JUDGMENT OF THE GENERAL COURT (Eighth Chamber)

23 July 2025 ( * )

( Public procurement – Protection of the European Union’s financial interests – Action for annulment – Lack of direct concern – Partial inadmissibility – Criteria for exclusion from participation in public procurement procedures – Concept of ‘final judgment that the person or entity is guilty’ – Article 136(1)(d)(ii) of Regulation (EU, Euratom) 2018/1046 – Persons who have powers of representation, decision or control with regard to a person or entity who is excluded – Article 136(4)(a) of Regulation 2018/1046 – Obligation to state reasons – Proportionality )

In Case T‑113/24,

Lattanzio KIBS SpA, established in Milan (Italy),

CY,

CV,

CW,

represented by M. Hommé and B. O’Connor, lawyers,

applicants,

v

European Commission, represented by F. Moro and P. Rossi, acting as Agents,

defendant,

THE GENERAL COURT (Eighth Chamber),

composed of A. Kornezov (Rapporteur), President, K. Kecsmár and S. Kingston, Judges,

Registrar: P. Cullen, Administrator,

having regard to the order of 8 May 2024, Lattanzio KIBS and Others v Commission (T‑113/24 R, not published, EU:T:2024:306),

having regard to the written part of the procedure,

further to the hearing on 15 January 2025,

gives the following

Judgment ( 1 )

1 By their action pursuant to Article 263 TFEU, the applicants, Lattanzio KIBS SpA (‘LKIBS’), CY, CV and CW, seek the annulment of Commission Decision Ares(2023) 8545235 of 13 December 2023 relating to the proceedings for the exclusion of LKIBS from participating in award procedures for public procurements and grants governed by Regulation (EU, Euratom) 2018/1046 and Regulation (EU) 2018/1877 (‘the contested decision’).

…

Forms of order sought

10 The applicants claim that the Court should:

– annul the contested decision;

– order the Commission to pay the costs.

11 The Commission contends that the Court should:

– dismiss the action as inadmissible in so far as it was brought by CW, and, in any event, as unfounded in its entirety;

– order the applicants to pay the costs.

Law

…

Substance

21 In support of their action, the applicants rely on eight pleas in law, alleging, in essence: (i) a manifest error of assessment in that the Commission regarded the judgment of the District Court of Milan as being a final judgment establishing that CY and CV were guilty of corruption; (ii) an infringement of Article 136(1)(d)(ii) of Regulation 2018/1046; (iii) that the Commission took national law into account in the application of that provision; (iv) an infringement of Article 136(4) of Regulation 2018/1046; (v), a failure to state reasons; (vi) an infringement of the principle of proportionality provided for in Article 136(3) of Regulation 2018/1046 and of Article 5(4) TEU; (vii) an infringement of Article 136(6)(a) of Regulation 2018/1046; and, (viii) an infringement of the right to be heard enshrined in Article 41 of the Charter.

The first, second and third pleas, alleging, in essence, an infringement of Article 136(1)(d)(ii) of Regulation 2018/1046

22 By their first three pleas in law, which it is appropriate to examine together, the applicants submit, in essence, that the Commission infringed Article 136(1)(d)(ii) of Regulation 2018/1046 in that it considered that the judgment of the District Court of Milan was a final judgment which established that CY and CV were guilty of acts of corruption.

23 By the first plea, the applicants submit that the Commission wrongly classified the ‘patteggiamento’ procedure, which led to the delivery of the judgment of the District Court of Milan, provided for in Article 444 of the Codice di procedura penale (Code of Criminal Procedure) as a ‘plea bargain’ procedure and that, in the context of that procedure, CY and CV had acknowledged their guilt. That conclusion is wrong, since, by delivering a judgment on the basis of that provision, the national court did not make an assessment of the facts or of the guilt of the defendants.

24 Furthermore, it follows from Article 445(1) bis of the Code of Criminal Procedure that a judgment delivered on the basis of Article 444 of that code is not a judgment of conviction. That first provision provides that such a judgment may be only be considered ‘equivalent’ to a conviction, which implicitly demonstrates that a ‘patteggiamento’ judgment cannot be classified as a judgment of conviction.

25 By the second plea, the applicants submit that the Commission infringed Article 136(1)(d)(ii) of Regulation 2018/1046 in regarding the judgment of the District Court of Milan as a valid basis for excluding LKIBS from participating in award procedures governed, inter alia, by Regulation 2018/1046. While they do not dispute that the judgment of the District Court of Milan is a final judgment, they submit that it does not establish that CY and CV are guilty of the crime of corruption.

26 By the third plea, the applicants submit that the Commission was obliged to take national law into consideration when interpreting the judgment of the District Court of Milan. In particular, it should have considered that judgment in the light of Article 445(1) bis of the Code of Criminal Procedure, from which it is clear that a judgment delivered on the basis of Article 444 of that code may not be used in an administrative procedure such as that which led to the adoption of the contested decision.

27 The Commission submits that the first three pleas should be rejected.

28 Article 136(1)(d)(ii) of Regulation 2018/1046 provides that ‘the authorising officer responsible shall exclude a person or entity referred to in Article 135(2) from participating in award procedures governed by this Regulation or from being selected for implementing Union funds where that person or entity is in one or more of the following exclusion situations: … it has been established by a final judgment that the person or entity is guilty of … corruption, as defined in Article 4(2) of Directive (EU) 2017/1371 or … as defined in other applicable laws’.

29 In the contested decision, the Commission found, in essence, that the judgment of the District Court of Milan was a final judgment and that, by requesting and consenting to the application of a reduced penalty, CY and CV had acknowledged their guilt in respect of acts of corruption within the meaning of Article 136(1)(d)(ii) of Regulation 2018/1046.

30 In that regard, first, it must be held that it is clear from that judgment that CY and CV, in their capacity of [ confidential ] ( 2 ) of the ‘Lattanzio Group’, including Lattanzio Advisory, which became LAIC, and other companies in that group, were accused by the public prosecutor’s office with conduct of the case, inter alia, of corruption within the meaning of the Italian Criminal Code. Those persons offered sums of money to officials of the Republic of North Macedonia and agreed with them on payments of sums of money and other services or benefits in order to obtain the stable reliance of those officials in the interests of Lattanzio Advisory and the ‘Lattanzio Group’ in the context of calls for tenders for contracts financed by the European Union in that State.

31 Secondly, it is clear from that judgment that the accused persons submitted a request for the special form of procedure provided for in Article 444 of the Code of Criminal Procedure to be applied and that the public prosecutor’s office agreed to that request.

32 Thirdly, the Tribunale di Milano (District Court, Milan) found, in essence, that the evidence before it demonstrated sufficiently, first, that there were incriminating facts, next, that those facts corresponded to a criminal offence, inter alia, that of corruption within the meaning of the Italian Criminal Code, and, finally, that those facts could be attributed to the accused persons. The Tribunale di Milano (District Court, Milan) also found that: there were no grounds for extinguishing the offence, nor defects in the procedure, as could be inferred from the investigatory measures and, in particular, the sources of evidence provided; that the parties had validly given their consent; that the facts alleged against the accused persons had been correctly classified in law; and, that the penalty negotiated was appropriate for the criminal offence at issue.

33 On the basis of those findings, the Tribunale di Milano (District Court, Milan) imposed on CY and CV a suspended sentence of two years’ imprisonment and on Lattanzio Advisory, which became LAIC, a financial penalty of EUR 80 000.

34 Thus it is clear from the judgment of the District Court of Milan, as confirmed by the applicants at the hearing, in essence, that there was sufficient proof of the incriminating facts, which were classified in law as being acts of corruption within the meaning of the Italian Criminal Code; that those acts could be attributed, notably, to CY and CV; and, that a suspended sentence of imprisonment was imposed on them for those acts. In addition, a financial penalty was imposed on Lattanzio Advisory, which became LAIC, for the same acts.

35 As regards the question whether the judgment of the District Court of Milan constitutes a final judgment establishing that the persons and entities concerned were guilty of corruption, within the meaning of Article 136(1)(d)(ii) of Regulation 2018/1046, it is common ground between the parties that that judgment is a final judgment.

36 As regards the condition that it must be established, by such a final judgment, that the person or entity in question is guilty of acts of corruption, it should be observed that the wording of Article 136(1)(d)(ii) of Regulation 2018/1046 does not specify whether a final judgment delivered in the context of a special form or criminal procedure, such as the ‘patteggiamento’ procedure provided for in the Code of Criminal Procedure, which, without formally declaring that the accused persons are guilty of acts of corruption, established that the acts may be attributed to them and imposes, for those acts, a sentence and a financial penalty, must be regarded as satisfying that condition.

37 In those circumstances, it is necessary to give a contextual and teleological interpretation of Article 136(1)(d)(ii) of Regulation 2018/1046 (see, by analogy, judgment of 4 March 2020, Bank BGŻ BNP Paribas , C‑183/18, EU:C:2020:153, paragraphs 42 and 43).

38 As regards the context of that provision, it must be observed that the provisions of Regulation 2018/1046, including those in Title V, Chapter 2, Section 2 thereof, relating to the Early Detection and Exclusion System, which includes Article 136(1)(d)(ii), of that regulation, are administrative and not criminal provisions. In particular, pursuant to Article 91 of Regulation 2018/1046, which is within Title IV, under Section 1 of Chapter 5, entitled ‘liability of financial actors’, is without prejudice to any liability under criminal law which financial actors may incur as provided for in applicable national law and in the provisions in force concerning the protection of the financial interests of the European Union and the fight against corruption involving EU officials or officials of Member States.

39 Thus, as an administrative provision, Article 136(1)(d) of Regulation 2018/1046 does not seek to establish the criminal liability, in national law, of a natural or legal person, but merely defines the cases in which that person must be excluded from award procedures governed by that regulation, which includes cases of corruption, which is referred to in Article 136(1)(d)(ii) of that regulation.

40 As regards the teleological interpretation of Article 136(1)(d)(ii) of Regulation 2018/1046, it must be noted that it is clear from both recital 64 of that regulation and in Article 135(1) thereof that the objective of the exclusion system is to ensure the protection of the financial interests of the European Union. Thus, first, Article 136(1)(d)(ii) of Regulation 2018/1046 seeks to exclude persons and entities that, owing to their conduct, are likely to represent a risk for the financial interests of the European Union. Secondly, that provision enables the Commission to comply with the obligation of sound financial management of the EU’s resources which is imposed on it by Article 317 TFEU (see, to that effect, judgment 27 September 2023, Imdea Materiales v Commission , T‑765/21, not published, EU:T:2023:588, paragraph 81).

41 In addition, it is specifically in order to avoid the risk of harming the financial interests of the European Union that Regulation 2018/1046 lays down the cases, such as those provided for in Article 136(2) and (5), permitting the provisional exclusion of tenderers from the award procedures that it governs, even in the absence of a final judgment establishing the guilt of the persons or entities concerned.

42 Furthermore, it is settled case-law that the application of national rules must not undermine the effectiveness of an EU measure (judgment of 16 May 2024, Toplofikatsia Sofia (Concept of the defendant’s domicile) , C‑222/23, EU:C:2024:405, paragraph 55). Thus, where a provision of EU law is open to several interpretations, preference must be given to the interpretation which ensures that the provision retains its effectiveness (see judgment of 23 November 2023, EVN Business Service and Others , C‑480/22, EU:C:2023:918, paragraph 37 and the case-law cited).

43 A strict interpretation of Article 136(1)(d)(ii) of Regulation 2018/1046, as proposed by the applicants, would be liable to harm the effectiveness of that provision in that it would have the consequence of enabling persons and entities upon whom, by a final judgment, sentences and financial penalties have been imposed for acts of corruption nevertheless to participate in award procedures for public contracts financed by the budget of the European Union, thus posing a risk for the financial interests of the European Union and the sound financial management of its resources.

44 Therefore, it must be held that a final judgment, such as that of the judgment of the District Court of Milan, which, without giving a formal ruling on the guilt of the persons or entities accused, nevertheless establishes, in essence, that the acts of corruption that may be attributed to them and imposes on them, for those acts, a sentence and financial penalty, falls within Article 136(1)(d)(ii) of Regulation 2018/1046.

45 That conclusion is not called into question by the applicants’ arguments.

46 In the first place, the applicants submit that the contested decision is vitiated by several translation errors. However, even if those errors were to be established, they would have no effect on the legality of that decision, to the extent that they do not affect the interpretation of Article 136(1)(d)(ii) of Regulation 2018/1046 upheld in the present judgment, nor the essential elements of the judgment of the District Court of Milan, as summarised in paragraphs 30 to 34 above and confirmed by the parties at the hearing.

47 In the second place, the applicants alleged that the national court cannot, pursuant to Article 444 of the Code of Criminal Procedure, deliver an ‘acquittal’, within the meaning of Article 530 of that code, even if the case file includes proof of the innocence of the accused person.

48 That interpretation by the applicants of those provisions of national law, even if correct, has no effect, however, on the fact that it is clear from the judgment of the District Court of Milan, as summarised in paragraphs 30 to 34 above, inter alia, that there was sufficient proof that the acts of corruption could be attributed to CY and CV, who asked to be able to benefit from the procedure provided for in Article 444 of the Code of Criminal Procedure, and that, on the other hand, there was no clear proof of their innocence.

49 In the third place, the applicants submit that Article 445(1) bis of the Code of Criminal procedure does not provide, contrary to the Commission’s finding in the contested decision, that a ‘sentenza di patteggiamento’ delivered pursuant to Article 444 of that code constitutes a criminal conviction, but only that such a judgment may be treated as equivalent to a conviction under certain conditions. In addition, they emphasise the differences between a judgment delivered on the basis of Article 444 of that code and a conviction delivered on the basis of Article 533 thereof.

50 In that regard, first, it suffices to note that those arguments concern the classification in Italian law of the judgment of the District Court of Milan and the differences that may exist between the effects of such a judgment and those following a criminal conviction within the meaning of Article 533 of the Code of Criminal Procedure. Such difference are not capable of affecting the interpretation of Article 136(1)(d)(ii) of Regulation 2018/1046, which appears in paragraph 44 above.

51 Second, and in any event, it must be observed, as the Commission has done, that, in accordance with the last sentence of Article 445(1) bis of the Code of Criminal Procedure, and subject to the exceptions provided for in that regard in the first two sentences of that provisions, a judgment delivered on the basis of Article 444 of that code is ‘equivalent’ to a conviction.

52 Furthermore, the Court of Justice has already had occasion to hold that a judgment which has become final and delivered under the ‘patteggiamento’ procedure provided for in Article 444 of the Code of Criminal Procedure, constituted, for the purpose of ascertaining whether the conditions for the application of the principle ne bis in idem enshrined in Article 50 of the Charter were met, a criminal conviction which has become final (judgment of 20 March 2018, Garlsson Real Estate and Others , C‑537/16, EU:C:2018:193, paragraphs 14, 30, 59 and 63).

53 In the fourth place, it is true, as the applicants observe, that the Commission was wrong to state, in recital 40 of the contested decision, that, in requesting and giving their consent to the application of a reduced sentence, such as that imposed on them by the Tribunale di Milano (District Court, Milan), the applicants had acknowledged their guilt. Such an explicit acknowledgement of guilt is not apparent from that judgment. However, in order to conclude that the judgment falls within Article 136(1)(d)(ii) of Regulation 2018/1046, the Commission did not rely solely on that acknowledgment, but it also took into account, in recitals 36 to 38 of the contested decision, the fact, recalled in paragraphs 32 and 34 above, that, according to that judgment, there was sufficient proof according to which, inter alia, the incriminating facts could be attributed to the accused persons, that Article 445(1) bis of the Code of Criminal Procedure treats judgments delivered on the basis of Article 444 of that code as being equivalent to a conviction, and that Article 136(1)(d)(ii) of Regulation 2018/1046 does not distinguish between final judgments according to whether or not they were delivered following an agreement made between the persons concerned and the public prosecutor’s office.

54 In the fifth place, the applicants raise an argument based on the first sentence of Article 445(1) bis of the Code of Criminal Procedure, according to which a judgment delivered on the basis of Article 444 of that code does not produce effects and cannot be used as evidence in, inter alia, administrative procedures. According to them, since the procedure which led to the adoption of the contested decision is administrative in nature, the Commission is prevented from relying on the judgment of the District Court of Milan in order to adopt it.

55 That argument must be rejected since it amounts to a submission that a provision of national law can preclude the application of a provision of EU law. That argument is therefore incompatible with the principle of the primacy of EU law, which establishes the pre-eminence of EU law over the law of the Member States. That principle therefore requires all Member State bodies to give full effect to the various EU provisions, and the law of the Member States may not undermine the effect accorded to those various provisions in the territory of those States (see judgment of 11 January 2024, Global Ink Trade , C‑537/22, EU:C:2024:6, paragraph 23 and the case-law cited), By virtue of the principle of primacy of EU law, rules of national law, even of a constitutional order, cannot be allowed to undermine the unity and effectiveness of EU law (judgment of 21 December 2021, Randstad Italia , C‑497/20, EU:C:2021:1037, paragraph 52).

56 In the sixth place, the argument raised by the applicants at the hearing, based on the judgment of 18 December 2024, TP v Commission (T‑776/22, under appeal, EU:T:2024:908), must be rejected. In paragraphs 44 and 45 of that judgment, the Court held that the authorising officer responsible when adopting an exclusion measure based on Article 136(1)(b) to (d) and (f) to (h) of Regulation 2018/1046, appeared to be bound by the legal classification of the conduct in question, adopted in a final judgment or in a final administrative decision, without having the slightest margin of discretion in that regard. However, in the present case, it is not a matter of adopting a different legal classification of the conduct in question from that adopted in the judgment of the District Court of Milan, but of interpreting a provision of EU law in order to establish whether such a judgment, taking account of the legal classifications such as they are set out therein, falls within its scope.

57 In the light of all the foregoing considerations, the first three pleas must be rejected as being unfounded.

…

The eighth plea, alleging an infringement of the right to be heard enshrined in Article 41(2)(a) of the Charter

…

124 Since none of the applicants’ pleas has been upheld, the action must be dismissed in its entirety.

Costs

125 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

126 Since the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Commission, including those relating to the interlocutory proceedings.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1. Dismisses the action;

2. Orders Lattanzio KIBS SpA, CY, CV and CW to pay the costs, including those relating to the interlocutory proceedings.

Kornezov

Kecsmár

Kingston

Delivered in open court in Luxembourg on 23 July 2025.

[Signatures]

* Language of the case: English.

1 Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.

2 Confidential information redacted.