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Italy’s Sanctions Enforcement Under Scrutiny: Lack of Jurisdiction Raises Concerns

Italy has faced criticism over its ability to enforce sanctions imposed on individuals and entities accused of wrongdoing due to a lack of jurisdiction in these cases.

According to sources, some mutual assistance treaties have been signed between Italy and other countries, allowing Italian enforcement authorities to request cooperation in investigating and prosecuting crimes. However, this limited cooperation may not be sufficient to address the scope of the problem.

Whistleblowing Protections in Place

Italy has a mandatory whistleblowing framework in place for companies with over 50 employees. This scheme provides protection for whistleblowers from retaliatory or discriminatory actions taken by their employers.

• The Italian Workers’ Statute regulates internal investigations, requiring companies to respect certain formalities when conducting these procedures.
• The General Data Protection Regulation also applies to internal investigations, ensuring that companies handle personal data in accordance with the law.

Employee Rights Under Scrutiny

Italy’s employment law provides safeguards for workers whose conduct is under investigation. However, there may be a distinction between officers and directors in terms of their rights and responsibilities during an investigation.

• Companies are required to follow specific procedures when investigating employee misconduct.
• Employees have the right to receive a detailed report on the investigation and to respect certain formalities during the process.

Internal Investigations: A Guide

For companies conducting internal investigations, it is recommended that they:

• Prepare a carefully drafted action plan outlining the scope, objectives, and timelines of the investigation.
• Identify the individuals responsible for managing the investigation.
• Ensure legal privilege is maintained if an external counsel is appointed.

Responding to Law Enforcement Requests

If a company receives a notice or subpoena from law enforcement seeking the production or preservation of documents or data, they should:

• Evaluate the individual circumstances of the case.
• Consider cooperating with authorities to avoid reputational damage and coercive measures.
• Note that there is no requirement for privately held corporations to publicly disclose the existence of an internal investigation or contact from law enforcement, unless they are listed issuers with reporting obligations under securities laws.

Local Enforcement View

In Italy, internal investigations are not regulated by specific legislation. However, it is recommended that companies pay attention to any relevant guidelines and best practices when conducting these procedures.

As Italy continues to grapple with the challenges of enforcing sanctions and conducting internal investigations, it remains to be seen how these issues will evolve in the coming months.