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“Of the alteration of prices in public bidding and auctions”, is the title of the Chapter VIII, of the Title XIII, about the crimes against the patrimony and the socioeconomic order, of the Book II, where are established the crimes and their punishments, of the Spanish Penal Code (CP).
It is a chapter formed by only one article, the article 262, in which the legislator has tried to gather all the elements referring to this criminal behavior. According to the Spanish Provincial Court of Barcelona´s sentence number 11730/2016: “It is broadly admitted that this precept has its immediate legislative precedent in the previous crime of schemes for altering the price of the things, which contemplates the specificity of alteration of the winning bid price in public auctions, of the article 539 of the punitive text of 1973.”
– Article 262:
Let us see first the content of the article 262, for studying it afterwards. The article 262 says:
“Article 262.
1. Those who request gifts or promises for not taking part in a public bidding or auction; those who try to get the bidders away by means of threats, gifts, promises or any other trick; those who collude with the aim of altering the winning bid price, or those who fraudulently breach or abandon the auction having obtained the awarding, will be punished with the punishment of imprisonment from one to three years and fine from twelve to twenty-four months, as well as special disqualification for bidding in judicial auctions from three to five years. If it is a bidding or auction summoned by the public administration or entities, will be also imposed to the agent and the person or company represented by it the punishment of special disqualification which will comprehend, in any case, the right to contract with public administrations for a term from three to five years.
2. The judge or court will be able to impose some of the consequences established in the article 129 if the guilty pertains to some legal entity, organization or association, including of transitory character, which carries out such activities.
3. Will be exempted from criminal liability the directors, administrators in fact or by right, manager and other members of the current and previous staff of any legal entity, formed or forming, which in that condition has committed any of the facts stated by this article, when they put an end to their participation in them and wholly, continually and diligently cooperate with the competent authorities, providing information and elements of proof which the latter lacks, which are useful for the investigation, detection and punishment of the rest of the persons implicated, always that the following conditions are met:
a) They must cooperate actively in this sense with the authority of the competence that is in charge of the case.
b) These legal entities or physical persons must have presented a request of exemption of the payment of the fine in conformity with the established in the Defense of the Competence Law.
c) Such request must have been presented before the directors, administrators in fact or by right, managers and other current or previous members of the staff of the legal entity, former or forming, have been informed that they are being investigated in relation these facts.
d) It must be also an active collaboration with the judicial authority or the Public Prosecution, providing useful and concrete evidences for assuring the proof of the crime and identifying other authors.”
As we are able to see, it is an article made up by three points: In the first, are established the typical behaviors and their punishments; In the second, is established the possibility of imposing the accessory consequences of the article 129, and; In the third and last point, is established an exemption for the directors, administrators in fact or by right, managers and other current or previous members of the staff of any legal entity.
Let us start with the first of its points. In it, at its outset, are described three typical behaviors: 1) Those who request gifts or promises for not taking part in a public bidding or auction; 2) those who try to get the bidders away by means of threats, gifts, promises or any other trick; 3) those who collude with the aim of altering the winning bid price, or those who fraudulently breach or abandon the auction having obtained the awarding.
Of these three behaviors, the first two already appear in the old article 539 of the CP of 1973, it is the third, the one which was added on the arrival of the CP of 1995, with the aim of avoiding the risks from the corruption surrounding the public auctions. The Spanish Provincial Court of Barcelona´s sentence number 8011/2016 exposes: “The Spanish Supreme Court´s sentence of 27 July 2015 says that it was the scenario of colluding (and not the rest) the last introduced by the legislator with the aim of avoiding the impunity of determined behaviors which were taking place during the public auctions and carried out by the denominated “bidders” (in Spanish “Subasteros”), which colluded in order to achieve winning bid prices for laughable or unreachable prices in prejudice of the executed and in direct or indirect benefit of the former.”
Among these three behaviors, there is another important difference. On the one hand, the first two are crimes of mere activity, being enough with requesting gifts or promises for not taking part in the public auction, or with trying to get the bidders away by means of threats, gifts, promises or any other trick, regardless of whether the wanted result is achieved or not, for understanding committed the crime. On the other hand, the last and third is a crime of result. The Provincial Court of Las Palmas de Gran Canaria´s sentence number 109/2010 says: “All the modalities gathered in the precept are crimes of mere activity in which is enough with carrying out the typical behavior for understanding the crime as consummated. That said, the last modality of behavior gathered, since 1995, in the Penal Code: the breaching or abandonment of the auction having obtained the awarding, is formulated as a crime of result, conceived as fraudulent behavior for not assuming the duties derived from the awarding and which requires the proof of trying to force another auction through provoking with the bid the abandonment of other bidders for in this way to give place to another summon.
In this sense, has been pointed out by the Spanish Provincial Courts; thus, the Sentence from the Provincial Court of Barcelona of 6 October 2006 that; “the typical modality established by the article 262, consisting in abandoning fraudulently the auction having obtained the warding supposes to prove, besides the abandonment or lack of fulfilment of the contract, that it was a fraud, extreme which is not proven in the Sentence. As the doctrine has pointed out, the legislator expressly imposing the fraudulent action for the typicity of the behavior pretended to incriminate not any lack of contractual fulfilment but a behavior of subjects professionally dedicated to buy goods in public auctions, known as “bidders” (in Spanish “Subasteros”) who, abandoning the auction after having obtained the awarding of the good, without waiting the acquisition of this, pretend a new auction without an initial price, provoking in this way a new acquisition of the auctioned good at laughable prices with regard to those of the market. And due to the fact that is used this procedure for obtaining a different price than the resulted from the winning bid price, has to be proven the aim of altering the price of the goods auctioned, in other words, the end of provoking a new auction without being subject to the type.”
This another excerpt from the Spanish Provincial Court of Barcelona´s sentence number 11730/2016 is also clear regarding the characteristic that the breaching or abandonment of the auction must be fraudulent: “Following that, it should be documented, for express demands of typicity, that not all breaching of an auction satisfies the type (objective fact which took place in the present cause and which was declared by Resolution of 7 March 2005), but, according to the wording of the norm, that breach which can be regarded as fraudulent, which makes that it is not enough for the purpose of legal-penal effects to just not judicially deposit the rest of the winning bid price (which can be due to accidental causes alien to the typical behavior). With general character, will be fraudulent that provoked breach which pursues ends not only not protected by the legal order but also repudiated by this. Pretending to concrete more its scope will be intertwined with the willful infringement of the duty of fulfilment of the conditions of the auction by the winning bidder (the only active subject possible) among which is the duty of assuming the conditions of the awarding (causing prejudices to the rest of the bidders or to the own owner of the good executed). In other terms, and according to the more common proceeding, to reach the bidder the higher bid and offer, surpassing the rest but with the intention of not fulfilling the conditions of the awarding provoking the breaching and summon of a new auction in order to obtain the good for a lower price (alteration of the price, different than its normal price in the legal transactions), what impedes to the loyal and in good faith bidders to have access to the good auctioned, affects the executed increasing the amount of the debt and also disturbs the creditor´s right of credit to whom delays its satisfaction.”
Once we have seen the objective elements of the type, we should see the subjective. In the three scenarios we are before a malicious crime, what implies that the active subject should know and want the objective elements of the type, including its eventual modality, when the active subject represents to itself the typical result as probable. We should exclude its commission by imprudence, since the article 262 does not mention anything regarding this, like the article 12 CP demands.
Concerning the legal good protected by the norm, according to the Spanish Provincial Court of Barcelona´s sentence number 8011/2016: “the crime of the article 262 CP protects the freedom of bids in the auctions and of the forming of prices in the market through the free concurrence proscribing that the possible bidders obtain unjustified benefits in prejudice of the administration, of the rest of the bidders and the own bankruptcy proceeding mass.”
On the other hand, the ambit of application of the article 262 CP is extended to all kinds of auctions, irrespective of whether they are private or official, not demanding the precept their condition of judicial or administrative auction. The Spanish Provincial Court of Barcelona´s sentence number 8011/2016 says: “Departing from it, the Chamber cannot share the arguments of the appellants that is not of application the article 262 CP to the behaviors that it contemplates when they are carried out in a private and voluntary auction because it is public, and precisely are summoned to it those, within the public or population in general, who are interested in bidding for awarding to themselves the good auctioned, and precisely this penal type is conceived to protect the freedom of bids in the auctions, the equality of opportunity of the bidders who go to them and of the formation of prices in the market through the free concurrence proscribing that the possible bidders obtain unjustified benefits in prejudice of the administration, the rest of the bidders and the own debtors who auction their own goods. The precept does not demand that they should be judicial or administrative auctions like the appellant tries to make us see, and it is logical that the private and willful auctions open to the public concurrence are also protected, if what is pretended is to obtain the highest price for the goods auctioned, that the rules of the game and market are respected and are discarded trickery and fraudulent maneuvers aimed at making to go out of such free concurrence the bidders whose bids may frustrate the expectations of those who want to award the good to themselves of a lower price than that of the market, for it cannot be forgotten that in this case, who would result damaged by it would be one of the defendants, Mr. Pelayo, co-owner of the good auctioned, who would see diminished his part in the price finally obtained if the other two liquidators of Zaida achieved to get the bidders away, provoking that the two first auctions were deserted and they might award to themselves the good for the 40% of its valuation. In the end, public auction is the one which is opened to the public, if it is organized by a private person, and if it is organized by a public entity we will be before an official auction, being imposed the jurisprudential criterion of the Spanish Supreme Court´s sentence of 25 March 1976. Furthermore, the last point of the article 262 CP establishes that if it is an auction summoned by the Administrations or public entities, besides will be imposed to the agent and the person or legal entity represented by it the punishment special disqualification which will comprehend, in any case, the right to contract with the public Administrations for a term from three to five years; this means that if the action has not that character there will be no place to the imposition of this punishment of disqualification, but the typical behaviors analyzed which are carried out with respect to it will continue being punished.”
Let us now talk about the second point of the article 262. This article makes possible the punishment to such organizations or legal entities not included in the article 31 bis. For this, along the punishment imposed to the author of the crime may be imposed some of the accessory consequences mentioned from the letter c) to g) of the article 33.
In other words:
“c) Suspension of its activities for a term which will not exceed five years.
d) The closure of its premises and establishments for a term which will not exceed five years.
e) Prohibition of carrying out in the future the activities in whose ambit has been committed, favored or covered the crime. This prohibition may be temporal or definitive. If it is temporal, the term will not exceed the fifteen years.
f) Disqualification for obtaining subventions and public helps, contracting with the public sector and enjoying tax benefits or incentives or of the Social Security, for a term which will not exceed fifteen years.
g) Judicial intervention for protecting the workers or creditors´ rights for the term considered necessary, which will not exceed five years.”
In any case, the imposition of any of these accessory consequences has been established as a possibility, an option which will depend on the decision of the judge or court, for clearly this point says “will be able to”.
Lastly, in the third point of the article 262 are exempted from criminal liability “the directors, administrators in fact or by right, manager and other members of the current and previous staff of any legal entity, formed or forming, which in that condition has committed any of the facts stated by this article, when they put an end to their participation in them and wholly, continually and diligently cooperate with the competent authorities, providing information and elements of proof which the latter lacks, which are useful for the investigation, detection and punishment of the rest of the persons implicated”. Always, that the rest of the conditions mentioned in the third point are met.
An exemption, which to some extent resembles the attenuating factor of the fourth point of the article 21 CP, “4º To proceed the guilty, before the criminal proceeding is aimed against him, to confess the infringement to the authorities.”
According to the article 65 of the Competence Defense Law (LDC):
“Article 65. Exemption of the payment of the fine.
1. Without prejudice of the established in the above articles, the National Commission of the Markets and the Competence will exempt a company or physical person of the payment of the fine which it would have been able to impose when:
a) It is the first in providing elements of proof which, to the judgement of the National Commission of the Markets and the Competence, allow it to order an inspection in the terms established in the article 40 in relation to a cartel, always that in the moment of providing them it does not have enough elements to order it, or
b) It is the first of providing elements of proof which, to the judgement of the National Commission of the Markets and the Competence, allow it to check an infringement of the article 1 in relation with a cartel, always that, in the moment of providing the elements, the National Commission of the Markets and the Competence does not have the enough elements of proof for establishing the existence of the infringement and has not been granted an exemption to a company or physical person by virtue of the established in the letter a).”
According to the fourth additional Disposition of the aforementioned LDC:
“2. For the purpose of the established in this law it is understood by cartel all agreement or practice agreed between two or more competitors whose objective consists in coordinating its competitive behavior in the market or to influence in the parameters of the competence through practices like, among others, the set or coordination of buying or selling prices or other commercial conditions, including in relation with the rights of intellectual and industrial property; the assignment of quotes of production or of selling; the allotment of markets and clients, including the colluding in tender, the restrictions in the importations or exportations or the measures against other competitors contrary to the competence.”
What perfectly fits with the typical behaviors described in the article 262.
From a joint interpretation of the article 262.3 CP and the article 65 LDC, we deduce that the law awards the offender who goes to the authorities to confess and infringement before the authorities go to him to investigate it.
Víctor López Camacho.
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