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Last Updated: Tuesday, 3 May, 2005, 10:27 GMT 11:27 UK
EU legal victory for Berlusconi
Italian Prime Minister Silvio Berlusconi
Mr Berlusconi has reduced the penalties for false accounting
The European Union's top court has upheld controversial changes to Italian law which make it harder to prosecute cases of alleged business fraud.

The European Court of Justice (ECJ) said it could not overrule the Italian law, which was introduced by Prime Minister Silvio Berlusconi in 2002.

Critics say the prime minister introduced the law to avoid charges of false accounting.

Most forms of false accounting are now civil rather than criminal offences.

Prosecutors in Milan asked the ECJ in Luxembourg to rule that the new leniency ran counter to a 37-year-old EU directive. But the court said EU directives could not be applied directly to individuals.

However, it did say the Italian courts could throw out the law if they believed it was incompatible with European standards of appropriate punishment.

Mr Berlusconi has stood trial in several corruption cases relating to his business activities before he became prime minister. He has either been acquitted, or his convictions have been reversed on appeal or annulled because the statute of limitations on prosecutions had run out.

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