The Indian Government has recently annulled the tender on military helicopters lately awarded to the Italian State-owned Agusta-Finmeccanica, on the surge of a general pressure on allegations of international corruption. The case stems from a criminal filing opened in Italy, still in the preliminary evidence-seeking phase.
Interestingly enough, the case involves the principles of administrative liability of legal entities set by Legislative Decree no. 231 of 8 June 2001 on corporations, with respect to a the new criminal offence of international corruption introduce by a law of 2012. Aside criminal violations relevant to managers, Finmeccanica will now be subject to possible sanctions, and its protective Model adopted in avoidance of criminal offences will be scrutinized.
Legislative Decree of 2001 states that companies or legal entities may be held responsible for crimes committed in their interest by top managers acting in office, and consequently the recent case of Finmeccanica, a State-owned conglomerate active in international public military tenders, sheds a clear light on the interpretations on how corporations may avoid sanctions adopting such Models as protective measures.
International corruption was added with a law following Italy’s adoption of the Convention on the fight against corruption involving officials of the European Communities or officials of the Member States of the European Union drawn by the Council on 26 May 1997. Yet the Legislative Decree is more ambitious, aiming at holding entities objectively responsible for crimes committed in their interest or to their advantage by individuals who represent, administer and/or manage such entities, as well as employees referring to such type of managers (i.e. employees who may have taken action because of a specific request by managers or referring directly to such top managers, under Article 7 of the Decree). The Decree thus encourages the adoption of an organisational, management and audit Model, whose paradigm is not set in any way by the same Decree, yet suited to prevent the execution of crimes which may appear the consequence of a number of actions. Nonetheless, the Decree provides a general obligation on companies to identify the possible measures with which managers may concretely give way to the illicit behaviour, envisaging a possible avoidance of liability in case of adoption of an Organisational Model in line of theory capable of avoiding the execution of the indicated crimes. In addition, the Decree enhances the development and enforcement of corporate governance systems, encouraging the adoption of a check and balance general measure between corporate bodies under which “companies may be directed, managed and controlled”, i.e. prevented in their possibility of violating criminal law ensuring sound and accurate procedures and information and reporting mechanisms.
A certain perspective insight, or if we will a futuristic approach to practicing business (in other words a sort of a “Nostradamus manager” facility in-house), is requested in adopting the protective Model, in order to present a feasible but foresighted attempt to identify of possible behaviours of managers. This futuristic insight appears to be an unquestionable requirement needed in view of mitigating or avoiding administrative sanctions identified by the Decree (which go from monetary fines to suspension of activities of the company).
It must be noted that the principles apply also to entities retaining head offices in Italy, which may be held responsible in relation to crimes committed abroad provided that the State where the violation occurred has not filed a criminal proceeding against such entity (which appears not to have happened still in the recalled Finmeccanica case).
Whichever the location of the corporate headquarter, the objective responsibility stems from the Italian operations of the company.