Responding to public demand to reduce the soaring levels of corruption in business operations in both the public and private sectors, the Italian parliament is to enact important anti-bribery laws to strengthen and clarify the existing laws, and to lead to more effective enforcement and imposition of sanctions. These laws are expected to become operative in the next few months.
In outline, they include new definitions of the criminal offences of ‘corruption’ and ‘extortion’ that will better identify the nature of the conduct that constitutes these offences and this in turn should lead to an increase in the number of successful prosecutions.
Furthermore, regulations will be introduced that will make it mandatory for those in the public sector to adopt a code of ethics, anti-bribery action plans, training and transparency in financial accounting and the cost of public works.
These regulations are comparable with the ‘adequate procedures’ requirement in connection with the corporate offence of failing to prevent bribery that was introduced by the UK Bribery Act 2010.
Similarly, the part of the regulations that concerns financial accounting is comparable with the books and records offence in the US Foreign Corrupt Practices Act 1977. Also, an amendment to Italy’s Criminal Code introduces a new offence of ‘illicit trafficking of influence’.
This represents a clear attempt to prevent corruption arising from the improper use of personal relationships and connections with public officials, and makes it an offence to request, give or promise cash or other advantage in return for private benefit.
However, by far the most significant change is the extension of the anti-bribery laws to the private sector. Under these laws, in addition to the company, its directors and general managers, those responsible for the preparation of financial statements, auditors, liquidators and those who assist them can be prosecuted for acts of bribery in the private sector. Henceforth, like the anti-bribery laws of other European countries including the UK, Italian anti-bribery laws will criminalise improper conduct in both the public and private sectors.
Those who conduct business in Italy should familiarise themselves with these changes. In particular, businesses should review their anti-corruption policies and procedures to ensure they are in accordance with the new laws and regulations, and that they operate to protect both their business and their employees from the risk of prosecution for bribery offences in Italy.
It may be that policies and procedures that accord with the laws of one jurisdiction will no longer be sufficient under Italian law.
For example, businesses should consider whether, in order to mitigate their exposure in Italy, they should introduce improved procedures to monitor contract negotiations being conducted on their behalf, especially as this may not form a part of existing policies and procedures designed to satisfy the adequate procedures requirement of the UK Bribery Act.