In a further sign European countries are toughening their stance on overseas bribery, Spanish prosecutors have secured their first convictions for bribery of a foreign official. This could mark a watershed moment in the enforcement of Spain’s longstanding foreign bribery laws.
Two individuals recently pleaded guilty to foreign bribery charges in a Madrid court. The two executives at a Spanish publishing company admitted bribing a minister from Equatorial Guinea to secure contracts for the company with the country’s education ministry.
The company itself was not part of the proceedings. Even so, this is a wake-up call for Spanish companies that anti-corruption prosecutors are willing to investigate and prosecute foreign bribery.
In this case, the conduct took place before corporate criminal liability was introduced into the Spanish criminal code in 2010 (and further reformed in 2015).
In brief, Spanish law provides that companies can be held liable for crimes committed on their behalf by their legal representatives or persons entitled to take decisions on the company’s behalf. Companies could also be criminally liable where other individuals commit crimes and the management grossly breached its duties of supervision, surveillance and control. In each case, the criminal conduct has to be for the company’s benefit, direct or indirect. For example, securing a lucrative contract through bribery.
Companies may, however, have a defence if they have suitable compliance programmes in place. And the criminal code sets out the six elements of an effective compliance programme:
risk assessment;
standards and controls to mitigate any criminal risks detected;
financial controls to prevent crimes;
an obligatory whistleblowing channel;
a disciplinary system to sanction violations of the compliance programme; and
periodic review of the compliance programme to make necessary adjustments after serious violations or organisational, structural or economic changes.
With the prosecutors securing their first conviction against individuals for foreign bribery, they are likely to be keen to follow that up with a conviction of a company. And so now would seem like an appropriate time for companies to revisit the requirements listed above and make sure their compliance programme is fit for purpose.
