Entity Liability: The Court of Cassation Clarifies Criteria for "Substantial Profit" with Judgment No. 23329/2025

The administrative liability of entities, introduced in Italy by Legislative Decree of June 8, 2001, No. 231 (often abbreviated as D.Lgs. 231/2001), represents a fundamental pillar in the sanctioning system aimed at preventing the commission of crimes in the interest or to the advantage of legal persons. One of the most delicate aspects, often subject to jurisprudential debate, is the determination of the "substantial profit" from the crime, a necessary condition for the application of specific sanctions, particularly disqualifying ones. On this crucial point, the Court of Cassation has intervened with the recent Judgment No. 23329, filed on June 23, 2025, offering an interpretation that enriches and specifies the evaluation criteria.

Legislative Decree 231/2001 and the Importance of Disqualifying Sanctions

D.Lgs. 231/2001 provides that an entity can be held liable for crimes committed in its interest or to its advantage by senior personnel or by individuals under their direction. In addition to pecuniary sanctions, the decree contemplates so-called "disqualifying sanctions" (Art. 13 and 14 D.Lgs. 231/2001), which can have a devastating impact on business activities, even leading to the suspension or revocation of authorizations, licenses, or concessions, or the prohibition of contracting with the Public Administration. The application of such sanctions is subject, among other conditions, to the circumstance that the entity has derived a "substantial profit" from the crime. But how is this "substantial profit" assessed? The Court of Cassation, presided over by Dr. G. F. and with Dr. P. S. as rapporteur, has provided a clear and detailed answer.

The Ruling of the Court of Cassation: Beyond the Numerical Data

The judgment in question, issued in proceedings involving the defendant M. D. M. and the Public Prosecutor M. P., annulling in part the decision of the Court of Appeal of Venice of March 4, 2024, has crystallized a fundamental principle that goes beyond a mere quantitative assessment of the illicit advantage. The ruling, which encapsulates the core of the decision, states that:

In matters of entity criminal liability, the substantial profit from the crime, required as a condition for applying disqualifying sanctions to the entity, must be deduced, in addition to the objective data of the extent of the advantage obtained, also from the subjective data, determined by considering the characteristics of the entity itself and the impact of its undue enrichment in relation to the specific activity, turnover, business structure, and market position of the same.

This means that the assessment of "substantial profit" cannot be limited to an arithmetic calculation of the economic advantage obtained. The Supreme Court introduces a two-phase perspective, which requires considering:

• Objective data: The intrinsic extent of the economic advantage obtained. This is the measurement of profit in absolute terms.
• Subjective data: The impact of such profit in relation to the specific entity. This is the innovative and most significant aspect.

For the subjective data, the judgment indicates a series of evaluation parameters that make the decision proportionate and calibrated to the reality of the business. These parameters include:

• The intrinsic characteristics of the entity (e.g., small, medium, large enterprise).
• The incidence of illicit enrichment in relation to the specific activity carried out by the entity.
• The entity's overall turnover.
• The business structure and its complexity.
• The entity's market position.

This interpretation aims to prevent a profit, perhaps small in absolute terms but significant for a small enterprise, from being underestimated, or a high profit that is negligible compared to the turnover of a multinational corporation, from automatically leading to disproportionate sanctions. It therefore introduces a principle of proportionality and adequacy, fundamental for the fairness of the sanctioning system.

Impact for Businesses and Corporate Compliance

Judgment No. 23329/2025 of the Court of Cassation is of paramount importance for all companies and professionals involved in compliance. It reinforces the need for careful and personalized assessment of crime risk and its consequences. For companies, this means that an effective organizational, management, and control model (MOGC) must consider not only crime prevention but also the potential repercussions of sanctions, including disqualifying ones, in light of this new and more complex interpretation of profit. Legal consultants will need to guide companies in analyzing their own corporate context to fully understand which scenarios could constitute "substantial profit" according to the new criteria, not limiting themselves to a purely accounting analysis.

Conclusions

The ruling of the Court of Cassation with Judgment No. 23329/2025 represents a turning point in the application of D.Lgs. 231/2001, particularly concerning disqualifying sanctions. By introducing an assessment of "substantial profit" that balances objective and subjective data, the Supreme Court ensures greater fairness and proportionality in the application of sanctionary measures. For companies, this translates into the imperative to strengthen their compliance systems, monitoring not only crime prevention but also the potential impact of any illicit profits on their structure and market position. A proactive approach and specialized legal advice are more indispensable than ever today to navigate safely in the complex landscape of entity administrative liability.