After a lengthy approval process, on 31 October 2012, the Italian Chamber of Deputies passed a long awaited anti-corruption law (Anti-Corruption Law). The Anti-Corruption Law (no. 190/2012) was published in the Italian Official Gazette on 13 November 2012, and entered into force on 28 November 2012.
The new law aims at improving transparency in the country’s public sector, introduces new categories of corruption-related offenses, and strengthens those already contained in the Italian Criminal Code. It also provides for the establishment of a new National Anti-Corruption Authority with investigative and remedial powers. Below is a summary of the main provisions of the Anti-Corruption Law.
The National Anti-Corruption Authority
The National Anti-Corruption Authority (Commissione Nazionale per la Valutazione, la Trasparenza e l’Integrità delle Amministrazioni Pubbliche – CIVIT) will have the task to:
- approve the National Anti-Corruption Plan prepared by the Ministry of Public Administration (Dipartimento della Funzione Pubblica);
- establish standards, measures, and guidelines to be applied by public officers in order to strengthen their regulatory regimes against corruption;
- determine and assess the causes underlying illicit conducts and the measures to prevent and sanction them;
- issue opinions on compliance of public officers' conducts with their duties and regarding assignments of public offices;
- cooperate with other local and/or international anti-corruption authorities; and
- report annually to the Parliament about its activity and results in the fight against corruption in the public sector.
New measures to be adopted by public administration entities
Each public administration is required to adopt specific measures to prevent the occurrence of acts of corruption or bribery. These include the adoption of an anti-corruption plan, the appointment of a compliance officer, and the adoption of a code of conduct for employees.
The anti-corruption plan shall be based on the National Anti-Corruption Plan and will be aimed at checking each administration's level of exposure to bribery risks. The plan must identify all activities that entail a degree of risk and set out what arrangements have been made (or will be made) to prevent the occurrence of corruption in these areas. Implementation of the plan shall be monitored by the compliance officer who will also assess the plan's sustainability and amend it to make sure that it complies with any changes in anti-corruption legislation or in the public administration’s own activities or operational model.
Each public administration will be required to adopt a tailored code of conduct for employees, based on the criteria set by CIVIT. Infringement by any employee of any part of the code will result in disciplinary sanctions.
Filling a gap in the Italian legislation, the Anti-Corruption Law protects public officials who report corrupt behavior. Whistleblowers will not suffer dismissal, sanctions, or discrimination for having reported misconducts. The whistleblower’s identity cannot be disclosed without express consent.
The Anti-Corruption Law identifies areas and activities which are considered to be particularly exposed to risk of possible corruption. These are:
- transportation of landfill material
- disposal of waste on behalf of third parties
- extraction, supply, and transport of dirt or ground materials
- packing, supply, and shipping of raw concrete and bitumes
- rental of manned and unmanned machinery or equipment
- supply of processed iron
- trucking on behalf of third parties
- guard house services
- other activities, services, or businesses that may be indicated by a ministerial law decree, on a yearly basis or otherwise, as potentially risky in term of criminal influences
Increased penalties for corruption-related offenses
Existing provisions on corruption-related crimes have been amended to increase the relevant penalties. Thus, bribery is now punished with up to 12 years imprisonment, active corruption (corruption in the exercise of a public function) with imprisonment up to five years and passive corruption (corruption by act contrary to official duties) is punished with imprisonment up to eight years. In addition, corruption in judicial proceedings is punished with imprisonment up to 10 years when committed to favor or harm a party in judicial proceedings; if the corruptive conduct leads to an unjust conviction to imprisonment, the penalty is imprisonment from five to 20 years, depending on the nature of the unjust conviction.
New corruption-related offenses in the private sector
The Anti-Corruption Law has introduced three new corruption-related offenses that are relevant for the private sector.
- Induced bribery (induzione indebita a dare o promettere utilità): This covers the offense by a public officer or a person charged with a public service who, abusing of his or her powers or office, induces a private party to give or promise money or any other advantage. The private party who is unlawfully induced to give or promise such money or other advantage to the public officer or person charged with a public service also commits an offense.
- Illicit traffic of influence (traffico di influenze illecite): This new crime is provided by new article 346-bis of the criminal code which establishes that it is an offense for a person to take advantage of his or her relationship with a public officer for the purpose of receiving or promising money or other kind of economic advantage as compensation in exchange for his or her unlawful mediation. It is also an offense for any person to unlawfully give or promise money or other advantage in exchange for unlawful mediation.
- Private bribery (Corruzione tra privati): It is an offense for a manager, general executive, director, auditor, or liquidator of a company (or any employee of a company acting under the direction or supervision of any of the above) to act — or omit to act — in breach of the duties relating to their office or in breach of the duty of loyalty incumbent upon them, to the detriment of the company, in exchange for the payment or the promise of money or other kind of advantage. It is also an offense for any person to give or promise money or other advantage to these individuals.
Corporate liability under Law 231/2001
The new crimes introduced by the Anti-Corruption Law are relevant also for purposes of Law 231/2001. This provides that companies acting in Italy may be held liable, fined, subject to restraining, or confiscation orders if certain offenses — including corruption, bribery, fraud, and money laundering offenses — are committed, or attempted, in the interest of the company and no adequate measures (organizational models) were adopted by the company to prevent the crime from being committed. The company’s liability is in addition to the criminal liability of the person who committed the offenses.
The Anti-Corruption Law encourages all companies to adopt an organizational model that will afford protection against liability. Indeed, article 6 of Law 231/2001 exempt the company liability if it can provide evidence that:
- it has implemented an organizational model aimed at preventing the criminal offense from being committed;
- it has appointed an internal supervising committee with independent powers of action and control, responsible for the supervision, implementation, effectiveness, and compliance of the organizational model; and
- the officer, manager, or other subordinate that committed or attempted to commit the crime have fraudulently breached the rules set out in the organizational model.
Moreover, the company shall prove that it has:
- identified the business activities in relation to which crimes may be committed and the kind of offenses that could be committed;
- designed and implemented procedures, policies, and protocols aimed at preventing offenses of the kind to which the company is exposed;
- introduced a sanctioning regime in the event of non-compliance with the organizational model; and
- adopted adequate training programs for staff and high-level management.
Which implications for Italian and foreign companies?
Law 231/2001 applies to all types of Italian companies and associations. Consolidated case law considers that it also applies to foreign companies with operations in Italy. As a result of the new Anti-Corruption Law, and the new underlying offenses which could give rise to corporate liability under Law 231/2001, companies should:
- if they do not have an organizational model, adopt and implement one;
- check that existing models would prevent the occurrence of the new offenses introduced by the Anti-Corruption Law and, if not, update the models accordingly;
- check the risk of exposure to the new offenses; and
- update the employees' code of conduct.