318, 319, 319-ter, 319-quater, 320, 321 and 322-bis.

At the same time, according to Article 159 paragraph 2 of the Criminal Code, only in the event of a conviction is the statute of limitations suspended for a maximum of one year and six months from the expiration term to file the grounds of the sentence, to the decision of the following stage of the proceedings. 

Such suspension may occur both between the first-degree sentence and the decision before the Court of Appeal and the decision before the Court of Appeal and the sentence of the Court of Cassation. This means that the maximum suspension period is three years.

However, it is important to consider that the reform introduced by Law No 9/2019 amended the statute of limitation provisions, stating that the statute of limitations is suspended from the first-instance verdict (regardless of whether it is a conviction or an acquittal) until the final judgment becomes enforceable. This means that, after the first-instance judgement, the statute of limitations cannot expire until the end of the proceedings. This amendment comes into force on 31 January 2020 and, therefore, this new rule will be applicable to all offences committed after 31 January 2020.

Finally, with reference to administrative liability against legal entities, Article 25 Legislative Decree No 231/01 states that the limitation period is five years from the occurrence of the crime.

Such term can be suspended by a request to apply precautionary measures and by an entity being charged with having committed the administrative offence. In the latter event, the statute of limitations does not run until the final judgment becomes enforceable.

Italian criminal law applies to crimes committed on Italian territory. More specifically, under Article 6 of the ICC, territorial jurisdiction is established:

  • over conduct which occurred either wholly or partially within the territory of the state; or
  • even in those circumstances where the offence is wholly committed abroad but its effects take place in the national territory. 

Nevertheless, with regard to certain serious offences, such as corruption, Articles 9 and 10 of the ICC establish national or universal jurisdiction over cases not covered by the above-mentioned Article 6 of the ICC.

Specifically, Italy has extra-territorial jurisdiction over conduct wholly committed abroad which does not have any effect in the national territory when three conditions are met:

  • the perpetrator is within Italian territory;
  • the double criminality principle is satisfied; and
  • a request for punishment is made by the minister of justice or the injured party. 

However, it should be mentioned that recently Anticorruption Law No 3/2019 has facilitated the prosecution of corruption offences committed by a national or foreign citizen by eliminating the third condition, above, for such crimes.

Legislative Decree No 231/2001 introduced administrative liability for legal entities in the event that any of the crimes listed in Legislative Decree No 231/2001 are perpetrated by directors, managers or employees for the benefit, or in the interest, of the company. 

This is an autonomous liability of the legal entity (so called organisational negligence) for not having adopted organisational models capable of preventing the crimes listed in the decree from being committed (for further details, see 2.5 Safe Harbour or Amnesty Programme and 4.1 National Legislation and Duties to Prevent Corruption).

The crimes of corruption under Articles 318 and 319 of the Criminal Code, bribery in relation to judicial acts, blackmail of a public official, undue inducement to give or promise benefits to the public official, private bribery, false accounting and market rigging are all listed in Legislative Decree No 231/01.

Among the offences giving rise to liability of a company, Article 25 Legislative Decree No 231/2001 lists the relevant crimes in relation to the public administration.

Finally, it is worth mentioning that a company’s liability arising from crimes committed is completely independent of corporate events following the perpetration of the crimes.

According to Articles 28, 29 and 30 Legislative Decree No 231/01, in the event of any changes to a legal entity’s organisational structure, the company remains liable for offences committed before the date on which the changes took effect; in the same way, in the event of a merger or takeover, the resulting legal entity is liable for the offences for which the previous entities were responsible before the merger or takeover. Likewise, in the event of a partial split, the liability of the divided company remains with reference to crimes committed before the split.

In general terms, the Italian criminal system is founded on the presumption of innocence, so the burden of proof in demonstrating a crime has been committed lies with the prosecutor. This means that, if there is any doubt about the defendant’s guilt, they must be acquitted due to the in dubio pro reo rule.

With regard to an individual’s liability, the first defence for any crime (not only bribery or other crimes against the public administration) may be based on the demonstration that the so-called “objective elements” of the offence have not been satisfied or sufficiently proved by the prosecutor. For example, a defence strategy may consist of attempting to demonstrate that no kind of illicit advantage has ever been promised or granted to a public official or the fact that the person who received the money is not a public official. 

Another defence strategy may consist of attempting to demonstrate the lack of intent by the defendant to commit a crime (ie lack of the so-called mens rea), which is a mandatory condition of punishability.

Mitigating or Exonerating Circumstances

Yet another argument that may be used as a defence is so-called “mitigating” or “exonerating” circumstances. 

The Criminal Code provides for two different types of these circumstances:

  • general circumstances (applicable to any kind of crime); and
  • special circumstances (applicable only to bribery and other crimes against the public administration).

Starting with mitigating circumstances, the first type (general mitigating circumstances) is regulated by Articles 62 and 62-bis of the Criminal Code and includes, for instance, compensation for damage before the trial, the case of conduct of particular social value or an intent to obtain a very low profit in crimes against the national heritage; regarding the second type (special mitigating circumstances), a new special mitigating circumstance applicable to crimes against the public administration has recently been introduced by Law No 3/2019 (regarding this new special mitigating circumstance described by Article 323-bis of the Criminal Code, see 5.4 Discretion for Mitigation).

With regard to exonerating circumstances, a new special exonerating circumstance has been introduced by Law No 3/2019 in the event of self-incrimination and effective co-operation with the judicial authority (regarding this new special exonerating circumstance described by Article 323-ter of the Criminal Code, see 2.5 Safe Harbour or Amnesty Programme).

It is important to bear in mind that the general types of mitigating and exonerating circumstances play a secondary role in defence for bribery and other crimes against the public administration.

With regard to legal entities’ liability, see 4 Compliance and Disclosure.

There are no exceptions to the above defences.

In general, there are no de minimis exceptions under Italian law: a bribe of any value will constitute an offence.

The only exception – relevant in any case subject to the court – can be configured if the “advantage” is permitted by law or if its value is very small as, for instance, in the case of a mere courtesy gift (the so-called "munuscula"). Decree No 62/2013 provides exceptions for the munuscula or donations of modest value to be identified, for public employees, in an amount of EUR150).

The value of the bribe could also be taken into account by the court as a mitigating factor in determining the quantum of sanction to be imposed. For instance, according to the mitigating circumstance provided by Article 323-bis of the Criminal Code, if the offences under Articles 314, 316, 316-bis, 316-ter, 317, 318, 319, 319-quarter, 320, 322, 322-bis and 323 of the Criminal Code are particularly slight, the sanction is reduced by up to one third.

In Italy, no sectors or industries are exempt from corruption offences. 

It is, however, important to bear in mind that most of the offences described require, as an “objective element” of the crime, the fact that the unlawful advantage is granted or promised to a public official or a public service provider.

Furthermore, Article 9 of Law No 146/2006 – as modified by Law No 3/2019 – provides a special exonerating circumstance for undercover agents who contribute to crimes against the public administration for the sole purpose of acquiring evidence.

With reference to corruption crimes, a new exonerating circumstance – introduced by Law No 3/2019 – is provided by Article 323-ter of the Criminal Code in the event of self-incrimination and effective co-operation with the judicial authority.

For more details, see 5.4 Discretion for Mitigation.

With regard to legal entities’ liability, as mentioned above, Article 6 of Legislative Decree No 231/2001 provides for exemption from liability if the company can demonstrate that:

  • i) the management body has adopted the so-called “organisational models” to prevent the crimes listed in the decree from being committed;
  • ii) the duty of ensuring that compliance programmes work and are observed has been allocated to a specific unit of the company that has autonomous initiative and control;
  • iii) the individual who committed the crime fraudulently circumvented the compliance programmes; or
  • iv) there was neither insufficient supervision nor lack of supervision by the unit mentioned in ii).

Regarding the specific exonerating consequence for legal entities, arising from the adoption of an adequate compliance system, see 4.1 National Legislation and Duties to Prevent Corruption.

Penalties upon conviction for the above offences differ for individuals and legal entities. 

With specific regard to penalties provided for legal entities, penalties arising from crimes can be “financial” or “disqualifying”. According to Article 10 of Decree No 231/2001, financial penalties are always applied for administrative offences arising from a crime and are applied in terms of not less than 100 units (the so-called “quotas”) and not more than 1,000 units. 

The amount of each unit is not less than EUR258 and not more than EUR1,549 and, according to Article 11 of Decree No 231/2001, the court determines the number of units by taking into account the gravity of the case, the extent of the entity’s liability and what has been done in order to eliminate or mitigate the consequences of the offence and prevent the commission of similar offences.

Penalties for the above offences when committed by individuals or legal entities are as follows:

  • for the crime of misappropriation pursuant to Article 314 of the Criminal Code:
    1. individuals: imprisonment from four to ten years and six months (imprisonment from six months to three years in the event of temporary misappropriation); 
    2. legal entities: the crime is not listed in Legislative Decree No 231/2001;
  • for the crime of blackmail by a public official pursuant to Article 317 of the Criminal Code:
    1. individuals: imprisonment from six to 12 years;
    2. legal entities: financial penalty from 300 to 800 units and disqualifying penalties pursuant to Article 9 paragraph 2 of Legislative Decree No 231/2001;
  • for the crime of bribery pursuant to Article 318 of the Criminal Code:
    1. individuals: imprisonment from three to eight years;
    2. legal entities: financial penalty of up to 200 units;
  • for the crime of bribery pursuant to Article 319 of the Criminal Code:
    1. individuals: imprisonment from six to 12 years;
    2. legal entities: financial penalty from 200 to 600 units; pecuniary sanction from 300 to 800 units (in the event of significant profit by the company as a consequence of the crime); disqualifying sanctions pursuant to Article 9, paragraph 2 of Legislative Decree No 231/2001;
  • for the crime of bribery in relation to judicial acts pursuant to Article 319-ter of the Criminal Code:
    1. individuals: imprisonment from six to 12 years;
    2. legal entities: financial penalty from 200 to 600 units; pecuniary sanction from 300 to 800 units (in the event of significant profit by the company as a consequence of the crime); disqualifying sanctions pursuant to Article 9, paragraph 2 of Legislative Decree No 231/2001;
  • for the crime of undue inducement to give or promise benefits pursuant to Article 319-quater of the Criminal Code:
    1. individuals: imprisonment from six to ten years and six months;
    2. legal entities: financial penalty from 300 to 800 units and disqualifying sanctions of “suspension or revocation of authorisations, licences or concessions functional to the commission of the crime” pursuant to Article 9, paragraph 2 of Legislative Decree No 231/2001;
  • for the crime of misconduct by a public official pursuant to Article 323 of the Criminal Code:
    1. individuals: imprisonment from one to four years;
    2. legal entities: the crime is not listed in Legislative Decree No 231/2001;
  • for the crime of influence-peddling pursuant to Article 346-bis of the Criminal Code:
    1. individuals: imprisonment from one to four years and six months;
    2. legal entities: financial penalty up to 200 units;
  • for the crime of keeping inaccurate corporate books and records pursuant to Article 2621 of the Civil Code: 
    1. individuals: imprisonment from one to five years;
    2. legal entities: financial penalty from 200 to 400 units;
  • for the crime of keeping inaccurate corporate books and records in listed companies pursuant to Article 2622 of the Civil Code: 
    1. individuals: imprisonment from three to eight years;
    2. legal entities: financial penalty from 400 to 600 units;
  • for the crime of private corruption pursuant to Article 2635 of the Civil Code:
    1. individuals: imprisonment from one to three years;
    2. legal entities: financial penalty from 400 to 600 units and disqualifying sanctions pursuant to Article 9, paragraph 2 of Legislative Decree No 231/2001.

The only guidelines or principles applicable to the assessment of the penalties are provided by the “general part” of the Criminal Code in Articles 132 and 133. The first states that the application of penalties will be at the judge’s discretion, within the limits (minimum and maximum) established by the law for each crime; the second specifies the principles to be applied by the judge in the exercise of their discretionary power (for instance, the judge has to take into account the seriousness of the offence and the individual’s attitude to the crime).

With regard to legal entities’ liability, according to Article 21 of Legislative Decree No 231/2001, if the company is liable for multiple crimes due to one action or omission, or committed as part of the same activity, and before a judgment (definitive or not) for one of these offences, the financial penalties provided for the most serious crime, increased by up to three times, are applied. However, the overall amount of the increased financial penalty cannotbe more than the sum of the penalties applicable for each offence. 

Legislative Decree No 231/01 identifies the autonomous administrative liability of legal entities, in the event one of the crimes listed in the decree (among these, bribery and corruption offences) is perpetrated in the interest or to the benefit of the company by persons who have representative, administrative or management functions or by persons under the direction or supervision of such persons.

All such provisions are enforced by the criminal court (following an initiative put in place by the prosecutor), which has the duty to assess – usually in the same proceedings – both individual and corporate liabilities and, as a consequence, issue judgments of acquittal or conviction. 

In the event a crime is committed by an individual in the interest of the company, according to Articles 6 and 7 of Legislative Decree No 231/2001, the latter may avoid an own administrative liability if it has adopted the so-called “organisational model” suitable to prevent the crimes listed in the decree from being committed. 

According to Legislative Decree No 231/2001, the model must be considered “effective”, meaning that, according to Article 6 paragraph 2 of the decree, the model must:

  • identify the activities in which the crimes listed in the decree may be committed;
  • provide specific protocols designed to assist the company in formulating and implementing company decisions, in relation to the crimes to be prevented;
  • identify procedures for managing the financial resources needed to prevent crimes from being committed;
  • provide obligations of disclosure to the supervisory board; and
  • provide a suitable disciplinary system.

The adoption of the model is not mandatory for the company but it is a necessary condition if the company wants to avail itself of the exonerating circumstance provided for by Legislative Decree No 231/2001.

Other essential tools for the implementation of the model – as usually stated by the courts – are disclosure of the content of the model and staff training:

  • communication is usually reserved to HR functions and is necessary in order to ensure employees are completely aware of the organisational model and the Code of Ethics;
  • training is crucial in order to comply with the requirement of Article 6 of Legislative Decree 231/2001, according to which the model, in order to be able to have an “exonerating effect” in favour of the company, must be “effectively implemented”. According to the Supreme Court’s interpretation of this requirement, employees must be properly trained with regard to the administrative liability of the company and, more specifically, with regard to the concrete compliance system in force. In addition to case law, the importance of the training is highlighted also by Confindustria (General Confederation of Italian Industry) guidelines (one of the most important and influential sets of guidelines concerning Legislative Decree 231 liability), according to which it is advisable for companies to adopt adequate training, appropriately calibrated according to the levels and the responsibilities of the recipients.

Among the activities a company may adopt in order to be compliant with Legislative Decree No 231/2001, an important role is played by three documents, which are considered essential elements of the compliance system:

  • the “Code of Ethics”, ie, the document that sets out the company’s principles and rules of conduct;
  • the “Code of Conduct”, ie, the document that provides the concrete application of the principles set out in the Code of Ethics; and
  • the “Anti-corruption Programme”, ie, the document that defines the concrete guidelines to follow in order to protect the company against the risk of corruption.

In the Italian criminal system, there is no obligation for individuals (who are not public officials) or companies to report bribery or other crimes against the public administration of which they become aware to the judicial authority.

Law No 179/2017 – which came into force on 29 December 2017 – introduced a public and private system of protection for whistle-blowers in Italy.

Starting from the public sector, according to the law, a public employee who, in the interest of the integrity of the public administration, reports to the “person responsible for preventing corruption and transparency” (pursuant to Article 1, paragraph 7 of Law No 190 of 6 November 2012), or to the Italian National Anti-Corruption Authority (Autorità Nazionale AntiCorruzione or ANAC), or by complaint to the ordinary judicial authority or the accounting authority, unlawful conduct of which they have become aware due to their employment relationship, cannot be sanctioned, demoted, dismissed, transferred, or subjected to any other organisational measure that will have a detrimental effect, directly or indirectly, on their working conditions, as determined by the report.

The law also states that the adoption of retaliatory measures against the whistle-blower is to be communicated to ANAC by the interested person or by their representative trade union organisation in the company. As a consequence of this, ANAC is required to inform the Department of the Public Function of the Presidency of the Council of Ministers or other safeguarding or disciplinary bodies with regard to any actions and measures to be taken.

The law therefore guarantees protection for the whistle-blower by providing two sanctioning powers to ANAC:

  • a fine of up to EUR30,000 for those who adopt retaliatory measures against the whistle-blower; and
  • a fine of up to EUR50,000 for the subject Responsible for Transparency and Anti-corruption which failed to examine the report received from the public employee.

The addressee of a whistle-blower’s complaint is different for the public and private sectors: while for the first, the disclosure must be addressed to ANAC, for the second, the law is silent and the prevailing opinion is to involve the Supervisory Board (Organismo di vigilanza).

From the (private) legal entities’ standpoint, the law provides specific protection to whistle-blowers according to Legislative Decree No 231/2001 (but only for those companies which have adopted an organisational model).

In greater detail, according to Article 6, paragraph 2-bis of the decree – as modified by Law No 179/2017 – companies are required to provide:

  • one or more channels enabling senior managers and subordinates to raise detailed disclosures of unlawful conducts pursuant to Legislative Decree 231 and based on precise and congruous facts, or breaches of the organisational model of the company, which they witnessed in the carrying out of their functions. Such channels must assure confidentiality of the identity of the whistle-blower when handling the disclosure;
  • at least one alternative reporting channel suitable to assure, through IT means, the confidentiality of the identity of the whistle-blower;
  • prohibition against retaliation or discriminatory acts, whether direct or indirect, towards the whistle-blower for reasons, directly or indirectly, connected to the disclosure;
  • within the disciplinary system adopted, sanctions against those infringing the measures for the protection of the whistle-blower, as well as those making disclosures, maliciously or negligently, that turn out to be unfounded.

Therefore, private whistle-blowers are also protected against any sanction, retaliation or other discriminatory behaviour (including, for instance, dismissal or workplace re-organisation) as a consequence of reporting any unlawful behaviour in the workplace.

No incentive is granted to whistle-blowers as a consequence of reporting bribery or corruption.

The only “incentive” – actually, a sort of “protection” for the whistle-blower – is that provided by Article 3 of Law No 179/2017, which qualifies the complaint of the whistle-blower, if the "interest of the integrity of the Public Administration” is pursued by the whistle-blower, as a “justified cause” of disclosure of professional secrets. Therefore, Article 3 provides for an exonerating circumstance for the crimes of “disclosure and use of official secrets” (Article 326 of the Criminal Code), “disclosure of professional secrets” (Article 622 of the Criminal Code), “disclosure of scientific and industrial secrets” (Article 623 of the Criminal Code) and “breach of the duty of loyalty” (Article 2105 of the Civil Code).

With reference to the new exonerating circumstance provided by Article 323-ter of the Criminal Code in the event of self-incrimination and effective co-operation with the judicial authority, see 2.5 Safe Harbour or Amnesty Programme and5.4 Discretion for Mitigation.

Provisions regarding whistle-blowers in the public sector are set out in Article 54-bis of Legislative Decree No 165/2001; provisions regarding the private sector are set out in Article 54-bis of Legislative Decree No 165/2001. 

As mentioned in 4.3 Protection Afforded to Whistle-blowers, both decrees have been amended by Law No 179/2017 entitled “Provisions for the protection of whistle-blowers who report offences or irregularities which have come to their attention in the context of a public or private employment relationship”.

See 5.3 Process of Application for Documentation.

See 5.3 Process of Application for Documentation.

As mentioned previously, in Italy the main anti-bribery and anti-corruption provisions are included in the Criminal Code, which describes conduct which could lead to the relevant crimes and provides the relative sanctions. 

At the same time, Legislative Decree No 231/01 establishes the autonomous administrative liability of legal entities, in the event that one of the crimes listed in the decree (among them, bribery and corruption offences) is perpetrated in the interest or to the advantage of a company.

All such provisions are enforced by the criminal court (following an initiative put in place by the prosecutor), which has the duty to assess individual and corporate liabilities and, as a consequence, issue judgments of acquittal or conviction. 

On the other hand, Law No 190/2012 established ANAC, which is an administrative authority aimed at preventing corruption in public administrations. ANAC has a broad range of powers (listed also in ANAC in Legislative Decree No 90/2014 and No 50/2016), which may be summarised as follows: 

  • it analyses the causes which facilitate corruption, identifying prevention initiatives (for this purpose ANAC issues the annual National Anti-Corruption Plan, which assesses the risk of corruption related to any office and points out the potential initiatives to be carried out to mitigate the risk);
  • it carries out inspections by requesting information, acts and documents and it executes the initiatives required by the National Anti-Corruption Plan;
  • it supervises public contracts and public tenders;
  • it reports to the public prosecutor's office in the event of crimes, or to the court of auditors in the event of detriment to the Treasury;
  • it regulates by issuing guidelines (also having a binding value);
  • it manages the national database of public contracts, the digital record of public contracts and the national register of evaluation commission members;
  • it imposes disqualifying and pecuniary sanctions in the event of failure to provide the information requested by ANAC or contracting authorities, without justified reason, or in the event of false information or documents being provided;
  • it carries out incentive reporting through a whistle-blowing channel and imposes pecuniary sanctions against:
    1. those who take revengeful initiatives against the reporters; and
    2. Corruption Prevention and Transparency Officials who fail to assess the reports received;
  • in the event of prosecution of any of the crimes under Articles 317, 318, 319, 319-bis, 319-ter, 319-quater, 320, 322, 322-bis, 346-bis, 353 and 353-bis of the Criminal Code or in the event of potential unlawful conduct referable to a successful tenderer, ANAC informs the prosecutor’s office and proposes to the prefect that they:
    1. order the replacement in the corporate bodies of the persons involved in the investigation; and
    2. if the company fails to comply with such order, impose the extraordinary and temporary management of the company with specific reference to the execution of the public contract related to the potential unlawful conduct.

With reference to mitigation powers it is important to highlight that they concern two different fields: administrative law and criminal law. 

From the administrative perspective it is worth mentioning ANAC Resolution No 949/2017 which introduced the facility to extinguish the administrative pecuniary sanctions issued by ANAC, in the event no disqualifying sanctions are applicable, by means of payment of a reduced fine. 

In greater detail, the payment is due within 60 days of notification of the violation, at a rate of EUR500 in the event of failure to provide the information requested and at a rate of EUR1,000 in the event of providing false information. 

On the other hand, regarding potential mitigation powers in the criminal field, the Criminal Code and the Criminal Procedure Code provide for three different mitigation measures, which may be applied by the criminal courts to reduce the sanctions described in 3.1 Penalties on Conviction.

Plea Bargain Proceedings

According to Articles 444 and following of the Criminal Procedure Code, individuals may settle the charge with a plea bargain agreement with the prosecutor setting out the pecuniary sanctions (fines) and the duration of imprisonment. 

The main positive outcomes of plea bargain proceedings are as follows:

  • the sanctions agreed with the prosecutor are reduced by a maximum of a third;
  • if the sentence does not exceed two years of imprisonment (or two years of imprisonment combined with a financial penalty), the judgment does not entail the cost of the proceedings or the application of ancillary penalties and security measures, except for confiscation in cases pursuant to Article 240 of the Criminal Code; and
  • if the sentence does not exceed two years of imprisonment (or two years of imprisonment combined with a financial penalty), the offence shall be extinguished if, within five years (if the judgment concerns a crime) or two years (if the judgment concerns a misdemeanour), the accused does not commit another crime or misdemeanour of the same kind.

Note that, as set forth by Article 444 Section 1-ter of the Criminal Procedure Code, in the event of prosecution of any of the crimes provided for by Articles 314, 317, 318, 319, 319-ter, 319-quater and 322-bis of the Criminal Code, the request for plea bargain proceedings is subject to the full restitution of the price or the profit arising from the offence. 

The court assesses whether the latter condition is met and, in general terms, whether the plea bargain agreement complies with the law and, in the event of a positive evaluation, issues the plea bargain sentence.

Furthermore, Law No 3/2019 added section no 3-bis to Article 444 of the Criminal Procedure Code, which states that, in the event of prosecution of any of the crimes provided for by Articles 314 section 1, 317, 318, 319, 319-ter, 319-quater section 1, 320, 321, 322, 322 bis and 346-bis of the Criminal Code, the plea bargain request may be subject to the exclusion or to the suspension of the accessory penalties provided for by Article 317-bis of the Criminal Code. Should the court deem it mandatory to apply these accessory penalties it will reject the plea bargain request.

Finally, it is important to highlight that, pursuant to Article 63 of Legislative Decree No 231/2001, administrative liability may also be settled through a plea bargain agreement. Indeed, the company is entitled to settle its potential administrative liability with an agreement on pecuniary sanctions and on the duration of disqualifying measures (if applicable).

Special Mitigating Circumstances

Two special mitigating circumstances are set forth by Article 323-bis of the Criminal Code. The first is met when the offences under Articles 314, 316, 316-bis, 316-ter, 317, 318, 319, 319-quater, 320, 322, 322-bis and 323 of the Criminal Code are particularly slight. In such event the sanction is reduced by up to one third.

In greater detail, such mitigating circumstance occurs when the whole offence is barely offensive and, therefore, not very serious, with reference to the conduct carried out, the amount of the economic damage or profit attained, the subjective attitude of the perpetrator and the event (see latest Court of Cassation, Section VI, 23 May 2019, No 30178). Therefore, the application of such mitigating circumstance cannot be determined by the mere slightness of the advantage gained by the perpetrator.

The second mitigating circumstance has been introduced by Law No 69/2015 and occurs if the perpetrator has made effective efforts to:

  • prevent any further consequences of the criminal activity;
  • provide evidence of criminal offences and dentify other perpetrators; or
  • allow seizure of the profits. (In accordance with Article 25 paragraph 5-bis Legislative Decree No 231/01, the same mitigating measure is applicable to the benefit of the legal entity which meets all the above-mentioned conditions and adopts a suitable organisational model to prevent crimes of the same type.

Such circumstance (which is applicable only with reference to the offences under Articles 318, 319, 319-ter, 319-quater, 320, 322, 322-bis and 323 of the Criminal Code) is a kind of active repentance post delictum and determines a reduction of from one third to two thirds of the penalties.

It is important to point out that, in accordance with the case law referred to, similar legal provisions (see Court of Cassation, Section IV, 14 April 2016, No 32520), such mitigating circumstance cannot be granted in case of reticence of the perpetrator, even if only partial, as collaboration is required to be effective and full.

Non-punishable Clause

Law No 3/2019 introduced a special non-punishable clause in the event of self-incrimination and effective co-operation with the judicial authority.

In greater detail, such clause requires that:

  • one of the offences pursuant to Articles 318, 319, 319-ter, 319-quater, 320, 321, 322-bis, 353, 353-bis and 356 of the Criminal Code is perpetrated;
  • the author voluntarily reports the crime to the authority and provides evidence of the crime and provides evidence to identify the other perpetrators; and
  • the perpetrator discloses the crime before being informed that they are under investigation and, in any event, within four months of when the offence was perpetrated.

Furthermore, the perpetrator is required to make available the benefit received or, where this is not possible, make available a sum of money of equivalent value, or provide useful information to identify the beneficial owner of the advantage. This initiative also has to be carried out within four months of the perpetration of the crime.

The non-punishable clause is not applicable if the self-incrimination is aimed at perpetrating the crime reported or at uncovering the agent who has acted in breach of the law.

Exonerating Circumstance for Legal Entities

Article 17 Legislative Decree No 231/2001 states that disqualifying sanctions are not applicable if, after the unlawful behaviour but before the start of the trial, the company is able to meet three different requirements:

  • payment of full compensation for damage and the removal of any detrimental or dangerous consequence of the crime;
  • removal of the organisational inefficiencies that determined the crime through the adoption and implementation of an organisational model pursuant to Legislative Decree No 231/2001; and
  • making available the “profit” arising from the crime in order for it to be confiscated. 

See 5.4 Discretion for Mitigation.

In recent times, there have been many cases of corruption which could be considered landmarks in Italian case law.

Among them, it is important to highlight the proceedings against the former Governor of Lombardy, Roberto Formigoni. He has been convicted with a final sentence of five years and ten months of imprisonment for the offences of criminal conspiracy and transnational corruption, with reference to bribes received in the Maugeri Hospital, Pavia, financing project.

It is also worth mentioning the criminal proceedings concerning pain therapy drugs. The investigation launched by the Parma Prosecutor’s Office involves 75 individuals, including doctors, entrepreneurs and executives of medical and pharmaceutical industries and several companies, and concerns administrative liability under Legislative Decree No 231/01. The alleged offences include, among others, criminal conspiracy, corruption and money laundering. 

See 5.6 Recent Landmark Investigations or Decisions Involving Bribery or Corruption.

In addition to the reports provided by the Court of Cassation concerning the general approach followed by criminal case law related – inter alia – to crimes against the public administration, it is important to point out that ANAC issues an annual report on the progress of its activities.

Such documents provide evidence of the results achieved and simultaneously highlight possible future initiatives aimed at preventing corruption.

In more detail, the latest version of the report (released on 6 June 2019) describes positive outcomes arising from the prevention activity, thanks to the productive collaboration between ANAC and the local officer responsible for the prevention of corruption and transparency appointed by each public administration. 

Lastly, it is important to highlight that on 17 October 2019 ANAC released a three-year report entitled “Corruption in Italy 2016–2019”, which assesses all the measures issued by the judicial authority in the last three years with reference to the crime of corruption. 

With reference to potential changes to the applicable legislation or the enforcement body, it is important to point out that on 1 October 2019, the Chamber of Deputies definitively approved the draft European delegation law 2018 aimed at ensuring the fulfilment of EU obligations.

Concerning criminal issues, the government will have to carry out some initiatives in order to effectively combat those offences which affect EU financial interests. In greater detail:

  • the maximum penalty limit (currently three years) referring to the offences of undue receipt of funds to the detriment of the state (Article 316-ter of the Criminal Code) and false tax declaration (Article 4 Legislative Decree No 74/2000) will have to be increased to four years of imprisonment;
  • the crime under Article 322-bis of the Criminal Code will also have to include public officials who are not part of EU institutions or international organisations; and
  • tax crimes will have to be listed among the relevant offences from which corporate administrative liability may arise pursuant to Legislative Decree No 231/2001.
Studio Legale Crippa Pistochini

Corso di Porta Vittoria n. 10
20122 Milan
Italy

(+39) 02 54123627

(+39) 02 5450983

studio@crippapistochini.it www.crippapistochini.it
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Law and Practice

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Studio Legale Crippa Pistochini was founded in 2003 in Milan and has a team of 15 professionals, among them a full professor in criminal procedural law. The firm provides assistance in the area of corporate criminal law to Italian and international clients, liaising with leading Italian and international law firms. With experience in all criminal jurisdictions and post-graduate specialisations in criminal law, the lawyers advise companies and individuals on preventative steps and, in the judicial phase, regarding criminal business law issues. In light of this specialisation, Crippa Pistochini has been involved in many relevant cases concerning public administration crimes, tax and financial crimes, environmental crimes and the criminal liability of legal entities under Legislative Decree No 231/2001.

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