ITALY Trends and Developments Contributed by: Enrico Maria Mancuso, Federico Bracalente, Marco Accorroni and Marco Mariotti, Herbert Smith Freehills Kramer LLP
The reform was controversial from the outset. Accord - ing to critics, the removal of Article 323 left a category of harmful official conduct – notably, discriminatory exercise of discretionary powers in public procure - ment and competitive procedures – without any crimi - nal sanction. However, the reform simultaneously introduced a new offence – Article 314-bis ICC – criminalising the unlawful appropriation of money or moveable prop - erty entrusted to a public official by reason of his or her office or service ( indebita destinazione di denaro o cose mobili ). According to scholars, certain conduct formerly prosecutable under Article 323 ICC may fall within the scope of Article 314-bis ICC. However, the new provision is materially narrower: • it applies only to moveable property and money held by virtue of office; and • it does not extend to immoveable (real) property or professional services, nor to the broader category of discretionary administrative conduct. In Judgment No 95 of 3 July 2025, the Constitutional Court declined to strike down the abolition of Article 323 ICC on constitutional grounds – both because such a ruling would produce an unconstitutional effect of further criminalisation, and because the 2003 Unit - ed Nations Convention Against Corruption’s provision on abuse of functions was found to be recommenda - tory rather than strictly mandatory: hence, no binding international obligation existed at the time. However, the Court explicitly acknowledged the existence of “clear gaps” in the criminal law framework after the reform. The reform also significantly restricted the trading in influence offence under Article 346-bis ICC ( traffico di influenze illecite ). Under the previous formulation, the offence criminalised mediation aimed at inducing a public official to perform any unlawful act in the exer - cise of his or her functions. The 2024 reform: • restricted the relevant mediation to only real relationships with public officials, thus excluding alleged ones; and • narrowed the definition of “illicit mediation” to require that the pact between the parties be
directed at inducing the public official to commit a specific criminal offence. The Constitutional Court, in Judgment No 185 of 16 December 2025, upheld the constitutionality of the reformed Article 346-bis ICC while explicitly acknowl - edging that the restriction leaves certain serious forms of undue influence-peddling without criminal sanction. The Court further called on the legislature to introduce an organic regulation of lobbying activities to draw a clear line between lawful representation and criminal mediation. Is a reform needed in light of the Directive? Article 7 of the Directive and its implications Article 7 of the Directive – titled “Unlawful exercise of public functions” – requires member states “to ensure that, where intentional, at least certain serious viola - tions of law in the performance of or failure to perform an act by a public official in the exercise of that offi - cial’s functions constitute criminal offences. Member States may limit the application of this Article to cer - tain categories of public officials”. The recitals cite as indicative examples violations of procurement rules guaranteeing free access and equality of conditions for candidates, and the deliber - ate misapplication of the law by judges or arbitrators. A significant concession to national discretion allows member states to limit the offence’s application to “certain categories” of public officials – a compromise secured during trilogue negotiations to obtain Italian and German support – though no further specifica - tion is provided, with a wide range of implementation being possible. The provision immediately triggered a sharp political confrontation, and a debate among scholars is likely to follow. At first glance, Article 7 imposes a genuine minimum harmonisation obligation, and the Italian lawmaker is likely to have to ensure criminal liability for at least the most serious forms of unlawful official conduct, par - ticularly discriminatory breaches of procurement rules.
123 CHAMBERS.COM
Powered by FlippingBook