Spain

A DECADE AGO, corruption was a serious problem in Spain, but acts of high-level corruption are far less evident today. Other forms of white-collar crime, however, are a serious problem in Spain. Media and domestic government reports routinely cite the proliferation of embezzlement, insider trading, consumer fraud, counterfeiting and tax evasion. Unfortunately, Spanish agencies that investigate white-collar crimes must compete for resources earmarked to prevent all forms of criminal behavior. Consequently, most government funds are budgeted to combat violent crimes, especially crimes linked to the influx of organized criminal networks into Spain over the past two decades.

The cultural and linguistic ties to Latin and South America and close proximity to Eastern Europe and Africa make Spain a haven for organized criminal gangs from disparate parts of the globe. Since the 1980s, organized criminal groups routinely traffic cocaine from Latin and South America to Spain.

Another grave problem arose in the mid-1990s, as organized criminal gangs from Eastern Europe purchased real estate and other assets in Spain with the proceeds of corruption, stolen state property, and money laundering from their home countries. Currently, Spain maintains a substantial presence of criminal gangs from Colombia, Italy, France, Great Britain, Morocco Portugal, and Turkey. Criminals from the former Soviet Union have also taken up residence in Spain, and some have been arrested for such activities as extortion, document fraud, and money laundering. Organized criminals and corrupt businessmen from the former Soviet Union and surrounding countries live in Spain and have also invested the proceeds of illicit activity in Spain, especially in real estate.

Organized criminal groups routinely transfer illegal proceeds through Spanish financial institutions. Spanish authorities conclude that nearly 23 percent of organized criminal activity pertains to money-laundering schemes. The value of laundered money held by organized crime in Spain amounts to about $7.2 billion. The illicit funds are transferred through the sophisticated Spanish financial sector, which provides a wide array of institutions to launder illicit profits. Money changing at exchange bureaus, which exchange more than $20 billion annually, is among the most important means of[Page 758] laundering money in Spain. Moreover, internet gambling in Spain is a growing concern for domestic and international regulators and law enforcement agencies. Spain permits both physical and virtual gambling establishments, both lacking stringent oversight mechanisms, to operate from Spanish territory.

Spanish authorities respond to threats from organized criminal groups in a timely fashion. As a result, Spain's formal anti-money laundering system is as good as that of any country in the world, with broad sectoral coverage and inclusion of all serious crimes. The 1993 Spanish anti-money laundering law covers the acquisition, use, conversion, or transfer of property derived from drug trafficking, terrorism, and organized crime.

Penalties to institutions or businesses for serious violations may include a private warning, a public warning, plus a fine of up to 1 percent of the equity capital of the entity, and other penalties. Penalties for individuals involved in serious offenses include a private warning, a public warning, or suspension of a license to practice business for one year. In addition, there is a mandatory fine for persons involved in serious offenses, of between 500,000 to 10 million pesatas per person, ranging from approximately $3,000 to $57,000.

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