Italian supreme court ruling on the criteria to apply corporate liability: an overview of the implications for foreign financial institutions operating in Italy

Abstract

Purpose To analyze the Italian Supreme Court decision (case no. 11626/2020) and its potential implications for foreign financial institutions operating in Italy. Design/methodology/approach This article provides firstly a brief description of Decree 231/2001 and of its application to financial institutions, then a description of the Italian Supreme Court decision and, lastly, a set of inputs to foreign financial institutions operating in Italy. Findings Following the decision under review, where the further conditions set out in the Decree 231/2001 are met, entities are liable under the same Decree when a relevant offense occurs in Italy – or there is Italian jurisdiction – regardless of their nationality, the localization of their registered office, the place where they predominantly carry out their business or whether there are rules governing the same matter in the State of origin. Practical implications Following the decision under review, foreign financial institutions operating in Italy should adopt and implement the control measures required by the Decree 231/2001 in order to avoid incurring the relevant sanctions. Originality/value This is an analysis of the potential practical implications for foreign financial institutions operating in Italy of a decision issued by the Italian Supreme Court that may also provide useful advice to mitigate the potential risks linked to it.