Unlike most countries, Italy counts the time when a first conviction is being appealed as part of the limitation period.
As many cases take years to come to court in the first place, with suspects then allowed two appeals with hearings that can stretch over months, convicted criminals can often rely on running out the clock to avoid jail.
Under the new law, approved by parliament late on Wednesday, the first 18 months after an initial conviction will not be part of the limitations period, nor will the 18 months after a conviction is upheld if the defence takes the case to the final court of appeal.
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The highest-profile case to time out recently was former Prime Minister Silvio Berlusconi's 2015 conviction for bribing a senator in 2006, in an attempt to bring down the Italian government at the time.
Had the new law been in place two years ago, the additional three years for the statute of limitations might have provided enough time to see Berlusconi's three-year prison sentence confirmed on appeal.
The new law also starts the limitations counter for violent and sexual crimes against minors from the victim's 18th birthday.
And it introduces a six-month deadline for judges carrying out a preliminary examination of a case to make a decision on whether to send it to court or shelve it.
For terrorism and mafia cases, a longer period of 15 months will be allowed.
The law also toughens sentences for burglary and purse snatching-type thefts, lifting the minimum sentence to three years from one. For armed robbery the minimum was raised to four years from three.