ITALY Trends and Developments Contributed by: Francesco Isolabella and Luigi Isolabella, Studio Legale Associato Isolabella
porations have thus integrated compliance into their organisational strategies, not only to mitigate crimi - nal risk but also for reputational, sustainability, and stakeholder-related reasons, and thus for the purpose of consistency throughout the entire system. Thus, a law originally aimed at redefining corporate criminal responsibility has, through judicial applica - tion, extended its principles, particularly the centrality of compliance, beyond strictly criminal domains. Meanwhile, as mentioned above, the Milan Prosecu - tor’s Office has recently launched numerous inves - tigations into companies operating in the logistics, distribution, and fashion sectors, industries with com - plex subcontracting chains that are subject to high exposure to risks such as tax evasion, price dumping, labour exploitation, etc. Regulatory authorities (Bank of Italy, Consob, ANAC, etc) have also begun imposing increasingly stringent compliance standards, requiring systematic and time - ly corporate responses. Restorative Justice The growth of compliance is not the only outcome of Decree 231/2001. It also laid the groundwork for another development, the substantive application of restorative justice to corporations. Restorative justice formally entered Italian law only with Articles 42 et seq of Legislative Decree 150/2022 (the Cartabia Reform) and currently applies solely to physical persons. Why, then, claim that restorative justice for corpora - tions (currently not provided for entities) hails from Decree 231/2001? Because, as in life, the more significant the changes, the smaller the formal steps are in their direction. And more often than not, small formal steps are followed by large, substantial steps. This process can be summarised as follows:
• a growing cultural inclination toward restorative solutions inspired by Anglo-American jurispru - dence; • effective use of existing legal instruments that, though not formally restorative, and although occa - sional and mainly used in connection with natural persons, foreshadowed such practice; • application of Article 17 of Decree 231/2001, which precludes disqualifying sanctions when, before trial, the company: (a) fully compensates damages and eliminates the harmful effects of the offense; (b) remedies organisational deficiencies by adopt - ing and implementing appropriate compliance models; and (c) submits any unlawful profits for seizure; • use of plea bargaining (patteggiamento) for legal entities pursuant to Articles 63 and 444 of the Code of Criminal Procedure; • the European Court of Justice’s reinterpretation of Articles 50 of the EU Charter of Fundamental Rights and 54 of the Schengen Convention affirm - ing substantial ne bis in idem (preventing a physi - cal or legal person from being sentenced twice for the same offence) – according to the Court, this shall be applied independently of the formal nature of the sanctions, which can also not be criminal so long as: (a) the regulations have a deterrent punitive effect for an offence recognised by national laws as a criminal offence; and (b) so long as the sanctions issued are so afflictive as to entail effects and consequences that are the same or similar to criminal ones; (c) existence of conciliatory tax settlement mecha - nisms allowing companies to resolve fiscal violations with the Revenue Agency; and (d) adoption by prosecutors, especially in Milan, of plea bargaining and ne bis in idem principles to close major investigations against dozens of multinationals, often in exchange for substan - tial monetary payments and significant compli - ance reforms, thereby avoiding conviction for both companies and their executives.
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