No 231 model: is that enough to convict the entity?

Not on its own. According to the Court, the absence or ineffective implementation of the model is not a constituent element of the entity’s administrative offence (illecito dell’ente). It is a circumstance that the law treats as capable of proving colpa di organizzazione (organisational fault), and that fault must be established as a concrete deficiency causally linked to the offence.

The framework. An entity is liable for offences committed in its interest or to its advantage by persons in senior positions or by their subordinates (Article 5 of Legislative Decree 231/2001). Where the offence is committed by a person in a senior position, Article 6 requires the entity to prove that it had a suitable model, effectively implemented before the offence. The model must also have been supervised, without omissions, by an autonomous body and fraudulently circumvented by the offender. Where the offence is committed by a subordinate, Article 7 requires that it was made possible by a failure to comply with management or supervisory duties. In this case the company had obtained, through its legal representative, the second portion of a regional grant using supporting documents for expenses never incurred: aggravated fraud to obtain public funds (Article 640-bis of the Criminal Code), a predicate offence under Article 24. The offence was statute-barred for the individuals; the entity was held liable following an incidental finding that the offence had been committed (point (b) of Article 8(1)).

Referring to the Fourth Division, no. 18413/2022, the Court lists as constituent elements the organic and teleological relationship with the entity (rapporto organico e teleologico), organisational fault, the predicate offence and the causal link between fault and offence. Organisational fault must be proved by the prosecution, and the entity may prove its absence. The judgment does not address the burden of exonerating proof that Article 6 places on the entity. On the merits, the factors weighed together were the offence committed by the senior person, the absence of models and the failure to set up a body for accounting control and for verifying the project activities.

Why it matters. For the criminal defence of the company, what counts is which control was missing and whether it would have caught that offence. The principle did not help the appellant company, because the deficiency had been established in concrete terms. The confiscation of the entire amount disbursed and the disqualification sanctions stand, since the conditions of Article 17 were not all met. The model adopted after the offence reduced the pecuniary sanction by one third (point (b) of Article 12(2)).

In practice.

For the management body. Risk mapping should be extended to grant reporting, with an independent accounting check before the reports are sent to the funding body.

For the defence of the entity. The entity becomes a party to the proceedings (costituzione) by a declaration filed with the registry of the authority conducting the proceedings, containing the particulars required on pain of inadmissibility. A legal representative charged with the predicate offence cannot represent it (Article 39). An application for riesame (review) of the preventive seizure must be lodged within ten days of its execution or of the date, if different, on which the entity became aware of it (Article 53 of Legislative Decree 231/2001 and Articles 322 and 324 of the Code of Criminal Procedure).

Frequently asked questions.

Without a 231 model, is the entity automatically convicted?
No. A concrete organisational deficiency linked to the offence is required. Without a model or equivalent controls, however, a defence is difficult to mount.

Does adopting the model after the offence help?
Yes. If it is suitable and operational before the opening of the first-instance trial, it reduces the pecuniary sanction by between one third and one half (Article 12). Disqualification sanctions are avoided if, within the same deadline, the entity has also paid compensation for the damage in full and eliminated the harmful or dangerous consequences of the offence, or has taken effective steps to that end, and has made the profit available for confiscation (Article 17). If the same steps are taken late, the entity may apply, within twenty days of service of the extract of the judgment, for the disqualification sanctions to be converted into a pecuniary sanction (Article 78).

Summary note by the CommercialistiAvvocati network, based on specialised legal and practice sources. The text does not reproduce original contributions and does not constitute professional advice.