Financial Crime World

Financial Crime Trends in Italy: A Year of Revitalization and Reform

After two years of economic slowdown induced by the pandemic, Italian enforcement authorities have seen a significant surge in criminal investigations, particularly in the areas of tax fraud and evasion, and money laundering.

Tax Evasion and Money Laundering on the Rise

Investigations have focused primarily on:

  • Tax evasion
  • Tax credits fraud
  • Money laundering
  • Criminal organizations that infiltrate legitimate businesses

The construction, health, retail, transportation, distribution, sport, and logistics industries have been among those most heavily targeted.

Measures to Dismantle Criminal Organizations

To combat the spread of organized crime, Italian authorities have implemented:

  • Enhanced monitorships and seizures aimed at dismantling criminal organizations’ infiltration of legitimate businesses
  • Significant increase in the number of companies being investigated and sanctioned for their involvement with criminal organizations

Fighting Corruption: A Major Focus

Corruption remains one of Italy’s most pressing issues, with the country scoring 56 out of 100 on Transparency International’s 2022 Corruption Perceptions Index. In response:

  • Authorities have adopted more proactive and preventive measures to combat corruption
  • Strengthened transparency, accountability, and integrity systems
  • Promoted whistleblowing
  • Imposed sanctions

New Whistleblowing Rules in Italy

Italy has implemented the EU Whistleblowing Directive, which requires public and private entities with at least 50 employees or those that operate in specific sectors such as financial services to:

  • Establish internal reporting channels for employees and other stakeholders
  • Failure to adopt these channels or follow up on reports can result in penalties

Corporate Criminal Liability: New Offences

Italy has introduced new corporate criminal offences, including:

  • Bid rigging
  • Obstruction in the selection of a contractor
  • Fraudulent transfer of value
  • These additions are part of wider reforms aimed at combating fraud and corruption in public procurement and other areas

Internal Investigations: Key Considerations

The introduction of new whistleblowing rules and corporate criminal liability will have significant implications for internal investigations. Companies must:

  • Establish specific procedures for receiving, managing, and verifying reports
  • Ensure the confidentiality and protection of whistleblowers

Cross-Border Coordinated Investigation and Enforcement Activity

Since its establishment in 2021, the EPPO has conducted numerous cross-border investigations across the EU, with several cases being referred to Italian courts. These investigations have focused on:

  • VAT-related offences
  • Fraud on public funds
  • Ties to organized crime

Conclusion

==========

The year 2023 has seen a significant increase in financial crime investigations in Italy, driven by the revitalization of enforcement efforts and the introduction of new laws and regulations aimed at combating tax fraud, money laundering, corruption, and other forms of financial crime. As authorities continue to crack down on criminal organizations and corrupt practices, it is likely that we will see an increasing number of companies being investigated and sanctioned for their involvement in these activities.