Italy

While Italian law does not recognise a unitary legal doctrine, such as fraud under common law jurisdictions, the main civil causes of action available in cases involving fraud (intended as an act of dishonesty that causes damage to another party) are: the general action in tort, the action for contract avoidance, the actio pauliana, and the action of a creditor against a sham transaction between the debtor and a third-party transferee (“simulazione”). Unless otherwise specified, this report focuses on civil causes of action.

Civil

General tort liability is codified under Article 2043 of the Italian Civil Code (CC) and arises where an intentional or negligent act causes unjust damage to others, giving rise to the tortfeasor’s duty to compensate the harm caused.

Fraudulent misrepresentation (dolo) may lead to contract avoidance where fraud is decisive for the conclusion of the contract (dolo determinante), so that the contract would not have been concluded if not for the fraudulent misrepresentation (Article 1439, CC). Conversely, merely incidental fraud (dolo incidente), which was not decisive in obtaining the party’s consent, does not affect the validity of the contract but may give rise to a claim for damages (Article 1440, CC).

The actio pauliana is governed under Article 2901 of the CC and grants protection to the creditor filing the action against the debtor’s dispositive acts transferring assets to third parties, to the extent that the dispositive acts are carried out with a view to depriving the creditors of the possibility to seize the assets. A special discipline of this cause of action in insolvency cases is provided for under Article 166 of the Italian Insolvency Code (CCII) (see Section 8, below).

Furthermore, where a transaction is merely sham (i.e. neither the debtor intended to transfer its rights nor the transferee intended to acquire them, or they intended to enter into a different transaction than the purported one) a creditor may seek a decision declaring that the sham transaction between the debtor and the third party is ineffective (Articles 1414 and 1416, CC).

Criminal

In criminal law, fraud is regulated under Article 640 of the Criminal Code (CrimC), which punishes anyone who, by means of deceit or fraudulent misrepresentations, induces another person into error and thereby obtains for themselves or others an unjust profit to the detriment of another. Article 640-ter of the CrimC addresses cyber fraud, punishing anyone who, by altering the functioning of an IT system or by unlawfully intervening on data, information, or programs contained therein, obtains an unjust profit to the detriment of another. In the context of insolvency, Article 322 of the Crisis and Insolvency Code (CCII) provides for criminal liability for fraudulent bankruptcy where a debtor intentionally conceals, dissipates, misappropriates, or misrepresents assets or liabilities to the detriment of creditors.

Within the framework of Italian corporate law, Articles 2621–2622 of the CC establish criminal liability for directors or corporate officers who intentionally misrepresent the company’s financial position through false accounting records, financial statements, or corporate disclosures, to the detriment of shareholders or creditors. Article 2629 of the CC further provides for criminal liability where directors carry out corporate transactions in breach of creditor protection rules. Additional corporate criminal offences are set forth in Articles 2624–2628 of the CC. It should also be noted that, pursuant to Legislative Decree 231/2001, companies may be held administratively liable for crimes committed by their directors, officers, or employees in the interest or to the advantage of the company.

Under Italian law, the question of whether jurisdiction may be established over international fraud claims depends on the defendant’s domicile. Where the defendant is domiciled in an EU Member State, Regulation No. 1215/2012 (Brussels I bis Reg.) governs the rules on jurisdiction. Conversely, where the defendant is not domiciled in an EU Member State, Law No. 218/1995 (“Law 218/1995” – which reformed the Italian system of private international law) applies. With a few minor exceptions, Law 218/1995 replicates, via its Article 3(2), the jurisdictional requirements set out in the Brussels I bis Reg.

In practice, in many cases, the Italian jurisdiction is established by virtue of a choice of court agreement. Absent such a choice, Italian courts have general jurisdiction over international civil and commercial disputes where the defendant is domiciled in Italy. Special jurisdiction varies depending on the nature of the claim.

If the claim relates to a contract, Italian courts accept jurisdiction if Italy was “the place of performance of the obligation in question”; that is, in particular, in the case of a sale of goods, if “the goods were delivered or should have been delivered” to Italy; in the case of the provision of services, if “the services were provided or should have been provided” in Italy (Article 7(1)(b), Brussel I bis Reg.).

If the claim relates to a “tort, delict or quasi-delict”, Italian courts accept jurisdiction if the harmful event or the damage resulting from the harmful event occurred in Italy (Article 7(2), Brussels I bis Reg.).

If the claim involves an actio pauliana, Italian courts accept jurisdiction if Italy is the place of performance of the fraudulent transfer. The same rule applies where a creditor brings an action for declaration of ineffectiveness of a sham transfer (Article 7(1)(a), Brussels I bis Reg., Italian Supreme Court, No. 26145/2017).

See Question 2.1, above.

Where an international dispute is brought before an Italian court, the applicable conflict of law rules are those set out in Regulation No. 593/2008 (“Rome I Reg.”) concerning the law applicable to contractual obligations, and Regulation No. 864/2007 (“Rome II Reg.”), concerning the law applicable to non-contractual obligations.

In matters related to contracts, the law chosen by the parties regulates the dispute (Article 3, Rome I Reg.); absent a choice, the applicable law is generally determined by reference to the type of contract and the territorial location of the party performing the characteristic obligation (e.g. the seller’s, the service provider’s, or the distributor’s habitual residence) (Article 4, Rome I Reg.). Ad hoc rules apply for specific types of contracts (carriage, insurance, consumer, etc).

In matters related to torts/delicts, as a general rule the applicable law “shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur” (Article 4, Rome II Reg.).

Under Italian law, the notion of “asset tracing” is closely linked to the identification of assets that are legally capable of being subjected to enforcement (enforcement-oriented perspective). Accordingly, the relevant question is not merely which assets can be traced in abstract terms, but rather which assets are legally amenable to attachments and enforcement measures.

In the specified sense, a wide range of assets may, in principle, be “traced” and be subjected to enforcement under Italian law, including movable assets, bank accounts and deposits, financial instruments, receivables owned to the debtor, company shares, trademarks, immovable property, rights in rem over immovable property, as well as salaries, employment-related income and pensions (within statutory limits). Certain categories of assets, however, benefit from absolute or partial exemption from attachment, in accordance with the rules governing enforcement proceedings.

The Italian legal system, unlike common law systems, does not typify asset tracing issues through autonomous categories such as tracing through mixed funds, proprietary claims in fraud cases, or tracing into substituted assets. These matters are instead assessed within the broader framework of civil procedural principles. Therefore, the answer largely depends on the circumstances of the individual case, the evidentiary record, and the court’s assessment thereof.

The answer to this question requires distinguishing between civil and criminal liability. In civil liability cases, creditors may seek enforcement on any of the debtor’s present or future assets (save for the exceptions referred to in Question 3.1, above), irrespective of the source of said assets. Unlike common law systems, Italian civil law does not recognise equitable tracing rules such as the “first in, first out” (FIFO) rule, the rule in Clayton’s Case, or pro rata distribution methods for mixed funds. Rather, the creditor’s right to enforce against the debtor’s assets is based on the principle of the debtor’s general patrimonial liability (Article 2740, CC), whereby the debtor is liable with all present and future assets. Where assets have been fraudulently transferred or commingled, creditors may rely on the actio pauliana (Article 2901, CC) to challenge transactions prejudicial to their rights or seek a declaration that a sham transaction is ineffective (Articles 1414 and 1416, CC).

In criminal cases, Italian law provides for the confiscation of the proceeds of crime, including where such proceeds have been commingled with lawfully acquired assets. Pursuant to Article 240 of the CrimC, the court may order the confiscation of property constituting the price, product, or profit of a criminal offence. Where the direct proceeds of the crime are no longer available – including where they have been mixed with other funds – the court may order confiscation by equivalent (confisca per equivalente), seizing assets of corresponding value from the defendant’s patrimony (Article 322 ter, CrimC for certain offences, and similar provisions in special legislation). In cases of money laundering (Article 648 bis, CrimC) and self-laundering (Article 648 ter.1, CrimC), the origin of assets from criminal activity may be established even where proceeds have been transformed or commingled, subject to evidentiary requirements.

Under Italian law, “proprietary claims” may be brought through possessory actions (azioni possessorie), petitory actions (azioni petitorie), and restitution following the annulment of a contract induced by fraud (dolo).

A party who has been unlawfully deprived of possession — including as a result of fraud — may bring a possessory action within one year from the dispossession or, if the dispossession was clandestine, from the date of discovery. Petitory actions may be brought to seek recognition and recovery of property held by another party (azione di rivendicazione).

Furthermore, where a contract is annulled pursuant to Article 1439 of the CC on the ground of fraud, the injured party is entitled to restitution of the assets transferred under the contract.

The rights arising from such actions may be enforced through judicial enforcement proceedings (esecuzione forzata) to secure the return of the assets.

Under Italian law (Article 2740, CC), liability of the debtor extends to all of its present and future assets, irrespective of their source, possibly including also substituted assets; to that extent, based on the type of asset, the creditor may select the proper method of enforcement (e.g. real estate, debtor’s claims against certain third parties, certain movable assets) in order to directly target the asset in question.

The main interim remedy available to preserve assets, including in cases of international fraud, is seizure for security (sequestro conservativo) under Article 671 of the Code of Civil Procedure (CPC). The court may grant such a measure where there are well-founded reasons to believe that, pending the proceedings on the merits, debtor’s assets may be lost, dissipated, or otherwise rendered unavailable, thus jeopardising the effectiveness of the creditor’s claim.

The issuance of the interim measure is conditional upon the establishment of both a serious risk of irreparable harm pending the decision on the merits (periculum in mora) and a prima facie case for the main claim (fumus boni iuris). However, the measure is not granted against a specific asset of the debtor, but rather against all of the debtor’s assets up to a certain amount; consequently, it is up to the creditor, when enforcing the provisional measure, to determine which of the debtor’s assets to attach.

From an EU law perspective, another available instrument is the European Account Preservation Order (EAPO) under Regulation No. 655/2014, which applies to pecuniary claims in cross-border civil and commercial matters, and allows a creditor to preserve funds held in bank accounts in Member States other than the Member State of the court seized, or that of the creditor’s domicile. The issuance of the measure presupposes that there is a real risk that, without such a measure, the subsequent enforcement of the creditor’s claim may be impeded or made substantially harder due to dissipation of assets. In practice, however, the use of EAPO remains relatively limited.

Under Italian law, there is no general disclosure tool available for identifying assets or wrongdoers.

The tool that most closely resembles a form of asset disclosure within the Italian legal system is that provided under Article 492 bis of the CPC, which may be employed by the creditor in the enforcement proceedings to identify the debtor’s attachable assets.

Under this provision, upon the creditor’s request, the bailiff may conduct electronic searches by accessing databases of public authorities, including the tax registry, the register of financial relationships, and databases of social security institutions, thus identifying the assets that the creditor may then subject to enforcement.

Unlike common law jurisdictions, Italian law does not provide for a general pre-action disclosure regime. Consequently, parties are not required to disclose documents or information prior to the commencement of judicial proceedings.

Italian courts may assist foreign proceedings involving fraud and asset recovery through judicial cooperation in evidence gathering, granting of interim measures (see Question 4.1, above) and recognition and enforcement in Italy of foreign judgments or awards (see Question 7.1, below).

As for the taking of evidence, Regulation No. 2020/1783 establishes the rules for cooperation between the courts of EU Member States in civil or commercial proceedings, whereas, at the international level, mutual judicial assistance is governed by the 1970 Hague Evidence Convention, through the mechanism of letters of requests and diplomatic agents or commissioners.

From an Italian private international law perspective, Article 69 of Law 218/1995 provides that Italian courts may give effect to foreign (non-EU) judicial requests for evidence to be taken in Italy, subject to the authorisation by the competent Court of Appeal, provided that such measures do not conflict with the fundamental principles of the Italian legal system. Evidence is taken in accordance with Italian law or in the manner expressly requested by the foreign judicial authority (if consistent with the principles of Italian law).

A useful tool to preserve evidence, also available for foreign proceedings, is pre-trial evidentiary measures (istruzione preventiva), which allow the acquisition of evidence — such as witness testimony (Article 692 CPC) and pre-trial expert assessment (Articles 696 and 696 bis, CPC) — prior to the commencement of the proceedings, in order to prevent it from being lost or becoming more difficult to obtain.

Italian courts have adopted a cooperative approach concerning requests for assistance from foreign courts and regulators, and they have mostly upheld such requests, adopting a very restrictive interpretation of the rule under which the assistance should be denied in case of conflict with the fundamental principles of the Italian legal system.

See Question 6.1, above.

Foreign judgments in fraud cases are recognised and enforced under Italian law in the same way as any other foreign judgments and awards.

In civil and commercial matters, foreign judgments rendered by courts of EU Member States are generally recognised and enforced in Italy under Articles 36 and 39 of the Brussels I bis Reg.

As to decisions rendered outside the EU, recognition and enforcement may take place pursuant to applicable multilateral and bilateral treaties to which Italy is a party, including those adopted by the EU on behalf of the Member States, such as the Lugano Convention.

Absent multilateral or bilateral treaties, a foreign judgment is enforced under Article 64 of Law 218/1995, provided that:

• the foreign court had proper jurisdiction under Italian jurisdiction rules;
• due process and the right to be heard were observed;
• the foreign decision is final and not in contrast with a previous Italian decision (ne bis in idem);
• the same dispute is not pending before an Italian court; and
• the decision does not produce effects contrary to public policy.

Foreign freezing orders rendered in civil and commercial matters within the EU are automatically recognised and enforceable in Italy under Brussels I bis Reg., provided that they are issued by a court having jurisdiction as to the merits of the matter. Where such measures are granted ex parte, they may only be enforced if the decision is served on the defendant prior to enforcement.

By contrast, foreign freezing orders ordered by a court lacking jurisdiction on the merits are effective only within the territory of the issuing Member States and, therefore, are not automatically enforceable in other Member States.

Article 42(2) of the Brussel I bis Reg. requires the party seeking enforcement to provide:

• a certified copy of the order;
• a certificate stating that the court had jurisdiction as to the merits of the case and that the decision is enforceable in the Member State of origin; and
• where the measure was ordered ex parte, proof of service of the order.

On the other hand, foreign freezing orders rendered in civil and commercial disputes outside the EU are not subject to recognition and enforcement in Italy according to Italian rules of private international law, as Article 64 (d) of Law No. 218/1995 requires the foreign decision to be final (a requirement that interim measures generally do not satisfy, due to their provisional nature).

Furthermore, Regulation (EU) 2018/1805 on the mutual recognition of freezing orders and confiscation orders establishes a simplified framework for the cross-border enforcement of freezing and confiscation orders issued in criminal matters within the EU. Under this Regulation, a freezing or confiscation order issued by a judicial authority in one Member State must be recognised and executed in another Member State without the need for a declaration of enforceability (exequatur). The executing authority may refuse recognition or execution only on the limited grounds set out in the Regulation, such as ne bis in idem, lack of dual criminality (in certain cases), or violation of fundamental rights.

From a jurisdictional standpoint, where an action for recovery is connected with insolvency proceedings, Italian courts have jurisdiction over the claim if the debtor’s centre of main interests (and therefore the insolvency proceeding) is located in Italy.

Within insolvency proceedings, actions relating to acts detrimental to creditors’ interests are governed by the law of the state of opening of proceedings.

The opening of insolvency proceedings centralises asset recovery actions within the insolvency procedure. From that moment, individual creditors may no longer commence or continue separate actions to recover dissipated assets or enforce claims against the debtor.

Standing to pursue asset recovery claims passes to the insolvency practitioner (curatore), who may bring clawback and liability actions to reintegrate the debtor’s estate and maximise the assets available for distribution among creditors pursuant to the principle of par condicio creditorum. According to this principle, creditors must be satisfied on an equal and collective basis, with the exception of secured creditors (creditori privilegiati).

Insolvency office holders may bring the fraud and recovery actions mentioned under Question 1.1, above, including liability actions against former directors. Insolvency practitioners are also entitled to bring an insolvency-specific actio pauliana (Article 166, CCII), which differs from the ordinary cause of action in respect of the interest protected (namely, the collective interest of creditors), the limitation period, and the more favourable evidentiary regime.

See Question 8.2, above.

Under Italian law, criminal proceedings and civil recovery may run in parallel. The injured party may either bring a civil claim within the criminal proceedings by joining as a civil party (costituzione di parte civile, Articles 74–82, Code of Criminal Procedure (CCP)) or initiate a separate civil action before the civil courts. If the injured party chooses to bring a separate civil action, it may pursue the claim alongside the criminal proceedings. However, the civil action may be transferred to the criminal proceedings at any time until a judgment on the merits is rendered in the civil case (Article 75(1), CCP). Conversely, if the injured party initially joins as a civil party in the criminal proceedings, it may withdraw and pursue a separate civil action, but only before the opening of the trial phase (dibattimento).

Pursuant to Article 75(3) of the CCP, if the civil action is brought after the issuance of the first-instance criminal judgment, the civil proceedings are stayed until the criminal judgment becomes final (i.e. no longer subject to appeal). Once the criminal judgment becomes final, the civil court is bound by the findings of fact and the determination of liability contained in a final criminal conviction (Article 651, CCP) or in a final acquittal based on the finding that the act did not occur or that the defendant did not commit it (Article 652, CCP). The civil court, however, retains autonomy in assessing damages.

Yes. Italian law provides for non-conviction-based confiscation through the confisca di prevenzione (preventive confiscation) regime, governed by Legislative Decree No. 159/2011 (the Anti-Mafia Code). This measure allows courts to confiscate the assets of individuals deemed socially dangerous (pericolosità sociale), even in the absence of a criminal conviction. The confiscation applies where there is a disproportion between the value of the assets held by the individual and their declared income, and there are reasonable grounds to believe that the assets derive from unlawful activities. Preventive confiscation proceedings are civil in nature and are conducted before specialised sections of the courts (sezioni misure di prevenzione). The standard of proof is lower than in criminal proceedings, requiring sufficient indicia rather than proof beyond a reasonable doubt.

Yes. Victims may benefit from criminal confiscation in certain circumstances. Under Article 322 ter of the CrimC, confiscation of the proceeds of crime is ordered “without prejudice to the rights of the injured party to restitution” (salvi i diritti della persona offesa alle restituzioni). This means that, where confiscated assets are traceable to the victim’s loss, the victim may seek restitution of those assets. Additionally, where the injured party has joined the criminal proceedings as a civil party (costituzione di parte civile), it may request that confiscated assets be applied towards satisfaction of its damages claim. In practice, however, the victim’s right to restitution or compensation takes priority over confiscation only where the assets are directly attributable to the victim; otherwise, confiscated assets are transferred to the state.

Where confiscated assets are directly attributable to the victim, the criminal court may order direct restitution as part of the criminal judgment. If the injured party has joined the proceedings as a civil party (costituzione di parte civile), the court may also award damages to be satisfied out of confiscated assets. Italian law does not provide for a general statutory framework for the distribution of confiscated assets in complex multi-victim cases; distribution is handled case-by-case by the court, applying general principles of civil law. Assets not subject to restitution or victim compensation are transferred to the state.

Under Italian civil law, the limitation period applicable to fraud-related civil claims varies depending on the nature of the claim: it is generally 10 years for contractual liability claims and five years for tort claims. However, pursuant to Article 2947(3) of the CC, where the underlying conduct also constitutes a criminal offence subject to a longer limitation period, the criminal limitation period applies to the civil claim as well. For instance, fraud-related civil claims may be subject to a six-year limitation period where the underlying facts constitute a criminal offence under Article 640 of the Italian CrimC.

While fraud does not per se suspend the limitation period, pursuant to Article 2941(8) of the CC, the limitation period is suspended where a debtor has fraudulently concealed the existence of the debt until such fraudulent conduct is discovered by the creditor. Fraud may also extend the limitation period as mentioned in Question 10.1, above.

The nature of the defences varies depending on the claim. For instance, where the plaintiff brings a tort claim, the defendant may argue that there was no wilful or negligent conduct on its part. If the plaintiff instead brings an action for annulment on the grounds that the defendant fraudulently misrepresented the circumstances under which the contract was concluded, the defendant may argue that the misrepresentation was recognisable by the plaintiff (i.e. that the plaintiff was or should have been aware of it).

A successful claimant may obtain several remedies, such as damages, restitution of assets or sums, specific performance, as well as precautionary and enforcement measures aimed at recovering the identified assets.

Constructive trusts and equitable liens are concepts typical of common law systems and do not exist under Italian civil law, which operates under a unitary concept of ownership and does not recognise the distinction between legal and equitable ownership. However, Italy recognises foreign trusts as a result of the ratification of the Hague Convention of 1 July 1985, on the Law Applicable to Trusts and on their Recognition.

Under Italian law, recovered assets are realised through enforcement proceedings. Depending on the nature of the asset, recovery may occur through judicial sale, transfer of sums held by third parties, or direct assignment to the creditor. The proceeds are distributed according to the principle of par condicio creditorum, unless specific statutory preferences apply (creditori privilegiati).

Yes. As for interest, creditors may recover both statutory interest (or interest on capital) and default interest (i.e. interest arising because of late payment). As to the latter, it is worth noting that, pursuant to Article 1284(4) of the CC, where the parties have not agreed on an interest rate, once a legal action is filed, the statutory interest rate is increased by eight percentage points. This provision also applies at the enforcement stage and increased interests start accruing from the service of the formal writ of enforcement (precetto) or writ of attachment of assets (pignoramento).

As for costs, see Question 12.3, below.

The answer to this question depends on the nature of the claim.

It depends on the case. Where the relevant requirements prescribed by law are met (see Question 4.1, above), ex parte urgent relief may be granted in a matter of days. Otherwise, interim measures are decided after an adversarial hearing between the parties; in such cases, the timeframe is typically within a few weeks.

The loser pays principle (principio di soccombenza) is a general rule in Italian civil procedure, whereby the unsuccessful party in litigation is ordered to reimburse the successful party’s legal costs. In any event, typical litigation and asset recovery costs in Italy include procedural costs and court fees, lawyers’ fees, costs for court-appointed and party-appointed experts, as well as other costs that may arise due to the complexity of the case. When liquidating lawyers’ fees, Italian courts refer to the Table attached to Ministerial Decree No. 55/2014, which is based on a scale that depends on the amount in dispute.

As for funding options, both third-party litigation funding and assignment of a disputed claim (cessione del credito litigioso) are available in Italy.

In practice, practitioners should ensure compliance with the procedural time limits prescribed by Italian law, particularly when seeking interim relief such as conservatory seizures, as these procedures are subject to stricter timeframes.

In civil law, a significant recent reform relevant to asset tracing and recovery is the amendment of Article 492 bis of the CPC, introduced by Legislative Decree No. 149/2022. See Question 5.1, above.

In criminal law, confiscation by equivalent (confisca per equivalente) is an important asset-recovery tool in fraud-related proceedings. Its application has been progressively extended to several offences, as it permits the authorities to seize assets of equivalent value where the direct proceeds of the offences cannot be located or are no longer available.

In recent years, Italian courts have extended accountability for corporate wrongdoings and, as a result, the recovery options at the aggrieved party’s disposal, by resorting to legal theories holding “shadow directors” or “hidden principals” liable when they abuse the corporate veil and run their business through a straw man or figurehead (prestanome).

See Question 13.1, above.