The Organisation for Economic Cooperation and Development (OECD) recently published its third report evaluating Italy's implementation and application of the OECD Convention on Combating Bribery of Foreign Officials in International Business and Transactions and the 2009 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions.
In Italy, the role of safeguarding public finances and ensuring consistency in jurisdictional issues in the courts is undertaken by the State Audit Court. On February 16 2012 the president of the court mapped out areas of legal infringement, corruption or malfeasance as the basis for a survey of the most frequent instances of inefficient or uneconomic management of public resources. This measure recognises that corruption remains a significant problem which, by its nature, may be far greater than can be estimated from the available evidence.
Both the State Audit Court and the OECD have highlighted the need for significant reform of Italian legislation on national and international corruption, but an important step is expected in the coming days in the form of Parliament's review of a new anti-corruption bill. The debate on the new bill was scheduled for the end of February, but the Ministry of Justice decided to postpone it in order to refine the text. The OECD report formalised a number of recommendations to be implemented as part of the reform. In particular, it argues that the legislature should:
- extend the statute of limitations to allow more time to prosecute and penalise companies and individuals in foreign bribery cases. The OECD's working group indicated that although 60 defendants have been prosecuted in recent years, with nine cases under investigation, final penalties were imposed on only three legal entities and nine individuals - in all cases through plea bargaining. Cases against numerous other legal and natural persons have been dismissed, in most cases under the statute of limitations.
- remove extortion as a possible defence - at present, this allows payers of bribes to escape liability for foreign bribery in a wide range of situations where bribes are solicited;
- ensure that penalties for individuals and companies constitute a practical deterrent;
- strengthen attempts to eliminate foreign bribery through stringent accounting and auditing, the introduction of whistleblowing protection and other measures; and
- improve the coordination of investigations into foreign bribery conducted by public authorities.
The new bill (as drafted) includes a number of significant provisions for the public authorities, such as the introduction of:
- a national anti-corruption plan whereby each central public office must indicate:
- its degree of exposure to corruption, assessing risk for each of its offices;
- the organisational measures needed to counter such risk; and
- the procedures for selection, training and rotation of employees working in sensitive areas, including legislative solutions to prevent and detect irregularities;
- restrictive rules to promote the highest level of transparency in public contracting and the management of relations with the public administration;
- measures to implement internal controls in relation to administrative and accounting compliance, as well as monitoring of service quality;
- additional rules on ineligibility for elected parliamentary office; and
- increases in penalties (typically by between 33% and 50%) in order to strengthen the deterrent effect of criminal laws and facilitate prosecution.
The justice commissions of the Chamber of Deputies and the Senate are also discussing the possible introduction of a new criminal offence of corruption between private individuals - at present, the offence of corruption is limited to dealings between a private party and a public official.
In order to support criminal investigations and prevent bribery, both the OECD working group and the State Audit Court advocate an increase in sentences reached through plea bargaining and the implementation of various methods of penalising companies and confiscating the proceeds of bribery. Enforcement of the offence against legal entities has also created a strong incentive for Italian companies to implement internal compliance programmes.
The new bill seems certain to make far-reaching changes to Italian legislation. It would reinforce the efforts of prosecutors and law enforcement officials in a long-running battle against bribery offences in Italy and abroad.
For further information on this topic please contact Roberta Guaineri at Studio degli Avvocati A Moro Visconti E de Castiglione R Guaineri by telephone (+39 02 455 1551), fax (+39 02 455 15599) or email ([email protected]).