Check Fraud Investigation Procedures in Italy: A Delicate Balancing Act

When white-collar crime is suspected or alleged within an Italian company, internal investigations become a crucial and sensitive step. Properly conducted, these investigations can help preserve evidence, inform defense strategies, and even facilitate remedial actions. However, the process is not without its complexities.

Standard Investigations vs. Defence Investigations

Companies may opt for standard investigations, which are governed by general rules, or “defence investigations” under specific statutory provisions. Defence investigations must be carried out by formally appointed external counsel and adhere to strict requirements, including:

• Formal invitations for witness interviews with explanations of their rights and duties
• Verbatim minute-taking or tape-recording

Defence investigations offer stronger protection of legal privilege and allow counsel to use results as admissible evidence in pending criminal proceedings. In contrast, standard investigations may not provide the same level of protection. The choice between these two options depends on the specific circumstances of the case and the purpose of the investigation.

Purpose of the Investigation

Another crucial consideration is whether the investigation aims for an independent, impartial assessment or seeks to gather evidence in support of the defence. Italian law does not require internal investigations to be impartial, and defence investigations are explicitly designed to collect evidence supporting the company’s defence.

Data Protection Considerations

Conducting internal investigations also raises critical data protection issues. With the General Data Protection Regulation (GDPR) in effect since May 2018, companies must ensure compliance with data protection rules, including:

• Obtaining legal basis for processing
• Providing information to data subjects
• Ensuring data security and retention periods

Italian legislation has confirmed that personal data processed in violation of GDPR cannot be used unless applicable procedural rules provide otherwise. Additionally, a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorized disclosure, or access to personal data may occur when a crime is committed, highlighting the importance of adequate security measures.

Conclusion

Internal investigations into suspected white-collar crime in Italy require a delicate balancing act between gathering evidence, protecting legal privilege, and ensuring compliance with data protection regulations. Companies must carefully assess their options and consider the specific circumstances of each case to ensure a thorough and effective investigation. By understanding the complexities of the process, companies can navigate this sensitive area and achieve their goals while minimizing potential risks.