Admissibility And Value Of Olaf Produced Evidence:The Italian Experiance – Commercial Law, Poland

1. A brief outline about evidence in criminal proceedings and fiscal proceedings with regard to subjects having the power of investigation

The Italian Codice di Procedura Penale[1] (Code of criminal procedure), in Book III (Evidences), Title II (Means of proof) shows admissible evidences in criminal proceedings: testimony, examination of parties, identification or exploration, judicial experiment, judicial examination and documents.

Art. 189 C.P.P. provides for possibility to accept an evidence that it’s not provided for by law, if judge regards it as “fit to guarantee the establishment of facts and  it isn’t prejudicial to moral freedom of person”;  while, art. 191 C.P.P. provides that “evidences acquired by violation of prohibitions provided by law cannot be used”.

Criminal proceedings are based on adversarial system, where evidence grows up during the trial phase (with a few exceptions) and even Italian Constitution provides for  cross-examination principle, with a few exception set out by law “in case of assent expressed by accused or established impossibility of objective kind or proved illegal conduct” (art. 111 V paragraph Cost.).

Therefore, investigative activity conducted during the phase of preliminary investigations represents basis of charge and helps Pubblico Ministero[2] to decide to bring a charge or not, but – generally – such activity isn’t an useful evidence that the judge can use to decide about the charge.

In criminal proceedings, investigations are directed by Pubblico Ministero and carried out by criminal police[3] (art. 327 C.P.P.); words “polizia giudiziaria” mean various police corps listed in art. 57 of Codice di Procedura Penale.

In fiscal proceedings, situation is quite different.

Controls carried out by Tax Authority (Agenzia delle Entrate) and by Guardia di Finanza (a police corps specialized in the fight against economic and tax crimes) merge into an act (called “processo verbale di constatazione[4]”) that represents basis for the following issue of tax regulation by Tax Authority (regulation called “avviso di accertamento”[5]), these acts merge into probative material on which fiscal judge will base his own decision.

 

2. OLAF law basis and probative value of OLAF investigations.

OLAF has been established by Commission Decision of 04/28/1999 and it has its own base on art. 325 TFEU.

The running of OLAF is described and regulated by EU Regulation 1073/99; notably, art. 9 (2) provides that probative value of investigations carried out by OLAF is corresponding to probative value of investigations carried out by national administrative inspectors, because OLAF investigations are “administrative investigations” (art. 11.1 Instructions to staff OLAF 120201).

As we can see afterwards, definition of OLAF investigations as “administrative” will bear upon their probative value in criminal trials.

Utilization of OLAF produced evidences in an Italian criminal proceeding is quite difficult.

Final report undersigned by Director of OLAF (but also internal acts of investigation) can be acquired, but they haven’t got a particular probative value, because art. 238 (1) C.P.P. gives value to records of another criminal proceeding, with regard to trial phase or “incidente probatorio[6]” phase and only if the defending counsel of the accused took part to forming of the evidence.

OLAF report could be considered as evidence in a criminal proceeding if – before it – that report could be used in a administrative proceeding that ended in irrevocable sentence, that is effective against accused as provides for by art. 238 (2) C.P.P.. For instance, OLAF report represents basis for a tax assessment against a VAT subject charged with tax fraud; issue is judged by “Commissione Tributaria[7]”; after irrevocable sentence by Commissione Tributaria, OLAF report can be acquired as evidence in a criminal proceeding[8].

OLAF report can represent indirect evidence in criminal proceeding, if an irrevocable administrative sentence is based on that report and, then, that sentence has been produced in criminal trial, as provided for by art. 238 bis C.P.P.

 

3. Positive judicial applications.

After this general theoretic introduction, we can consider, actually, the value of OLAF produced evidence, in Italian legal cases. 

We can notice that there is a great dichotomy, for the arguments pointed out in the previous paragraph: in the field of tax (administrative) proceedings, judges recognized full value to OLAF final report[9] and also to its internal acts of investigation; on the contrary, in criminal proceedings, no conviction has been based on OLAF produced evidence[10].

Some example of different opinions can be useful.

Court of Cassation (Tax Chamber) in sentence 09/28/2012 n. 16570 considered that investigations carried out by OLAF “have full probative value” and such value is attributed not only to final report signed by Director of OLAF, but also to “acts or records of inspection, because also these documents, as every information acquired according to art. 45, section 3, Reg. CE 515/1997, can be utilized by Agency in judicial proceedings about infringement of custom law” (Court of Cassation, Tax Chamber, 09/26/2012 n. 16539[11]).

We can notice that, in tax proceedings, judges can base own decision not only on the final report made by inspectors (the above mentioned record of ascertainment), but also on the single internal act of inspection (hearing of witnesses, documents and so on) and, consequently, probative parallelism between OLAF action and internal authority action is perfect.

Quite different is the situation in the field of criminal proceedings.

GUP[12] of Tribunale[13] of Naples, in sentence 07/14/2009 n. 1390,  considered that OLAF report (which assumed that lamps declared as Malayan were, really, made in China) was a mere suspect, not even a clue.

Tribunale of Rovereto, in sentence 10/16/2007 n. 30, considered that an OLAF advice[14] (which assumed that the existence of a connexion between operators, in lack of others pieces of evidence, was not sufficient to exclude the operators concerned, according to art. 143 Reg. CE 2454/1993) could be evidence for the defence.

In the end, Court of Cassation (IV Criminal Chamber), in sentence 12/02/2005 n. 2878 considered that OLAF statement, that OLAF didn’t carry out an investigation against a particular subject, couldn’t be considered as “new evidence”, fit for beginning a proceeding of review of previous conviction.

Therefore, Italian criminal judges twice considered that documents produced by OLAF were not “evidence” and once considered OLAF advice as evidence (but only about the interpretation of the law, not about facts) for the defence.

Possibility provided for art. 189 C.P.P. has not been ever utilized.

 

4. Final remarks and suggestions.

In the end, we can note that – in Italy – the important job made by OLAF had a very strong impact in administrative field, but no direct importance in criminal field.

To improve the Italian reaction to frauds that harm financial interest of European Union, it’s possible to adopt – in my opinion – two different strategies.

The first strategy is to awaken Italian Prosecutors to call as witnesses OLAF officers who carried out investigations, and also to awaken Italian Judges to use OLAF report, according to art. 189 C.P.P..

In such a way, OLAF officers could explain what kind of activity had been done and what persons had been interviewed (those persons could be called as witnesses, according art. 195 (1) C.P.P.).

The other strategy is to regulate, by European Union rule, the value of OLAF produced evidence in criminal proceedings, giving it a higher value than current one.

By the way, this could be coherent with the improvement of guarantees for the witness and for the person concerned interviewed by OLAF, improvement that came out of proposal of reforming EU Regulation 1073-99.

In a frame of growing legislative harmonization and of greater attention to financial interests of European Union, it could even suppose an evidence gathered by OLAF under vigilance of an European judge (and with the assistance of a counsel for the person concerned) to which giving the same value of an evidence gathered in “incidente probatorio[15]”, that is the same value of evidence gathered during trial phase.

In such a way, the value of OLAF produced evidence would be uniform and homogeneous in all the State of the European Union, regardless of  procedural systems and this would prevent different evaluations of the same fact (or of similar facts), if considered by different Authorities.

 

Bernardo Cartoni

“Centro di diritto penale tributario” of Turin, Italy

Barrister in Rome and Warsaw

 

[1] Abbreviated, C.P.P.

[2] So it’s called the Italian Public Prosecutor

[3] “Polizia giudiziaria”.

[4] Record of ascertainment.

[5] Tax assessment.

[6]By “incidente probatorio” it’s possible to collect evidences during pre trial phase, in the cases provide for by the law.

[7] It’s the Italian court that has jurisdiction on tax litigations.

[8] If the VAT subject is a single entrepreneur; if is a corporation, sentence isn’t effective against legal representative (accused in criminal proceeding) and, therefore, art. 238 (2) C.P.P. is not enforceable.

[9] For the sake of brevity, we examine only sentences delivered in 2012.

[10] The author carried  out a search on database “De Jure”, searching for word “OLAF” in the text of Italian sentences.

[11] The same principle is also in Cass. Chamber I 09/19/2012 n. 15758, Cass. Chamber I 09/19/2012 n. 15760 and Cass. Tax Chamber 07/27/2012 n. 13483.

[12] Judge of preliminary hearing.

[13] This is theItalian criminal court of first instance.

[14] Advice 09/09/2004 D/10951.

[15] See note n. 6