The Prosecutor had challenged the Company vis-à-vis its responsibility for fraud against the State or other public entity, a crime committed by the directors in the interest or to the advantage of the company and for not having adopted and effectively implemented, before the crime was committed, an organization and management model aimed at preventing crimes such as the one contested, which was committed on behalf and in the interest of the company.
Legislative Decree 231/2001 provides for the organization's administrative liability for specific crimes (so-called predicate offences) that are committed in its interest or to its advantage, by directors, persons with management functions and also third parties who operate in the interest or on behalf of the company, unless (reversal of the burden of proof) the company proves :
– that it has adopted and effectively implemented – before the offence was committed – organizational and management models suitable to prevent some of the specific offences listed in the aforesaid Legislative Decree;
– that it has entrusted a supervisory body with the supervision of the model's compliance;
– that the offence was committed by fraudulently breaching the model;
– that there was no omission or insufficient supervision by the body.
In addition to a definite fine (which can amount to up to €2 million), the conviction can also include prohibition measures such as being banned from contracting with the public administration.
In a recent ruling dated July 2020, the Criminal Court of Milan – through the President of the Judge's office for preliminary investigations – ruled that no action should be taken against a single-member company in liquidation due to the absence of an independent center of interest with respect to that of the offenders.
This case is unique because the alleged offenders pursuant to art. 640 of the criminal code were two brothers, directors of the Company, one of whom had served as Chairman, was the liquidator of the Company at the time of the discussion and was also the company's sole shareholder. Moreover, also in consideration of the delays attributable to the Covid-19 emergency and given that the liquidation had been completed, the company was close to being written-off from the company register, with the consequence that the possible sanction would, have actually been charged to the sole shareholder, who was already accused with having committed the crime.
The Court considered that in this particular case there was no essential prerequisite for the application of case law regarding the company's liability for offences, i.e. the existence of two independent and distinct centers for the imputation of legal relationships, one traceable to the entity, the single-member company, and the other to the natural person charged with the underlying offence.
According to the Court, in this situation, what is lacking is the rational of the regulation "which imagines criminally deviant behavior held by individuals in the interest of organizational structures of a certain complexity as an autonomous center for the imputation of legal relationships distinct from those who have essentially operated" and again "the legal entity, in relation to the predicate offence which is the basis of the administrative liability of the legal entity, was not really necessary and unattainable, since it is a behavior which can be peacefully attributable to individuals who could have carried it out without any corporate shield".
Case law is not unequivocal and indeed, in similar cases, several times in recent years the judges had reaffirmed the undoubted autonomy of the natural person with respect to the legal entity and therefore the responsibility of the latter.
The impression is that the Court's decision, was also influenced by the fact, that the company was soon going to be cancelled (written-off) from the register of enterprises with the result that the imputation to a single person would have emerged all the more as opposed to what should have been autonomous centers of interest. This said, the author deems that the application of Legislative Decree 231/2001 to a single quota-holder company cannot be excluded tout court, even if there is correspondence between the director and the quota-holder, and that instead the context and situation should be analyzed case-by-case.
If the adoption of the organization and management model is not mandatory by law, given the reversal of the burden of proof principle, it is good practice to carefully assess the situation, the risk profiles pertinent to the company's business, and the type of relationships established with employees (whose actions could backfire on the company) before deciding to exclude the adoption of the model and the appointment of a supervisory body which, among other things, may also be monocratic and coincide with the role of the auditor.
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