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Trends and climate

Trends

Have there been any recent changes in the enforcement of anti-corruption regulations?

The Italian legal framework for corruption has been extensively amended in the past few years.

The main recent amendments are the following:

  • Law 190/2012, by which Italy implemented its commitments to the Criminal Law Convention on Corruption (1999) and to the UN Convention against Corruption (2003). Pursuant to Law 190/2012, a few provisions of the Italian Criminal Code concerning corruption were amended and other new provisions were introduced (eg, Article 319 of the Criminal Code, governing the undue induction to give or promise a benefit by public officials);
  • Decree-Law 90/2014 extended and reinforced the functions of the National Anti-corruption Authority, whose role is to prevent corruption within public administration – for this purpose, the authority may perform inspections and audits, as well as impose sanctions;
  • Law 69/2015 further amended the Criminal Code, providing for harsher penalties for corruption offences; and
  • Legislative Decree 382017, implementing Decision 2003/568/GAI of the European Council, reformed the provisions governing private bribery (ie, Articles 2635, 2635bis and 2635ter of the Italian Civil Code).

Legislative activity

Are there plans for any changes to the law in this area?

N/A.

Legal framework

Authorities

Which authorities are responsible for investigating bribery and corruption in your jurisdiction?

Investigations of bribery and corruption are carried out by the Public Prosecutor’s Office and penalties are imposed by judges of the Italian courts, courts of appeal and the Supreme Court. In addition, the National Anti-corruption Authority (ANAC) has investigative powers.

Domestic law

What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction?

The key Italian anti-corruption provisions regarding individuals are laid down by the Criminal Code.

Company liability for corruption and bribery is provided for by Articles 25 and Article 25ter of Legislative Decree 231/2001, which introduced an administrative liability for companies and legal entities for crimes committed in the interest or to the advantage of companies by directors, executives and their subordinates, agents and other individuals acting on behalf of the legal entity.

Moreover, ANAC’s guidelines on bribery and corruption, albeit not legally binding, lay down the best practices that private and public companies should follow to ensure that they comply with Italian and EU regulations.

International conventions

What international anti-corruption conventions apply in your jurisdiction?

International conventions must be ratified by the Italian Parliament in order to be enforceable in Italy.

The following conventions apply in Italy:

  • the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of the Organisation for Economic Cooperation and Development 1997;
  • the Criminal Law Convention on Corruption (Treaty 173 of the Council of Europe) 1999; and
  • the UN Convention Against Corruption 2003.

Specific offences and restrictions

Offences

What are the key corruption and bribery offences in your jurisdiction?

The main provisions relating to corruption carried out by individuals are:

  • Article 317 of the Criminal Code regulates the “extortion committed by a public official”, punishing the public official who, abusing his or her powers, forces someone to give or promise money or other benefits unduly to him or her, or a third party;
  • Articles 318 to 322 of the Criminal Code govern the main bribery offences relating to domestic public officials, such as:
  • ‘proper bribery’;
  • ‘bribery for the performance of the function’, which applies also in the absence of a specific act or omission by the official in exchange of the bribe;
  • ‘bribery in legal proceedings’; and
  • ‘undue induction to give or promise benefits by public officials’, which provides for penalties both for the official and the individual that gives or promises the bribe;
  • Article 322bis extends to foreign officials the above-mentioned provisions (originally provided for domestic public officials);
  • Articles 2635 and 2635bis of the Italian Civil Code govern ‘private bribery’ and ‘incitement to private bribery’, the latter providing penalties for both:
  • individuals offering benefits to ‘in-house’ persons so that they act or omit acts in breach of the duties relating to their office; and
  • ‘in-house’ persons soliciting the promise or giving of benefits to act, or to omit acts, in breach of the duties relating to their office; and
  • Article 25 of Legislative Decree 231/2001 envisages the company’s administrative liability in case of corruption and bribery committed in the interest or to the advantage of the company by directors, executives and their subordinates, agents and other individuals acting on behalf of the legal entity.

Hospitality restrictions

Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?

Scholars and case law both consider that gifts and other benefits related to hospitality can be the object of transactions that may amount to corruption or bribery.

In fact, the relevant provisions of the Criminal Code and the Civil Code refer to “money or other benefit”, thus including anything that could provide an advantage to the corrupted party.

Facilitation payments

What are the rules relating to facilitation payments?

Facilitation payments (ie, payments made to Italian public officials aiming to expedite or secure the performance of such officials’ duties) are prohibited as they fall under the offence of ‘bribery for the performance of the function’ pursuant to Article 318 of the Criminal Code, which occurs when the public official, in connection with the performance of his or her functions or powers, unduly receives, for him or herself or for a third party, money or other benefits or accepts the promise of them.

Liability

Scope of liability

Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction?

Yes, Articles 317 to 322bis of the Criminal Code and Articles 2635 and 2635bis of the Civil Code provide the main rules concerning the liability of individuals committing bribery and corruption.

In addition, Legislative Decree 231/2001 foresees that legal entities may be held liable for a group of offences (including corruption and bribery) committed in their interest or to their advantage by directors, executives and their subordinates, agents and other individuals acting on behalf of the legal entity.

Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances?

Yes, Article 231 of the Criminal Code states that all the penalties provided for the offences of ‘proper bribery’ and ‘bribery for the performance of the function’, as well as the relevant aggravating circumstances, apply to any person who provides or promises money or other benefits to public officials (ie, active corruption).

Foreign companies

Can foreign companies be prosecuted for corruption in your jurisdiction?

The general principles concerning the liability of foreign individuals and companies operating in Italy are laid down by the Italian Criminal Code, according to which:

  • Italian criminal law applies to all those, citizens or foreigners, who are in Italy (Article 6 of the Criminal Code);
  • anyone who commits an offence on Italian territory will be punished under Italian criminal law (Article 3 of the Criminal Code); and
  • any offence is deemed to have been committed in the territory of Italy when the relevant act or omission (or the event that is its consequence) has taken place, in whole or in part, in Italian territory.

With regard to foreign companies’ administrative liability pursuant to Legislative Decree 231/2001, scholars and recent case law have recognised the possibility to apply the decree to all foreign companies, in relation to unlawful acts committed on the Italian territory by them, under the condition that these companies have operated in Italy.

Whistleblowing and self-reporting

Whistleblowing

Are whistleblowers protected in your jurisdiction?

Law 179/2017, which entered into force on December 29 2017, aims at protecting employees who report crimes (whistleblowers) – including corruption and bribery – and irregularities that occur in the workplace.

The new provisions on whistleblowing apply to both the public sector and all those private companies that have implemented an organisational model pursuant to Legislative Decree 231/2001. The latter, in particular, will have to:

  • develop internal channels that allow employees to report potential misconducts within the work place;
  • guarantee their confidentiality; and
  • shield the whistleblowers against any retaliation or discrimination.

Self-reporting

Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?

No leniency programmes are envisaged by Italian regulations on bribery and corruption.

Dispute resolution and risk management

Pre-court settlements

Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements?

Even though there are no specific provisions governing pre-trial settlement of criminal proceedings relating to corruption and bribery, during the proceedings it is possible, for both the defendant and the prosecutor, to request a plea bargain under Article 444 of the Code of Criminal Procedure.

The court may impose, on request of the parties, an alternative sanction or a reduced sentence in case the punishment is less than five years’ imprisonment (ie, reduced up to one third and taking into account all the mitigating and aggravating circumstances).

With specific regard to corruption and bribery, Article 444 of the Code of Criminal Procedure provides that the possibility of such plea bargain is subject to the entire restitution of the price and/or the profit of the offence.

As far as legal entities are concerned, Article 63 of Legislative Decree 231/2001 provides that criminal proceedings against companies may be settled during the proceedings, under the conditions that:

  • the crime falls under the scope of Article 444 of the Code of Criminal Procedure; and
  • the judge decides not to impose prohibitory penalties on the company.

Defences

Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction?

N/A.

What other defences are available and who can qualify?

N/A.

Risk management

What compliance procedures and policies can a company put in place to assist in the creation of safe harbours?

The main tool is the organisational model adopted pursuant to Legislative Decree 231/2001, which provides for penalties as a consequence of the criminal offences committed in the interest or to the advantage of the company by directors, executives and their subordinates, agents and other individuals acting on behalf of the legal entity.

In fact, Article 6(2) of Legislative Decree 231/2017 foresees that the company’s criminal liability, which might arise in connection of corruption and bribery, may be avoided in case the company proves that:

  • it has adopted and implemented a compliance programme aimed at preventing the offences sanctioned by Legislative Decree 231/2017 (the so-called ‘organisational model’);
  • the management of the company has appointed an internal body (the so-called ‘supervisory body’) with the purpose of overseeing the implementation and the updating of the organisational model;
  • the crime has been committed by an individual who has fraudulently violated the provisions laid down in the organisational model’; and
  • the supervisory body’s overseeing duties have been carried out diligently.

The company’s exemption from criminal liability is subject to the judge’s verification that the organisational model is fully operational and effective. In this regard, an effective model should include:

  • the identification of areas of activity in the company’s business where there could be an opportunity to commit any of the offences set out by Legislative Decree 231/2017;
  • adequate procedures for regulating the decision-making process within the areas at risk, with the aim to prevent crimes;
  • the provision of financial resources consistent with the aim of crime prevention;
  • the obligation for each division of the company to inform and report to the supervisory body; and
  • disciplinary sanctions to enforce the respect of the provisions of the organisational model.

Record keeping and reporting

Record keeping and accounting

What legislation governs the requirements for record keeping and accounting in your jurisdiction?

The key provisions concerning record keeping and accounting for Italian companies are laid down by the Italian Civil Code.

In particular, Article 2214 of the code provides that the general ledger and the inventory book are mandatory for all legal entities, along with all the other entries that may be required in relation to the nature and the size of the company.

Also, according to Articles 2423bis and following of the Civil Code, the balance sheet of limited liability companies must be drawn up transparently and must represent a true and fair view of the patrimonial and financial situation of the company and of the economic result of the financial period. In this regard, Articles 2621 and 2622 of the Italian Civil Code regulate the offences of ‘false company notices’ and ‘false company notices of listed companies’. Under these provisions, it is an offence for directors, CEOs and other key functions of private and listed companies to state false facts on the financial stance of the company, or to omit information whose communication is required by law, in balance sheets, reports or other corporate communications, thus misleading the addressees of such documentation.

What are the requirements for record keeping?

The Italian legal framework and the best practices lay down few requirements for record keeping; examples include:

  • the obligation to provide for the stamp of the books – that is, the books’ pages have to be progressively numbered and each sheet stamped by the office of the Register of Enterprises or by a notary public (Articles 2215 and 2218 of the Civil Code);
  • the obligation to keep all the accounts in accordance with the rules of orderly accounting, without leaving blank spaces, interlineations or marginal notations (Article 2219 of the Civil Code); and
  • the obligation to keep the accounts for at least 10 years from the date of the last entry (Article 2220 of the Civil Code).

Reporting

What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations?

Italian companies are not requested to disclose potential violations, as there are no explicit reporting obligations, nor leniency programmes, under the relevant Italian provisions.

Penalties

Individuals

What penalties are available to the courts for violations of corruption laws by individuals?

Breach of the provisions of Criminal Code regarding corrupting behaviours may result in the imprisonment of the offender.

With regard to the duration of the sentence that the judge may impose, the Italian Criminal Code lays down a range between one and 12 years of imprisonment, based on the seriousness of the crime. The most severe penalties apply for offences including:

  • ‘extortion committed by a public official’ (Article 317 of the Criminal Code);
  • ‘passive bribery’ (Article 319); and
  • ‘bribery in legal proceedings’ (Article 319ter).

Article 322 of the Criminal Code provides a reduced penalty for ‘induction to corruption’.

In case of conviction for one of the corruption offences, the judge will order:

  • the confiscation of the goods that constitute the price, the product or the profit of the crime, unless they belong to a person extraneous to the crime; or
  • if the confiscation of the goods described above is not possible, the confiscation of goods of the offender for an amount equal to the profit of the crime.

The law also provides that the offender may incur in ancillary penalties, such as the provisional or permanent disqualification from holding public office.

Companies or organisations

What penalties are available to the courts for violations of corruption laws by companies or organisations?

Pursuant to Legislative Decree 231/2001, pecuniary penalties may apply in connection with corruption and bribery. The pecuniary sanction is determined by the judge through a quota-based system, from a minimum of €258 to a maximum of €1,549 per quota.

In determining the pecuniary penalty, the judge has a wide discretionary power, and will consider elements such as:

  • the economic and financial stance of the company;
  • the importance of the act/offence committed;
  • what the company did in order to cancel or mitigate the consequences of the act; and
  • what ongoing practices the company has in place in order to prevent the commission of crimes.

In case of more serious offences (eg, breach of Articles 319, 319ter(1) and 321 of Criminal Code), the judge may also apply, for a minimum period of one year, prohibitory penalties such as:

  • restrictions on the business activity of the company;
  • suspension or withdrawal of licences and permits;
  • prohibition of contracting with the state or with governmental agencies;
  • non-eligibility for, or revocation of, funding and subsidies;
  • prohibition against advertising goods and services; and
  • total ban on conducting business.