With judgement no. 3238/2023 filed on 25 January, The Italian Court of Cassation [Supreme Court] Criminal section III, ruled that the profit from a tax offence committed before 31 January 2019, cannot be subject to confiscation for equivalent value purposes if the statute of limitations has expired for the crime, regardless of the existence of a previous non-definitive conviction.


The ruling in question is one of the first applications relating to a principle recently expressed by the Joint Sections of the Italian Court of Cassation [Supreme Court] regarding the retroactive application of the provision included in Article 578-bis of the Italian Code of Criminal Procedure.


The rule in question, effective 31 January 2019, stipulates that "when confiscation in special cases provided for in the first paragraph of Article 240-bis of the Italian Penal Code and other legal provisions or confiscation provided for in Article 322-ter of the Italian Penal Code has been ordered, the appellate court, or The Italian Court of Cassation [Supreme Court], in declaring the offence extinguished due to the statute of limitations or amnesty, shall decide on the appeal for the sole purposes of confiscation, after establishing the defendant's liability".


The appeal, which led to the ruling under review, was brought by two individuals convicted of tax offences in the first instance.
Indeed, the Court of Appeal had ordered that the case should not proceed due to the statute of limitations for the crimes, but otherwise upheld the appealed judgment.
Among the grounds for the ensuing appeal to the Court of Cassation, complaint was made regarding the non-applicability, to the confiscation for equivalent value, of the aforementioned Article 578-bis of the Italian Code of Criminal Procedure, which would presuppose a formal conviction by virtue of the non-retroactivity of the unfavourable criminal law.
This is because, according to the arguments advanced by the defence, while the rule under consideration is a procedural rule, its main effect is exerted on the substantive level. The grounds for appeal were held to be well-founded.


The Joint Sections, resolving a jurisprudential conflict on the point, by means of a ruling dated 29 September 2022, the reasons for which have not yet been filed, ruled that the aforementioned Article 578-bis of the Italian Code of Criminal Procedure consists to all intents and purposes of a provision that is also substantive in nature and, as such, subject to the prohibition of retroactivity of the rule in malam partem [so as to wear an evil appearance] enshrined in Art. 25 of the Constitution.
Consequently, the aforementioned provision cannot be applied, as far as confiscation for equivalent value hypotheses are concerned, in relation to acts committed prior to its entry into force.

Such an assertion appears to be based specifically on the punitive character of the aforementioned ablative measure, having an afflictive nature and thus, substantially punitive.
It should be emphasised, in any case, that the preclusion in question concerns only confiscation for equivalent value and not direct confiscation, which is devoid of a punitive nature and not subject to the prohibition of retroactivity, being in fact governed in its application by the opposite principle of Art. 200 of the Italian Penal Code.
The appeal was therefore upheld and the judgment set aside without referral in regard to the confiscation for equivalent value order and the ancillary penalties.
 
 
Article by Roberto Soardi

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