Italian Court Rules on Plea Bargains and Ancillary Punishments in White-Collar Crimes

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The Italian Court has issued a significant ruling clarifying procedures for plea bargains and ancillary punishments in white-collar crimes, including bribery, influence peddling, and financial fraud.

Procedures for Plea Bargains and Ancillary Punishments

Defendants and public prosecutors may request that the judge not apply or soften ancillary punishments, such as confiscation of assets, or limit their application to specific assets.
The reduced sanction agreed upon by the parties must be submitted to the judge for approval, who will only deliver a judgment on the punishment if the formal requirements set forth by law are met.
Plea bargaining does not cover compensation for damages, which must be quantified and submitted to a civil judge.

Criminal Company Law and Corporate Fraud

The court’s ruling also addressed the application of corporate liability under Article 63 of Legislative Decree No. 231/2001, which provides for criminal responsibility of legal entities in cases of corporate fraud.

Companies may be held liable for crimes committed by their representatives or employees, including:
- False accounting
- Illegal restitution of contributions to shareholders
- Breach of trust

The court’s decision emphasized the specific provisions of Italian criminal law aimed at punishing corruption, including:

Bribery: punishment with imprisonment ranging from three to ten years for public officers who receive or accept money or other goods in exchange for performing their duties.

Anti-Bribery Regulation

The court’s ruling also addressed the lack of a specific duty on companies to adopt a compliance program aimed at preventing bribery offenses, except for state-controlled companies. However:

Companies may still adopt an organisational and control model under Legislative Decree No. 231/2001 to be exonerated from vicarious corporate liability.

Insider Dealing, Market Abuse, and Criminal Banking Law

The court’s decision also addressed insider trading and market manipulation under Article 184 of TUF, which punishes anyone who trades on the basis of inside information.

Companies may be held liable for these offenses under Legislative Decree No. 231/2001.

Consequences for Companies

The court’s ruling has significant consequences for companies operating in Italy:

The importance of implementing effective compliance programs to prevent bribery and other white-collar crimes.
Failure to do so may lead to vicarious corporate liability under Legislative Decree No. 231/2001.

Next Steps

The Italian Court’s decision on plea bargains and ancillary punishments is expected to have a significant impact on the country’s white-collar crime landscape:

The Bill of Law No. 808/2023, currently under discussion, suggests amending the provisions on influence peddling.
Companies and individuals involved in these crimes will need to adapt their compliance programs accordingly.