Financial Crime World

Italy’s Financial Crime Investigation Process Under Scrutiny: Experts Weigh In on Key Areas and Future Trends

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As the world continues to recover from the pandemic, Italy’s financial crime investigation process has been under increased scrutiny. Two leading white-collar experts, G. Scassellati-Sforzolini and G. Checcacci, shared their insights on key areas and future trends in this complex field.

Key Areas of Focus

Italy’s authorities have been focused on combating fraud related to the health emergency during the pandemic. As the economy rebounds, a surge in criminal investigations has confirmed Italy’s status as a hub for white-collar crime enforcement. The fight against:

  • Corruption
  • Money laundering
  • Tax evasion
  • Corporate fraud
  • Health, safety, and environmental issues

remains at the forefront of enforcement action.

European Union’s Impact

The new EU whistleblowing directive is expected to increase reports of improprieties within companies, potentially fueling new investigations on corporate crimes. The proposed EU directive on corporate sustainability due diligence may also amplify attention on:

  • Environmental and human rights violations in the M&A field
  • Criminal risks during due diligence

Differences in Enforcement

One key difference between Italy’s white-collar enforcement and that of other jurisdictions is the lack of discretion in prosecution decisions by public prosecutors. In Italy, prosecutors are obligated to open an investigation whenever they become aware of potential criminal activity, regardless of whether private parties file complaints or join the proceedings as defendants.

This can lead to companies being targeted with criminal complaints in complex corporate battles, which may then escape their control. Italian law does not provide for non-prosecution or deferred prosecution agreements, leaving companies without the option to settle cases directly with prosecutors.

Consequences of Non-Compliance

Companies operating in Italy must heighten their focus on compliance and adjust their programs according to Italian law. The corporate liability statute requires companies to take adequate measures to prevent criminal activity, and failure to do so can result in severe penalties, including:

  • Fines
  • Disqualifying measures such as permit revocation or business suspension

Best Practices for Companies

In the event of a white-collar crime crisis, experts recommend:

  • Identifying the issue early on
  • Drawing up an informed action plan
  • Conducting an internal investigation to preserve documents and information for potential trials
  • Cooperating with authorities or self-reporting (although these actions are not formally recognized as exculpatory or mitigating circumstances in Italy)

The Role of Compliance Programs

Companies should develop effective internal investigation strategies and cooperate with authorities to ensure compliance. With the new EU whistleblowing directive expected to boost investigations, companies must be prepared to respond effectively.

As the white-collar practice continues to evolve, experts predict a growing focus on:

  • Compliance
  • Risk management
  • Crisis communication

Companies require specialized expertise in multiple jurisdictions and substantive areas to navigate these challenging situations effectively.