Transnational Bribery of Foreign Officials: Article 286 ter of the Criminal Code

The international expansion of Spanish companies goes hand in hand with a major criminal-law risk: irregular payments to officials in other countries to win or keep a contract. Article 286 ter of the Spanish Criminal Code (CP) defines transnational bribery —also known as bribery in international economic transactions— with penalties of imprisonment of three to six years. As criminal lawyers specialising in offences against the public administration and corruption, we explain what the provision punishes, how it bears on the company and how the defence is built.

What Art. 286 ter CP Punishes

Art. 286 ter CP punishes those who, through the offer, promise or giving of any undue benefit or advantage —whether financial or of another kind— bribe or attempt to bribe, directly or through an intermediary, a public authority or official for the benefit of that person or of a third party, so that they act or refrain from acting in relation to the exercise of public functions in order to obtain or retain a contract, business or any other competitive advantage in the conduct of international economic activities.

The penalty is imprisonment of three to six years and a fine of twelve to twenty-four months, unless the benefit obtained is greater than that amount, in which case the fine is one to three times the amount of the benefit. To this is added, in every case, a ban on contracting with the public sector, the loss of the possibility of obtaining public subsidies or aid and of tax and social-security benefits or incentives, and a ban on taking part in commercial transactions of public significance for a period of seven to twelve years. The provision applies unless the conduct is already punished by a more serious penalty under another provision of the Code.

Who Is a "Foreign Public Official"

The decisive element of the offence is the recipient of the bribe. Art. 286 ter CP refers to articles 24 and 427 to define who is a public official for these purposes. Art. 427 CP extends the figure to:

• Any person holding a legislative, administrative or judicial post or employment in a European Union country or in any other foreign country, whether by appointment or election.
• Any person exercising a public function for an EU or foreign country, including a public body or public undertaking, for the European Union or for another public international organisation.
• Any official or agent of the European Union or of a public international organisation.
• Any person carrying out a public-service function managing the European Union's financial interests or taking decisions on those interests.

This is an autonomous concept: what matters is the public function performed, regardless of how the official's home legal system classifies that person.

The Liability of the Legal Person

Transnational bribery is an offence for which the company is liable in its own right. Under art. 31 bis CP, the legal person is criminally liable for offences committed in its name or on its behalf, and for its direct or indirect benefit, by its legal representatives or by those holding powers of organisation and control, as well as for offences committed by subordinates where the duties of supervision, oversight and control have been seriously breached.

For the offences in this chapter, art. 427 bis CP sets out the penalties for the legal person: a fine of two to five years, or of three to five times the benefit obtained where that figure is higher, if the natural person's offence carries imprisonment of more than five years; with lower bands in the remaining cases. In addition, the courts may impose the optional penalties in art. 33.7 CP (suspension of activities, closure of premises, prohibition of activities, disqualification from obtaining subsidies and from contracting with the public sector, judicial intervention and even dissolution).

The International Framework: OECD, FCPA and UK Bribery Act

Art. 286 ter CP is not a stand-alone rule but the Spanish piece of an international anti-corruption framework. Its origin lies in the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which required signatory States to criminalise this conduct. Alongside it sit the United Nations Convention against Corruption and the instruments of the Council of Europe and the European Union.

In practice, companies operating globally must bear in mind that there are foreign laws with extraterritorial reach:

• The US FCPA (Foreign Corrupt Practices Act), which may apply to companies with a connection to the United States.
• The UK Bribery Act, particularly demanding, which even contemplates the corporate offence of failing to prevent bribery.

A single transaction may therefore be investigated at the same time in several jurisdictions. This makes it necessary to coordinate the defence strategy, to assess the scope of the ne bis in idem principle and to anticipate cooperation between authorities. Criminal defence in Spain cannot ignore that cross-border dimension.

Distinction from Related Offences

Transnational bribery must be distinguished from other conduct that, at first sight, resembles it:

• Corruption in business (art. 286 bis CP): this is bribery in the private sector, between private parties (directors, managers or employees of companies) to gain an improper advantage in contracting or in commercial relations. Art. 286 ter, by contrast, requires the recipient to be a foreign or international public official.
• "Domestic" bribery of officials (arts. 419 et seq. CP): this governs bribery of Spanish authorities and officials. Art. 286 ter is the specific form for the international sphere and for obtaining advantages in cross-border economic transactions.

Correct characterisation matters because it determines the applicable penalty, the regime of liability of the legal person and the jurisdiction of the courts themselves.

Lines of Defence

The defence of the company or director under investigation is built on several pillars, which must be assessed from the outset of the proceedings:

1. No act of bribery: contesting that the payment, gift or attention is linked to an act within the recipient's public functions and aimed at obtaining an advantage in an international transaction. Not every entertainment or hospitality expense, within reasonable limits and the customs of the country, amounts to a bribe.
2. Status of the recipient: analysing whether the person receiving the benefit truly qualifies as a public official under art. 427 CP.
3. Effective compliance programme: for the legal person, proving the adoption and effective implementation, before the offence, of an organisation and management model suitable to prevent this kind of conduct, supervised by a body with autonomous powers, in accordance with art. 31 bis CP. Its presence may lead to exemption of the company or, at least, to mitigation of the penalty.
4. Chain of intermediaries and due diligence: reviewing the engagement of agents, consultants and local partners and the due diligence applied, in order to rule out knowledge or wilful blindness as to where the payments went.
5. Evidence and jurisdiction: examining the traceability of the payments, the contracts and the communications, as well as the jurisdiction of the Spanish courts where the facts took place wholly or partly abroad, and any overlap with proceedings in other jurisdictions.

In this field, expert evidence on compliance and financial analysis is often decisive in establishing the degree of corporate control and the true nature of the payments. The settled case law of the Supreme Court requires proof of all the elements of the offence, which leaves a technical margin for defence that should be worked on rigorously.