Criminal liability of Legal Entities

This Article concerns one of the topics dealt with by the law firm for its beneficiaries and focuses on the topic relating to the “Criminal liability of Legal Entities,” such as a company or a Public Administration, covering insights, remedies, and advice.

Typically, one thinks that criminal responsibility concerns only natural persons. Still, in a world where entrepreneurial realities have been showing themselves more and more often not immune to illegal infiltration, public decision-makers passed new rules making the legal system more avant-garde.

Even in Italy, therefore, these rules passed under the pressure of international agreements.

How can we define legal entities’ crimes?

Criminal law general principles teach only natural persons are liable to criminal responsibility. Also, the precept of “personality” of criminal responsibility posed difficulties regarding attributing the crime to those who committed it concretely, creating many theoretical problems in the classification of the conduct of “legal persons” who are not individuals.

So, they decided to talk about the “administrative liability” of entities to distinguish it from the criminal liability of natural persons.

Despite the evident differences in the treatment imposed on the two criminally responsible offenders, the same penal and procedural rules of the codes already in force to fight crime are also applicable to the legal ones, called “Entities.”

As a matter of fact, can a company or Public Administration be incarcerated? Not for sure. So how can society react, worried about becoming the victim of non-law-abiding companies often endowed with immense economic powers and which go beyond national borders, influencing political decisions as well?

The Legislator felt in need to have specifically designed rules to contain the phenomena of illegality affecting the legal economy by way of due process suitable procedures for ascertaining criminal responsibility.

Consequently, a company can answer for illegal conduct committed by its directors, officers, managers, or employees subject to the control of the former.

Conversely, the right to defend themselves is guaranteed not only to individuals but also to legal entities in the person of their legal representatives.

Then in 2001, there was a real historical turning point in the world of entrepreneurship following the new criminal laws at issue. Entrepreneurs have slowly begun to grasp the implications of the new regulatory complex.

Although more than ten years have passed, many companies are still defaulting concerning the obligations introduced with Legislative Decree No. 231 of 2001 and successive modifications in Italy.

For many companies, the path toward legalization is very tiring, and many companies have decided to relocate their plants to countries with less restrictive laws.

The bewilderment caused by the new rules derives from the difficulty of the business world to grasp some aspects on which they pivot.

First, controlling the corporate enterprises’ activities requires the “organization and management model” and the associated “Supervisory Committee.” This dual mechanism can not nearly compare with traditional risk and management control systems, such as the Board of Statutory Auditors, internal or external audits, and auditing firms. Officials and managers of public and private companies did not realize and still do not realize that the new mechanism aimed to prevent the commission of the offenses prohibited by the same Decree within the company structure. Therefore, it is not a question of control over civil, accounting, commercial, and fiscal regulations but a device that presents completely new peculiarities that distinguish it from all preceding it.

Secondly, the entrepreneurial culture did not immediately realize that it would have to adapt without delay to the new regulatory reality, leading to convictions and dramatic consequences in several cases of bankruptcies of large companies, especially at the first impact of these norms’ application.

Italynlaw Law Firm Communications Office issued this Article.

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