In Law No. 300/2000, Italy implemented both the 1997 EU Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, and the 1997 Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Since 2000, therefore, the Italian anti-corruption system has significantly extended its reach, in such a way as to include bribery of public officials of EU institutions and EU Member States and also, under certain conditions, public officials of foreign states and international organisations (such as the UN, the OECD and the European Council).
In Legislative Decree No. 231/2001, Italy introduced the notion of criminal responsibility of corporations, also applicable to bribery offences, on condition that the offence is committed in the interest or for the benefit of the corporation by its managers or employees. The corporation's responsibility is qualified as an administrative offence by the law, but the matter is dealt with by a criminal court in accordance with the rules of criminal procedure, in proceedings that are ordinarily joined with the criminal proceedings against the corporations' officers and employees. Also in this respect, therefore, as of 2001 the effectiveness of the Italian anti-corruption system has significantly increased.
Through Law No. 190/2012, a significant reform of the Italian anti-corruption system entered into force, introducing, inter alia, new bribery offences, increasing the punishments for existing offences and generally enlarging the sphere of responsibility for private parties involved in bribery. Law No. 69/2015 additionally increased the punishments for corruption offences and Legislative Decree No. 38/2017 has extended the reach of private commercial bribery by implementing the EU Framework Decision 2003/568/JHA on combating corruption in the private sector.
In the light of the above, it can certainly be stated that in the past decade the effectiveness of the Italian anti-corruption system has been significantly improved.
II DOMESTIC BRIBERY: LEGAL FRAMEWORK
The Italian Criminal Code (ICC) provides for various bribery offences applicable to domestic public officials; the main constitutive element of these offences is always the existence of an unlawful agreement between the public official and the briber. The main bribery offences are the following.
First, the offence of 'proper bribery', provided for by Article 319 ICC, occurs when the public official receives money or other things of value, or accepts a promise of such things, in exchange for performing an act conflicting with the duties of his or her office, or for omitting or delaying an act of his or her office (or for having performed, omitted or delayed such an act).
Second, the offence of 'bribery for the performance of a function', provided for by Article 318 ICC, occurs when the public official unduly receives money or other things of value or accepts the promise of them, for him or herself or for a third party, in connection with the performance of his or her functions or powers. The reach of this offence was significantly broadened by Law No. 190/2012 to apply to the receiving of money or other things of value, by the public official, either in exchange for the carrying out of a specific act not conflicting with the public official's duties, or for generally making the public office potentially available to the briber.
Third, the offence of 'bribery in judicial acts', provided for by Article 319 ter ICC, occurs when the above-mentioned bribery conduct is performed to favour or damage a party in a civil, criminal or administrative proceeding.
Fourth, the offence of 'unlawful inducement to give or promise anything of value', provided for by Article 319 quater ICC, occurs where the public official induces someone to unlawfully give or promise to him or her or to a third party money or anything of value, by abusing his or her quality or powers. In the residual cases where the private party is not only 'induced', but is also 'forced' by the public official to give or promise a bribe, the offence entails the exclusive criminal liability of the public official and is considered an 'extortion committed by a public official', according to Article 317 ICC.
Finally, the offence of 'trafficking of unlawful influence', introduced by Law No. 190/2012 and provided for by Article 346 bis ICC, occurs in residual cases where the offences of proper bribery and bribery in judicial acts are not performed, and when anyone, by exploiting existing relations with a public official, unduly makes someone give or promise to give money or other patrimonial advantage as payment for his or her unlawful intermediation with the public official, or as consideration for the carrying out by the public official of an act conflicting with the office's duties, or for the omission or delay of an office's act. In conclusion, the less serious offence of 'instigation to bribery', provided for by Article 322 ICC, occurs where the private party makes an undue offer or promise that is not accepted by the public official, or where the public official solicits an undue promise or payment that is not carried out by the private party.
The above-mentioned bribery offences apply in relation not only to public officials, but also, with exceptions, to 'persons in charge of a public service' (Article 320 ICC).
According to Italian law:
- Public officials are persons 'who perform a public function, either legislative or judicial or administrative' (for the same criminal law purposes, 'an administrative function is public if regulated by the rules of public law and by acts of a public authority and characterised by the forming and manifestation of the public administration's will or by a procedure involving authority's powers or powers to certify'; Article 357, Paragraphs 1 and 2, ICC).
- Persons in charge of a public service are 'the ones who, under any title, perform a public service' (for the same criminal law purposes, 'a public service should be considered an activity governed by the same forms as the public function, but characterised by the lack of its typical powers, and with the exclusion of the carrying out of simple ordinary tasks and merely material work'; Article 358, Paragraphs 1 and 2, ICC).
In accordance with the above definitions, public officials includes judges and their consultants, witnesses (from the moment the judge authorises their summons), notaries public, police officers, etc., whereas persons in charge of a public service include state or public administration employees lacking the typical powers of a public authority .
Employees of state-owned or state-controlled companies are not expressly included within the legal definition, but they implicitly fall within the relevant 'public' categories on condition that the activity carried out is effectively governed by public law or has a public nature.
In principle, public officials cannot participate in commercial activities, as expressly stated in relation to state employees by Legislative Decree No. 3/1957 (Article 60). However, owing to the lack of a comprehensive regulation some exceptions do exist.
Italian criminal provisions do not expressly restrict the providing of gifts, meals, entertainment, etc., either to domestic or foreign officials. However, all these advantages could potentially represent the 'undue consideration' for a public official prohibited by Italian law (falling within the concept of 'other things of value' provided for in relation to bribery offences).
In particular, with respect to the offence of bribery for the performance of a function, the past consolidated case law excluded tout court criminal relevance with regard to gifts of objective 'small value' that could be considered as 'commercial courtesies' in specific cases. In contrast, in relation to proper bribery (i.e., in relation to the performance of an act conflicting with the duties of office), the very strict interpretation of the case law is that the small value of the gift never excludes, as such, criminal responsibility. The crucial criterion for affirming or excluding criminal liability is therefore the relation of do ut des between the gift (or other advantage) and the act of the public official (i.e., to what extent the gift represents a consideration for carrying out the act).
In addition, some Italian non-criminal regulations restrict the provision of gifts, etc., to Italian officials. As of 1 January 2008, Italian government members and their relatives are prohibited from keeping in their personal possession 'entertainment gifts', received on official occasions, of a value higher than €300 (Prime Ministerial Decree of 20 December 2007).
Furthermore, in accordance with Law No. 190/2012, in March 2013 the Italian government issued a new code of conduct for public administration employees, specifically aimed at preventing corruption and at ensuring compliance with public officials' duties of impartiality and exclusive devotion to the public interest. In particular, as far as gifts and considerations are concerned, Article 4 of the code provides that public employees are forbidden from asking for or accepting gifts or other things of value (with the exception of courtesy gifts of small value) as consideration to accomplish or to have accomplished a duty of their office, either from subjects who could benefit from their decisions or from subjects that are going to be the addressees of the activity or powers related to the public office. The prohibition applies with respect to gifts received not only from private parties, but also from other public employees. In any case, pursuant to the code, the limit on the permissible value of courtesy gifts of small value is equal to a maximum of €150, and if gifts of higher value are received, they shall be put at the disposal of the public administration.
With respect to job assignments, public employees are prohibited from accepting assignments of professional collaboration by private people who have (or have had in the previous two years) a significant economic interest in relation to decisions or activity concerning the relevant public office.
Furthermore, Article 10 of the Code holds that public employees acting as private persons in relation to other public employees may not benefit from their professional role to obtain undue things of value.
A similar prohibition against receiving gifts or hospitality of any kind, with the exception of those considered as commercial courtesies of small value, is ordinarily contained in most of the ethical codes implemented by the various state-owned or state-controlled corporations.
All the aforementioned regulations directly apply only to the recipient of the gifts or hospitality and not to the party providing the gifts or hospitality, and the sanction for violation of the regulations is limited to an internal disciplinary action.
In addition to the bribery of public officials, in 2002 an offence prohibiting private bribery was introduced, provided for by Article 2635 of the Italian Civil Code. The reach of the offence was first extended by Law No. 190/2012, and then by Legislative Decree No. 38/2017, which has implemented the EU Framework Decision 2003/568/JHA on combating corruption in the private sector.
The offence occurs where money or other undue benefits are solicited, agreed or received by directors, general managers, managers in charge of the accounting books, internal auditors and liquidators of a corporation, to carry out or omit an act in violation of the duties of their office. A criminal complaint filed by the victim is a necessary requirement, unless the crime generates a distortion of competition in the acquisition of goods or services.
Punishment is imprisonment for one to three years for both the briber and the corporate officer, which is doubled for corporations listed in Italy or in the European Union, but limited to one year and six months for ordinary employees.
The following sanctions are applicable to individuals, in relation to domestic and foreign bribery: imprisonment for six to 10 years for the offence of proper bribery; imprisonment for one to six years for the offence of bribery for the performance of a function; imprisonment for six to 12 years for the offence of bribery in judicial acts; imprisonment for six to 10 years and six months for the public official and up to three years for the private briber for the offence of unlawful inducement to give or promise anything of value; and imprisonment for one to three years for the offence of trafficking of unlawful influences.
All these sanctions can be increased by 'aggravating circumstances', and the confiscation of the proceeds of crime also applies in the event of conviction. In contrast, a civil settlement with the person injured, aimed at compensating damage, can qualify as a 'mitigating circumstance' to reduce the criminal sentence.
For the offence of instigation to bribery, the sanctions provided for proper bribery and for bribery for the performance of a function apply, are reduced by one-third.
With respect to corporations, the relevant sanctions comprise fines, confiscation and disqualifications, and the latter include the suspension or revocation of government concessions, debarment, exclusion from government financing and even prohibition from carrying on business activities (Articles 9 to 13 of Legislative Decree No. 231/2001). These sanctions can also be applied at a pretrial stage, as interim coercive measures. In the event of conviction, confiscation of the profit or price of the offence has to be applied, including confiscation of the corporation's assets to a value corresponding to the profit or price of the offence (Article 19 of Legislative Decree No. 231/2001). At a pretrial stage, prosecutors can request the competent judge to grant an order freezing the profit or funds related to the bribery offence (Article 45 of Legislative Decree No. 231/2001).
III ENFORCEMENT: DOMESTIC BRIBERY
Bribery laws are enforced by public prosecutors. In the Italian legal system, public prosecutors are magistrates – not a government agency – and as judges they are independent from the executive power. According to Italian law, criminal action is compulsory and not discretionary, and it cannot be dropped by the public prosecutor (unless he or she assesses that no crime was ever committed and accordingly requests a dismissal from the competent judge; with respect to the corporate criminal responsibility, the dismissal is directly ordered by the prosecutor).
Plea-bargaining is widely used in the Italian system in relation to corruption offences. It has to be granted by the competent judge, further to the agreement of the offender with the prosecuting authorities, on condition that the punishment agreed is not higher than five years' imprisonment. The law considers a plea bargain to be substantially equivalent to a conviction sentence (Article 444 of the Italian Code of Criminal Procedure), but according to case law the affirmation of guilt has a lower value because criminal responsibility was not proven in the course of a criminal trial.
In relation to domestic bribery offences, several investigations and prosecutions, some involving foreign companies, have been conducted by Italian authorities in recent years, including the following cases.
i The Enipower case
This case concerns an investigation started in 2003 by the Milan prosecutor's office for the alleged payment of bribes by several private parties to officers of the companies Enipower SpA and Snamprogetti SpA (controlled by the state-owned company Eni) to obtain public contracts. Most of the defendants, individuals and companies have already been sentenced following court decisions or have entered into a plea bargain with court authorisation.
ii The Siemens AG case
This case started in connection with the Enipower case mentioned above, and concerned the alleged payment of bribes by Siemens officers to Enipower officers to obtain public contracts. The great significance of the case is that, in April 2004, the Court of Milan applied for the first time the provisions on corporate criminal responsibility to a foreign corporation, including the use of interim coercive measures at pretrial stage (Siemens was prohibited from entering into contracts with the Italian public administration for one year). The conviction of Siemens AG and of its officers was subsequently confirmed at the trial stage by the Court of Milan.
iii The G8 case
This case concerns allegations of corruption against government members and public officials in connection with the adjudication of public tenders regarding restructuring and building projects in connection with the G8 summit held in Italy in June 2009. In October 2012, in the main leg of the prosecution, the Rome Court of First Instance sentenced both the public officials and the private parties involved to punishments ranging from two to four years' imprisonment. These convictions were then confirmed by the Rome Court of Appeal on 28 January 2015, and finally by the Court of Cassation on 10 February 2016.
iv The Lombardy region case
Apellate proceedings are currently pending in respect of top politicians and officers of the Lombardy region for allegedly having facilitated the obtaining of public healthcare funds by certain private hospitals in exchange for money or other patrimonial advantages. On 27 November 2014, the Milan Court of First Instance sentenced, in a separate relevant leg of the proceeding, the alleged intermediary of the bribe to five years' imprisonment. This conviction was then confirmed by the Milan Court of Appeal on 15 March 2017. As far as the main proceeding against the former president of the Lombardy region is concerned, on 23 December 2016 the Milan Court of First Instance, Section X, handed down a sentence of six years' imprisonment. On 19 September 2018, the Milan Court of Appeal confirmed the conviction, increasing the sentence to seven years and six months' imprisonment.
In May 2014, the Milan prosecutor's office started an investigation in relation to the adjudication of public tenders in the context of the 2015 Universal Exposition of Milan. A relevant leg of the proceeding has already ended with the main defendants accepting a plea bargain granted by the judge of the preliminary hearing. The most severe sentence imposed was three years and four months' imprisonment. In another leg of the proceeding, on 19 July 2016, the Milan Court of First Instance sentenced a relevant public official to two years and two months' imprisonment. Appellate proceedings are currently pending.
In 2014, the Venice prosecutor's office started an investigation against top politicians of the Veneto region and businesspeople for corruption relating to public funds used for the 'Mose' project, a huge dam aimed at protecting Venice from the high tide. On 16 October 2014, a relevant leg of the proceeding ended with 19 defendants accepting a plea bargain granted by the judge of the preliminary hearing. The most severe sentence imposed was two years and 10 months' imprisonment and a €2.6 million confiscation order. In another leg of the proceeding, the trial of first instance started in 2015 and ended on 15 September 2017 with four convictions (inter alia, the former Minister of the Environment was sentenced to four years' imprisonment), but also with the acquittal of the former Mayor of Venice. Appellate proceedings are currently pending.
vii Mafia Capitale
In 2014, the Rome prosecutor's office started investigations against top politicians of the municipality of Rome and businesspeople for corruption and conspiracy in relation to the adjudication of public tenders concerning assistance services to be carried out by the Rome municipality (in particular, assistance services for immigrants and refugees). In December 2014, 44 people were arrested. The trial started in 2015 and ended on 20 July 2017 with 41 convictions issued by the Rome Court of First Instance. In September 2018, the Rome Court of Appeal confirmed most of the convictions (and it considered the aggravating circumstances relating to mafia to be well-founded).
IV FOREIGN BRIBERY: LEGAL FRAMEWORK
Pursuant to Article 322 bis (Paragraphs 1 and 2) ICC the bribery offences originally applicable for domestic public officials (see Section II) are extended to apply to public officials of EU institutions and EU Member States, and to the private briber.
Furthermore, Article 322 bis (Paragraph 2) ICC extends the application of the aforementioned domestic bribery offences to cover public officials of foreign states and international organisations (such as the UN, the OECD and the European Council), with the following two significant limitations:
- only active corruption is punished (i.e., only the private briber, on the understanding that foreign public officials will be punished according to the laws of the relevant jurisdiction); and
- application is conditional on the act being committed to obtain an undue advantage in international economic transactions or with the purpose of obtaining or maintaining an economic or financial activity (the conduct prohibited by the latter part of this limitation was added by Law No. 116/2009, implementing the UN Convention against Corruption of 2003).
As previously mentioned, as of 2000, under Article 322 bis ICC, the reach of bribery offences has been significantly broadened in that it is now immaterial whether the functions of the official who receives or is offered a consideration have no connection to Italy. However, in relation to such offences, Italy has not established a general 'extraterritorial' jurisdiction. In fact, the governing principle on the point has remained that of territoriality, according to which Italian courts have jurisdiction only on bribery offences that are considered to have been committed within the Italian territory: namely, when at least a segment of the prohibited conduct (i.e., the decision to pay a bribe abroad), or its actuation, takes place in Italy. This principle suffers a derogation in favour of the extraterritorial jurisdiction only to a very limited extent, and under stringent requirements (presence in Italy of the suspect, request of the Italian Minister of Justice, unsuccessful extradition proceeding, etc.; see Articles 9 and 10 ICC).
With respect to the definition of foreign public officials (i.e., officials of EU Member States, of foreign states and of international organisations), Italian law makes express reference to the persons who, within these states and organisations, 'perform functions or activities equivalent to those of public officials and of persons in charge of a public service' (Article 322 bis, Paragraphs 1 and 2, ICC). In other words, Italian criminal law extends to them the same definitions already provided for domestic officials, explained in Section II. As far as officials of EU institutions are concerned, Italian law provides for an express listing of the relevant categories (including members of the European Commission, Parliament and Court of Justice, and officials of related institutions; Article 322 bis, Paragraph 1, ICC).
The regime regarding gifts and gratuities is the same as that applicable to domestic bribery, already explained in Section II. Facilitating payments are prohibited by Italian law. Payments amounting to bribery offences (described in Section II) are prohibited whether they are carried out directly or indirectly, through intermediaries or third parties. In the event of payments made through intermediaries, Italian prosecutors should prove, and Italian courts should assess, whether the payment to the intermediary was made with the knowledge of the intent to subsequently bribe the foreign public official.
Both individuals and corporations can be held liable for bribery of a foreign official. With respect to the responsibility of individuals, see Section II. As of 2001, as mentioned in Section I, prosecutions can also be brought against both Italian and foreign corporations for bribery offences (Article 25 of Legislative Decree No. 231/2001). For a corporation to be held responsible, it is necessary that a bribery offence is committed in the interest or for the benefit of the corporation by its managers or employees. The corporation's responsibility is qualified as an administrative offence, but the matter is dealt with by a criminal court in accordance with the rules of criminal procedure, in proceedings that are usually joined with the criminal proceedings against the corporations' officers or employees. Where the bribery offence is committed by an employee, the corporation can avoid liability by proving to have implemented an effective compliance programme designed to prevent the commission of that type of offence (Article 7 of Legislative Decree No. 231/2001). Where the bribery offence is committed by senior managers, the implementation of an effective compliance programme does not suffice and the corporation's responsibility is avoidable only by proving that the perpetrator acted in fraudulent breach of corporate compliance controls (Article 6 of Legislative Decree No. 231/2001).
As explained in Section III, bribery laws are enforced by public prosecutors. In the Italian legal system, public prosecutors are magistrates – not a government agency – and as judges they are independent from the executive power. Under certain conditions, plea-bargaining with prosecuting authorities is recognised by Italian law (see Section III). In the Italian system, there is no formal mechanism for companies to disclose violations in exchange for lesser penalties. However, a certain degree of cooperation with the prosecuting authorities before trial (in terms of removal of the officers or members of the body allegedly responsible for the unlawful conduct, implementation of compliance programmes aimed at preventing the same type of offences, compensation for damage, etc.) can have a significant impact in reducing the pretrial and final sanctions applied to the corporation.
The penalties applicable to individuals and corporations in relation to foreign bribery are the same as those applicable to domestic bribery, explained in Section II.
As far as civil enforcement is concerned, Italy ratified the Council of Europe Civil Law Convention on Corruption of 4 November 1999 in Law No. 112/2012, which entered into force on 28 July 2012. Therefore, current Italian legislation on this point (especially on the aspects of civil liability and compensation of damage deriving from corruption) can be considered to be in compliance with international standards.
V ASSOCIATED OFFENCES: FINANCIAL Record-keeping AND MONEY LAUNDERING
The relevant provisions on bookkeeping, auditing, etc., are contained in the Italian Civil Code of 1942. Article 2423 of the Civil Code provides that balance sheets of limited liability companies have to be drawn up with transparency and have to represent in a true and fair view the patrimonial and financial situation of the company and the economic result of the financial period. Articles 2423 bis to 2429 of the Civil Code provide the criteria to be followed for the drafting of the balance sheet, and the tasks to be accomplished by the board of directors and by the internal auditors on this point.
The duty to appoint internal auditors, and their tasks, are provided by Article 2397 et seq. of the Civil Code. In particular, according to Article 2403 of the Civil Code, the internal auditors control compliance with the law, with by-laws and with the principles of fair administration, and in particular they control the adequacy of the organisational, administrative and accounting structure adopted by the company and its concrete functioning. The duty to appoint a firm to audit the internal control on accounting is provided for by Article 2409 bis et seq. of the Civil Code.
With respect to listed companies, Italian law provides for more stringent internal and external company controls.
Companies have no obligation to disclose violations of anti-bribery laws or associated accounting irregularities. Internal and external auditors have a duty to signal any relevant violations, and they are responsible for damages in the event of non-compliance.
In the 1990s, investigations of company accounts were largely used as a tool to discover bribery payments, and the offence of false accounting was often charged jointly with that of domestic bribery. Legislative Decree No. 61/2002 has amended the definition of false accounting offences, largely reducing their sphere of application. Law No. 69/2015, which entered into force on 14 June 2015, has again broadened the definition and reach of these offences, so they can now be used again.
In the event that the payment of bribes does amount to a false accounting offence, with respect to listed companies Italian law provides the punishment of imprisonment for three to eight years (Article 2622 of the Civil Code) and, with respect to non-listed companies, the punishment of imprisonment for one to five years (Article 2621 of the Civil Code).
Italian law prohibits the tax deductibility of both domestic and foreign bribes.
Money laundering legislation is very effective in the Italian system, in terms of both criminal and administrative sanctions.
In particular, the statute of the criminal offence of money laundering is provided for by Article 648 bis ICC, which punishes with four to 12 years' imprisonment anybody who, with knowledge and intent, substitutes or transfers money, goods or other things of value deriving from an intentional crime, or carries out, in relation to that benefit, any transactions in such a way as to obfuscate the identification of its criminal provenance. Domestic and foreign bribery, therefore, represent predicate offences for the criminal offence of money laundering.
Until January 2015, charging the offence of money laundering was conditional upon the offender not having participated in the predicate offence (i.e., had the offender participated in the predicate offence, he or she would be responsible only for that offence); this condition is no longer required under the new regime, under which 'self-money laundering' is also punishable.
In addition to the extremely severe prison sentence mentioned above, the law provides for the compulsory confiscation of the relevant money or goods in the event of conviction (and the related possibility of freezing them at a pretrial stage).
Furthermore, the administrative provisions on anti-money laundering are very effective under Italian law. They are now contained in Legislative Decree No. 90 of 25 May 2017, which implemented the Fourth Anti-Money Laundering Directive 2015/849/EU in Italy.
In essence, this legislation imposes on relevant 'categories of subjects' (financial intermediaries, professionals, etc.) certain anti-money laundering obligations, the most significant of which are the following:
- 'customer due diligence' obligations, which mainly consist of the following activities:
- identifying the customer and verifying the customer's identity on the basis of documents, data or information obtained from a reliable and independent source;
- identifying the beneficial owner and verifying his or her identity;
- obtaining information on the purpose and the intended nature of the business relationship or professional service; and
- conducting ongoing monitoring in the course of the business relationship or professional service;
- record-keeping obligations; and
- reporting obligations: according to Articles 35 to 42 of the above-mentioned Legislative Decree No. 90/2017, the 'relevant subjects' have to disclose to competent authorities (the Financial Intelligence Unit) 'suspicious transactions' relating to money laundering and terrorist financing. Failure to disclose a suspicious transaction does not amount to a criminal offence, but it is penalised by the imposition of fines and other administrative sanctions (Articles 58 to 61 of the Legislative Decree). The Financial Intelligence Unit can impose the suspension of the relevant suspicious transactions on financial intermediaries.
VI ENFORCEMENT: FOREIGN BRIBERY AND ASSOCIATED OFFENCES
Several investigations and prosecutions for foreign bribery offences have been conducted by Italian authorities in recent years, the most significant of which are the following.
i The Oil-for-Food programme
On 10 March 2009, in respect of the mismanagement of the Oil-for-Food programme, the Milan Court of First Instance sentenced three Italian individuals, acting directly or indirectly for an Italian oil company, to two years' imprisonment for the offence of foreign bribery on the assumption that they paid bribes to a state-owned Iraqi company. On 15 April 2010 the Milan Court of Appeal acquitted all co-defendants because the charges were time-barred.
ii The Nigeria Bonny Island case
This case concerns an investigation conducted by the Milan prosecutor's office against the companies Eni SpA and Saipem SpA in relation to the offence of foreign bribery allegedly committed by the companies' officers (in the frame of the international consortium TSKJ, involving the US company KBR/Halliburton, Japanese company JGC and French company Technip), and allegedly consisting of significant payments to Nigerian public officials between 1994 and 2004 to win gas supply contracts. On 17 November 2009, the Milan judge for the preliminary investigations rejected the prosecutors' application to apply a pretrial 'interim measure' prohibiting Eni SpA and Saipem SpA from entering into contracts with the Nigerian National Petroleum Corporation, owing to lack of Italian jurisdiction. The case against Eni SpA was subsequently dismissed, and the case against five officers of Saipem SpA was also dismissed on 5 April 2012 because of the time bar. In contrast, in July 2013, Saipem SpA was sentenced by the Milan Court of First Instance to a fine of €600,000 and to confiscation of €24.5 million. In February 2015, the conviction of Saipem SpA was confirmed by the Milan Court of Appeal, and in February 2016 the Court of Cassation issued the final judgment convicting Saipem SpA.
iii The Finmeccanica–AgustaWestland case
This case concerns an investigation conducted by the prosecutor's office of Busto Arsizio (an area close to Milan) against the companies Finmeccanica and AgustaWestland, and their top managers, in relation to the offence of foreign bribery allegedly committed in 2010 in connection with the supply to the Indian government of 12 helicopters. In 2014, the prosecutor discontinued the investigations against Finmeccanica in the light of the assessment that the company was not involved in the alleged wrongdoing and had implemented adequate compliance programmes to prevent corruption offences. In the same period, AgustaWestland SpA and AgustaWestland International Ltd entered into a plea bargain with the prosecutor's office. In October 2014, the Milan Court of First Instance acquitted on the merits the top executives of both companies in relation to the bribery offences, but sentenced them to approximately two years' imprisonment for the offence of tax fraud. In April 2016, the Milan Court of Appeal overturned the acquittal of the two executives and sentenced them to four and four and a half years' imprisonment respectively. These convictions were then quashed by the Court of Cassation on 16 December 2016 and, in the subsequent appellate trial, the Milan Court of Appeal acquitted both defendants in January 2017.
iv Pending trials
Trials for alleged foreign bribery are currently pending against the companies Eni and Saipem, and their managers, in relation to the adjudication of licences and public tenders in Nigeria and Algeria. In particular:
- with respect to Nigeria, in November 2013, the Milan Prosecutor's Office started a new criminal investigation into the company Eni SpA, its top managers and Italian and foreign individuals for the alleged offence of bribery of Nigerian public officials, for the granting in 2011 of an oil-prospecting licence for an oil field in Nigerian offshore territorial waters by the Nigerian government to the subsidiaries of Eni and Shell. Over the course of 2016, the foreign company Shell and its managers were added as suspects to the investigation, and at the end of 2017 all suspects were committed to trial. The trial started in summer 2018 and it is currently pending before the Milan Court of First Instance, while two defendants who opted for a summary trial were sentenced to four years' imprisonment in September 2018; and
- with respect to Algeria, several years ago the Milan Prosecutor's office started a criminal investigation into the companies Eni SpA and Saipem SpA, some of their top managers and foreign agents for the alleged offence of bribery of Algerian public officials, for the adjudication of several tenders in Algeria in 2007–2010. The trial before the Milan Court of First Instance ended in September 2018 with the acquittal of Eni SpA and its top managers, and with the conviction of Saipem SpA and its top managers and agents, who were given sentences ranging from four years and one month's imprisonment to five years and six months' imprisonment, plus confiscation of €197 million as proceeds of crime. Appellate proceedings are likely to start in the course of 2019.
VII INTERNATIONAL ORGANISATIONS AND AGREEMENTS
Italy is a signatory to the following European and international conventions with relevance for anti-corruption purposes:
- European Union:
- the Convention on the Fight against Corruption Involving Officials of the European Communities or Officials of the Member States of the European Union, Brussels, 26 May 1997 (ratified by Law No. 300/2000, entered into force on 26 October 2000);
- Council of Europe:
- the Criminal Law Convention on Corruption, Strasbourg, 27 January 1999 (ratified by Law No. 110/2012, entered into force on 27 July 2012); and
- the Civil Law Convention on Corruption, Strasbourg, 4 November 1999 (ratified by Law No. 112/2012, entered into force on 28 July 2012); and
- the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Paris, 17 December 1997 (ratified by Law No. 300/2000, entered into force on 26 October 2000);
- the UN Convention against Transnational Organized Crime, New York, 15 November 2000 (ratified by Law No. 146/2006, entered into force on 12 April 2006); and
- the UN International Convention against Corruption, New York, 31 October 2003 (ratified by Law No. 116/2009, entered into force on 15 August 2009).
Italy actively participates with the OECD Working Group on Bribery and with the Council of Europe's Group of States against Corruption, whose recommendations were recently mostly implemented by Italy.
VIII LEGISLATIVE DEVELOPMENTS
As mentioned above, in the past decade the effectiveness of the Italian anti-corruption system has significantly improved as a result of reforms that have extended the reach of bribery offences to include public officials of foreign states (Law No. 300/2000) and corporations (Legislative Decree No. 231/2001), and that address private corruption (especially Law No. 190/2012 and Legislative Decree No. 38/2017).
In particular, Law No. 190/2012, concerning 'Provisions for the prevention and repression of corruption and illegality in the public administration', is the result of several bills that had been pending in Parliament for a few years, and it was aimed at improving the efficiency and deterrence of the Italian anti-bribery system, and at complying with the higher standards requested at international level, by the OECD in particular.
In addition to the criminal aspects, a crucial aim of Law No. 190/2012 was to introduce into the public administration new compliance procedures to improve transparency in the decision-making process, to avoid conflicts of interest in relations with private parties, to increase accountability of public officials and ultimately to remove at source the causes of corruption.
Law Decree No. 90 of 24 June 2014 has attributed significant new powers to the National Anti-Corruption Authority (ANAC) in an effort to counteract bribery conduct by providing effective coordination and exchange of information between that body and the various prosecutor's offices investigating cases of corruption, as well as providing the ANAC with effective powers of supervision over relevant public tenders.
As explained in Section IV, compliance programmes have a crucial role under Italian law for excluding or mitigating corporate responsibility. In particular, where a bribery offence is committed by an employee, the corporation can avoid liability by proving to have implemented an effective compliance programme designed to prevent the commission of such an offence (Article 7 of Legislative Decree No. 231/2001). On the other hand, where a bribery offence is committed by senior managers, the implementation of an effective compliance programme does not suffice, and the corporation's responsibility is avoidable only by proving that the perpetrator acted in fraudulent breach of corporate compliance controls (Article 6 of Legislative Decree No. 231/2001).
X OUTLOOK AND CONCLUSIONS
As explained in Sections I and VIII, the Italian anti-corruption system has greatly improved, in particular with the extension of the reach of corruption offences to include foreign public officials and the responsibility of corporations.
Furthermore, Law No. 190/2012 has additionally improved the effectiveness of the anti-corruption system by introducing new bribery offences, increasing punishments for existing offences and, more generally, enlarging the sphere of responsibility for private parties involved in bribery.
Law No. 69/2015 has additionally increased the punishments for corruption offences and Legislative Decree No. 38/2017 has extended the reach of private commercial bribery, by implementing the EU Framework Decision 2003/568/JHA on combating corruption in the private sector.
The significant powers given to the ANAC in 2014 was an additional concrete step in the right direction.
1 Roberto Pisano is the managing partner of Studio Legale Pisano. The information in this chapter was accurate as at November 2018.