Article 436 Spanish Criminal Code: Fraud in Public Procurement

Article 436 of the Spanish Criminal Code punishes the public official who, acting by reason of his office in any of the stages of public procurement or in the settlement of public funds or assets, colludes with the interested parties or uses any other device to defraud a public body. The penalty is imprisonment of two to six years with disqualification of six to ten years, and the private individual who colludes receives the same custodial penalty together with a ban on public subsidies, on contracting with the public sector and on tax and social security benefits.

Wording of Article 436 of the Spanish Criminal Code

Elements of the offence

1. A perpetrator who is a person in authority or public official intervening by reason of his office in an act of public procurement or in a settlement of public funds.
2. Collusion with the interested parties, or the use of any other device, understood as a concerted arrangement or a manoeuvre directed at the public body.
3. The purpose of defrauding a public body, which is an element of intent and does not require that the loss actually materialise.
4. For the private individual, a concerted arrangement with the official, and not merely a benefit obtained from an irregular procedure.

Defence strategy

Irregularity is not fraud. Public procurement is dense with formal requirements, and a breach of them is not this offence. Splitting a contract, an insufficiently reasoned award, a defective technical specification or an emergency procedure used loosely are administrative irregularities. The offence requires collusion or a device aimed at defrauding. The defence establishes what the irregularity consisted of and whether the public body suffered or risked any loss.

The position of the private contractor. The private individual answers only where he colluded with the official. A contractor who submitted a bid, who benefited from a specification favourable to his product, or who was awarded a contract through a defective procedure, has not thereby colluded. The defence traces the actual communications between the parties, since the prosecution frequently infers the arrangement from the outcome alone.

Intervention by reason of office. The official must have intervened by reason of his office in the procurement or settlement. Members of a body who voted on a proposal prepared by others, and officials who reported on a partial technical aspect, are in a materially different position from the person who drafted the specification or chaired the award panel. Individualising the role is what determines liability.

Quantification and restitution. Where a loss was caused, its quantification governs both the sentence and the civil liability, and it is habitually calculated as the whole contract value rather than as the overpayment. The defence produces a valuation of the works or supplies actually delivered, and restitution of any excess before trial founds the mitigating circumstance of reparation, which in this bracket is what can bring the sentence to the two-year threshold.

• Article 404: prevarication by officials
• Article 419: bribery contrary to duty
• Spanish Criminal Code by article
• Spanish-language entry

This entry is provided for information only and does not constitute legal advice. The application of any provision depends on the circumstances of the individual case and requires examination of the case file by a qualified lawyer.