Corporate crimes in Spain

Corporate crimes are the crimes punishing abuses of power carried out within a company by people with an influential position, that is, the de facto or de jure administrators and partners. Their behaviour may affect the assets of the legal entity and the persons related to it and even damage the general economic order.

Chapter XIII of Title XIII of the Criminal Code regulates corporate crimes against assets and the socioeconomic order in Spain. Under this regulation, companies are cooperatives, savings banks, mutual companies, financial or credit institutions, foundations, business companies, or any other entity of a similar nature. It is a numerus apertus and its application extends to any corporate form, incorporated or information with a permanent market share.

The requirement for the prosecution of corporate crimes

Corporate crimes are semi-public crimes, insofar as there is a requirement for criminal prosecution. According to the Supreme Court in its judgment nº 260/2004 of 4 June 2004, the basis of this requirement is the principle of minimal intervention in criminal law, since civil proceedings may be sufficient to safeguard the individual rights of the persons concerned. Consequently, corporate crimes may be prosecuted at the request of a party, using a complaint of the aggrieved person or the Prosecution Office in the representation of a minor or a disabled person. There exists an exception when the crime affects the general interests of economic content or a plurality of persons, in which case the complaint of the aggrieved person will not be necessary.

The crime of false accounting

The accounting of a company is an indispensable instrument that reflects its financial assets. The transparency of the company’s administration and the accuracy of the information about its legal and financial situation are crucial for the proper functioning of the company and the economic interests of parties related to it.

The crime of false accounting punishes the de facto or de jure administrators, (…) who falsify the statements or other documents that should reflect the legal or economic situation of the company. For this type of crime to occur, the administrator must not only lie or alter the real situation to the detriment of the partners, the business, or a third party but also do so in such a way to cause said economic damage. In other words, there is a deliberate distortion of the statements to cause harm. This crime occurs before the signing when the formulated and (where appropriate) audited annual accounts begin the reporting process to the partners. The legal assets protected are both the commercial trade, and the company and third parties’ interests. This criminal conduct is punishable by one to three years imprisonment and a fine of six to twelve months unless there is economic damage, in which case the punishment is of 2 to 3 three years imprisonment and a fine of 9 to 12 months. It is worth mentioning that the Criminal Code has a fine per day system, in which the judge determines the daily quota according to the financial capacity of the convicted person.

On the other hand, and according to the jurisprudence of the Supreme Court, the Treasury is not admitted as a taxable person, since Article 310 already includes the specific crime of false accounting to deceive the Treasury.

The crime of abusive or harmful agreements

The crime of abusive agreements prohibits partners and administrators from taking advantage of their majority situation, from imposing abusive deals to the detriment of other partners. The deals penalized are those adopted for their own or third parties’ benefit, with no benefits for the company.

Fictitious agreements crimes protect the company and its partners against the abuse of power by some of its members. Imposing or taking advantage for oneself or a third party, of a detrimental agreement to the partners and the company adopted by a fictitious majority, is punishable. Such majority may be simulated by abuse of a blank signature, undue attribution or illicit denial of voting rights to those who are legally entitled, or any other similar means.

Articles 291 and 292 of the Criminal Code in Spain criminalize these conducts. The penalty is of six months to three years imprisonment and a fine of up to three times the benefit obtained from the agreement.

The crime of denial of corporate rights

This crime, provided for in article 293 of the Criminal Code, punishes the obstruction of the political and economic rights recognized to each partner in commercial law. This figure covers specifically the right to information, the right to participate in the management or control of the company activity, and the right to preferential subscription of shares. In practice, the de facto or de jure administrators who prevent or deny, without any legal reason, any of those corporate rights, are punishable with a fine of six to twelve months.

It requires persistent conduct with abuse of office in open violation of corporate law and not a mere isolated and sporadic refusal.

The crime of obstruction to inspection activity

This crime protects the clarity and transparency that companies acting in markets subject to administrative supervision must comply with regarding people and inspection bodies. The concealment of financial or political information about a company may affect the general economic order, and Article 294 of the Criminal Code sanctions the de facto or de jure administrators who deny or prevent inspection or supervisory actions.

Such conduct is punishable by six months to three years imprisonment or a fine of 12 to 24 months.

Compliance with corporate laws is becoming increasingly important. Companies and their partners must be aware not to commit corporate crimes that may be unlawful and punishable.

Inés Castro Rivera

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