Italy is party to four international and European Union ( EU ) conventions aimed at combating corruption: MAJOR ECONOMIC PARTNERS

Transcription

1 INTERNATIONAL ANTI-CORRUPTION CONVENTIONS Italy is party to four international and European Union ( EU ) conventions aimed at combating corruption: International Anti-Corruption Conventions... 1 Legislative Framework for Combating Corruption... 1 Enforcement Bodies 2 Perspectives on Corruption 2 Foreign Bribery 3 Anti-Corruption Initiatives.. 3 Legal Profession Input 4 Recent Notable Enforcements. 4 Recent Developments & News Organisation for Economic Co-operation and Development ( OECD ) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ( OECD Anti-Bribery Convention ); 2. United Nations Convention against Transnational Organised Crime ( UNTOC ); 3. United Nations Convention again Corruption ( UNCAC ); and 4. EU Convention on the Fight against Corruption Involving Officials of the European Community or Officials of the Member States of the European Union ( EU Anti-Corruption Convention ). In addition, Italy is also a member of the Council of Europe Group of States against Corruption ( GRECO ) and is a signatory to: 5. The Council of Europe Criminal Law Convention on Corruption (CETS No 173); and 6. The Council of Europe Civil Law Convention on Corruption (CETS No 174). Italy ratified both the OECD Anti-Bribery Convention and the EU Anti-Corruption Convention through Law No 300/2000 of 29 September Law No 146/2006 ratified UNTOC, and Law No ratified UNCAC into Italian law. Italy has yet to ratify either of the Council of Europe Conventions. MAJOR ECONOMIC PARTNERS Italy s total estimated exports for 2011 was US$508.9bn and total estimated imports for 2011 was US$541bn. Main export partners are: Germany (13.2%), France (11.7%), Spain (5.9%), US (5.8%), UK (5.4%) and Switzerland (4.6%). Main import partners are: Germany (16.2%), France (8.5%), China (7.9%), Netherlands (5.4%) and Spain (4.5%) *. * Percentages as of CIA World Factbook, available at: (last accessed 2 March 2012). LEGISLATIVE FRAMEWORK FOR COMBATING CORRUPTION Italian Criminal Code Italy s anti-corruption laws are codified in the Criminal Code ( CC ). Articles criminalise passive bribery of public officials and of persons in charge of a public service, and Articles criminalise STATUTE OF LIMITATIONS The offences of corruption are all subject to varying statutes of limitations. A distinctive feature of the Italian legal system is that time does not stop running even after a trial has begun. It is estimated that 140,000 cases ended in 2011 due to being time-barred, and of these, most were corruption cases because the facts generally do not come to light for many years. Both the OECD and GRECO have expressed concern over Italy s statute of limitations 1. The OECD reports that with respect to foreign bribery cases, 62% of cases were dismissed. 1 GRECO Eval I-II Rep (2008) 2E, available at: (last accessed 2 March 2012); Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Italy, December 2011, available at: (last accessed 2 March 2012). active bribery of public officials or of persons in charge of a public service and instigation to corruption. Law No 300/2000 introduced Article 322-bis, which extends the offences under the articles above to include bribery of foreign officials (sub-paragraph 2) and considers officials of EU institutions and public officials of foreign countries or members of international organizations. With respect to the foreign officials, only the corruptor is held responsible under Italian law. The rationale is that the foreign official would be liable under their respective national law. Both the public official and the corruptor are subject to criminal sanctions, i.e. 1

2 imprisonment, where the public official accepts the bribe (Article 321 CC). Where the official does not accept, only the corruptor is liable (Article 322 CC). Criminal liability under these Articles also applies to legal persons, i.e. companies and associations, pursuant to Legislative Decree 231/2001 of 8 June Italian law makes a distinction between so-called improper bribery (or bribery relating to lawful acts) and proper bribery (which relates to unlawful acts, i.e. the omission or delaying of acts relating to office, or acts in breach of official duties). This has a direct bearing on the sanctions that can be imposed on an offender. For lawful bribery, the penalty ranges from six months to three years imprisonment. For unlawful bribery, the penalty is higher, two to five years imprisonment, and can be increased if there are aggravating circumstances. For example, if the corruption occurs in connection with the exercise of judicial functions, or the corrupt act results in an award of civil services, wages, pensions or contracts with the public administration (Articles 319-ter and 319-bis CC), or if there is a conviction of participating in organised crime (Article 7(1) Legislative Decree 152/1991). An individual convicted of inducement to bribery may also be penalised one-third of the sanction for the type of bribe he/she tried to induce. In addition to imprisonment, the court also confiscates the profit or the price of the bribe. However, the applicable penalties may be reduced by up to one-third if the offer or promise of undue advantage is not accepted by the other party. The CC also provides for the offence of concussione in Article 317. The elements of concussione are: - a public official abusing his or her functions or power; - to oblige or induce; - an individual to unduly give, or promise to give; - money or other assets; - to that official or a third party at the direction of the official. The public official faces possible imprisonment of 4 to 12 years, and the individual induced to provide the bribe is treated as a victim (Article 317, CC). Bribery within the private sector is criminalised by Article 2635 of the Civil Code (as amended by Legislative Decree 61/2002) and applies mainly to senior management officers. The offence includes offering and accepting a bribe and is punishable by imprisonment of up to three years, provided that damage has been suffered. ENFORCEMENT BODIES Investigations of corruption offences are carried out by the police forces, in particular: Arma dei Carabinieri (an arm of the Ministry of Defence); Polizia di Stato (Ministry of Interior); and Guardia di Finanza (Ministry of Economy and Finance). The Guardia di Finanza has a mechanism for receiving reports of bribery suspicions, including a telephone hotline and a Public Relations Office, to which citizens can communicate their suspicions. Public Prosecutors, or magistrates, are entrusted with prosecuting the offences in the Italian court system. Reporting crime Public officials are obligated to report, without delay, any criminal offences they may become aware of during the course of their duties (Article 331 Criminal Procedure Code). A failure to report is punishable with a fine ranging from EUR There are no legal protections in place for officials making a mandatory report under this law. Accountants, auditors, advisory and legal professionals may also report suspicions of corruption to law enforcement agencies, but reporting is discretionary under Article 333 of the Criminal Procedure Code. PERSPECTIVES ON CORRUPTION IN ITALY (TRANSPARENCY INTERNATIONAL INDICES) Public perception on the level of corruption in Italy has significantly deteriorated over the past five years, according to the Transparency International Corruption Perceptions Index ( CPI ). The most recent survey 2

3 shows Italy scoring 3.9 out of a possible perfect clean score of 10 and ranked at 69th out of 183 countries surveyed. The Global Corruption Barometer ( GCB ) 2010 found that 65% of those ITALY CPI Year Score Rank surveyed globally felt that corruption had increased, 30% felt that there was no change, and only 5% felt that it had decreased. Similarly, a Eurobarometer ( EB ) survey conducted in late 2011 found that the majority of Italians, 56%, believe that corruption in their country has increased (35% no change, 4% felt it had decreased, and 5% replied Don t know ) 2. Italians also felt that there were not enough prosecutions to deter people from giving or receiving bribes (71%) and that court sentences in corruption cases were too light (85%). Government efforts to combat corruption are viewed as largely ineffective (64% GCB, 75% EB), which correlates to the perception that the political parties and politicians are the most corrupt (4.4 on a scale where 1 = clean, GCB; 67% indicated that corruption was most widespread amongst national politicians, EB). The problem of corruption is seen as a major issue (87% EB), but corruption is also viewed as being part of the business culture by 89% of the population. FOREIGN BRIBERY Since Article 322-bis came into force in 2000, Italy has concluded enforcement actions involving 60 defendants in 23 cases, although only 12 of them (9 individuals and 3 legal persons) have been actually sanctioned for foreign bribery, because most of the actions were eventually dismissed due to the expiration of the applicable statute of limitation period. According to the 2011 Transparency International Report, in the Corruption Perception Index rank Italy holds the 69th position (out of 183 countries). Oil-for-Food programme On 10 March 2009, the Court of Milan in the first instance sentenced three Italian individuals to two years imprisonment for acting directly and indirectly for an Italian oil company that allegedly paid bribes to state-owned Iraqi company. When the case was appealed, the statute of limitations had run out; therefore on 15 April 2010 the Milan Court of Appeal acquitted all three individuals. ENI-Nigeria The company officers of ENI SpA and Saipem SpA allegedly bribed Nigerian officials from 1994 to In an action separate from the main proceedings, the public prosecutor also requested that the court prohibit the two Italian companies from entering into contracts with the Nigerian National Petroleum Corporation. The presiding judge initially denied the request because he found a lack of Italian jurisdiction in November Eventually, the Supreme Court on 2 December 2010 ruled that it is possible to apply precautionary measures when a company is investigated also in relation to crimes foreign bribery. However, this action, along with the main proceedings, is still pending before the Court of Milan. ANTI-CORRUPTION INITIATIVES The Anti-corruption and Transparency Service ( SAeT ) is Italy s National Anti-corruption Authority 3. The SAeT is housed within the Ministry for Public Administration and Innovation and replaced the High Commissioner against Corruption ( ). SAeT is required to submit quarterly reports to Parliament and has signed a Memorandum of Understanding with other bodies involved in the fight against corruption: the Court of Audit, National Council for Labour and Economy, Transparency International Italy 2 The full report is available at: (last accessed 2 March 2012). 3 The department s website is available at: (last accessed 2 March 2012). 3

4 and the UN Development Programme. For the year 2011, the government committed EUR2m to the fight against corruption. 4 The Court of Audit is an autonomous and independent body responsible for safeguarding public finance and guaranteeing respect for jurisdictional order. Although it is not entrusted specifically with a role in fighting corruption, it contributes de facto through its auditing and judicial tasks. In 2008, the Court of Audit recovered EUR69,013,083 for damages caused to the Italian state through corruption in public administration. The government has also sponsored the project Culture of Integrity in the Public Sector, which aims foster a shared culture against corruption through education. The project operates under the auspices of the Scuola Superiore della Pubblica Amministrazione ( SSPA ). 5 There are also a few private sector initiatives to fight corruption and clean up commercial transactions, such as those spearheaded by the Confederation of the Italian Industry (Confindustria) and the Chambers of Commerce. LEGAL PROFESSION INPUT There is no coordinated effort on the part of the national (Consiglio Nazionale Forense) or local bar associations; however, prosecutors, magistrates, academic lawyers and other legal professionals are involved with some of the on-going initiatives. For example, a commission established on 23 December 2011 by Minister Griffi (namely, Commissione per lo studio e l'elaborazione di proposte in tema di trasparenza e prevenzione della corruzione nella pubblica amministrazione ) is headed by a magistrate and includes two judges in its membership. Similarly, the project Culture of Integrity in the Public Sector includes several lawyers. When GRECO made an on-site visit, lead examiners noted the high level of enforcement activity and involvement demonstrated by the judges, prosecutors and members of the police forces. This is all the more remarkable in a context where in the majority of cases, in spite of their efforts, confiscation and I CONTINUE TO DO MY JOB TO THE BEST OF MY ABILITIES, OUT OF A SENSE OF DUTY. BUT I NO LONGER BELIEVE IN JUSTICE. - Deputy Chief Prosecutor Alfredo Robledo precautionary measures are cancelled and defendants are not sanctioned because of the expiration of the limitation period. 6 Their efforts, however, continue to meet significant resistance and many lawyers leading the fight have become discouraged. Milan Deputy Chief Prosecutor Alfredo Robledo heads a group of anti-corruption magistrates, who say that there is a backlash against the perceived overzealousness of left-wing judges, resulting in the dismantling of laws against corruption over the last 20 years. The Court of Audit reported that corruption cost Italy EUR60bn in 2011, which according to some estimates, makes up half of the cost of corruption in the whole of the EU. 7 RECENT NOTABLE ENFORCEMENTS Siemens AG Siemens allegedly paid bribes to officers of Enipower to obtain public contracts. In April 2004, a Milan court applied the provisions on corporate criminal responsibility for the first time to a foreign corporation and prohibited Siemens AG from entering into contracts with the Italian public administration for a period of one year. 4 Joint First and Second Round Evaluation Compliance Report on Italy, GRECO, March 2011, available at: (last accessed 2 March 2012). 5 The project s website is available at: (last accessed 1 March 2012). 6 GRECO Eval I-II Rep (2008) 2E, available at: (last accessed 2 March 2012). 7 Court of Audit Annual Report 2011, reported at Corte dei Conti: Corruzione dilaga, Severino rinvia il disegno di legge, la Repubblica, 16 February 2012, available: (last accessed 2 March 2012). 4

5 Pirelli/Telecom Some employees of the companies Pirelli/Telecom were investigated for, among other crimes, corruption, privacy violations, espionage and IT crimes. The companies were charged with domestic and foreign bribery pursuant to Law 231. In May 2010 the companies reached a "pattaggiamento" (plea bargain) as a result of which they agreed to pay EUR 400,000 for the charges of both national and international bribery, whereas the employees involved were condemned to imprisonment from two years up to four years and two months. The sum paid by Telecom was reduced taking into account that Telecom had voluntary compensated certain damaged parties and enhanced its organizational model. Oil for Food A number of cases related to the UN s Oil for Food programme have been initiated. This particular case involved four counts of bribery ranging from USD 60,000 to USD 37.6m, in connection with an oil company s business in Iraq. Three individuals were each sentenced (including the company s commercial manager, one company attorney and a company partner responsible for relations with an Iraqi state agency) to two years imprisonment, barred from entering into public contracts for two years and had over EUR 1m in assets confiscated. The sentences, however, were overturned on appeal after the offences were declared time-barred due to the expiry of the statute of limitations. Berlusconi The Milan court recently dismissed the case against Berlusconi in relation to the alleged payments to UK lawyer David Mills to file false testimony in the 1990s to shield him from prosecution for statute of limitations. RECENT DEVELOPMENTS AND NEWS The government has presented several proposals relating to anti-corruption efforts, including: - two bills to implement the Council of Europe Criminal and Civil Law Convention on Corruption (ETS 173 and ETS 174); - an Anticorruption Bill (AS 2156), which would introduce a National Anticorruption Plan and National Anticorruption Network 8 ; - Law No 43 (of 25 February 2008), which begins the ratification process for implementing EU Framework Decision 2003/568/JHA (of 22 July 2003) 9 ; - Legislative Decree 150 (the Reform Decree) adopted 27 October 2009 to implement the socalled Brunetta Reform of public administration launched in 2008; - a bill to protect public sector employees who report suspicious conduct pursuant to Article 331 Criminal Procedure Code from direct and indirect discrimination; - a bill designed to shorten the statute of limitations for a number of offences if the defendant had no prior convictions, which was approved by the Chamber in April 2011 and is pending in the Senate. The OECD Working Group is concerned about this proposal because it believes foreign bribery is by nature mainly a first time offender offence; and - Legislative Decree no. 201/2011, titled Salva-Italia ( Save Italy ), which resulted in the establishment of a commission in January 2012 to review the stalled anti-corruption bill. The commission s first report of 30 January 2012 made several recommendations, including calling for companies to implement stronger internal risk controls and a culture of anticorruption, the protection of whistle-blowers, providing an incentive for whistle-blowers to 8 The Bill has been discussed on several occasions; however no draft law has yet to be adopted. 9 Specifically at Article 29. The full text of the law in Italian is available at: (last accessed 2 March 2012). 5

6 come forth, strict rules for access to company management by public officials, and greater transparency of the finances of public officials. 10 The OECD Working Group recommended abolishing the offence of concussione because it is nearly always used as a defence in cases involving bribery of a public official. The government introduced draft bill AS 1594 in October 2007 to abolish concussione, but then later informed the OECD Working Group in a letter dated 12 March 2009 that it would not repeal the offence P.a., piano anti-corruzione: Premi a chi denuncia. Redditi passati ai raggi X, ItaliaOggi, 31 January 2012, p Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Italy, December 2011, available at: (last accessed 2 March 2012). 6