The Legislative Decree no. 231/01 the test of the international law
Since the promulgation of the 1948 Republican Constitution, Italy has placed the individual at the heart of the regulation of human relationships, the economy, labor market and development, so that it is correct to assume that there is an “Italian Rule of Law, constitutionally oriented and protected, axed on the right of the individual”; man and his fundamental prerogatives are indeed at the center of the Italian legal system.
The Italian regulations pertaining to the “Administrative liabilities of legal entities deriving from offences” contained with Legislative Decree no. 231 of 8 June 2001 (henceforth, “Legislative Decree no. 231 of 2001”) represent a copernicanian revolution in the italian criminal and public framework.
It states that legal entities, including limited companies, may be held liable – and therefore sanctioned by financial means or criminal proceedings – in relation to certain crimes which are committed or attempted in Italy or abroad in the interest or for benefit of the Company. The companies may, in any case, adopt organizational, managerial and control models which are suitable for preventing the crimes themselves.
Companies are subject to money penalties and/or interdiction, for any tipical offences committed or any attempts to commit offences – in Italy or abroad – in the interest or to the advantage of the company itself:
- by individuals who are representatives, directors or managers of the company or of one of its organizational unit that has financial and functional independence, or by individuals who are responsible for managing or controlling the company (individuals in apical positions or “apicals”);
- by individuals who are managed or supervised by an individual in an apical position (individuals under the command of others).
There are no differences between foreign and national compaies.
The international origin of the new law
By way of implementation of the delegation under Article 11 of Law No 300 of 29 September 2000, on 8 June 2001 Legislative Decree no. 231 (hereinafter the “Decree” or “Legislative Decree no. 231/2001”) was adopted, aligning national legislation with the international conventions on the liability of legal persons.
These are, specifically, the Brussels Convention on the protection of the European Communities’ financial interests of 26 July 1995, the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, signed in Brussels on 26 May 1997, and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997.
The Decree, which lays down “Provisions on the administrative liability of legal persons, companies and associations, including those without legal personality”, introduced into the Italian legal order an administrative liability regime applying to Entities (meaning companies, associations, consortia, etc., hereinafter, “Entities”) for a series of specified offences committed in the interest or to the advantage of the entità.
The list of “predicate offences” was recently expanded by the addition of some types of administrative breaches.
The Entity’s liability is additional to that of the natural person who was the perpetrator of the offence, and is independent of it, as it also exists where the perpetrator has not been identified or cannot be charged or where the offence is extinguished for a reason other than amnesty.
The administrative liability regime laid down in the Decree for prosecution of the offences specifically identified there in, applies to Entities which benefited from the offences or in whose interest the predicate offences – or administrative breaches – identified in the Decree were committed. The penalties applicable to the Entity may include fines, interdictions, confiscation, publication of the sentence and appointment of a special administrator. Interdiction measures, which may have a more severe impact on the Entity than monetary penalties, consist in the suspension or revocation of licenses and concessions, prohibition on contracting with the public administration, prohibition on conducting business activities, denial or revocation of funding and contributions, and the prohibition on advertising products and services.
The above-mentioned liability also applies to offences committed abroad, provided that the country in which the offence was committed does not initiate proceedings in respect of those offences and that the Entity has its head office in Italy.
The 231 system
After establishing the administrative liability of Entities, in Article 6 the Decree provides that an Entity shall not be liable where it can prove that it adopted and effectively implemented, before the offence was committed, “an appropriate organisation and management model to prevent offences of the kind that has occurred”.
Article 6 also provides for creation of an internal control body within the Entity, tasked with monitoring the operation, effective implementation and observance of the model, and with updating the model.
The Organisational, Management and Control Model (hereinafter also the “Model”) must meet the following requirements:
- identify the activities which may give rise to the offences listed in the Decree;
- define the procedures through which the entity makes and implements decisions relating to the offences to be prevented;
- define procedures for managing financial resources to prevent offences from being committed;
- establish reporting obligations to the body responsible for monitoring Model operationand compliance;
- put in place an effective disciplinary system to punish non-compliance with the measures required by the Model.
If the offence is committed by persons holding a representative, administrative or management role in the Entity or one of its organisational units with financial and functional autonomy and by persons who, de facto or otherwise, manage and control the Entity, the Entity shall not be liable if it can prove that;
(i) management had adopted and effectively implemented an appropriate organisational and management model to prevent offences of the kind that has occurred;
(ii) the task of monitoring the Model implementation, compliance and updating was entrusted to a corporate body with independent powers of initiative and control;
(iii) the perpetrators committed the offence by fraudulently circumventing the Model;
(iv) (iv) there was no omission or insufficient control by the control body.
On the other hand, where the offence is committed by persons under the management or supervision of one of the above-mentioned persons, the Entity is liable if perpetration of the offence was made possible by non-performance of management and supervisory duties. Such non-performance shall be ruled out where the Entity, before the offence was committed, had adopted and effectively implemented an appropriate Model to prevent offences of the kind committed, based, of course, on a priori assessment.
Lastly, Article 6 of the Decree provides that the Model may be adopted on the basis of codes of conduct prepared by representative trade associations and submitted to the Ministry of Justice. This Model was prepared and updated also having regard to the guidelines prepared by ABI and approved by the Ministry of Justice.
231 models System
Company’s organisational solutions provide for control activities at all operational levels, which make it possible to univocally and formally identify responsibilities, in particular as concerns performing controls and correcting any irregularities found.
Macro types of control:
- line controls, aimed at ensuring the correct application of day-to-day activities and single transactions. Normally, such controls are carried out by the production structures (business or support) or incorporated in IT procedures or executed as part of back office activities;
- risk management controls, which help define risk management methodologies, verify compliance with the limits assigned to the various operating functions and check whether the operations of individual production structures are in line with established risk-return targets. As a rules, these checks are carried out by other than production structures;
- compliance controls, made up of policies and procedures to identify, assess, check and manage the risk of non-compliance with laws, Supervisory authority measures or self- regulating codes, as well as any other rule which may apply to the Bank;
- internal auditing, aimed at identifying anomalous trends, violations of procedures and regulations, as well as assessing the overall functioning of the internal control system. It is performed by different structures.
The first impact of the new law
The Legislative Decree no. 231/01 – in compliance with the principles set forth in EU legislation on the prevention of corporate crimes and the assessment of companies’ liability – introduced for the first time into the Italian legal system the direct liability of companies and other legal entities for crimes committed by directors, executives, their subordinates and other subjects acting on behalf of the legal entity, when the unlawful conduct has been carried out in the interest of or to the benefit of the company concerned.
This law had caused a significant impact inside the companies’ governance, affecting single functional areas, organizational processes, proxy powers; general system of management control; training programs; penalties etc… In addition, the decree statues the creation of specific governance and management models supervised by ad hoc supervision bodies that are related to the specific activities. Moreover, the management and organizational models should be adopted and implemented effectively to fulfill the legal binds comprehensive the workers’ security and healthcare. This is a fundamental issue to implement a responsible conducts at a social and ethical level and to avoid that the compliance to law and rules could be realized as a make-up operation.
The Legislative Decree n. 231 is a proactive mechanism which encourages the private sector’s involvement -through the implementation of best practices focused on prevention and individuation of pathological behaviors- in an innovative economic multilevel anti-corruption governance system.
It nurtures a cooperation, between major corporates and the national Public Administration, aimed to spread bottom-up the culture of legality. In this way the independent ethical dimension of business is promoted while increasing the consumers’ confidence in the private sector entrepreneurial activity .
The Legislative Decree N. 231 is also a keen answer to the need for a constructive trialogue among government, business and civil society on the transparency of the joint public and private involvement against forms of deviance, and in particular corruption.
Having in mind this need, we can better understand the actual expansion of the Legislative Decree’s approach throughout the Italian legislation and the ongoing multiplication of criminal offences falling under corporate liability. Most of all, it becomes apparent the current move towards a legally oriented economic order to be interpreted as a part of a wider reformist plan of the Italian justice and the economic systems aiming to promote growth, employment and investment
The economic environment legally oriented in a multi-level legal system
Andrea Strippoli Lanternini
The modern economic science enhances the crucial role of a legally oriented economic environment for better protecting all the subjective legal positions.
That assertion has acquired a meaning even more dense of implications if we focus our attention on the recent 70th anniversary of the United Nations.
Founded after the Second World War, this top multilateral organization pursues the development of friendly relations among States, based on the protection of the right to equality, at both international and national levels, and cooperation in the economic, social, cultural and humanitarian dimensions.
The General Secretariat of the United Nations has defined the rule of law as “a principle of governance in which all persons, institutions and entities , public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and indipendently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, voidance of arbitrariness and procedural and legal transparency” .
It should also be recorded the substantive definition of the rule of law endorsed by the Council of the International Bar Association in a resolution passed in 2009:
“an independent, impartial judiciary; the presumption of innocence; the right to a fair and public trial without undue delay; a rational and proportionate approach to punishment; a strong and independent legal profession; strict protection of confidential communications between lawyer and client; equality of all before the law; these are all fundamental principles of the Rule of Law. Accordingly, arbitrary arrests; secret trials; indefinite detention without trial; cruel or degrading treatment or punishment; intimidation or corruption in the electoral process, are all unacceptable. The Rule of Law is the foundation of a civilised society. It establishes a transparent process accessible and equal to all. It ensures adherence to principles that both liberate and protect” .
The concept of “Rule of Law” is also to be distinguished from “Rule by Law”.
The difference is that in the former the law is preeminent and can serve as a check against the abuse of power. Under the latter, the law is a mere tool for a government that suppresses in a legalistic fashion.
TheCorporate Social Responsibility
The concepts of Business Sustainability or Sustainable Development (SD) and Corporate Social Responsibility (CSR) began to emerge with the goal of pursuing economic, social and technological development able to meet the present generations’ needs without compromising those of the future generations. Sustainable development is then a leading principle that should direct the economic activity in the broadest sense of the term toward a strategy of conservation of natural resources, preservation of biological diversity and environmental protection (that implies that ‘economic activity’ is not to be referred only to the enterprises, but also to other entities such as the same States, and all human communities). Hence the development of the concept of corporate sustainability, understood as the responsibility of enterprises to handle (both internally and externally) natural resources/energy and, thus, their own impact on the ecosystem of a long-term economic development.
Corporate social responsibility has developed, instead, since the 50’s of the last century, as a new way of operating of the enterprise when compared to the traditional approach, guided only by the principles of maximisation of the economic and financial performance. With the emergence of the stakeholder theory, when establishing its economic and trade strategies the enterprise should no longer consider exclusively the economic interests of its stakeholders, but it has to account for its own decisions to other bearers of interests (consumers, employees, suppliers, etc.).
New CSR practices have developed, and the companies have voluntarily adopted codes of conduct or standards of conduct, over and above the legal norms already in force. CSR programmes are therefore developed, aimed at the welfare of employees (workers’ rights, attention towards creating healthier and safer workplaces); at the consumer protection (processing of annual reports characterized by greater transparency); at the protection of the most vulnerable groups (through the donation or devolution of part of the company’s profit to non- profit organisations); etc.
While CSR focuses mainly on social components that are affected by business activities (external stakeholders, workers, consumers, suppliers, public opinion), SD is centred on the management of the environmental factor, with reference to the potential impact that the company can generate internally and on the environment as well.
Over the last decade, the proliferation of regulatory mechanisms, voluntary standards and policies of ‘social sustainability’ – together with the increasing attention towards development models that provide not only economic prosperity, but also the improvement of the living conditions of the most disadvantaged countries – have led to a growing interest in the themes of sustainable development, also considered in its social dimension. The European Union has defined the SD as one of its long-term global objectives: in the framework of its policies it has moved toward a more efficient use of natural and energy resources (especially with regard to climate change and to the goal of reducing carbon emissions) and integrated the sustainable dimension in the strategy on corporate social responsibility.
The increasing demand for social sustainability has thus progressively produced a ‘mutual contagion’ and CSR started to evolve according to the ‘Triple P Approach’ or ‘Triple Bottom Line’ (people, planet, profit), to include the topics traditionally related to SD, according to a holistic approach to economic and social progress.
More recently, the central role assumed by the human rights and the absence of an unambiguous definition of ‘social responsibility’ have placed CSR within a much broader framework (just think of the continuous references to norms and standards for the protection of human rights, such as the Universal Declaration of Human Rights, the ILO Conventions on workers’ rights, the OECD Guidelines for multinational enterprises, etc. that now increasingly integrated within corporate policies).
This implies that human rights compliance policies, although voluntary, are often included in the corporate strategy of CSR albeit with different degrees of intensity.
The cost of compliance versus non-compliance.
In the long term, corruption is not sustainable. The main concern for business is that involvement in corruption destroys trust in a company, and this loss of reputation makes it difficult to enter supply chains.
Corruption also creates instability for a company, as a corrupt business environment encourages other forms of misconduct by employees, including fraud.
Moreover, since companies that bribe begin to rely on bribery to get them business, they find themselves at a disadvantage when they cannot find someone to bribe.
Compliance, on the other hand, improves company reputation and public trust in the brand, therefore enhancing competition and leading to greater innovation.
Generally, panelists focused on making the business environment less conducive to corruption through greater transparency at all levels; from the government and MNEs, to SMEs and third parties, including consultants and other intermediaries.
Participants also indicated the challenge involved in bribery between two private companies.
Anti-corruption policies should cover not only companies, but also public governance, civil society, the media, and other relevant actors. Some panelists suggested that policies also be accompanied by a greater use of technology, simpler procedures, steeper penalties for black market activities, and a limit on cash transactions.
Additional data on the cost of compliance for businesses was also identified as useful information to help persuade companies to introduce effective preventive measures. Finally, the need for effective and equal enforcement of existing regulations was emphasized so that selective enforcement does not become a vehicle for “legalized corruption.”
Hard law and soft law.
In international law the sources of binding norms (so-called hard law) are traditionally distinguished from the non-binding ones (commonly referred to as soft law).
Hard law comes from treaties (Conventions) and custom, that is the States’ repetition over time of a behaviour considered as mandatory. However the major international organizations (in particular the UN) and the conferences of States adopt different types of acts (denominated as ‘recommendations’, ‘resolutions’, ‘declarations’, or simply ‘guidelines’, etc.) which are frequently used in the field of human rights, but – according to their own statutes – do not generate binding norms, and are therefore defined by the doctrine as sources of soft law. In that sense, the contribution given by the French scholars is significant, as it is clear from the comprehensive illustration by G. Feuer in 1984 (Technique juridique et valeurs morales en droit international du développement, in Droit et libertés à la fin du XXe Siècle. Études offertes to Claude-Albert Colliard, Paris, 1984). Most current conceptions, and in particular those of Common Law scholars, consider that the sources of soft law play an ancillary function when compared to those of hard law. In fact, according to them, over the time many soft law principles and norms have become part of customary international law (and hence binding norms); according to them, that has happened for instance to the Universal Declaration of Human Rights (see O. De Schutter, International Human Rights Law, Cambridge, 2010). In other cases they integrate or interpret the existing binding sources, such as those arising from treaties (see the case of the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy).
Nowadays, however, most scholars agree that the boundary between hard and soft law is very weak. Indeed, more precisely, «the differentiation between so-called soft and hard (or legally binding) law is not binary, but one that should be viewed as developing on a continuum» (J. Nolan, The corporate responsibility to respect human rights: soft law or not law?, in Human Rights Obligations of Business-Beyond the Corporate Responsibility to Respect?, Ed. S. Deva-D. Bilchitz, Cambridge, 2013, p. 142).
Moreover, it is interesting to note how, especially in the context of the international economy, rules are no longer imposed exclusively by the States, but they are increasingly the result of a participatory process between public and private actors (L. Baccaro and V. Mele, For lack of anything better? International Organizations and Global Corporate Codes, 2011, Public Administration, 451). The fact that the standards applied in business at the international level stemmed from practice, and therefore from the consensus of the enterprises too, can hardly be considered a novelty. The concept of lex mercatoria, now widely accepted, was already discovered and deeply analyzed for example in 1964 by the great scholar Berthold Goldman (Frontières du droit et lex mercatoria, Archives de philosophie du droit, 1964). And certainly the principles and rules for the protection of human rights applied to the economic activities resemble a new lex mercatoria. That is why some scholars speak now of ius commune in this matter
Catalogue of assumption of responsibility of the entities: main figures
Articles 24 and 25 of the Decree concern a series of offences laid down in the Criminal Code which have in common the identity of the legal asset they protect, which is the impartiality and sound management of the Public Administration.
Law no. 190 of 6 November 2012 (the “anti-corruption law”), which entered into force on 28 November 2012, reformed the rules for the offences in question, making the punishments harsher, amending certain cases and adding new ones. Consequently, the offence of “Illegal inducement to give or promise benefits” was added to Art. 25 of the applicable Decree, whereas previously it was covered by the offence of “Extortion in office”. It also introduced the corporate law offence of “Corruption among individuals”, described in Chapter 7.4.
For the purposes of criminal law a Public Administration Body is defined as being any legal person that pursues and/or implements and manages public interests and which is engaged in legislative, jurisdictional or administrative activity, governed by provisions of public law and which is implemented through instruments issued by the authorities.
Purely by way of example, and with reference to the entities typically having relations with the Bank, the following can be identified as being Public Administration Bodies: i) the State, the Regions, the Provinces, the Municipalities; ii) Ministries, Departments, Committees; iii) Non- economic Public Entities (INPS, ENASARCO, INAIL, ISTAT).
Among the types of criminal offences considered here, extortion in office and illegal inducement to give or promise benefits, as well as bribery, in its various forms, assume the involvement of a private individual and a public agent, i.e. a natural person who, for the purposes of criminal law, holds the position of “Public Official” and/or of “Person in Charge of a Public Service”, as defined respectively in Articles 357 and 358 of the Criminal Code.
In short, it should be noted that the distinction between the two profiles is in many cases debatable and blurred, and that it is defined by the above-mentioned provisions according to criteria referring to the objective function performed by such persons.
The title of Public Official is given to those who perform a legislative, judicial or administrative public function. The exercise of an administrative public function is usually associated with those who have decision-making responsibilities or concur to the decision making process of a public body or who represent the public body in dealings with third parties, and with those exercising “authoritative powers” or “certification powers”.
The concept of “authoritative powers” includes not only coercive powers, but also any discretionary activity carried out in respect of persons who are not on the same level as the authority (see Court of Cassation, Joint Sections, ruling no.
Purely by way of example, we may mention the following persons, who have been identified by case law as being Public Officials: court bailiffs, court-appointed technical experts, receivers in bankruptcy cases, tax collectors or executives attached to municipal companies (even if in the form of an S.p.A.), university assistants, postmen, officials at the ACI (Italian Automobile Club) branch offices, municipal councillors, municipal surveyors, public school teachers, health service officials, notaries and employees of INPS (Italian Social Security Agency), authorised local health service doctors, tobacconists authorised to collect vehicle tax.
The title of Person in Charge of a Public Service is assigned by exclusion, as it goes to those who perform public interest activities, not consisting of simple or merely material tasks, governed in the same manner as public function, but which do not entail the powers typically assigned to a Public Official.
Purely by way of example, we may mention the following persons, who have been identified by case law as being Person in Charge of a Public Service: payment collectors of the National Electricity Company (Enel), gas and electricity meter readers, post office clerks tasked with sorting correspondence, employees of the Italian State Mint, security guards responsible for cash consignments.
It should be noted that under the law, for the purpose of being classified as a Public Official or a Person in Charge of a Public Service, a person does not necessarily have to be an employee of a Public body: this because in certain particular cases, a public function or public service may also be performed by a private person. With reference to Bank operations, certain specific activities – in particular those concerning the placement of public debt securities, tax collection, treasury services for a Public Body, investment financing, special or soft loans, can, according to case law, take on public service relevance to the point that the Bank’s employees and managers may, in performing those activities, take on the title of public agent, at least as Person in Charge of a Public Service. Therefore, employees and officers who in exercising the above-mentioned duties of public importance adopt conduct typical of public agents as described for the offences of bribery, extortion and illegal inducement to give or promise benefits are punished as such and can also trigger the Bank’s liability under Legislative Decree no. 231/2001.
The liability of the officers and employees, as well as the entity, can also arise if they adopt conduct with public agents typical of private individuals as described for the above-mentioned offences.
It should be noted in particular that, under Article 322-bis of the Criminal Code, the conduct of the private individual – whether as bribe-giver or as the party induced to give or promise benefits − is a punishable criminal offence not only when involving Public Officials and Persons in Charge of a Public Service within the Italian Public Administration, but also when it involves: i) persons corresponding functions or performing corresponding activities within European Community institutions, or within Entities established on the basis of the Treaties establishing the European Communities, or, lastly, within the other European Union Member States; ii) persons holding corresponding functions or performing corresponding activities within other third countries or international public organisations, provided that, in this case, the private individual pursues an undue benefit for himself or others with reference to an international economic transaction or acts in order to obtain or maintain an economic or financial activity (for example, in order to avoid termination of a supply/works contract or the issue of a measure negatively affecting his economic activity).
The criminal offences laid down in Articles 24 and 25 of the Decree are summarised below.
Embezzlement to the detriment of the State (Article 316-bis of the Criminal Code)
This type of offence occurs when, after lawfully receiving loans, subsidies or grants from the Italian Government or the European Union for the implementation of works or activities in the public interest, a party does not use the funds so obtained for the purposes for which they were granted. For banks, this type of offence can occur either where the subsidies are directly granted to the Bank for its benefit, or where the Bank takes part in the funding process in favour of private beneficiaries who are responsible for the diversion of those funds from their intended public purposes, and aid and abet such beneficiaries in perpetration of the offence.
Unlawful receipt of public grants to the detriment of the State (Article 316-ter of the Criminal Code)
The offence is committed in the cases in which – by using or submitting false statements or documents, or by omitting due information – a party obtains grants, financing, subsidised loans or other similar contributions granted or issued by the State, by other Public Authorities or by the European Union without being entitled to them. This offence is committed regardless of the use to which the contributions are put, as the crime arises at the time when the contributions are obtained. This offence, too, can occur either where the beneficiary of the grants is the Bank itself or where the Bank acts as intermediary in favour of customers responsible for the false declarations and aids and abets them.
Fraud (Article 640, paragraph 2, no. 1, of the Criminal Code)
This type of offence occurs when an unfair profit is obtained by means of artifices or deceits aimed at misleading and causing damage to the State or any other Public Body.
This offence occurs, for instance, when, in preparing the documents or data required for participating in a tender procedure, the tenderer provides the Public Administration with false information supported by forged documents in order to be awarded the contract.
Aggravated fraud for the purpose of obtaining public funds (Article 640-bis of the Criminal Code)
This type of offence occurs when the fraud is carried out for the purpose of unduly obtaining public funds from the State, other Public bodies or the European Union.
The distinguishing features of this offence are the following: compared with the generic fraud offence (Article 640, paragraph 2, no. 1, of the Criminal Code), this offence is characterised by its specific material object, which is obtaining public funds, howsoever named; compared with the unlawful receipt of public grants (Article 316-ter of the Criminal Code), this offence is characterised by the additional use of some artifices or deceits to mislead the granting authority.
Computer fraud (Article 640-ter of the Criminal Code)
Computer fraud consists of altering the functioning of an IT or telecommunications system or of tampering with the data or software contained therein, obtaining unfair profit. This type of offence is relevant for the purposes of Legislative Decree no. 231/2001 only where it is committed to the detriment of the State or other Public Bodies.
By way of example, such an offence may occur in the event that, once a loan has been obtained, the IT system is tampered with for the purpose of changing the amount of the loan to an amount higher than that lawfully obtained, or where, the entries of a current account held by a Public Body are changed by unlawfully breaking into a home banking system.
Extortion in office (Article 317 of the Criminal Code)
An active role in the offence of extortion can be played by a Public Official or a Person in Charge of a Public Service who, abusing of his/her office or powers, forces someone to give or promise to him/her or a third party money or other undue benefits.
Such force is applied with violence or threat of unfair damage (e.g. refusal to duly perform an action unless paid to do so), by means that do not leave the freedom of choice to the person under force, who is consequently considered the victim of the offence and exempt from punishment. Therefore liability of the legal entities for extortion arises, provided of interest to or of benefit to the entity, in the case of an offence committed by a senior officer or an employee in one of the following alternative forms:
• extortionate conduct in concert with a Public Official or a Person in Charge of a Public Service against a third party;
• extortionate conduct in the exercise of certain duties of public importance which, as illustrated in the Introduction, can lead to a bank operator qualifying as a Public Official or a Person in Charge of a Public Service.
Illegal inducement to give or promise benefits (Article 319-quater of the Criminal Code)
This offence punishes the conduct of a Person in Charge of a Public Service or a Public Official who, abusing of his/her office or powers, induces another person to give or promise to him/her or to a third party money or other undue benefits.
This is an offence different than that of extortion: the pressure and demands of the public agent are not in the form of moral violence typical of extortion, but instead assume forms of mere conditioning of the will of the counterparty, such as describing the potential unfavourable consequences or difficulties, stonewalling, etc. The conduct of the person submitting to the inducement, paying or promising undue benefits to avoid damage or to achieve unlawful advantage, is also punished.
Therefore corporate liability for illegal inducement can arise, provided of interest to or of benefit to the entity, in the case of an offence committed by a senior officer or an employee in one of the following alternative forms:
• inducive conduct adopted in concert with a Public Official or with a Person in Charge of aPublic Service against a third party;
• inducive conduct adopted in the exercise of certain duties of public importance which, asillustrated in the Introduction, can lead to a bank operator qualifying as a public agent (Personin Charge of a Public Service or Public Official);
• acceptance of inducive conduct from a public agent.
The element common to all cases of bribery consists in an agreement between a public agent (Public Official or a Person in Charge of a Public Service) and a private individual.
The corrupt agreement presupposes that the counterparties act on an equal footing, regardless of which of the two parties initiated the bribery, unlike the situation in cases of extortion in office and illegal inducement to give or promise benefits, which instead requires that the person holding the public office, abusing of such office, exploits his/her superior position vis-à-vis the private party who is in a state of inferiority. Moreover, it can prove difficult in practice to distinguish between instances of bribery and illegal inducement; the distinction is important first and foremost to determine the punishment to be inflicted upon the private individual, which is milder for illegal inducement.
In bribery, two separate offences are distinguished: one is committed by the person receiving the bribe, who holds the public office (passive bribery), the other is committed by the bribe-giver (active bribery), which under the provisions of Article 321 of the Criminal Code is punishable by the same penalties envisaged for the person receiving the bribe. The Bank may be liable for this type of offence committed by its managers or employees, also in its interest or for its benefit in the case of both active and passive bribery. Indeed, as stated in the Introduction, where a bank employee performs activities that can be qualified as public services, such employee may take on the title of public agent.
The following types of bribery are covered by Article 25 of the Decree.
Bribery relating to the exercise of duties (Article 318 of the Criminal Code)
This type of offence occurs when a Public Official or a Person in Charge of a Public Service receives, for his/her own benefit or for the benefit of others, money or other benefits, or accepts a promise thereof, for performing his/her own duties or exercising his/her own powers. The activity of the public agent can concern either a required act (for example: fast-tracking a procedure which comes under his responsibility), but the offence also exists if the illegal benefit is:
• paid or promised regardless of the identification of a “purchase or sale” in a well-defined act, in that the mere fact that it arises in relation to the general exercise of duties is sufficient;
• paid after an official duty is performed, even if it was not previously promised.
Consequently there are extensive and widely diverse scenarios of subservience to the duty and of donations giving a generic appearance of preferential treatment3.
Bribery relating to an act contrary to official duties (Article 319 of the Criminal Code)
This offence, also known as “direct bribery”, consists in an agreement relating to the promise or giving of undue payment in relation to an act, to be performed or already performed, that is contrary to the official duties of a public agent (for example, a cash payment for ensuring the award of a contract in a competitive tendering procedure).
Bribery in judicial proceedings (Article 319-ter, paragraph 1, of the Criminal Code)
In this type of offence, the conduct of the bribed person and of the bribe-giver is characterised by the specific aim of favouring or damaging one of the parties to criminal, civil or administrative proceedings.
Incitement to bribery (Article 322 of the Criminal Code)
This offence is committed by a private party whose offer or promise or money or of other benefits for the exercise of public office (Article 318 of the Criminal Code) or of an act contrary to official