Introduction
Spanish bribery legislation
OECD report
Comment


?Introduction

In December 2012 the Organisation for Economic Cooperation and Development (OECD) Working Group on Bribery adopted the Phase 3 Report on Implementing the OECD Anti-bribery Convention in Spain. Through this report, the working group evaluated and made recommendations regarding Spain's implementation of the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions. The convention entered into force in Spain on February 22 2000, although it was not transposed into domestic legislation until Law 15/2003 was passed to amend the Spanish Criminal Code.

This update first analyses the criminal offences of corruption and corruption in international business transactions as defined in the Criminal Code, and then summarises the report's conclusions and recommendations.

Spanish bribery legislation

Domestic bribery
The Criminal Code provides that the corruption of public officials is a criminal offence for both the authority or public official who receives or requests a bribe (passive corruption), and the individual or company who offers or gives such bribe (active corruption).

The gravity of the penalty will depend on the purpose of the bribe, as follows:

  • when the act induced by the bribe is unlawful;
  • when the act induced by the bribe is in accordance with the official's duties; and
  • when the bribe is delivered or offered without the expectation of anything in return from the public official.

A criminal offence occurs as soon as the bribe is requested or offered. Therefore, it is unnecessary for the bribe to be accepted or given in order for a criminal offence to have been committed.

For the purposes of domestic bribery, the definition of 'public officer' encompasses Spanish public officials, public officials of the European Union or public officials of any other EU member state.

Both the individuals who carry out these acts of bribery and the legal persons on whose behalf and for whose benefit they act shall be held liable for the criminal offence.

Bribery of foreign officials in international business transactions
Article 445 of the Criminal Code defines the criminal offence of 'corruption in international business transactions'. This offence has the following characteristics:

  • The offence punishes those who offer bribes or agree to bribe foreign public officials or public officials of international organisations – that is, only active bribery is penalised.
  • The bribe must be aimed at making the public official take a specific action or refrain from carrying out an act inherent to his or her position.
  • The purpose of the bribe must be to obtain or conserve a contract or other irregular benefit while carrying out international financial activities. Only serious cases aimed at bribing a public official in order to obtain an irregular benefit within the scope of a public procurement procedure are considered criminal offences. Therefore, it would seem that the following cases do not fall within the scope of this criminal offence:
    • the act induced by the bribe is in accordance with the official's duties; or
    • the bribe is paid without the expectation of anything in return from the public official.

For the purposes of this criminal offence, the following are considered to be foreign public officials:

  • any individual who holds a legislative, administrative or judicial office or who exercises a public duty, including in a public institution or a public company, in a foreign country that is not a member state of the European Union; and
  • any public official or officer of an international public organisation outside the European Union.

The punitive measures taken against perpetrators of this criminal offence are:

  • a prison term of two to six years;
  • a fine; and
  • a ban on entering into public sector contracts, as well as disqualification from being able to obtain public subsidies, tax or Social Security benefits for a period of seven to 12 years.

Both the individuals who carry out these acts of bribery and the legal persons on whose behalf and for whose benefit they acted shall be held liable for this criminal offence.

Jurisdiction
In accordance with Spanish law and jurisprudence, Spanish courts are competent to investigate and prosecute foreign corruption when:

  • perpetrated by Spanish nationals under certain circumstances;
  • totally or partially perpetrated in Spanish territory;
  • preparatory acts for its perpetration are carried out in Spanish territory; and
  • the damage, profit or effects of the criminal offence take place in Spanish territory.

OECD report

Summary
In its report, the OECD Working Group on Bribery welcomed the 2010 amendment to the Criminal Code that introduced a separate foreign bribery offence and was encouraged by the entry into force of a regime for legal persons' liability. However, the working group was concerned that the new liability regime excludes a large number of state-owned companies from its scope.

On the other hand, the working group expressed its serious concerns that, almost 13 years after the entry into force of the Spanish foreign bribery offence, no individual or company has yet been prosecuted or punished under this offence. It was particularly alarmed that at the time of the report, the Spanish foreign corruption criminal offence had given rise to only seven investigations, all of which had been closed. Furthermore, the working group was concerned by the low number of foreign bribery investigations given the size of the Spanish economy and its significant external commercial activities, including high-risk sectors and countries.

Working group's recommendations
The OECD report concluded with a wide range of recommendations and issues for follow-up to ensure the effective investigation, prosecution and punishment of foreign bribery in Spain. The most significant recommendations can be summarised as follows.

Foreign bribery offence
The report recommended that Spain:

  • clarify that all bribes to a foreign public official in order to affect the official exercising his or her discretion would constitute the basis for a foreign bribery criminal offence, including when the act induced by the bribe is in accordance with the official's duties and regardless of whether:
    • the company would have been awarded the business through the proper channels anyway; and
    • the benefit obtained is irregular; and
  • clarify that the definition of foreign public officials' encompasses officers of the European Union or civil servants who are nationals of another member state.

Liability of legal persons
The report recommended that Spain:

  • amend the Criminal Code to ensure that state-owned and state-controlled companies can also be held liable for foreign bribery;
  • take steps to increase the effectiveness of the liability of legal persons in foreign bribery cases, including raising awareness among prosecuting authorities;
  • promote, together with the relevant professional associations, internal controls, ethics and compliance programmes or measures in businesses involved in commercial transactions abroad; and
  • ensure that the implementation of compliance programmes and internal controls by a legal person cannot be used as a defence in order to avoid liability.

Whistleblowing and reporting suspicions of foreign bribery
The report recommended that Spain:

  • create and publicise clear means by which reports of suspected foreign bribery can be made by both the private sector and the general public to law enforcement officers;
  • establish an internal reporting procedure within the Ministry of Foreign Affairs; and
  • adopt an appropriate regulatory framework to protect public and private sector employees from any disciplinary action when they report suspicions of foreign bribery in good faith and on reasonable grounds.

Investigation and prosecution of foreign bribery cases
The report recommended that Spain:

  • reviews its overall approach to enforcement in order to combat international bribery effectively;
  • ensure that the police forces and magistrates receive adequate and specific training on foreign bribery criminal offences;
  • ensure that foreign bribery allegations are not closed prematurely; and
  • use proactive steps to gather information from diverse sources and enhance investigations.

Follow-up measures
The working group requested that Spain provide a written self-assessment report by December 2013 on its progress in amending the Criminal Code and prosecuting foreign bribery cases.

The working group further invited Spain to submit a written follow-up report on all recommendations and follow-up issues by December 2014.

The working group will take appropriate measures throughout this process, including the possibility of a Phase 3bis evaluation.

Comment

It is difficult to assess the impact that the OECD report will have on both the Spanish legislation on foreign bribery and its enforcement by the law enforcement authorities. So far, there are no plans to amend the Criminal Code to include the recommendations of the working group. However, it would be reasonable to believe that in light of the OECD report, the Spanish authorities – the Public Prosecution Office, police and investigative judges – will step up their efforts and effectiveness in the investigation and prosecution of foreign bribery allegations.

For further information on this topic please contact Adriana de Buerba or Juan Palomino Segura at Pérez-Llorca by telephone (+34 91 436 04 20), fax (+34 91 436 04 30) or email (adebuerba@perezllorca.com or jpalomino@perezllorca.com).

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