INFOFLASH N.3 TAX MAY 2020

by LDP | May 28, 2020 | infoflash

For the Italian Supreme Court, the foreign company is also liable under Legislative Decree 231/2001

 

 

The liability arising from Legislative Decree 231/2001

 

Following the introduction of Legislative Decree 231/2001, a company may be held liable for crimes committed on its behalf or for its benefit, by a person who has operational authority (e.g. directors, managers) or by person subject to the direction and the supervision of the above managers and directors, if the crime committed falls within the catalog of crimes provided for by Legislative-Decree 231. The company is liable personally and independently and its liability is in addition to and does not replace that of the person who is the material author of the crime. The sanctions provided for by Legislative Decree 231 are both pecuniary (up to a maximum of Euro 1,549,000.00) and restraining (revocation of licenses, authorizations, concessions; prohibition to contract with the Public Administration). According to the aforementioned decree, however, the company is not liable if it can prove that it has adopted and effectively implemented, before the commission of the crime, an Organisation and Management Model suitable for preventing crimes of the type that has occurred and that it has entrusted the control of updating and compliance with the Model to a specific body with verification and control powers (the so-called “Supervisory Body“).

 

The ruling of the Italian Supreme Court

According to recent ruling no. 11626/2020 of the Italian Supreme Court, all companies are liable under Legislative Decree 231/2001 for crimes committed on Italian territory in their own interest or to their own benefit, regardless of their nationality and the place where they have their registered office, as well as regardless of whether or not rules are governing similar matters in the State to which they belong.

For the Italian Supreme Court, in fact, the jurisdiction must be assessed with reference to the place where the crime was committed, being irrelevant that “the fault in the organization and therefore the preparation of inadequate models took place abroad” and by a foreign company.

Moreover, the Supreme Court specifies, binding only Italian companies to bear organizational costs from which foreign companies operating on Italian territory would be exempt would constitute an alteration of free competition.

 

The case

In the specific case, the Court of Appeal of Rome had imposed a fine of €600,000.00 on two companies which were linked to each other and were part of an international holding company, for the benefit obtained from the commission of simple bribery and corruption in judicial acts by the directors of the companies. In particular, through the giving of sums of money, the companies had managed to obtain the availability of substantial assets resulting from a previous bankruptcy.

 

The decision of the Supreme Court

As pointed out, however, the Supreme Court has expressly stated that even a foreign company, when operating in Italy, is required to comply with Italian laws, the same way as any person acting in the same territory. As proof of this, as highlighted by the Supreme Court, there is the explicit consideration, by Decree 231, of the opposite case, that of the crime committed abroad by an Italian company: in this case the national jurisdiction is asserted unless the State of the place where the crime was committed is also proceeding.

 

The importance of implementing and updating the Organisational Model

It is, therefore, increasingly important to adopt an Organizational Model which not only has the function of preserving the company (including foreign companies) and its top management from criminal sanctions that could affect the company as a going concern, but also has a positive impact on the entire company organization in terms of better risk control, security and legality.

 

 

LDP remains at your disposal for any further information or deeeping regarding the above-mentioned topics.

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