Spain

Researcher4660: INVIED is the organ, officially autonomous but legally dependent on the Ministry of defence, in charge of defence asset disposal. Its activities do not appear to be subject to any external oversight.

Sources of public income are regulated by Article 142 of General Budgetary Law 47/2003, which is published and scrutinized by auditors. The disposal of assets related to defence is regulated through Law 33/2003, on the Patrimony of Public Administrations. The RD 1286/2010 establishes the INVIED (though it's legally dependent on the Ministry of Defence) to oversee defence asset disposal. The Order DEF/432/2013 delegates further competencies on INVIED.

The RD (2010) establishes the normal procedures for the disposal of real estate and other assets: real estate, commercial spaces, land, and military assets. For the latter, there are further regulations in RD 1638/1999, and Law 53/2007 on the Control of Defence Trade applies when this material is to be exported.

The process is a normal administrative procedure. According to the regulations imposed there, income coming from real-estate and urban activities by INVIED will finance the acquisition of infrastructure and equipment for the Armed Forces, defence modernization, and specific programmes.

The website of INVIED presents a wide range of information on asset disposal, from normative requirements, ongoing and closed procedures, to their annual accounts and audit reports by the IGAE. It also includes information about planned disposals, proceedings and requirements for the bidders.

According to the 2013 Annual Report, INVIED answered questions formulated by members of Parliament: 80 from Congress, and 42 from the Senate, as well as a report required by the national Ombudsman. As indicated by Source 1, there is no indication that the activities of INVIED are subject to any other external oversight, and even less of the effectiveness of those internal controls

There is a certain amount of coverage regarding the disposal of real estate assets by the military to certain cities and local councils in Spain, particularly when disagreements over prices have arisen. However, no reports or speculation about corruption in the process have emerged, nor there are no public reports or media accounts on the effectiveness of the controls over the disposal of assets and what their main uses are in practice.

Researcher4660: Sources of public income are regulated by Article 142 of General Budgetary Law 47/2003, properly published and scrutinized by auditors. The disposal of assets related to defence is regulated through Law 33/2003, on the Patrimony of Public Administrations. The RD 1286/2010 establishes the Statute of the autonomous (but legally dependent on the Ministry of Defence) organ in charge of defence asset disposal, the INVIED (in Chapters I, II and IV). The Order DEF/432/2013 delegates further competencies on INVIED.

The RD (2010) establishes the normal procedures for the disposal of real estate and other assets: real estate, commercial spaces, land, and military assets. For the latter, there are further regulations in RD 1638/1999, and Law 53/2007 on the Control of Defence Trade applies when this material is to be exported.

The process is a normal administrative procedure. According to the regulations imposed there, income coming from real-estate and urban activities by INVIED will finance the acquisition of infrastructure and equipment for the Armed Forces, defence modernization and specific programmes.

The website of INVIED presents a wide range of information on asset disposal, from normative requirements, ongoing and closed procedures, to planned disposals, proceedings and requirements for the bidders. Present in the website are also their annual accounts and audit reports by the State Audit Office (IGAE) that exerts external control. This report is highly detailed (see sources) although presents some delays. As shown in sources, the latest report available as of June 2015 is that of 2013.

According to the 2013 Annual Report, INVIED answered questions formulated by members of Parliament: 80 from Congress, and 42 from the Senate, as well as a report required by the national Ombudsman. As indicated by Source 1 and confirmed by PR 1, there is no indication that the activities of INVIED might be subject to any other independent external oversight, and even less of the effectiveness of those controls in case they exist.

Researcher4660: For 2014, the total amount of secret funds was €26.8 Million, of which Defence (in concrete terms, the Secretary of State of Defence) was assigned €500,000. The projected amount for 2015 is the same (less than 1% of the total defence budget). The total budget for the National Centre on Intelligence (CNI) for 2015 was €223.69 Million*, which also included €19.8 Million of &quoute;secret funds&quoute;. This is separate from the official Ministry of Defence budget. For 2015, the consolidated budget of the Ministry of Defence amounts to 6.700M Euro.

Considering the total &quoute;secret&quoute; budget as the National Centre on Intelligence budget and the rest of the secret funds (which is considered here as spending on national security) as a proportion of the extended defence and security budget (considered here as the defence budget with the CNI and other secret funds added it), the percentage of &quoute;secret spending is approximately 3 per cent of the total defence and security budget.

(this information was taken from a news article; it is assumed that the level of spending was made available by the government)

Researcher4660: The use of secret funds is regulated through Law 11/1995, and parliamentary control is exerted by the Commission on Secret Funds, regulated through Congress Resolution of the Presidency of Congress, 11 May 2004, on official secrets. The departments allowed to receive secret funds are the CNI (dependent on the Ministry of the Presidency), Home Affairs, Defence, and Foreign Affairs.

There is no full information available about expenditure and uses of secret funds. The assignation and use of secret funds is subject to a particular system of spending justification and control that excludes public access.

Parliamentary control is exerted by the Committee on Official Secrets. Those organs authorized to receive and use secret funds are required to report bi-annually to this committee, and a report must be sent to Congress for oversight in case additional funds are required. The director of the CNI must report once a year.

Given that deliberations and conclusions of this Committee are not publicly available, and MPs are obliged to keep the information secret, compliance with the second part of the question (detailed, line item descriptions of all expenditures) can only be assumed. Since no complaints have been known in this regard, it can be assumed that the information provided is detailed and reliable. However, there is no way to confirm it. The members of the Committee must keep the content of the debates and deliberations secret.

Researcher4660: The security sector is audited, legislators are provided with audit reports, and those are subject to parliamentary debate. Nonetheless, the extent of the debate about them is not known in the case of the Committee on Official Secrets.


To elaborate, reports on State budgetary execution are at the disposal of the legislature and this includes the security sector. The budgetary and financial regime of the intelligence services (CNI) is subject to special regulations as objectives, budget and activities, as well as the control of secret funds more generally lie within the specialized Parliamentary Committee on Official Secrets. This means that debates take place behind closed doors and no minutes are published.

The Court of Audits is in charge of external audit (revision, verification, evaluation of documentary evidence, management and control procedures of public Administrations and entities) as explained by the TCU Norms (23 December 2013) released on 23 December 2013. The TCU reports are sent to the government, published online, and also sent to the Congress-Senate Committee on Relations with the TCU. The resolutions approved by this organ, as well as the report itself, are published in the State Official Bulletin (BOE).

No evidence has been found about omissions or lack of clarity or detail in the report of the Court of Audits. The only shortcoming that could be mentioned is the lack of means that sometimes causes delays in the elaboration of the final audit reports. For example, there is no audit report for the defence sector 2014 in the website of the Court. However, the 2015 State budget, previously examined by the Court, was approved after parliamentary debate, including the accounts of the security sector.

Researcher4660: The defence budget systematically excludes significant items of military expenditure. There are important amounts of extra-budgetary expenditure financed through other lines within the overall state budget, including military pensions, military R&D, budget for the Civil Guard (funded through Home Affairs despite their military status) and others. Relevant expenditures are thus assigned to other ministries, including the Ministry of Industry; Education; Economy; and Foreign Affairs.

This situation makes it difficult to properly evaluate defence budget and limits and distorts public debate, including official statements and parliamentary interventions by members of the government. Most public accounts are usually based on the initially planned budget and point to a military spending of 0.5% of GDP for defence issues. Public calculations by SIPRI and EDA point to around a 1% however. Both sources interviewed for this assessment point out that if the NATO criteria is applied, the real budget could amount to around 1.3%-1.5% of GDP.

Response to Peer Reviewers: This question relates specifically to off-budget expenditure, not defence income. Given evidence that the defence budget systematically excludes significant items of military expenditure, score changed from 4 to 2.

Researcher4660:
The defence budget that is made publicly available on the Ministry of Defence website is the initial projection and differs widely from the consolidated and executed budget, with the difference between the planned and executed budget averaging around 14% -reaching 30% in some years.

Among the main reasons for this mismatch in budgets are very limited funds for international missions that are subsequently financed through resource to the Contingency Fund. Meanwhile, any Special Armament Programmes are funded through extraordinary loans approved later in the planning cycle. The difference between the planned and executed budgets is huge for any considered year in the last decade. The resource to &quoute;extraordinary&quoute; funds along the year is used every year to fund international missions and armament programmes.

Response to Peer Reviewers: Given the disparity between Spain's planned and executed budget and the evidence that reliance on extraordinary funds facilitates this difference, score changed to 2.

Researcher4660: No modern, updated or clear mechanism is in place to classify (or declassify) information. The Law used dates back to 1968, from the Franco regime (Law on Official Secrets, reformed through Law 48/1978). It allows the government to classify as secret any object, information, or document that could pose a risk to defence or national security (Articles 2 and 4). Proposals and initiatives to reform it have arises at times, but no change has been made so far.

The authority to classify information (“reserved” or “secret” according to the degree of protection assigned) rests with the Council of Ministers and the Joint Chiefs of Staff. Classification does not need to be publicly motivated, and declassification must be granted by the same organ that granted classification or a judicial authority.

There is no proper system in place to declassify information, nor is there a regular and systematic review of classified documents. No system for automatic de-classification of information after a number of years is in place. The amount of classified information and the lack of a systematic review prevent declassification (reportedly, documents classified as secrets can remain as such forever since nobody is charged with revision).

Already in 1995, the national Ombudsman concluded a report on the regulatory framework of classified information with a call to the Parliament to study, evaluate, and eventually approve a new legal regulation on official secrets which should have in mind rights and principles established by the Constitution. The analysis conducted by the European Parliament in 2011, pointing out an excessive scope for secrecy, still holds nowadays. There have been initiatives by political parties and proposals by civil society organizations to reform the system and approve a new law in accordance with the Constitution of 1978, but none have yielded results so far.

The mechanisms to classify information are established by law, but the organs in charge have a wide discretionary margin to decide which items fall within the realm of “national security”. An example is the 2010 agreement of the Council of Ministers by which most information about diplomatic relations has been made secret in response to a petition of the Ministry of Foreign Affairs. The decision was not publicly known or debated in advance but denounced by historians when they realized the new situation.

The authorities with responsibility and role in the classification of information have a wide discretionary margin to act. The mechanisms are clear, but the existence of independent oversight is not. As a whole, the system is outdated and subject to important criticisms (including the aforementioned by the Ombudsman and the European Parliament) for its lack of transparency and control.

Response to Peer Reviewer: A specified body is tasked with the responsibility to classify and declassify documents; however, its discretionary powers are too broad and unspecified to merit a three. Score of 2 is maintained.

Researcher4660: There is no evidence of any ownership of commercial businesses by defence and military institutions. Even services located within military bases are outsourced according to the law on public contracting. The Spanish state and some public institutions still own a number of companies that are however subject to strict regulations, and supposedly not devoted to obtain economic profit but social purposes. In this sense, they cannot be considered “commercial businesses”.

What the Ministry of Defence and related institutions do, under any government, is support and promote the activities of private companies producing and exporting defence services, as well as through research & development activities, as a matter relevant for national security. They provide support to access foreign markets, to the main associations of defence companies (Spanish Association for Defence, Aeronautics and Space Technologies, TEDAE; and Association of Companies Contracting with Spanish Public Administrations and other States, AESMIDE), and also to internationalization through the offsets regulation and practices (see questions 70-72).

Researcher4660: There is no evidence to indicate that the Spanish military own any commercial businesses.

Researcher4660: Law 53/1984 restricts public employees from undertaking private profitable activities. It is applied to all public sector employees (except for high level posts, which are regulated through other norms) including military and civilian personnel in the Ministry of Defence.

The exercise of any professional, labour, company, or industrial activity by those professionals requires a previous official procedure to recognize the compatibility of the activities, which must be delivered by the Ministry of the Presidency. Failure to comply with this proceeding (in other words, joining such an activity without previously obtaining the official permission to do so) can be penalized with dismissal.

In the case of the scandal surrounding the finding of 127 kg of cocaine worth 4M Euro in the main training vessel of the Spanish Army, the Juan Sebastian Elcano, judicial and police investigations are being conducted, and it seems that low-level members of the crew have been charged in this episode.

Other than that, there is no evidence of unauthorised private enterprise by military or other defence employees.

Researcher4660: There is no evidence of public commitment by senior leadership to anti-corruption and integrity measures. The Social Responsibility Programme of the Ministry published just a report in 2010, and no further information is available in the Ministry website.

A review of the latest interventions by the Ministry, and hearings in the Defence Committee, does not provide results. There have been initiatives by opposition parties, including the Socialist Party (PSOE) to request the presence of the Ministry to provide explanations about cases of corruption, but they have been rejected by the Popular Party.

Cases of corruption within defence institutions are receiving levels of media attention and coverage. In at least one of those cases (El País, 2014), the military judge who initiated investigations faced significant problems in accessing information--including opposition from a colonel in charge of a military base. She was later subject to disciplinary measures by the Central Military Court. She subsequently received the public support of the maximum judiciary organ (General Counsel of Judiciary Power, CGPJ), which called for the stop or abstention from any act that could disturb the interdependency of judicial procedures. Defence authorities have in other cases initiated procedures and referred cases to the Military Prosecution Office however, as shown in the sources section.

(NB: It is important to note that the President of the Central Military Court is proposed by the Minister of Defence and appointed by the Council of Ministers. Other members are appointed by the Minister among generals and colonels in line for promotion to general, as any appointment to the level of general is an exclusive, discretionary matter for the government.)

One highlighted case involves Lieutenant Luis Gonzalo Segura, who unsuccessfully attempted to denounce corruption and irregular practices in the Army and later published a novel about it. Lieutenant Segura has been subject to disciplinary measures, was sent to a military prison and by June 2015 was expelled from the Army. His case, and others, have prompted the Citizen Observatory on Corruption and the parliamentary party Union Progress and Democracy to open e-mail accounts to receive confidential denounces related to the military.

Several generals in the Spanish Armed Forces have reportedly expressed concerns for the potential that this case might trigger a wave of denounces of corruption and &quoute;the potential damage for the image of the institution&quoute;. The same report indicates that they recognize that corruption exists in the Army but can be dealt with &quoute;within&quoute; the institution.

The fact that there is no record of a speech or public declaration against corruption on the part of the Minister of Defence or high level officers is all the more shocking given the gravity of this problem in Spain and its high relevance in political life. There are several judicial investigations and proceedings in place (widely covered by media) affecting the higher state levels. It is in this context, as well as the consequences of the financial crisis, that new political parties have emerged disputing the traditional space of the Popular and the Socialist Parties, gaining the municipal elections in May 2015 in some of the larger Spanish cities and competing in the next general elections (November 2015).


Response to Peer Reviewer: Seeing as Carme Chacon (PSOE), who served as defence Minister from 2008 to 2011, called for an &quoute;urgent and generalized fight against corruption&quoute; two years ago, score changed from 0 to 1. While she referred to the whole of Spanish politics, particularly the corruption scandals involving the PP (and not the defence sector), it reflects nonetheless public acknowledgement by senior officials that corruption is a major issue. Score changed to 1.

Researcher4660: General regulations on corruption and bribery apply, including the Criminal Procedural Code and the Criminal Code. The Criminal Code criminalizes all UNCAC offences with some limits (see question 5), including illicit enrichment, which is not recognized as a stand-alone crime.

A review of media reports and news about corruption related to defence and security institutions show mixed results. The available evidence suggests that some cases, and particularly those of small bribery and petty corruption, have been properly addressed, while in others there have been efforts to place obstacles on judicial procedures and pressures on military officers trying to denounce corruption.

At least in one of those cases (El País, 2014) the military judge who initiated investigations faced important problems to access information including the opposition of the military coronel in charge of the military base. She was later subject to disciplinary measures by the Central Military Court. She subsequently received the public support of the maximum judiciary organ (General Counsel of Judiciary Power, CGPJ) which called for the stop or abstention from any act that could disturb the independency of judicial procedures.

In the case of Gen. Rafael Blasco Ibáñez, no sanction has been applied by the Ministry of Defence yet. On the other hand, defence authorities have in other cases initiated procedures and referred cases to the Military Prosecution Office.

A specially reported case involves the Lieutenant Luis Gonzalo Segura, who tried to denounce corruption and irregular practices in the Army without success and later published a novel about it. He has been subject to disciplinary measures, served jail sentences and was, at the time of ending this report, expelled from the Army.

The scarce number of cases that have been publicly reported tend to be leaked or obtained by some of the most experienced reporters, not the result of a policy of transparency in this regard. They also show inconsistencies in the application of judicial and disciplinary measures. There are disciplinary sanctions and even action by military tribunals in cases of bribery and corruption. However, they show contradictory trends and suggest a lack of consistency and effectiveness in application.


Response to Peer Reviewer: Given evidence that cases of corruption are made public through leaks and not through a policy of transparency, it is hard to determine whether standards have been consistently applied. Score changed to 2.

Researcher4660: The latest UNCAC review concluded that areas to be improved within the Spanish anti-corruption laws included developing regulation to protect whistle-blowers in Labour and Administrative Laws; policies and norms to encourage persons involved in corruption to provide information; and improvements to the Law on Protected Witnesses, which does not apply in the aforementioned cases.

The recommendations from Transparency International's National Integrity Systems Assessment of Spain in 2011 to protect whistle-blowers who report fraud and corruption in public and private sectors are also still valid. Members of TI Spain have repeatedly recommended the approval of a law to encourage whistle-blowing in cases of corruption and other illegal practices and grant juridical protection for such actions.

The lack of legal mechanisms and legislation relating to whistle-blowing is even more acute for the case of military personnel. The institutionalised mechanism to facilitate reporting on corruption is direct reporting to a supervisor, who can (or cannot) take the corresponding action. The resource to other means is highly penalized. The case of Lieutenant Luis Segura can be viewed as a reminder of the relevance of those recommendations. Segura attempted to denounce corruption and irregular practices in the Army through the established channels by reporting it to his supervisors. Going against their subsequent recommendation to stay silent about this corruption, he went on to publish a novel about it instead, and as a result, has been subject to harsh disciplinary measures (he has served jail sentences and, at the time of ending this report, expelled from the Armed Forces).

Added to the lack of legal dispositions and mechanisms for whistle-blowing, this case suggests that it is actively discouraged in the defence sector. According to source 2, defence institutions place a great value in discretion and internal management of affairs. Furthermore, Segura has been able to garner a huge public support through media appearances, social media, and public events. But in the case of members of the Armed Forces, support tends to be expressed anonymously, due to fear for punishment. Those cases have prompted the Citizen Observatory on Corruption and the parliamentary party Union Progress and Democracy to open e-mail accounts to receive confidential denounces related to corruption in the military. As these initiatives are recent, no results can be reported so far.

According to a report by the Digital Confidential, Generals of the Armed Forces have expressed concerns for the potential that this case might trigger a wave of denounces of corruption and &quoute;the potential damage for the image of the institution.&quoute; In the same report they recognize that corruption exists in the Army but can be dealt with &quoute;within&quoute; the institution. The same outlet reports the approval of a new and confidential instruction to avoid leaks from institutions linked to military justice (as a reaction to leaks regarding the case of cocaine found in the Navy vessel Juan Sebastian Elcano and investigation over corruption in the Getafe military base).

Response to Peer Reviewers: While provisions for whistle-blowing are largely non-existent, there are nonetheless some institutionalized mechanisms to report corruption. Score changed to 1.

Researcher4660: There is some evidence of special attention being paid to the selection of personnel in sensitive positions in terms of selection, time in post, or oversight.

The Instruction 72/2012 on the procurement of armament and material and programme management establishes the responsibilities of the Programme Managers in the coordination and follow-up of activities and contracts. According to the Instruction, the Programme Manager shall be an officer with specific professional capacities and skills who has completed (or will soon complete) the official course on Programme Management or equivalent training in national or international organizations.

The Ministry of Defence also provides training for personnel, including procurement and programme management. However, those provisions reportedly have been unable to stop a situation where programme management personnel lack the resources and motivation, and sometimes the specialized training and knowledge, to deal with highly complex and technically demanding procurement programmes. The Secretary of State for Defence has published evaluation reports of the Special Armament Programmes. In these, a lack of independence of the Programme Managers with regards to their assigned units is recognized. It also underlines the lack of a culture of systematic and professional programming and of efficient programme management. As a result, “anybody can be in charge of programme management”.

There have been political initiatives to develop and extend the regulations about conflicts of interest to middle and high-level officers of the Armed Forces that are not formally considered “senior executives” but are in charge of procurements and contracts with weaponry companies of huge monetary value. The proposal presented in Congress by the opposition party UPYD was rejected by the Popular Party. Some military associations have supported an update in regulations to improve control. The Unified Association of Spanish Military (AUME) has also proposed a system of external audits because “the only way to know law breaches within the Armed Forces is the existence of someone within who is ready to talk about it”.


Response to Peer Reviewers: There is some evidence that special attention is paid to personnel in sensitive positions in terms of training and definition of responsibilities. However, there is no evidence regarding specific rules of conduct and of clear oversight mechanisms. Score changed to 2.

Researcher4660:
Detailed information on the number of personnel is provided on the Ministry of Defence website (cited above) and in defence-related publications (see above). The Sub-Secretary of Defence is in charge of issues related to personnel. Detailed and explicit account of the numbers of personnel is publicly known covering civilian and military personnel. There is media reporting on personnel numbers and evolution which concurs with the figures provided. The information is available by range of age, sex, and position in the military scale or in the classification levels for civilian personnel.

Researcher4660: Pay rates and allowances for military and civilian personnel are publicly available and detailed in the annual budgets. For military personnel, rates and allowances are also available on the recruiting websites, although the information about allowances is quite vague. The amounts of pay rates and allowances according to level and position are published annually in the Official State Bulletin (BOE).

Researcher4660: The payment system for civilian and military personnel is regulated by law and publicly available, as confirmed by Reviewers. It is also reported in established media. No evidence has been found suggesting that there are problems in the system of payment with regards to time and procedures.

The current financial crisis and measures to adjust public accounts have affected all public personnel including those related to defence (such as the reduction of net salaries, and in some cases, a change in working conditions). However, they have not affected the basic features of the system, which remains routine, published, and non-discretionary.

For the military, as stated in Q 39, pay rates and allowances are published in the recruiting websites, although the information on allowances is rather vague. However, no information has ever emerged about failures or inconsistencies in this system.

Researcher4660: The Law 7/2007 regulates the Statute of the Public Personnel, while military career advancements are regulated through Law 39/2007. Furthermore, RD 35/2010 establishes the regulations for entry and promotion for Armed Forces Personnel. This RD details the criteria for selection process in the military career, especially in Chapter 2 (arts. 3-19).

Calls for military openings and the outcomes of selection are published in the website of the Ministry. The system of promotion and appointment seems strong and fair at the military level--including objective job descriptions, assessment processes, and publicity of the system. However, there is no sign of independent oversight by non-military personnel.

Researcher4660: Law 7/2007 regulates the Statute of the Public Personnel, while military careers are regulated through Law 39/2007. RD 35/2010 regulates the promotion of personnel in the Armed Forces and more information is provided in the website of the Ministry and those on recruitment for different branches of the armed forces. Furthermore RD 35/2010 establishes regulations for entry and promotion of personnel of the Armed Forces. The system of promotion and appointment seems strong and fair at the military level.

There is no evidence of independent scrutiny at the highest senior military levels, as those positions are decided by the government. With the last reform of the Law of Military Career, the Ministry of Defence does not need to consult the High Boards of the Army, Navy or Air forces before appointing Chiefs of Staff.

Researcher4660: Compulsory conscription was abolished in Spain in December 2001.

Researcher4660: There is no compulsory or voluntary conscription in Spain. General regulations and punishments are in place to guard against bribery of public officials (see question 5 for more details).

Researcher4660: Pay rates and allowances for military and civilian personnel are publicly available and detailed in the annual budgets. For military personnel, rates and allowances are also available on the recruiting websites. Furthermore, their amounts, composition and updating are published annually in the Official State Bulletin (BOE). The number of members in the armed forces is publicly available through the Statistic Bulletins of the Ministry of Economy. The Ministry of Defence also publishes statistics of civil and military personnel. The public availability and robust nature of the payment and recruitment systems make this phenomenon unlikely to occur in Spain.

Researcher4660: The salary policy for Spain's Armed Forces is regulated by the Royal Decree 1314/2005, which gives the Ministry of Treasury the power to transfer money to the Ministry of Defence for personnel's payment. Chapter 5 of the Decree (art. 20) establishes the Higher Commission on Military Retributions (&quoute;Comisión Superior de Restribuciones Militares), which is the official organ established for the management and the supervision of the overall payment process.

Retributions are proposed in the General State Budgets for each year. The Higher Commission on Military Retributions is who, according to the disposition of the yearly State budget, adapts pay rates and allowances. Payments are made effective for the corresponding organs or the Armed Forces or the Ministry of Defence for the personnel placed under their jurisdiction.

As in the rest of the Spanish State Administration, chains of command and chains of payment are separated. However, this seems based in custom and practice as no evidence has been found of a published policy in this regard.

Response to Peer Reviewer: In light of evidence that Spain's salary policy is regulated by the Royal Decree 1314/2005 as well as the Higher Commission on Military Retributions, score changed to 4.

Researcher4660:
The Law 39/2007 on Military Career states (Article 4) that the standards of military behaviour are complemented by the Statute of Public Personnel in all those areas where there is no contradiction. The Organic Law 9/2011 regulates in Article 6 the rights and duties of members of the Armed Forces. The ethical principles and rules of behaviour of the military are contained in the Royal Orders (Reales Ordenanzas) of the Armed Forces. The principles guiding military behaviour are set up in Article 5 including integrity among others. Rules of conduct are stipulated in Articles 14 to 23, with Article 15 establishing the “primacy of ethical principles”. The Royal Orders configure the de-ontological code of the Spanish military personnel and contain the rules of behaviour and ethical principles. They are binding laws. Nonetheless,
no specific mention of bribery, conflicts of interest, or post-separation activities is present in the text.

The Criminal Military Code makes no direct mention of corruption, only indirect references. Economic crimes are included in Title IX. Article 191 establishes that the military member who “uses its condition to pursue personal interests in any type of contract or operation related with the military administration, will be punished with jail for a period from three months to six years.” Most of the prosecutions initiated by corruption refer to this part of the Military Criminal Code. Those documents address integrity and behaviour but the lack of specific mentions and guidance in terms of corruption, gifts, bribery, etc.

Civilian personnel related to defence are not known to have a Code of Conduct beyond the normal obligations, rights and duties of application to all public employees. These are included, among others, in the Basic Statute of the Public Official and Law 5/2006 regulating conflicts of interest of members of government and senior officials (see sources). Law 5/2006 details what is considered an infraction in Article 17. There are references to compatibility with private activities, presentation of accurate information on goods and properties, etc. There are also some regulations on post-separation activities. In terms of gifts, bribery and hospitality, there is not explicit mention although it is understood as included in the norms of conduct of the public officer.

The aforementioned norms are legal regulations. As such, they are public and available for anyone interested in them. However, the large pool of scandals and judicial proceedings going on in Spain - involving politicians, public officers, and private companies - suggests that the effectiveness of those norms is limited. Their breach is dealt with through police and judicial means. There is no evidence of a robust oversight mechanism beyond the action of law enforcement.

Researcher4660: A limited set of cases of corruption have received media coverage and the responses by military authorities show mixed and contradictory approaches.

Very little information is available and even the more experienced reporters of defence issues in the main media offer limited information in this regard. Thus very few cases of corruption are made public and those cases tend to be leaked more than the result of a deliberate policy. In some cases, defence authorities have initiated procedures and referred cases to the Military Prosecution Office. In others, more problems have appeared. At least in one of those cases (El País, 2014) the military judge who initiated investigations faced important problems to access information including the opposition of the military colonel in charge of the military base. She was later subject to disciplinary measures by the Central Military Court. She subsequently received the public support of the maximum judiciary organ (General Counsel of Judiciary Power, CGPJ) which called for the stop or abstention from any act that could disturb the independence of judicial procedures.

Those known procedures and prosecutions have been pursued for breaches of the Criminal Military Code, not the Royal Orders.

Researcher4660: No information is publicly available to indicate that regular training on anti-corruption occurs for military or civilian personnel in the defence sector. The same applies generally to the public sector.

The reading of the IEEE document (cited in sources) suggests that there is no such a programme in the Spanish Armed Forces, noting that good practice is explained with no reference to this being made. An interviewee has confirmed that if this training exists, it is likely to be very recent and/or not publicised by the Ministry of Defence. Since corruption (and unemployment) are the most critical issues affecting today’s Spain, “it is reasonable to believe that, should any such a training be in place, the Ministry of Defence would have largely publicized it”. The score has been selected on this basis.

Researcher4660: No evidence has been found about the existence of such a policy. The limited information available about cases of corruption related with defence institutions come from media and specialized outlets. However, it does not seem related to an explicit policy of transparency by the Ministry of Defence, since most sources cited in those reports are not linked to this organ. The few cases made public are not related to a defined policy.

As expressed in the minutes of the Defence Committee, the Popular Party (which holds an absolute majority in Parliament) has rejected the requests of opposition parties for the Ministry of Defence to appear under the Committee to provide explanations about cases of corruption related to the security institutions.

The new Law regulating Transparency and Access to Public Information could have a positive effect with regards to transparency, although some of the Law provisions establish exceptions and limits in access to information when it comes to defence issues, on the basis of national security needs.

For those cases where information is available, the record is mixed. In some cases the defence authorities have taken the initiative to refer the case to the Military Prosecution Office, while at least in one of them the judge initiating the proceedings faced obstruction and was subject to disciplinary measures.


Response to TI-Reviewer: Agree, because there is no explicit policy regarding the publication of prosecutions, score of 2 is most appropriate.

Researcher4660: With regards to facilitation payments, the general provisions about bribery apply, including the Criminal Code and the Criminal Procedural Code, which impose sanctions consisting of imprisonment from two to six years and fines.

According to statistics of the Ministry of Justice, 53 persons were convicted in 2013 in Spain for bribery and facilitation payments, although it is not possible to know from the data how many offences (if any) were connected to defence and security affairs.

A review of media reports and news about corruption connected to defence and security institutions show mixed results. Some cases seem properly addressed (particularly those of small bribery and petty corruption), while in others there have been efforts to place obstacles on judicial procedures and pressures on military officers trying to denounce corruption.

Researcher4660: No evidence has been found about the existence of a military doctrine addressing corruption as a strategic issue on operations. As a matter of fact, neither the 2012 National defence Directive nor the 2013 National Security Strategy mention corruption as a threat on operations. In a review of documents on the website of the Ministry of Defence related to and analysing international missions, references to corruption address the problem as a feature of the countries in which missions are deployed, and mainly as a governance-related problem.

Researcher4660: No specific information is published by the Ministry of Defence about training in corruption issues for commanders deployed in international missions.

A special issue of the Spanish Magazine on Defence on Afghanistan mentions training sessions and workshops about what constitutes corruption when operating abroad, notably including instructions on how to deal with locals and relations that may constitute forms of bribery. The GRAPA Report is the most comprehensive study so far about Spanish participation in missions abroad, interviews with more than 100 participants covered questions about training prior to deployment. It revealed that the established system includes a training programme to be delivered over six months, although this is highly flexible depending on time, dates of deployment, etc, which includes operational rules and procedures, and cultural and socio-economic issues of the area of deployment. No mention is made to specific anti-corruption training, however. The Statute of the Mission also deals with disciplinary and criminal aspects, as well as with others of an administrative nature (financial and economic), although individual Statutes are not made public.

Despite the lack of information about training for commanders, no media in Spain have reported corruption issues when operating abroad despite the deep involvement of Spanish armed forces in international peace operations.

Given the evidence from the magazine, it is likely there is some training in place. The score is between 1 and 2 but 2 has been awarded given the strong probability that such pre-deployment training takes place.

Researcher4660: No public evidence is available about the deployment of professionals with a specific mission of monitoring corruption.

The GRAPA report, the most comprehensive conducted so far about Spanish participation in international missions, does not provide information in this regard.The Statute of the Mission also deals with disciplinary and criminal aspects, as well as with others of an administrative nature (financial and economic), although individual Statutes are not made public.

Researcher4660: No specific information is published by the Ministry of Defence about specific guidelines or training on addressing corruption risks while contracting in international missions.

The GRAPA Report is the most comprehensive study so far about Spanish participation in missions abroad. Conducted with more than 100 interviews, it includes questions about training prior to deployment. It revealed that the established system includes a training programme to be delivered over six months, although this is highly flexible depending on time, dates of deployment, etc, as operational rules and procedures, and cultural and socio-economic issues pertinent to the area of deployment. No mention is made to specific anti-corruption training or guidelines, however, even less for the specific issue of contracting.

The Statute of the Mission also deals with disciplinary and criminal aspects, as well as with others of an administrative nature (financial and economic), although individual Statutes are not made public.

Researcher4660: Spanish laws allow for the possibility that private security companies can be used to complement the role of security forces. The legal framework was established mainly through an Organic Law on Private Security (2002) and the issue is also contemplated by Law 5/2005 on National Defence.

According to the Private Security Monitor of the University of Denver, those contractors are mainly used within the national territory. There is a possibility of use of private contractors abroad to protect military bases but with restrictions. Additional regulations were set up through additional orders in 2011 (324/2011, 317/2011, and 318/2011). The norms do not include the possibility of sanctions.

As of November 2015, Spain had not signed the International Convention against the Recruitment, Use, Financing and Training of Mercenaries. The country has not provided information to the UN Working Group on the Use of Mercenaries about laws, rules and regulations for private security services. It supports the Montreux Document defining how international law applies to the activities of private military and security companies when operating in armed conflict zones. Just one Spanish company (ACK3 SOLUTIONS) has signed the International Code of Conduct for Private Security Service Providers (ICoC).

The business of private security is estimated around 3,300 million Euro a year in Spain, mostly for protection of persons and goods. Even the access to official buildings is provided by those companies.

In light of the shortcomings of Operation Atalanta to face piracy off the coast of Somalia, in 2009 the Spanish government authorized the use of private security in Spanish fishing vessels in the area. The companies accepted were the private security Segur Ibérica and the arms producer General Dynamics Santa Barbara. Segur Iberica was contracted to provide security to 13 boats, while the government authorized the purchase of heavy weaponry provided by GDSBS. The contracted personnel received a three-day specific training on weapons use delivered by the Navy in Cartagena (Murcia). The Council of State emitted a note stating that these companies provide a new, efficient and legal operative model. But also noted that if their components break International Law, it is the State who must assume the responsibility.

The activities of those companies are regulated through the aforementioned laws and legal texts. There is no public information available about the existence of a strict scrutiny over their activities. However, no scandals of corruption or breaches of International Law have been reported by the Spanish media.

Researcher4660: The Central State Administration acquisition planning and public procurement is regulated by Law 30/2007, of Public Sector Contracts and the amended text of Law of Public Sector Contracts of 16 November 2011. Additional regulations and requirements have been established through Organic Law 2/2012 of Budgetary Stability and Financial Sustainability and the Law on Transparency, Access to Information, and Good Governance (2013).

Ministerial Order 37/2005 regulates the process of defence planning. Law 24/2011 regulates public sector contracts in Defence and Security incorporating to the Spanish juridical corpus the Directive 2009/81/CE about defence and security acquisitions. The EDA Code of Conduct has also been signed. Law 24/2011 regulates all contracts related to defence and security, with the exceptions of compromises derived from international agreements, government-to-government contracts, and purchases made by military units deployed abroad.

For the defence sector, Instructions 67/2011 (on regulation of the bidding process), 2/2011 (on the process of planning financial and material resources), and 72/2012 (on phases of execution and service for armament and material) provide for independent and formalized oversight process for procurement decisions. Instruction 72/2012 also establishes the procedures, activities and documents for programme management and the structure and functions of programme offices.

The norms that regulate defence and security procurement do not contain clauses specific to corruption risks. Law 24/2011 establishes as a general principle that all items not regulated by its disposition fall under the Law 30/2007 of public sector contracts. In this sense, and as far as it can be determined, no items are exempt from regulations. All the public administration is covered by anti-corruption clauses.

Researcher4660: The Ministry of Defence discloses defence purchases for the current fiscal year, as well as estimates for the following ones.

In 2014, the Ministry of Defence elaborated an Annual Plan for Centralized Contracting delineating the contracts that could be needed during the year (regulated through Instruction 54/2012). Annex 7 discloses details of those operations which are publicly available, in order to improve transparency and competency in processes (through open, negotiated with publicity and restricted procedures), classified according to contracting unit and sector. The initiative tries to improve compliance with Law 19/2013 on Transparency, and includes proposals of bids to be subject of centralized contracting by the Contracting Boards of the Ministry of Defence, Chiefs of Staff, and the Armed Forces branches.

The concept of life cycle analysis was established recently, through Instruction 2/2011. Additionally, Instruction 72/2012 regulates phases of execution and service (including maintenance) for armament and material processes, and further establishes the procedures, activities and documents for programme management and the structure and functions of programme offices. It regulates Armament and Material Programmes including: a) procurement; b) modernization; c) procurement of permanent resources; d) procurement of maintenance resources); and e) disposal.

The Annual Plan for Centralized Contracting is included in the PACDEF, with Annex 7 of this document containing the specific contract proposals. No specification is made as to what information can be publicly disclosed. In the absence of specific arrangements, general accountability norms apply, thus allowing the Parliament to ask for further information on specific issues.

As an example, the website of the Spanish Navy offers information about procurement processes according to the geographical dependencies and the state of the process, the anticipated information, open and completed bidding processes, provisional and definitive adjudications, contracts signed, and minor contracting (see the last link above).

In a document published in July 2014, the head of the Contracting Unit of the Ministry recognized that negotiated proceeding accounts for 85% of the procurement in Defence. This type of contracting is theoretically applicable to a few specific set of cases (as it poses some risks in terms of transparency and competition) but widely used in practice. It requires the petition of offers to at least three companies able to deliver, while prohibiting discriminatory practices or advantages to any of the bidding companies. The Law on Public Contracts opens the door to avoiding public processes for contracts below 200,000 Euro for works and 60,000 Euro for supplies and services, in which the bidding can exclude publicity by asking for offers to at least three capable companies. The winning contract would be awarded after negotiation with the companies presenting offers. The motives for use are mainly administrative simplicity as the contracting organ has more control over time in the processes. Coupled with the number of contracting units, this demonstrates that contracting doctrines and practices are not homogeneous and that companies face problems in accessing information about Defence contracts.

Small scale procurement and contracting is reportedly considered the area at highest risk of corruption and irregularities, according to Source 2, due also to its de-centralized and less publicized nature. In a judicial sentence by the Military Central Court, later confirmed by the Supreme Court and addressing a case of illicit enrichment by military members, it is stated that this small scale procurement offers more opportunities to evade control due to de-centralization.

Researcher4660: There are control and oversight mechanisms in place (internal and external), and they are generally considered active and efficient. However, their work might have some shortcomings as explained below. The process of managerial restructuring of the Ministry of Defence and procurement systems is ongoing.

Oversight of the defence procurement is conducted on three levels:

Preliminary oversight is conducted through the National Audit Office, via financial controllers placed in each Ministry. A preliminary audit is mandatory when ordinary procurement procedures are initiated (Law 47/2003). A subsequent audit is also possible, conducted by the National Audit Office.

Secondly, there is a Programme Office responsible for each contract (with different competencies and composition according to the cost of the programme), headed by a Programme Officer. They are in charge of overseeing execution and provide instructions as needed. There is also a Cost Evaluation Group (GEC, created through RD 1551/2004) - functionally dependent on the Directorate of Economic Affairs - who provide a periodical evaluation of costs and conduct profit analyses on companies providing goods and services to the Ministry; evaluate the costs of units, centres and organs of the Armed Forces; and participate in methodologies for cost planning and control.

Thirdly, the Court of Audits is the senior body responsible for final oversight, with a right to demand any data, documents, and background information needed in relation to contracts of whatever nature and value.

There are, however, risks associated with this system. According to Navazo, the Audit Office does not physically verify contracts in progress (making preliminary audit a formality), and Programme Officers may lack specific training to deal with sometimes huge procurement contracts. Furthermore, the action of the Court of Audits generally comes at later stages hampering real oversight functions. However, they are generally recognized as independent and active.

The Secretary of State Pedro Arguelles announced in 2013 that programme offices in charge of systems and programmes will be integrated in the Directorate General of Armament and Material (DIGAM). This unit is being restructured and will be in charge of coordinating contracting, quality inspection, economic and financial control and industrial cooperation agreements (ICA, related to offsets), with the overall goal being to improve management and co-ordinate with industrial policies and R&D. Related to this point, the Directorate General on Economic Affairs will drive a modernization programme with regards to contracts affecting also programme contracts. The Ministry expect to improve and modernize the management system for programmes. Arguelles also stated that currently there are more than 100 contracting units in the defence system and the overall need to reduce them by 50%. The effort to streamline the functioning of the Ministry of Defence in managerial terms continues.

Researcher4660: The Ministry of Defence discloses defence purchases for the current fiscal year and estimates for the following ones. In 2014, the Ministry of Defence elaborated an Annual Contracting Plan (PACDEF) delineating the contracts for the following year for the first time, (regulated through Instruction 54/2012), with Annex 7 detailing operations to be negotiated openly in the public domain with publicity and restricted procedures, classified according to contracting unit and sector. The initiative tries to improve compliance with Law 19/2013 on Transparency. In November 2014, the Plan for 2015 was approved basically along the same lines. The Plan includes proposals of bids to be subject of centralized contracting by the Contracting Boards of the Ministry of Defence, Chiefs of Staff, and the Armed Forces branches. The PACDEF and associated processes are still in their initial phases of development. Although the bulk of purchases is included, the coverage is expected to improve as the processes advance.

Related to this, the Directorate General on Economic Affairs is also working on a modernization programme aimed at improving and modernizing the management system for contracts and programmes. According to Carlos Ruiz, Unit Head of the Programme of Contracting Modernization in the Ministry of Defence, the resource to negotiated processes without publicity must be justified on extraordinary circumstances, with an adequate explanation of the reasons that make not possible use the normal proceedings.

According to the Head of the Contracting Unit in the Ministry of Defence (Rodriguez, 2014) and responsible of the Plan of Modernization, currently negotiated proceedings account for 85 percent of the procurement in Defence. This type of contracting is theoretically applicable to a few specific set of cases (as it poses some risks in terms of transparency and competition) but widely used in practice. It requires the petition of offers to at least three companies able to deliver, while prohibiting discriminatory practices or advantages to any of the bidding companies.

The Law on Public Contracts opens the door to avoiding public processes for contracts below 200,000 Euro for works and 60,000 Euro for supplies and services, in which the bidding can exclude publicity by asking for offers from at least three capable companies. The winning contract would be awarded after negotiation with the companies presenting offers. The motives for non-disclosure in this instance relate mainly to administrative simplicity--as the contracting organ has more control over time in the processes.

Researcher4660: Companies bidding for contracts with the Ministry of Defence need to be registered in the Registry of Defence Companies, and most subsequent bids require compliance with a Ministry of Defence set of requirements called Certificate of Quality Assurance (PECAL), which ensures reputation and business sustainability. There is a Code of Conduct for contractors and sub-contractors which subscribes to the principle of transparency both for the government and the contractor party. However, this is a voluntary procedure rather than a compulsory one.

No other requirements are placed on companies in terms of business conduct or compliance beyond what is generally in the Law on Public Contracts. This norm establishes an exclusion of public contracting for cases of conviction for corruption and bribery, among others. Investigation or prosecution are not motives for exclusion.

There is no specific conduct requirement for companies aiming to bid for work with the Ministry of Defence and Armed Forces, beyond general references to reputation and sustainability, and a voluntary principle of transparency.

Researcher4660: The National Directive on Defence is approved by each new government at the beginning of the term and followed by the Directive on Defence Policy. The National Directive on Defence is presented to the parliamentary Defence Committee after approval, for information and debate, but this organ has no power to amend or veto this document in whole or in part. This lack of parliamentary participation also affects the definition of the National Security Strategy, of which the most recent edition was in 2013.

Both the National Security Strategy and the National Directive on Defence lack references to the resources (means, capabilities) needed to fulfil objectives. There is also no definition of responsibilities and competencies. As a result of the shortcomings of the documents, and of those of parliamentary control and participation, Spain lacks a strategic document supported by a majority in the Parliament that clearly identifies the risks and dangers facing the country, as well as the strategic objectives of the Armed Forces and the necessary means and capabilities.

Those factors mean that part of the procurement requirements may be related with the national defence and security strategy, but the door is open to procurement outside them as a result of lack of definition. As a strategic framework is lacking, any procurement operation can be considered as pertinent irrespective of real priority or strategic relevance. The Royal Institute Elcano (2013) points out that “decisions on major weapons programmes have not been taken in line with defence needs, but rather mainly as a result of political, industrial and social criteria.”

An example of this trend is explained by M. Gonzalez in El País (27 October 2014). He found that the approval by the Council of Ministers of a new cycle of investment in armament programmes worth 10,000 million euro was justified by the need to gain leverage over the sector in order to support processes of reorganization of the Spanish military industry ahead of a single European market. Those new contracts were, in other words, expected to feed the economic needs of the companies and raise the persuasion abilities of the Ministry. In this way, new special programmes worth 1 percent of the country’s GDP were approved on the grounds of economic and not military/strategic needs.

Response to Peer Reviewers: While evidence suggests that procurement requirements are not entirely based on Spain's strategic needs, Spain has a formal national security strategy that ostensibly shapes procurement decisions. Score changed from 0 to 1.

Researcher4660: General regulations are provided by the Laws on Public Contracts and on Defence Contracts. Instruction 67/2011 asks for several ex ante studies to identify capability needs before launching a procurement programme (Operative Needs Document and Functional Needs Document). Furthermore, Instruction 72/2012 regulates the planning life-cycle, including financial, management, and follow-up issues. Procedures and controls are in place and seem effective (at least) once a decision on procurement has been taken.

The issue is less clear at the policy level of decisions on big procurement programmes, which seem more vulnerable to influence by other interests apart from strict needs. An example of this trend is explained by M. Gonzalez in El País (27 October 2014). The approval by the Council of Ministers of a new cycle of investment in armament programmes worth 10,000 million euro is explained by the need to push and support processes of reorganization of the Spanish military industry ahead of a single European market. Those new contracts are expected to fulfil economic needs of the companies and promote their reorganization.

This suggests that, as happened with the first PEAS at the end of the 90s, procurement is to some extent based on needs other than defence planning and programming (in this case, industrial policy). With regards to past Special Armament Programmes, the Royal Institute Elcano (2013) has pointed out that “decisions on major weapons programmes have not been taken in line with defence needs but rather mainly as a result of political, industrial and social criteria”.

Those decisions might not qualify strictly as opportunistic purchases, but they are still not related on Spanish delineated defence needs. In this regard, the National Security Strategy provides general guidelines that are then applied in quite flexible ways. There are ad hoc acquisitions that depend on factors such as contingency, opportunity, and budget constraints. And, as this assessment has mentioned, on elements of industrial policy.

Researcher4660: Defence procurement is regulated by the Law on Defence Contracts and by the Law on Public Contracts for the issues not covered by the former.

As stated in the 2013 edition of the Spain Government Defence Corruption Risk Index, procurement procedures in Spain feature four main types of contracts: open procedure; restricted; negotiated; and competitive dialogue. Service contracts below 18,000 Euro and work contracts below 50,000 Euro can be awarded directly. Normally, contracts above those figures are subject to open or restricted awards. Negotiated and competitive dialogue processes are regulated for specific cases sensitive in terms of national security.

In general, regulations lay out requirements to make awards as objective as possible, and avoid any partiality or favouritism by establishing principles of freedom of access, publicity and transparency, non-discrimination and equal treatment, and of efficient use of funds.

However, a nuance needs to be acknowledged with regards to procurement in the defence system. The need to keep some degree of opacity for reasons of national security (affecting both public institutions and contracting companies) could have provided some room for doubtful practices, such as the resource to restricted processes by reasons other than national security (although justified on those grounds). The Report of the Court of Audits 2013 on public contracting 2010-2011 points to cases in the defence sector where single-sourcing was not adequately justified on the grounds of security.

There is another factor that needs to be taken into account. According to the Head of the Contracting Unit in the Ministry of Defence (Rodriguez, 2014) and responsible of the Plan of Modernization, currently, negotiated proceedings account for 85% of defence procurement. It is unclear how this translates to the proportion of the total value of contracts. This type of contracting is theoretically applicable to a few specific sets of cases (as it poses some risks in terms of transparency and competition) but widely used in practice. It requires the petition of offers to at least three companies able to deliver, while prohibiting discriminatory practices or advantages to any of the bidding companies.

The Law on Public Contracts opens the door to avoiding public processes for contracts below 200,000 Euro for civil works and 60,000 Euro for supplies and services, in which the bidding can exclude publicity by asking for offers to at least three capable companies. The winning contract would be awarded after negotiation with the companies presenting offers. The motives for use are mainly administrative simplicity as the contracting organ has more control over time in the processes.

Researcher4660: Tender boards are subject to transparent regulations, and Spain has an independent auditing Court which audits decisions. Nonetheless, there are ways in which the transparency of the tender process can be undermined.

Procurement Boards and Procurement Bureaus are the two different types of technical bodies in charge of evaluating tenders. Procurement Boards are optional in legal terms, and evaluated and awarded contracts from these Boards do not amount to substantial values or complexity. Boards must consist of a financial controller and a legal advisor. Conversely, Procurement Bureaus are compulsory, except for certain specific cases. There is a whole set of requirements with regards to the preparatory documents for the contract (in terms of administrative and technical requirements), as well as rules for document standardization.

In general terms, regulations on tender boards and public procurement procedures do not include anti-corruption clauses or regulation of integrity risks. The same applies to companies bidding for contracts.

The decision of these technical bodies must be published on the relevant website or in the Official Bulletin (national or regional). Contracts are registered in the Registry of Contracts of the Public Sector of the Ministry of Economy. According to the Law on Public Contracts, the board must also send the decision to other companies taking part in the process, including the reasons for the decision, the name of the awarded companies, and the motivations for their selection.

For cases of negotiated process without publicity, there is no obligation to publish any information related to the contract. Each national, regional, or local authority decides what to publish. According to the Head of the Contracting Unit in the Ministry of Defence (Rodriguez, 2014) and responsible of the Plan of Modernization, currently, negotiated proceedings account for 85% of defence procurement. This type of contracting is theoretically applicable to a few specific sets of cases (as it poses some risks in terms of transparency and competition) but widely used in practice. It requires the petition of offers to at least three companies able to deliver, while prohibiting discriminatory practices or advantages to any of the bidding companies.

The documents related with the processes must be sent to the Court of Audits within a period of three months for cases above 600,000 Euro for civil works, 450,000 for supplies and 150,000 for services. The Court of Audits must also be informed about changes in the contract including time requirements, prices, or unexpected issues. The TCU carries out audits of contracting decisions, although they might be not comprehensive and be published with a significant delay. The Court report (2013) points out that some information about defence contracts in the period 2010-2011 was not received and hampered a proper evaluation of proceedings.

Researcher4660: There is no specific regulation for the defence sector but general laws apply.

For example, collusion is forbidden by Article 1 of the Law on Defence of Competition. Additionally, the Law on Public Contracts, in Additional Disposition 23 (on practices contradicting free competition) provides for the necessary cooperation between contracting authorities and the Consultative Board of State Contracts, in order to inform the National Commission for Markets and Competency about those facts that could amount to infractions to the norms of competency, particularly collusion. Collusion is also penalized by Article 262 of the Criminal Code, with charges that can potentially amount to jail sentences in certain cases.

Criticisms of the system have pointed out that this administrative tutelage of competency proceeds slowly, with the result that sanctions are approved (at best) once the contracts has been awarded and are in advanced execution phase. As an example, the CNMC imposed a sanction in January 2015 to more than 30 companies for collusion practices in public contracting 2010-2013. No information is publicly available about sanctions in the defence sector. The critics of the system argue that it is strong in sanctions and punishments, but these may come too late to make a real difference in the process.

Researcher4660: Procurement staff and specially programme managers receive training and have clearly delineated responsibilities. However training is likely to be limited given the number of contracting units. The declarations of the high officer responsible of the Contracting Unit provide further evidence that coherence and preparation in the system is not only lacking but that programme managers often lack independence with regards to their assigned units. This last factor does not automatically qualify for undue influence but might open the door for it.

Instruction 72/2012 regulating procurement of armament, material, and programme management establishes the responsibilities of the Programme Manager in the coordination and follow-up of activities and contracts, added to those established by Law of Public Contracts (3/2011). He/she is responsible for the programme and supported by the Programme Office, which coordinates all related information. The programme office is functionally dependent on the General Direction on Armament and Material (DIGAM). The Programme Manager shall be an officer with specific professional capacities and skills and have passed (or pass afterwards) the official course on Programme Management or equivalent training in national or international organizations. The Ministry of Defence provides training in procurement and programme management. The Centre on High Studies in National Defence (CESEDEN), dependent on the Ministry, offers a wide range of formative activities including specialized courses on High Management of Financial, Logistical, and Human Resources. The first is directed to officers that either are, or could be, placed in positions of responsibility with regards to planning, economic programming, budget and economic, and financial management.

Effectiveness of the system is hampered by decentralization and proliferation of contracting units (156) -- with more than 385 persons in charge of programme management at those levels and with different doctrines and practices hampering monitoring and the follow up of contracts (more than 80,000 yearly). This is recognized in a document by C. Rodriguez, head of the Contracting Unit of the Ministry, dated July 2014.

Programme management personnel lack coordination, resources, and sometimes specialized training and knowledge to deal with highly complex and technically demanding procurement programmes. Those positions lack professional recognition and potential for career improvement, and there are high levels of mobility and turnover. As recognized in the reports of the Secretary of State on Defence, there is a lack of independence of the Programme Managers with regards to their assigned units (despite the fact that they are functionally dependent from the Ministry), as well as lack of a culture of systematic and professional programming and of efficient programme management.

Response to Peer Reviewers: While programme management personnel often lack the specialized training they need to deal with highly complex procurement programmes, evidence suggests that they nonetheless receive basic training and have clearly delineated responsibilities. Score raised to 2.

Researcher4660: The Law on Public Contracts applies here, which establishes general procurement regulations for public sector contracts.

Its Chapters IV and V establish detailed regulations on validity, the revision of decisions on contracts, and alternative means for the settlement of disputes. There can be special appeals for contracts of a substantial value, and ordinary appeals for the rest. A resource can always be posed in front of the administrative Courts. The fact that 85% of defence sector contracting is pursued through negotiated proceedings might hamper publicity and competition in the system.

Formal rights to complain are in place as established by law and regulations, which also provide formal protection for companies from discrimination. However, there is no public available evidence of defence companies complaining for the results of procurement processes. There is no evidence that it has been used by companies.

Response to Peer Reviewer: Score criteria for score 3 are fulfilled. Score maintained.

Researcher4660: In terms of curtailing and sanctioning the corrupt activities of a supplier, the Law on Public Contracts and the Law on Defence contracts are applicable. General laws about corruption including the Criminal Code are also applicable here.Companies and individuals with a formal judicial sentence for corruption are also banned from applying to any future public contract tenders. Those under investigation are not allowed to participate in bidding until they are convicted or acquitted of these charges.

In other words, there are mechanisms in place, but no information is available about previous sanctions imposed by the Ministry of Defence on suppliers (something that could point out to a lack of sanctions, or of public information about them).

Researcher4660: Spain engages in offset contracts in the form of Industrial Cooperation Agreements (ICA). The DIGAM and the autonomous ISDEFE are responsible for negotiation and supervision of offset contracts. The guidelines are not public but issued by the Ministry of Defence through internal and confidential procedures with a general request of 100 per cent the contract value. This means that selling countries must invest 100% of the contract value back into the Spanish economy.

The Ministry of Defence has stated that offset contracts are negotiated on case by case basis according to the exclusions accepted by Article 346 of the EU Treaty, and those provided for in Article 7 of the Law on defence and security contracts.

The Secretary of State for Defence Directive 375/2000 establishes that an ICA must be negotiated prior to the acquisition to any foreign company (both with it and with its sub-contractors) and has to be considered within the evaluation process. A contract cannot be awarded unless an ICA has been set up. The contractor has to sign a confidentiality agreement before the negotiation of an ICA starts. The ICA must include a compliance plan.

The ISDEFE plays a supporting role in the negotiation and follow up of offset contracts. However the information available through their annual report is scarce and lacks concretion. As per the DIGAM, they do not publish annual reports; nor do they provide specific information on the Ministry website.

The value provided by ICAs in terms of technology transfer activities to Spanish industries and public bodies in the period 1984-2010 has been estimated at 3,833 Million Euro - this takes into account 418 ICAs, of which 136 were active in 2012.

There is no evidence that corruption and integrity are issues included in negotiation and contract awards, however. As stated before, the ISDEFE is in charge of following up on contracts, but there is no public information on the extent and scope of those controls. The fact that this information is not disclosed and guidelines are issued internally and confidentially poses a notable integrity risk.

Researcher4660: There is no official offsets policy and the documents available in this regard are scarce (please see Q70 for additional details). Allegedly the ICAs have the same essential compliance programmes as the main procurement contracts; the Code of Conduct establishing transparency for defence contracts can be interpreted to be of application here too.

However, the Ministry of Defence and ISDEFE (in charge of supporting negotiations and of follow up of offset contracts) make public only the basic details of the offset contracts and programmes, such as their number and estimated value. The guidelines are issued through confidential procedures and no evaluations have been made public so far.

Researcher4660: As mentioned in comments to questions 70 and 71, no information is publicly available about the guidelines surrounding offset contracts. The score has been selected guided by those facts.

No public information has been found on competition regulations for offset contracts. A Ministry of Defence publication (2012) states their intentions to promote the participation of small and medium-sized companies in the ICAs linked to offset contracts, which may suggest that competition is encouraged. No further confirmation of this policy, or developments of frameworks, is publicly available however.

Researcher4660: There is no known specific policy with regard to the role of agents and intermediaries in defence procurement. There is, however, evidence that they are used (or at least, have been used in the past). The main scandal in this regard was the use of at least six intermediaries to contract the flights for Spanish troops deployed in Afghanistan. In 2003, one of these planes crashed in Turkey and 62 military officers died in the accident. Investigations showed that the Ministry of Defence paid 149,000 Euro for the trip, of which more than half was earmarked to pay commissions to six intermediaries. The government tried to hide the evidence of this sub-contracting and use of intermediary agents.

The Spanish Supreme Court imposed fines to compensate the victim’s families that haven’t been paid so far. Measures taken after the accident, when the scandal was followed by judicial investigations, included the right to exert actions for technical control and monitoring of planes, and the future use of passenger planes for military displacements abroad. However, no known measures were taken to limit or control the use of intermediaries in public defence contracting.

In areas other than defence, the use of intermediaries in public contracting coupled with the widespread use of processes with limited transparency and concurrency, is at the core of a good number of scandals of corruption affecting Spanish public institutions nowadays.

In short, no evidence has been found in terms of an explicit and public policy regulating the use of agents and intermediaries in the defence sector, although there is evidence that they are (or were) used. As there is no policy or it is not explicit, it is impossible to know whether they are subject to vetting and scrutiny.

Researcher4660: The general Law on Public Contracts establishes that all financial and economic conditions have to be set up alongside with the specifications and demands of the service for which the suppliers bid. In the defence sector, there is a certain amount of media coverage on the main contracts and programmes (including the monetary value and timelines), particularly by journalists highly specialized in defence and security issues. The basic financial details are provided (amount, timeline of payments), but without including details such as interest rates, commercial loans, export credit agreements, or rules and regulations.

A review of the Special Armaments Programmes so far displays a set of disappointing results. In the first set of PEAs contracted in the 1990s, maintenance costs were not taken into account when awarding contracts, and the payment timelines have been re-negotiated several times (the latest extending the payment timelines to 2030). At the end of 2014, the Ministry of Defence announced a new cycle of defence investments which amount to a new Special Armament Programme. Approved by the Council of Ministers, the only financial information available is that provided by the media: the estimated cost per unit and/or total (depending on the case) of each specific weapons system to be acquired, with no further details provided.

Researcher4660: Title V of the Law on Defence and Security Contracts allows for the inclusion of specific measures with regards to sub-contractors and subsidiaries, including the duty to provide information about sub-contracts both during the tender and during execution. In those cases when an obligation of sub-contracting is established, the maximum percentage is up to 30 per cent of the contract (this disposition pretends to encourage participation of small and medium-size companies). In those cases, there is a requirement of principles of transparency, non-discrimination and equal treatment upon sub-contracting operations.

The Ministry of Defence has expressed the intention to apply those provisions, as well as the priorities of national industrial policy, the Code of Conduct for the main contracting party, the Code of Good Practices in the Supply Chain and the CE interpretative Guidelines on sub-contracting in the best form, to guarantee both national security and the efficiency of the programmes.

There is no evidence of formal requirements with regards to anti-corruption. The DIGAM and the General Direction of Economic Affairs, the two ministerial bodies with responsibilities on contracts and the monitoring of suppliers and outsourcing, do not provide detailed information in the MoD website and do not produce reports about their activities.

Researcher4660: A search about Spain weapons imports in the SIPRI Arms Transfers Database for 2012-2013 shows a total amount of €208 million, almost €97 million of which were purchased by the US, followed by Germany (€68.7 million), Israel (€37.2 million) and France (€19 million).

It is difficult to assess to what extent procurement decisions such as these are based in influence of selling nations, however. Records of arms transfers found in the SIPRI database show that purchases are concentrated in a few countries. But this could be due to &quoute;influence&quoute; or most probably to the fact that they are partners in the EU or NATO. In Israel's case, the explanation could be the high specialization of this country in the development of advanced weapons and military systems.

Formalised processes for capability gap identification and adherence to strategic requirements are weak however, as seen in Questions 62 and 63.

Response to Peer Review: Given evidence that Spain has multiple suppliers and can broadly justify its purchases according to strategic need, score raised to 3.