Airbus Group, NV - Alestis Aerospace - Enagas - Enresa - Hispasat - Indra - International Airlines Group - Red Electrica Corporacion - Ebro Foods
* Attached companies: RTVE- Corporacion de Radio y Television Espanola
* Reference: http://www.sepi.es/es/sectores
Privatization Program
As the size of its public enterprise sector is relatively small, Spain does not have a formal privatization program.
8. Responsible Business Conduct
Spanish companies consider corporate reputation, competitive advantage, and industry trends to be the major driving forces of responsible business conduct (RBC). Initiatives undertaken by the EU and international organizations have influenced companies’ decision to implement RBC, and companies continue to increasingly adhere to its principles. Associations and fora that bring together the heads of leading corporations, business schools and other academic institutions, NGOs and the media are actively contributing to implementation of RBC in Spain. Although the visibility of RBC efforts is still moderate by international standards, in the last two decades there has been a growing interest in it. Today, almost all of Spain’s largest energy, telecommunications, infrastructure, transport, financial services and insurance companies, among many others, have undertaken RBC projects, and such practices are spreading throughout the economy.
The Spanish government has taken some measures to promote RBC since 2002. The government endorsed the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, and the national point of contact is the Ministry of Industry, Trade, and Tourism.
9. Corruption
Spain has a wide variety of laws, regulations, and penalties to address corruption. The legal regime has both civil and criminal sanctions for corruption, bribery, financial malfeasance, etc. Giving or accepting a bribe is a criminal act. Under Section 1255 of the Spanish civil code, corporations and individuals are prohibited from deducting bribes from domestic tax computations. There are laws against tax evasion and regulations for banks and financial institutions to fight money laundering terrorist financing. In addition, the Spanish Criminal Code provides for jail sentences and hefty fines for corporations’ (legal persons) administrators who receive illegal financing.
The Spanish government continues to build on its already strong measures to combat money laundering. After the European Commission threatened to sanction Spain for failing to bring its anti-money laundering regulations in full accordance with the EU’s Fourth Anti-Money Laundering Directive, in 2018, Spain approved measures to modify its money laundering legislation to comply with the EU Directive. These measures establish new obligations for companies to license or register service providers, including identifying ultimate beneficial owners; institute harsher penalties for money laundering offenses; and create public and private whistleblower channels for alleged offenses.
The General State Prosecutor is authorized to investigate and prosecute corruption cases involving funds in excess of roughly USD 500,000. The Office of the Anti-Corruption Prosecutor, a subordinate unit of the General State Prosecutor, investigates and prosecutes domestic and international bribery allegations. There is also the Audiencia Nacional, a corps of magistrates with broad discretion to investigate and prosecute alleged instances of Spanish businesspeople bribing foreign officials.
Spain enforces anti-corruption laws on a generally uniform basis. Public officials are subjected to more scrutiny than private individuals, but several wealthy and well-connected business executives have been successfully prosecuted for corruption. In 2018, Spanish courts conducted 48 corruption cases involving 205 defendants. The courts issued 63 sentences, with 40 including a full or partial guilty verdict.
There is no obvious bias for or against foreign investors. U.S. firms have rarely identified corruption as an obstacle to investment in Spain, although entrenched incumbents have frequently attempted and at times succeeded in blocking the growth of U.S. franchises and technology platforms in both Madrid and Barcelona. As a result, Spain is among the least welcoming countries in Europe for some of the U.S.’s leading technology companies, such as Airbnb, Uber, and Expedia. Although no formal corruption complaints have been lodged, U.S. companies have indicated that they have been disqualified at times from public tenders based on reasons that these companies’ legal counsels did not consider justifiable.
Spain’s rank in Transparency International’s annual Corruption Perceptions Index improved slightly in 2018, with the country climbing to position 41 (from 42 in 2017); its overall score (58) is one of the lowest among Western European countries. Among the Spanish public, corruption continues to be one of the main concerns, second after unemployment.
Spain is a signatory of the Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery and the UN Convention Against Corruption. It has also been a member of the Group of States Against Corruption (GRECO) since 1999. OECD has noted concerns about the low level of foreign bribery enforcement in Spain and the lack of implementation of the enforcement-related recommendations. GRECO highlighted the “limited progress made by Spain in adopting 11 of the group’s recommendations from 2013 to combat corruption. GRECO criticized Spain for failing to adopt of a code of conduct in its Congress and Senate, conduct a thorough review of the financial disclosure regime, or establish an enforcement mechanism for when misconduct occurs.
Resources to Report Corruption
Contact at government agency or agencies are responsible for combating corruption:
Resources to Report Corruption
Ministry of Finance
Alcala, 9
28071 Madrid, Spain
34 91 595 8000
https://ssweb.seap.minhap.es/ayuda/consulta/PTransparencia
informacion.administrativa@minhap.es
Transparency International
National Chapter - Spain
Fundacion Jose Ortega y Gasset
Calle Fortuny, 53, 28010 Madrid
Spain
Telephone: +34 91 700 4105
Email: transparency.spain@transparencia.org.es
Website:http://www.transparencia.org.es/
10. Political and Security Environment
There have been periodic peaceful demonstrations against austerity measures and other social or economic policies. Public sector employees and union members have organized frequent small demonstrations in response to service cuts, privatization, and other government measures.
11. Labor Policies and Practices
Spain’s unemployment rate fell to 14.4 percent at the end of 2018, down from 16.5 percent at the beginning of 2018 and marking the lowest level in a decade-down from its peak of 26.9 percent in 2013. The youth unemployment rate fell to 33.5 percent at the end of 2018, an improvement of almost four percentage points from 2017, but still representing 502,900 unemployed people under the age of 25. Despite these gains, in 2018 Spain maintained the EU’s second highest unemployment and youth unemployment rates after Greece. Steady job creation is due, in part, to Spain’s flourishing tourism industry. In 2018, Spain set a new record with more than 82.6 million visitors (a 0.9 percent increase compared to 2017), who spent more than 89.7 billion euros-a 3.1 percent year-over-year increase.
While youth unemployment has fallen substantially, the “lost decade" of extraordinarily high unemployment continues to affect Spain’s socioeconomic development and harms the country’s long-term competitiveness. Spanish economists and politicians across the political spectrum consistently raise concerns about the quality of youth jobs, which are often low-paid, temporary, low-skilled positions that are the first to be terminated in any economic difficulty.
Spain added 566,200 jobs in 2018, lowering its unemployment rate to 14.4 percent, the lowest rate since the fourth quarter of 2008, according to Spain’s National Institute of Statistics (INE). Spain’s economically active population increased by 103,800 people in 2018, totaling 22.8 million people, of whom 19.5 million were employed and 3.3 million unemployed. Several indicators suggest a modest but gradual improvement in Spain’s longer-term employment trends. The 2018 job growth rate rose to nearly three percent from 2.6 percent in 2017; the number of “long-term" unemployed (over a year without work) dropped 17.4 percent from 2017; and over four-fifths of the jobs created in 2018 were full-time positions (476,800 positions)-2.9 percent higher than 2017.
The labor market is divided into permanent workers with full benefits and temporary workers with many fewer benefits. Labor market reform legislation enacted by the parliament in September 2010 aimed to encourage the use of indefinite labor contracts by reducing the number of days of severance pay under these contracts. In January 2011, government, business, and labor union representatives agreed to a pension reform that increases the legal retirement age from 65 to 67 over a 15-year period beginning in Jan. 1, 2013, and gradually increases the number of years of contributions on which pensions are calculated. In 2012 the Spanish government enacted a series of measures to make hiring and firing easier.
Collective bargaining is widespread in both the private and public sectors. A high percentage of the working population is covered by collective bargaining agreements, although only a minority (generally estimated to be about 10 percent) of those covered are actually union members. Under the Spanish system, workers elect delegates to represent them before management every four years. If a certain proportion of those delegates are union-affiliated, those unions form part of the workers’ committees. Large employers generally have individual collective agreements. In industries characterized by smaller companies, collective agreements are often industry-wide or regional. The reforms enacted in 2012 gave business-level agreements primacy over sectoral and regional agreements and made it easier for businesses to opt out of higher-level agreements. They also required collective labor agreements to be renegotiated within one year of expiration.
The Constitution guarantees the right to strike, and this right has been interpreted to include the right to call general strikes to protest government policy.
12. OPIC and Other Investment Insurance Programs
As Spain is a member of the European Union, Overseas Private Investment Corporation (OPIC) insurance is not offered. Various EU directives, as adopted into Spanish law, adequately protect the rights of foreign investors. Spain is a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA).
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
*Ministry of Industry, Trade, and Tourism, http://www.comercio.gob.es/es-ES/inversiones-exteriores/informes/Paginas/presentacion.aspx
Table 3: Sources and Destination of FDI
Table 4: Sources of Portfolio Investment
14. Contact for More Information
Elliot Carmean, Economic Officer, tel.: (34) 91 5872399; carmeaner@state.gov
Ana Maria Waflar, Economic Specialist, tel.: (34) 91 5872290; waflarax@state.gov
Tags
Bureau of Economic and Business Affairs Bureau of European and Eurasian Affairs Spain
Source: U.S Department of State, Bureau of European and Eurasian Affairs
