On January 31, 2019, Italy’s new Law No. 3/2019 on “Measures to fight crimes against the public administration as well as on the matter of statute of limitations and transparency of political parties and movements” entered into force. This new law introduces important measures affecting Italian criminal law and significantly amends Legislative Decree No. 231/2001 with respect to corporate liability.
With respect to Italian criminal law, the new law will make the following changes, increasing the penalties applicable to certain crimes against the public administration:
| 1. |
Increasing in the penalties for corruption pursuant to Section 318 of the Criminal Code. The minimum penalty will increase from one to three years of imprisonment, and the maximum will increase from six to eight years; |
| 2. |
Introducing a life-long prohibition on dealing with public administrations and a life-long disqualification from holding public office for individuals sentenced for a corruption-related crimes, except for sentences of imprisonment not exceeding two years or where an attenuating circumstance provided for by Section 323-bis of the Criminal Code applies (in which case the duration of the above-mentioned penalties is temporary); |
| 3. |
Amending the rules on the statute of limitations. The new law provides that the statute of limitation is suspended from the judgment of first instance (regardless of whether a conviction or an acquittal) until the final judgment becomes enforceable and that, as regards continuing crimes, the statute of limitations will start to run from the date on which the ongoing crime ceased. It should be noted that this amendment will enter into force on January 31, 2020 and that, therefore, the new statute of limitations rules will not apply to crimes committed before that date; |
| 4. |
Extending the prohibition on dealing with public administrations to the crimes of embezzlement, corruption in judicial proceedings, and trafficking in illegal influence (influence peddling), as amended by Law No. 3/2019; |
| 5. |
Amending Sections 9 and 10 of the Criminal Code by removing the need for a Ministry of Justice request or the victim’s complaint in order to prosecute certain crimes against the public administration committed abroad by an Italian citizen or by a foreign citizen against the Italian state or an Italian citizen; and |
| 6. |
Introducing reductions in penalties and a special exemption from liability in cases of voluntary self-disclosure and for individuals providing useful information to obtain evidence of a crime and to identify the offender. |
Law No. 3/2019 also significantly amends the Italian Civil Code by introducing the possibility of prosecuting ex officio private-to-private corruption (Section 2635 of the Civil Code) and incitement of private-to-private corruption (Section 2635-bis of the Civil Code).
With respect to Legislative Decree No. 231/2001, the most significant amendments include:
| 1. |
Extending the list of predicate crimes provided for under Section 25 to also include trafficking in illegal influence (influence peddling), referred to under Section 346-bis of the Italian Criminal Code, as amended; |
| 2. |
Increasing the restraining measures applicable to certain crimes against the public administration whose duration shall not be less than four years and not exceed seven years, for crimes committed by individuals in top management positions, and not less than two years and not exceed four years for crimes committed by individuals subject to management’s directives; |
| 3. |
Introducing reduced restraining measures for extortion, improper inducement to give or promise money or other benefits, and corruption where, before the judgment of first instance, the company effectively attempted to stop the illegal activity, cooperated with authorities in obtaining evidence of the crime, and remediated the organizational failures that caused the crime by adopting and implementing an organizational model suitable for preventing repetition of the crime; |
| 4. |
Amending the duration of precautionary measures which, according to the new law, shall not exceed one year, if applied before the judgment of first instance, or one year and four months, when applied after the conviction judgment of first instance. |
Among the various legislative changes introduced by Law No. 3/2019, the most relevant for companies doing business in Italy are those increasing the duration of restraining measures (e.g. suspension of the company’s business, prohibition from dealing with the public administration, suspension of licenses, permits and authorizations which have been instrumental in committing the crime, etc.) applicable to certain crimes against the public administration and those introducing a leniency program for companies attempting to effectively reduce the negative consequences resulting from the commission of these crimes.
Finally, given the inclusion of the new crime of trafficking in illegal influence among those which may trigger corporate liability, companies should update their organizational, management and control models in order to ensure conformity with the amendments made to Legislative Decree No. 231/2001 and take advantage of the safe-harbor. To this end, companies should conduct a thorough assessment to identify which business areas are exposed to the risk of committing this crime and should adopt appropriate preventive controls. We will be happy to answer any questions that companies may have in taking these actions to ensure compliance with the new law’s requirements.
