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Legislative Decree 231/01 Italy: what it provides for and when it applies

A guide on Legislative Decree 231/01 Italy: its provisions and the types of companies it applies to.

Table of Contents

For the first time in the Italian legal system, Legislative Decree 231/01 (Italy) introduced the revolutionary concept of “administrative responsibility of companies”.

The introduction of this concept has profoundly changed the way in which companies must manage legal and ethical aspects within their structure. Therefore, its introduction has had a significant impact on the Italian legal and business system and on the regulation of the administrative liability of entities.

The Decree has been issued following several European and international directives, implementing EU directives on the prevention and suppression of economic and financial crimes.

It has increased the focus on crime prevention and ethical responsibility but has also encouraged many Italian companies to re-evaluate their internal procedures and adopt stricter organization and control models.

If on one hand, Legislative Decree 231/01 has brought to the fore the question of these aspects, on the other hand there has been some criticism. Indeed, the adoption of the model envisaged by the decree could be challenging and with high implementation costs.

What is the purpose of the Legislative Decree 231/01 Italy?

The ultimate purpose of the decree is that of preventing and sanctioning the administrative offences committed by individuals acting in the name of or on behalf of legal entities.

As a matter of fact, the Legislative Decree 231/01 precisely defines which responsibilities belong both to the employer and to the employee, should the latter commit wrongdoing. By adopting this organizational model, the employer will be able to demonstrate that a system of organization, management and control suitable for preventing crimes of the kind that occurred has been implemented.

In a nutshell, we can undoubtedly state that this legislative framework aims to:

  • Prevent the perpetration of crimes by legal persons.
  • Promote a culture of legality and responsibility in businesses.
  • Ensure greater transparency and fairness in economic and financial activities.

When does Legislative Decree 231/01 apply?

The decree applies to companies, entities and associations, including those without legal personality. However, there are some entities that are excluded from the decree’s domain of application.

Indeed, the text does not apply to the State, to territorial public entities and, to a broader extent, to entities that perform functions of constitutional importance (see for further discussion Article 1, paragraph 3 of the decree) and non-economic public entities.

It should be clarified that the term “State” means any of its administrative structures thus Ministries, Prefectures, Police Headquarters but also any of its bodies that perform legislative, jurisdictional and executive functions (Parliament, Constitutional Court…).

One might ask why the decree does not apply to these entities. The answer is simple: these entities are excluded because the exercise of institutional functions would cease in the event of the application of prohibitory sanctions.

As for public entities, public entities without public authority (INPS/INAIL/ACI) but performing services of collective interest are also excluded.

Generally speaking, it can be stated that the public nature of the entity is not the only condition for the exclusion from the domain of application of the Decree 8.06.2001 no. 231. An additional factor is that the entity does not engage in economic activities. Should this be carried out, it makes the entity subject to the decree. Indeed, it should be remembered that the purpose of Legislative Decree 8.06.2001 no. 231 is to prosecute illegal conduct in activities of an economic nature.

What does the Decree include?

This legislative framework establishes the crimes for which the entity should be held liable if committed.

The crimes included range from offenses against the public administration to computer crimes and unlawful data processing, as well as occupational health and safety offenses.

According to the decree, companies and entities should adopt templates of organization, management and control suitable for preventing crimes.

These templates should be drafted taking into account the characteristic of the entity and should define:

  • An ethical code;
  • Procedures for the formation and execution of the entity’s decisions;
  • Systems for managing financial resources;
  • Internal control systems.

As regards the last point, provision is made for the appointment of a supervisory body. This must be endowed with autonomous powers of action and control, as it will be in charge of supervising the functioning and compliance of the models. Moreover, it will also take care of their updating, should there be any developments in the current legislative framework.

Once the crimes have been identified, the Decree also establishes a series of penalties which aim to condemn the subjects involved in such offenses.

The penalties provided for entities can be of various types:

  • Financial penalties;
  • Bans (a suspension or revocation of authorizations resulting in a ban on dealing with the Public Administration, exclusion from facilitations, financing, contributions or subsidies);
  • Seizure;
  • Publication of the sentence.

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Regulatory Framework

Legislative Decree n. 231 of 08/06/2001

Reference (Italian only)

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