As the phenomenon of the internationalizations of companies continues to grow, a now consolidated case law has made evident what follows: the fact of being a multinational or foreign-based company does not exclude the possibility for the company itself to be indicted pursuant to the Legislative Decree 231/2001, for an offence committed in the Italian territory by one of its managerial figures or employees.
Criminal liability pursuant to the Legislative Decree 231 does not stop when dealing with a foreign-based multinational company
In light of what has been discussed above, even multinational or foreign-based companies which are operating in the Italian territory need to protect themselves from the serious penalties provided for in the Legislative Decree 231/2001. In order to do that, they need to provide themselves with a so-called MOG 231: this is an organizational model which evaluates and prevents the occurrence of offences covered by the Legislative Decree 231.
This is an innovative principle which, implying a sort of extra-territoriality of the application of the Legislative Decree 231/2001, could be missed by many multinational or foreign-based companies operating in the Italian national territory.
Penalties applicable to the multinational/foreign-based companies
The penalties provided for by the Legislative Decree 231/2001, in case of recognition of a liability of the company, and in case of occurrence of certain conditions which we will illustrate shortly, can therefore be applied also to a multinational or foreign-based company operating in Italy.
These penalties are particularly afflictive, and, more specifically, they are:
- pecuniary sanctions;
- prohibitive sanctions;
- publication of the conviction.
Even more specifically, the prohibitive sanctions can be:
- Prohibition to carry on the business;
- Suspension or revocation of the authorizations, licenses, or concessions functional to the commission of the offence;
- Prohibition to negotiate with the public administration, except in order to obtain performances of a public service;
- Exclusion form benefits, financing, contributions or subsidies and the revocation of those already received;
- Prohibition to advertise goods and services.
It is important to notice how these prohibitive sanctions can also be applied as a precautionary measure, therefore even during the investigation period, and over the course of the trial, before the responsibility is ascertained with a final conviction.
The pecuniary sanctions can be particularly heavy. Art. 11, in paragraph one provides that
“in calculating the pecuniary sanction, the judge takes into account the seriousness of the event, the degree of the company responsibility, and the activities carried out in order to attenuate the consequences of the event and to prevent the commission of further offences”
More significantly, in paragraph 2, this same Article also provides that
“the total amount is established according to the company financial conditions, in order to assure the sanctions effectiveness”
Consequently, the bigger the company held liable, the bigger the pecuniary sanction, so that it can be effective.
The conditions for the applicability of Legislative Decree 231/2001 towards a foreign-based company
As detailed above, a consolidated case law has made evident how the Legislative Decree 231/2001 can be applied against multinational companies with their registered office located outside of Italy.
Let us see what are the conditions identified by such case law, which could make the Legislative Decree applicable to this kind of companies.
According to the Court of Cassation (Ruling n°11626, Section IV, 11.02.2020):
“on the subject of the liability of companies, the legal entity can be held liable for the administrative offence resulting from a predicate offence for which there is national jurisdiction, committed by its legal representatives or persons subject to their direction or supervision, regardless of the nationality of the entity or the place in which it has its registered office. In addition, the legal entity can be held liable regardless of the existence of regulations governing similar matters in the Country in which it is registered. This includes regulations with regard to the preparation and effective implementation of organisational models, designed to prevent the commission of offences giving rise to administrative liability pursuant to Legislative Decree 231/2001”
Therefore, in the event that the Italian jurisdiction exists, i.e. when a predicate offence is committed, in whole or in part, on Italian territory, pursuant to Article 6 of the Criminal Code, by a person in a top position, or by a person subject to the direction or supervision of the foreign company, and it is committed in the interest or to the advantage of the foreign company itself, the company will also be held criminally liable pursuant to Legislative Decree no. 231/2001. This is the case regardless of the fact that the company is foreign, has its registered office abroad, it carries most of its business abroad.
This ruling further confirms an already consolidated orientation taken by the relevant case law, since the Siemens case (ruling by Milan Court, 28/02/2004), until the ruling of Florence Court of Appeal (Section III, n°373, 16/12/2019), which recognized the criminal liability of a foreign-based company for the crimes of injury and manslaughter resulting from the sadly known “Strage di Viareggio”.
This principle, together with the wording of Article 6 of the Italian Criminal Code, which makes Italian jurisdiction operative even when the conduct or event is only partially committed in Italy, makes it possible, if not probable, that a multinational or foreign-based company will be held liable pursuant to Legislative Decree No. 231/2001.
What must a multinational or foreign-based company in order to minimise the risks?
Pursuant to Legislative Decree 231/2001, a criminal liability cannot be attributed to a company that adopted an appropriate Organizational, Management and Control model (Modello di Organizzazione Gestione e Controllo, MOGC, in Italian), in line with that same Legislative Decree. Therefore, it appears evident why a multinational or foreign-based company operating in Italy should consider the possibility to adopt such Organizational Model.
- The company should adopt a MOGC before the occurrence of the event;
- Such model should contain a specific evaluation of the risks related to the activities carried out in Italy by the foreign company workers.
Naturally, many commentators pointed out how complex and expensive it could be for a multinational company to adopt a proper MOGS pursuant to Legislative Decree 231/2001, which should cover the whole structure of the company.
It has been therefore observed that:
“the Legislative Decree 231 itself does not require the adoption of a model called “MOGS 231”, exactly aligned to the structural schemes widespread in the Italian corporate practice. On the contrary, the company could be exempt from sanctions if it is able to prove its organizational diligence even beyond the adoption of a model, since Decree 231 requires the company to adopt organisational and management models suitable for preventing offences of the kind of those which have occurred. What matters, therefore, is not the adoption of a Organizational Model 231 that is formally such, but rather that the entity has structured a set of internal corporate compliance rules suitable for mapping and managing the risk of offence and that are therefore suitable for integrating the requirements of effective suitability for the prevention of said risk’ (F. Torelli, Riv. Trim. Dir. Pen. Econ. 3-4/2020)