Case Explained: Draft Organic Law On Public Integrity: A Further Step In The Fight Against Corruption In Spain – Legal Perspective

The Council of Ministers has approved the Draft Organic Law on Public Integrity, a wide‑ranging legislative initiative designed to prevent corruption—understood in a broad and comprehensive sense—and to strengthen the mechanisms for its detection, investigation, and sanctioning across both the public and private sectors.

Given its status as a draft bill, the proposed legislation has not yet entered into force and may still be subject to amendments prior to final approval. That said, the current text already provides a sufficiently clear indication of the regulatory direction and makes early preparation advisable.

While the Draft has a broader scope, the analysis below focuses on those elements expected to have the most significant impact on companies.

KEY TAKEAWAYS

• Corporate law obligations: The Draft introduces the mandatory registration of shareholdings with the Commercial Registry, together with additional disclosure and information obligations under the Spanish Capital Companies Act.

Enhanced controls in public procurement: Entities seeking to contract with the public sector will be required to implement a criminal compliance model—specifically, an “appropriate organization and management model for integrity and the prevention of criminal offenses, together with effective supervision thereof.” In addition, all participants involved in public procurement procedures must execute conflict‑of‑interest declarations.

• Stricter oversight of Political Parties: The Draft establishes new control obligations relating to audits and introduces more stringent oversight of political donations. These measures significantly increase the level of regulatory scrutiny and, consequently, the associated risk exposure related to donations.

• Potential creation of specialized judicial divisions: The Draft contemplates the possibility of creating specialized divisions within the Courts of First Instance and the Provincial Courts specifically dedicated to anti‑corruption matters and offenses against the Public Administration.

• Harsher penalties and sanctions for corruption: The sanctioning framework applicable to both legal entities and individuals is substantially reinforced.

First, the Draft allows for the imposition of fines calculated on the basis of either the company’s annual turnover or the unlawful benefit obtained. Second, it introduces mandatory disqualification measures—which were previously discretionary—preventing offenders from obtaining public subsidies and grants, contracting with the public sector, and benefiting from tax or Social Security incentives (“blacklisting”).

With respect to individuals, the Draft also provides for an increase in maximum prison sentences in certain cases for corruption cases, which may reach up to 20 years.

• Extension of statutes of limitation: In cases involving corruption and offenses against the Public Administration, the Draft proposes extending the ordinary statute of limitations from five to seven years for offenses punishable by a maximum prison sentence of five years.

• New compliance obligations linked to internal reporting systems: The Draft establishes an obligation requiring all bodies and entities that are required to maintain an internal information system (whistleblowing channel) to also have a compliance or integrity system in place. The draft specifically proposes amending the Whistleblower Protection Act in order to introduce the following provision: “(h) To have a policy or strategy setting out the general principles governing internal reporting systems and the protection of whistleblowers, which is duly publicized within the entity or body. This policy must be integrated into the entity’s or body’s compliance or integrity system.”

• Confiscation of criminal proceeds: The Draft introduces new prerogatives aimed at facilitating the confiscation of assets derived from criminal conduct, with the stated objective of recovering the damage caused by such offenses.

WHAT DOES THIS MEAN IN PRACTICAL TERMS?

From a practical standpoint, companies will need to further reinforce their criminal compliance management systems, particularly in connection with activities involving corruption and the public sector.

This need is driven, on the one hand, by the authorities’ increased focus on detection and prosecution, supported by greater resources and extended investigation timeframes. On the other hand, the consequences of non‑compliance are significantly more severe, ranging from higher financial penalties to the mandatory imposition of disqualification measures.

Against this backdrop, early and proactive preparation will be essential to mitigating both legal and reputational risks in an increasingly demanding regulatory environment.