IMPLEMENTATION AND UPDATING OF 231 MODELS: THE INTRODUCTION OF TAX OFFENCES AND THE SPREAD OF COVID-19 HAVE AN IMPACT ON THE ADMINISTRATIVE LIABILITY OF ENTITIES
LEGISLATIVE DECREE No. 231/2001
Legislative Decree 231/2001 (hereinafter also the “Decree”) introduced into our system the administrative liability of legal entities in the event of offences committed by persons in top management positions or by persons subject to the management and supervision of the latter. In this regard, the Decree sets out an exhaustive (but constantly updated) list of offences which, if committed in the interest or to the advantage of the company, may expose the latter to the heavy system of sanctions contemplated by the Decree itself.
In any case, the legislator has provided for the possibility for the company not to incur this responsibility on condition that it has adopted and effectively implemented an organizational model suitable for preventing offences of the type that has occurred and has entrusted the task of supervising the functioning, observance and updating of the model to a control body (the so-called Supervisory Body).
Within this framework, since December 2019 tax offences have officially become part of Legislative Decree 231/2001; in fact, Decree Law no. 124 of 26 October 2019, converted with amendments by Law no. 157 of 19 December 2019, introduced into Legislative Decree 231/2001 art. 25-quinquiesdecies, entitled “Tax offences“. Companies are therefore now called upon to question the effectiveness of internal control systems in a very delicate area of the company’s business, namely the tax area.
In addition to the above, the current emergency linked to the spread of Covid-19 inevitably impacts on companies, forcing them to face new risks, direct and indirect, which could also give rise to administrative liability profiles pursuant to Legislative Decree 231/2001.
THE NEW OFFENCES
In particular, the new tax offences relevant for the purpose of administrative corporate liability are:
- Fraudulent declaration by use of invoices or other documents for non-existent transactions (Art. 2 lgs. 74/2000): punished with fines of 100 to 400 quotas for fictitious liabilities of less than 100,000 euros and 100 to 500 allowances for fictitious liabilities of more than 100,000 euros;
- Fraudulent declaration by means of other artifices (art. 3 lgs. 74/2000): punished with fines of 100 to 500 quotas;
- Issuance of invoices or other documents for non-existent transactions (art. 8 lgs. 74/2000): punished with fines of 100 to 400 quotas for fictitious liabilities of less than 100,000 euros and 100 to 500 quotas for fictitious liabilities of more than 100,000 euros;
- Concealment or destruction of accounting documents (art. 10 lgs. 74/2000): punished with fines of 100 to 400 quotas;
- Fraudulent tax evasion (art. 11 lgs. 74/2000): punished with fines of 100 to 400 quotas.
In addition to the sanctions mentioned above, there are also disqualification sanctions, including: the prohibition to contract with the public administration, the exclusion from facilitations, loans, contributions and subsidies (and the consequent revocation of those already granted) and the prohibition to advertise goods or services.
It should be noted that the risk of committing the offenses listed above intensifies even more in a context of international transactions (for example, it may be more complicated to identify a so-called foreign “shell company”, due to the greater difficulty of obtaining information and documents relating to it).
However, the most severe aspect of the new legislation is the introduction of confiscation by equivalent (Article 12-bis of Legislative Decree 74/2000) which, in cases where it is not possible to carry out the confiscation directly, falls on the assets and sums of property of the offender with a value equivalent to the price or profit of the tax offence committed.
Even stricter, in the case of conviction for some of the above mentioned crimes (in particular, when certain thresholds are exceeded; for example, in the case of the crime referred to in Article 2, if the amount of the fictitious elements declared is higher than 200,000.00 Euro), is the so-called confiscation for disproportion (Article 12-ter of Legislative Decree 74/2000) borrowed from Article 240 bis of the Italian Penal Code, namely: “the confiscation of sums of money, goods or other utilities of which the convicted person cannot justify the origin and of which, even through a third party, is the owner or has the availability for any reason, in a value “disproportionate” to his declared income as declared for income tax purposes, or to his economic activity”.
THE IMPACT OF COVID-19
The current epidemiological emergency caused by the spread of Covid-19 forces companies to verify the adequacy of their controls on health and safety at work, in order to avoid any profile of administrative liability of the entity pursuant to Legislative Decree 231/2001.
In particular, in accordance with the provisions of Decree-Law of 17 March 2020, the infection with Covid-19 contracted during work (and therefore also during the journey in itinere) constitutes an accident at work. In this regard, as specified in the Inail note of May 15, 2020, the occurrence of an accident at work for Covid-19 does not automatically give rise to the employer’s liability, but he will be liable only if it is established that it is liable for fraud or negligence. For the purposes of liability 231, the employer and – through the employer – the company must, therefore, be able to demonstrate that it has taken all appropriate measures to prevent any possible contagion. In fact, if the company, maliciously or negligently, has failed to comply with the necessary measures provided for by the emergency regulations and has gained an interest or an advantage from such omission (for example, the mere cost saving related to the adoption of protective measures), pursuant to Legislative Decree 231/01, the company will be liable for accident events resulting from the contraction of the contagion, such as negligent injuries or homicide to the detriment of its employees (Article 25-septies of Legislative Decree 231/2001).
Moreover, in addition to the aforementioned direct risk of contagion, there is a whole other series of risks indirectly linked to the health emergency, among which we can cite as examples:
- offences against the Public Administration: in the current emergency context, the opportunities of contact with the Public Administration may have intensified. For example, to support companies in managing the impact of the Coronavirus emergency, the Government has activated and made available to companies a series of social safety nets (e.g., CIGO, CIGD, FIS, etc.). Companies wishing to apply for them, therefore, will have to communicate a series of information to the competent Authorities, on the basis of which the salary integration treatment will be provided. In case of submission of documentation containing untrue information and consequent undue payment of the contribution by the State, the company itself could be charged with the administrative liability (art. 24 Legislative Decree 231/2001) resulting from the commission of the offence of undue receipt of payments (art. 316-ter Italian Criminal Code);
- computer crimes: today’s emergency and the massive recourse to smart-working are putting a strain on the security of the information systems of all companies, thus intensifying the risk of committing those crimes relating to the IT sphere (ex art. 24-bis Legislative Decree 231/01).
THE AUTONOMY OF THE ENTITY’S RESPONSIBILITY
Finally, it should be noted that any grounds of exemption applicable to the person who is the author of the tax offense cannot, on the other hand, be applied to the entity, given the principle of autonomy of the entity’s liability, which has also been confirmed by the Italian Supreme Court.
IMPLEMENTATION AND UPDATING OF MODELS
As a result of both the changed regulatory environment and the delicate historical moment we are experiencing, it is all the more advisable to implement a 231 model in order to preserve the company and its top management from heavy criminal sanctions and ensure effective risk control.
With regard to companies which have already adopted a 231 model, it is important to keep in mind that models that do not take into account the reform are certainly unsuitable for preventing the tax offences listed above. Therefore, it is advisable to promptly update the 231 models and, at the same time, have a professional assess the correctness and robustness of the controls already contained in the model with regard to the risks arising from the current emergency.
In particular, models will have to provide for:
- an appropriate training program for staff in tax matters;
- the provision of roles and responsibilities within the different sectors of the organization in relation to tax risks;
- adoption of an adequate administrative-accounting system, supported by an effective management system;
- adequate information flows to the Supervisory Board, such as to allow it to identify anomalies that may require further investigation;
- introduction of procedures for the detection and management of tax risk (e.g. “shell companies”);
- adequate controls to contain the risks directly and indirectly connected to the current emergency linked to the spread of Covid-19.
 Please note that a quota ranges from 258 to 1549 Euros.
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