Corruption is a major problem in Italy. The integrity of public officials is marred by their relationships with organised crime and businesses. Public procurement, particularly infrastructure, presents a very high risk of corruption, as it involves large resources and exposes companies to organised crime. Extortion, active and passive bribery, bribing a foreign public official, fraud and money laundering are criminalised under the Criminal Code of the Italian Republic. The anti-corruption laws broaden the scope and punishment of corruption offences, and are generally implemented effectively. Italy is a signatory to the OECD Convention and has rejected the exception for facilitation payments.
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The Italian judicial system is not free from corruption. The courts are described as inefficient and the judicial processes as slow (HRR 2014). The capacity of the Italian judicial system to uphold fundamental market principles is low (ICS 2015). Businesses have relatively low confidence in the Italian legal system and do not consider the legal framework for settling disputes and challenging regulations to be efficient (GCR 2014-2015). Almost half of the surveyed households perceive the judiciary to be corrupt and more than one quarter of citizens believe that abuse of power and bribery are widespread among the courts (GCB 2013; EB, Feb. 2014).
The Italian police force does not pose high corruption risks for companies. Companies report that the police can be consistently relied upon to enforce law and order (GCR 2014-2015). One third of citizens perceive the police to be corrupt and the same percentage of surveyed citizens believe that bribery and abuse of power are common among police officials (GCB 2013; EB, Feb. 2014). Authorities have established effective mechanisms to investigate abuse and corruption among police forces, yet long delays by courts and prosecutors impede investigations (HRR 2014).
There is a higher risk of encountering corruption in Italy's public services sector. Businesses rank inefficient government bureaucracy as the most problematic factor for doing business in Italy, and consider government regulations to be very burdensome (GCR 2014-2015). Almost half of the citizens believe that bribery and abuse of power for personal gain as common practices among public officials issuing business permits (SE 2014). Registering a company in Italy is less time-consuming, yet more costly compared to the OECD average (DB 2015).
Italian land administration is not free from corruption. More than half of citizens believe that abuse of power and bribery are widespread among officials issuing building permits (EB, Feb. 2014). Property rights are well defined in Italian courts (ICS 2015); however, slow court proceedings cause delays in enforcement (FitW 2015).
The tax administration is not considered transparent in Italy. Bribing tax authorities has been identified as one of the most recurring corruption offences (ICS 2015). Italian tax laws do not consider bribes to be deductible (ICS 2015). Almost all companies operating in Italy identify tax rates as a problem (European Commission, Feb. 2014), and more than one-third of surveyed citizens report that abuse of power and bribery are widespread among tax officials (EB, Feb. 2014).
Former President Berlusconi was convicted for tax-fraud. He initially received a sentence of four years imprisonment, yet due to his age, the sentence was reduced to 1 year's part-time community service in 2014 (FitW 2015).
The customs administration poses some corruption risks to businesses operating in Italy. Surveyed businesses rate the transparency of the border administration as moderate, and report that irregular payments may occur when dealing with exports and imports (GETR 2014). The average time and cost required to trade across boarders is higher than the OECD average (DB 2015).
Many businesses consider corruption common in Italy's public procurement (European Commission 2014). Most corruption cases in recent years have involved government procurement (ICS 2015). Companies report that favouritism taints the decisions of procurement officials when awarding contracts, as public funds are frequently diverted based on political-business connections (GCR 2014-2015). An annual report released by the Financial Guard of Italy revealed that one out of every three public contracts contained irregularities, and that USD 1.62 billion out of USD 5 billion worth of public contracts during 2015, were lost in cases of fraud (AlJazeera, Apr. 2015).
In existence is a major anti-corruption probe that was launched into contracts involving Milan's Expo 2015 world's fair. A number of politicians and entrepreneurs have been accused of influencing contracts related to the project (FitW 2015). Seven people, including the event's top procurement manager were arrested, and the infrastructure minister was forced to resign (Guardian, Apr. 2015). In another case, over 30 public officials, as well as the mayor of Venice, were arrested for receiving USD 34 million in bribes for securing contracts to build the city of Milan (FitW 2015). In mid-2015, a corrupt network of politicians, public officials and business people, had been arrested in connection with what was dubbed the “Mafia Capital” case, in which a cartel of cooperative social organisations rigged lucrative public contracts to manage migrant reception centers in Rome (Reuters, June 2015). Companies are therefore recommended to use a specialised public procurement due diligence tool to mitigate the corruption risks related to public procurement in Italy.
A large Italian steel industry owned by the Riva family is being investigated for environmental pollution and criminal association to commit environmental offences. The company has been accused of releasing cancer-inducing toxins into the air, and wire-tap evidence cited by the prosecution claims senior executives tried to bribe officials to cover up environmental hazards at the plant (Bloomberg, Jan. 2013). The trial for environmental pollution is yet to begin, however, the former CEO, Fabio Riva, received a sentence of more than six years imprisonment for fraud. Riva is appealing the verdict (Reuters, June 2015).
The Criminal Code of the Italian Republic criminalises extortion, active and passive bribery, bribing a foreign public official, fraud and money laundering. The Anti-Corruption Law broadens the scope and punishment of corruption offences, criminalises trading influence in the public and private sectors, and modifies the statute of limitations. It also gives more investigative powers to the National Anti-Corruption Authority (CiVIT), increases whistleblower protections, enhances transparency in public contracts, and bans officials found guilty of corruption from holding certain administrative posts. The law further stiffens penalties for corruption and false accounting, and raises prison sentences for most corruption crimes including public extortion, embezzlement, corruption of public officials and judicial corruption (Simmons & Simmons elexica, July 2015). It also stipulates for pecuniary compensation, implying the compulsory return of the proceeds of a crime. Furthermore, the law grants the national anti-corruption authority new powers in the area of public procurement. The law criminalises all balance sheet fraud and provides for prison sentences of up to eight years for listed companies and six for unlisted ones (Reuters, May 2015). Nevertheless, the country’s slow and overburdened judicial system is seen as the biggest impediment to the proper enforcement of the law (Reuters, May 2015). The Code of Conduct of Public Officials (in Italian) includes detailed provisions on transparency, conflicts of interest and gifts. Gifts involving public officials are regulated by the Rules on Protocol Gifts (GRECO 2013). It requires elected and appointed officials at central, regional and local levels - including those who carry out temporary tasks on behalf of public authorities, as well as their relatives - to declare assets (EU ACR 2014). The Anti-Corruption Law provides protections to whistleblowers within the public sector; however, the provisions lack comprehensiveness as they do not consider all circumstances and reporting aspects. According to the same report, whistleblower protection in the private sector is not regulated (EU ACR 2014). Italy has also rejected the exception for facilitation payments, and is a signatory to the OECD Anti-Bribery Convention, the United Nations Convention Against Corruption (UNCAC) and the Council of Europe’s Civil and Criminal Law Conventions against Corruption. Access the Lexadin World Law Guide for a collection of legislation in Italy.
Freedom of expression is guaranteed by the Constitution of the Italian Republic, and is in most cases respected by the government (HRR 2014). Conflicts of interest between political parties and media owners is a serious obstacle to effective freedom of press. Physical threats or attacks against journalists occasionally come from organised crime networks or other political or social groups (FotP 2014). Large number of newspapers and magazines with regional influence are owned by political parties or media groups (FitW 2015). Freedom of information is not regulated by the Italian constitution or other laws, and it can take several years before journalists obtain information. The press environment in Italy is described as 'partly free' (FotP 2014). Reportedly, authorities cooperate with civil society organisations (HRR 2014). Italy is part of the Open Government Partnership, which further strengthens the collaboration between the government and civil society (FotP 2014). The civil society is reported to play an important role in preventing corruption (NISA 2011).
- Freedom House: Freedom in the World - Italy 2015.
- Simmons & Simmons elexica: 'Italy's new enforcement provisions on anti-corruption and false accounting', 3 July 2015.
- Reuters: 'Italian steel magnate arrested in Ilva case', 6 June 2015.
- Reuters: 'Italy hit by new corruption scandal over migrant centers', 4 June 2015.
- Reuters: 'Italy passes new law to tackle rampant corruption', 21 May 2015.
- The Guardian: 'Expo 2015 in Milan is - for the hopeful - a sign that Italy is back on its feet', 29 April 2015.
- Aljazeera: 'Italy report shows rampant public sector corruption', 9 April 2015.
- World Economic Forum: Global Competitiveness Report 2014-2015.
- World Economic Forum: Global Enabling Trade Report 2014.
- European Commission: Special Eurobarometer 397, Feb 2014.
- Freedom House: Freedom in the World - Italy 2014.
- European Commission: Flash Eurobarometer 374 - 2014.
- European Commission: The EU Anti-Corruption Report - Italy 2014.
- US Department of State: Investment Climate Statement - Italy 2014.
- GRECO & EU: Joint First and Second Evaluation Rounds, June 2013.
- US Department of State: Human Rights Report - Italy 2013.
- Freedom House: Freedom of the Press – Italy 2013.
- Corriere del Veneto: ‘Mazzette e regali per evitare i controlli Finanziere indagato per corruzione’, 13 September 2013 (in Italian).
- La Repubblica: ‘Trezzano, tangenti per il Piano regolatore: anche due assessori pdl fra i nove arrestati', 14 May 2013 (in Italian).
- Bloomberg: 'Italy’s Riva Steel Billionaires May Close Largest Factory', 18 January 2013.
- European Commission: Special Eurobarometer 374 - 2012.
- BBC: 'Judges held in Italy Naples mafia swoop', 19 March 2012.
- Nuovo Paesesera: 'Cerveteri, 300mila euro per approvare Piano regolatore: 4 arresti', 24 January 2012 (in Italian).
- La Repubblica Torino: ‘Sanita': Piemonte, favori e corruzione nell'inchiesta della Procura’, 27 May 2011 (in Italian).
- Torino Today: ‘Tangenti, operazione della Finanza: sette arresti nella sanità’, 27 May 2011 (in Italian).
- Transparency International: National Integrity System Assessment – Italy 2011.