Spain

Under Spanish Civil Law, fraud is qualified as a vitiating factor affecting consent (dolo vicio del consentimiento) which makes the contract null and void and entitles the affected party to claim the nullity of the agreement, restitution of consideration and damages. The action for civil fraud must be exercised within a period of four years after the completion of the contract, which cannot be suspended nor interrupted.

Where fraud amounts to a criminal offence, its civil consequences are the same. However, it must be noted that the civil claim may be pursued concurrently with the criminal action. Alternatively, the damaged party can decide to reserve the civil action until the rendering of the criminal judgment, in which case Spanish Civil Code provides that the statute of limitation is of one year from the date when the criminal judgment becomes final and definitive.

Yes. Spain has specific regimes addressing fraud, dishonesty or financial crime and related matters. The main regime is set out in the “Criminal Code” the provisions of which are, where appropriate, supplemented by other statutory provisions, such as those contained in the “Companies Act” or tax law.

As a general rule, Spanish courts have jurisdiction over criminal offences committed in Spain, irrespective of the nationality of the alleged offenders and victims. In certain circumstances, Spain may also assert jurisdiction over offences committed abroad where a relevant connection with Spain exists, such as where the proceeds of the offence are deposited in Spanish bank accounts or otherwise channelled through the Spanish financial system.

In civil and commercial matters, jurisdiction is mainly determined by European Union Law (Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I bis”)) international treaties or, ultimately, by the Ley Orgánica 6/1985, de 1 de julio, del Poder Judicial (the “Judiciary Act”).

Brussels I bis states that claims must be filed before the courts chosen by the parties or, failing that, those of the defendant’s domicile or, in certain cases, the courts of the place of performance of the contract. However, there is a large number of exceptions corresponding to certain contracts (e.g. insurance or transportation contracts or contracts entered into by consumers).

In civil and commercial matters, the relevant connecting factors are primarily the choice of the parties, the defendant’s domicile, the place of performance of the contract. Certain contracts have, however, special rules.

In criminal matters, Spanish jurisdiction is primarily based on the principle of territoriality. However, under certain circumstances, Spanish criminal jurisdiction may also extend to offences committed abroad (e.g. when the offender or the victim are Spanish).

Spanish law does not provide for specific rules relating to fraud and asset tracing cases. Hence, general rules on conflicts of law apply: Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (“Rome I”) applies where the conflict of laws arises between the laws of European Union Member States or between the laws of Member and non-Member States:

• Rome I states that the contract shall be governed by the law chosen by the parties either if the choice is made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case (Article 3). However, the same Regulation sets forth that the choice of the parties shall not prejudice the application of provisions of the law of a country other than the country whose law has been chosen which cannot be derogated from by agreement (Article 3) and, more importantly, that a party, in order to establish that he did not consent (for example in case of fraud), may rely upon the law of the country in which he has his habitual residence (Article 10) if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with the law expressly chosen with its counterparty.
• When Rome I does not apply, the Spanish Código Civil (the “Civil Code”) states that the contract will be subject to “the law expressly chosen by the parties, provided that such law has a relevant connection with the transaction concerned; and that failing such an express choice, the applicable law shall be the common national law of the parties; in the absence thereof, the law of their common habitual residence; and, as a last resort, the law of the place where the contract was concluded”. This rule also applies in the case of contracts entered into for fraud.

Spanish courts are able to identify a wide range of assets and financial information, including real estate, bank accounts, vehicles, tax records, sources of income and insurance-related data. As a result, asset identification and tracing can be particularly effective in terms of cost and variety of information in Spanish proceedings.

This task is carried out effectively through the so-called Punto Neutro Judicial, which is a platform designed to find by the courts all the relevant financial information. Additionally, several public registries (such as the Land Registry or the Registrar for Companies) publish information on in rem rights, property transfers, charge and encumbrances.

Yes. Mixed funds may be traced under the same principles and mechanisms applicable to other assets. However, the ability to trace specific assets should be distinguished from the scope of the defendant’s liability. Liability arising from the offence is not limited to the particular asset that was misappropriated or stolen: in the event of a conviction, the defendant may be liable with all present and future assets until the amount awarded by the judgment has been fully covered.

Spanish law does not recognise proprietary claims in the common law sense — in particular, it has no doctrine equivalent to the constructive trust or equitable tracing. However, victims of fraud may pursue proprietary remedies where they can identify specific assets or proceeds, including actions for nullity, rescission (which will give rise to restitution and/or damages), precautionary measures and, in criminal proceedings, confiscation/freezing mechanisms. The availability of such remedies depends heavily on the identifiability and traceability of the asset.

It must be noted however that when the defrauding party has transferred the asset acquired by fraud to a bona fide third party, the latter’s acquisition is protected by law and the defrauded party’s right to restitution is replaced by a right to be compensated with the asset’s current value, its profits and legal interests.

The courts allow for the tracing and seizure of substituted assets without the need to locate the original asset, taking a broad approach to forfeiture. In particular, it is possible to forfeit assets of equivalent value when the proceeds or profits of a crime have been concealed or substituted.

Spanish criminal courts have jurisdiction to grant interim and protective remedies at the request of the prosecuting parties, who have the burden of the proof of a reasonable prospect of success of the prosecution and a risk that the defendant may seek to evade the effects of any conviction.

There is no exhaustive list of these remedies, which include, amongst others, freezing orders, court-appointed administration, deposit and the provision of bonds, securities or any other kind of guarantees, precautionary registration of the criminal complaint in the Land Registry or the Registrar for Companies and orders prohibiting the sales of assets (which can also be registered). Personal interim measures, such as pre-trial detention may also be ordered.

Spanish civil courts have also jurisdiction to grant at claimant’s request the same interim measures under the same above-mentioned requirements. Finally, it must be noted that Spanish courts cannot grant antisuit injunctions nor request the claimant to provide any security on costs.

As regards assets, Spain has a very effective system through the Punto Neutro Judicial (see Question 3.1 above), which allows the court to obtain extensive centralised information from different public and private databases in order to identify assets.

As regards wrongdoers, this is generally dealt with within the criminal proceedings. Once the potential wrongdoer is identified, the relevant investigative measures can be requested from the court in the context of those proceedings.

Under Spanish law, certain mechanisms are available for obtaining pre-action disclosure and securing evidence. However, their scope and availability are limited, particularly when compared with common law discovery, as they may only be used where the relevant statutory requirements are strictly satisfied.

Yes. In criminal matters, Spanish courts are empowered to assist foreign courts (whether from Member States of the European Union or from third countries) as provided by EU law, international treaties or simply on the basis of a principle of reciprocity. This assistance may include both investigative and interim measures.

Likewise, civil courts may assist foreign courts under the requirements set forth in the Brussels I Regulation or, failing that, as provided in international treaties or finally, the Spanish Law 29/2015, of 30 July, on international legal cooperation in civil matters (Ley 29/2015, de 30 de julio, de cooperación jurídica internacional en materia civil (the “LCJI”)).

Spain has a well-established practice of cooperation with foreign courts and authorities in fraud and asset recovery matters, especially within the European Union framework. In relations with third States, cooperation is generally more dependent on bilateral or multilateral treaties and on mutual legal assistance mechanisms.

In general terms, Spanish courts, regulators and other authorities cooperate effectively with foreign authorities in the framework of EU instruments or applicable international treaties.

Yes. A non-exhaustive list has been referred to above.

Spanish private international law establishes a hierarchical system for the recognition and enforcement of foreign judgments. More specifically, the recognition and enforcement of foreign judgments rendered in the European Union are subject to European Union Law instruments. Where those instruments do not apply (i.e. in judgments from certain non-EU States), are governed by any applicable bilateral or multilateral international treaty and, finally, in the absence of any EU or other international instrument, by the LCJI.

Recognition and enforcement of civil and commercial resolutions rendered in a European Union Member State

This matter is governed by Brussels I bis Regulation, which, from a Spanish perspective, provides as follows:

• A judgment given in a Member State which is enforceable in that Member State shall be enforceable in Spain without any declaration of enforceability being required. The foregoing also applies to any judgment ordering a provisional, including a protective, measure. That is, it also applies to injunctions and preliminary measures.
• Enforcement shall carry by operation of law the power to proceed to any protective measures which exist under the laws of Spain and under the same conditions which apply to the enforcement of a Spanish judgment.
• Consequently, under no circumstances may a judgment given in a Member State be reviewed as to its substance or as to the foreign court jurisdiction.
• Foreign parties seeking the enforcement in Spain will not be bound to grant any security, not even a security for costs.
• Spanish courts may only refuse the enforcement if the party against whom the judgment was entered alleges and proves that the resolution is contrary to the Spanish material public policy (i.e. procedural public policy rules cannot be invoked), that the court rendering the resolution violated its right to due process or that the judgment is irreconcilable with an earlier judgment involving the same cause of action between the same parties able to be recognised under EU law (res judicata).This decision is subject to appeal.
• The foregoing also applies when the judgment contains a measure or an order which is not known in the laws of Spain. In that case, that measure or order shall, to the extent possible, be adapted to a measure or an order provided for by Spanish law.

Recognition and enforcement of civil and commercial resolutions rendered out of the scope of Brussels I bis, but comprised in an applicable international treaty

Recognition and enforcement of civil and commercial resolutions rendered by the courts of non-EU State Members with which Spain has concluded an international treaty on the subject matter (such as The Hague Judgments Convention of 2 July 2019 or bilateral treaties entered into with, amongst others, Morocco, Colombia, China, México, Israel or Russia) are subject to the rules set forth therein, which, in summary, establish a reciprocal framework under which judgments rendered by the court of one of the contracting States must be recognised by the other under certain conditions which refer, in general, to the State addressed public policy, the respect of the rights to defence and due process and the prohibition to review the merits of the case.

Recognition and enforcement of civil and commercial resolutions out of the scope of European Union Law and bilateral or multilateral treaties

Finally, the recognition and enforcement of any other foreign judgment is governed by the LCJI. The LCJI regulates recognition and enforcement separately, as follows:

• Recognition (which the LCJI, following the traditional terminology, refers to as exequatur proceedings) is the process by which a foreign judgment is accorded legal effect in Spain. It only applies to final and definitive judgments. Recognition may be sought either as a principal claim through exequatur proceedings or incidentally within ongoing judicial proceedings (in which case, it lacks the res judicata effect).
• Exequatur does not allow to review the substantive merits of the foregoing judgment. Its scope is limited to determining whether the statutory requirements have been satisfied. Consequently, exequatur can only be refused if the judgment is manifestly contrary to Spanish material public policy and/or the defendant’s rights of defence and due process were violated, and/or the judgment infringed Spanish courts’ exclusive jurisdiction and/or the judgment is irreconcilable with a judgment previously rendered in Spain (or capable of being recognised in Spain (res judicata)) or there are other proceedings involving the same cause of action between the same parties (lis pendens).
• Once recognised, the LCJI establishes that the judgment will produce the same effects as a domestic judgment, including res judicata, evidentiary effects and the creation, modification or extinguishment of legal rights and obligations.

Enforcement of foreign orders in Spain depends on their origin, following the process set out above.

When insolvency proceedings and fraud-related claims coexist, the insolvency court assumes primary authority over the administration of the debtor’s estate and the collective satisfaction of creditors. The opening of insolvency proceedings does not prevent the continuation of criminal proceedings, although measures affecting the debtor’s assets may require coordination with the insolvency court and may be modified or lifted to comply with insolvency rules.

Insolvency administrators may bring avoidance, restitution and liability actions aimed at increasing the insolvency estate assets. They may also seek the declaration of the insolvency as guilty if the insolvency was caused or aggravated by the wilful misconduct or gross negligence of its directors. Such a finding may lead to disqualification from managing companies or administering third-party assets, loss of credits or rights in the insolvency and, in some cases, liability to cover part of the debts not satisfied through the liquidation of the company's assets.

Assets may be recovered through insolvency claw-back actions. To succeed, these actions do not require proof of fraud or intention, but only that the transaction was detrimental to the insolvency estate. However, they generally apply only to transactions carried out within the two years preceding the declaration of insolvency. Outside that period, recovery is possible through ordinary civil remedies, including the Paulian action, subject to its specific requirements, including proof of fraud against creditors, as well as the action for absolute nullity due to an illegal purpose.

As a general rule, where criminal proceedings are commenced in Spain, any civil claims arising from the criminal offence are determined together with the criminal prosecution within the same proceedings. In other words, there is no need to commence separate civil proceedings, since both the criminal prosecution and the civil claim for compensation arising from the offence may be pursued within the criminal proceedings themselves.

However, where the injured party waives the right to pursue the civil claim within the criminal proceedings, the civil claim may instead be brought independently before the civil courts. In such cases, Spanish law regulates the circumstances in which the civil proceedings must be conducted, specifying the situations in which they must be stayed pending the determination of the criminal proceedings and those in which they may continue. This issue is governed by the doctrine of criminal preliminary issues (prejudicialidad penal).

The doctrine of criminal preliminary issues means that civil proceedings may be affected by the existence of parallel criminal proceedings where the facts under criminal investigation are relevant to the determination of the civil claim. However, the mere existence of criminal proceedings does not automatically require the civil proceedings to be stayed. A stay will only be ordered where criminal proceedings have been instituted in respect of allegedly criminal conduct forming the factual basis of the civil claim, and where the decision of the criminal court is capable of having a decisive influence on the outcome of the civil proceedings.

Spain does not have an independent civil forfeiture regime or in rem forfeiture outside of criminal proceedings; however, Spanish law allows for the ordering of forfeiture even in the absence of a conviction in specific and limited cases. The substantive basis is found in Article 127-ter of the Criminal Code, which authorises forfeiture without a conviction when illicit assets are proven in adversarial proceedings and any of the legally prescribed circumstances apply, such as death, a chronic illness preventing prosecution, failure to appear in court, or the absence or extinction of criminal liability.

Yes, private individuals may participate in criminal forfeiture by appearing as a private prosecutor or civil party to request the return of their assets and compensation for damages suffered.

From a criminal law perspective, where the recovered asset is a specific item, it will be returned to its rightful owner. However, when the recovered assets consist of sums of money and the assets available are insufficient to compensate all victims in full, they will generally be distributed among them proportionally unless a preferential right applies.

This allocation may be determined in the judgment itself or deferred to a later stage, namely the enforcement phase, once it is possible to determine the recovered assets.

Where insolvency proceedings have been commenced, this distribution regime is displaced by Spanish insolvency law, which establishes its own rules on creditor ranking and payment priority.

There is no single statute of limitations for criminal actions for fraud; on the contrary, limitation periods depend on the merits and specific criminal offence at hand. Limitation periods can vary from 5 to 20 years and depending, as explained above, on the specific criminal offence and the penalty prescribed for it.

In case of a mere civil fraud, the statute of limitation is four years from the compliance of the contract by both parties and cannot be interrupted. When the fraud coincides with a hypothetical criminal offence, the limitation period stated by case law is of five years (although Civil Code fixes it in only one year in tort cases).

Under Spanish law, a civil action arising from a criminal offence is normally dealt with within the criminal proceedings, unless the injured party expressly reserves the right to bring it in separate civil proceedings. When the civil action is pursued together with the criminal action and the case ends in dismissal or acquittal without any ruling on civil liability, the limitation period will generally begin to run from the date on which the relevant decision becomes final. Meanwhile, when the civil action has been reserved, the limitation period may still be affected by the principle of criminal precedence, provided that the applicable legal requirements are met.

In criminal cases involving fraud or asset concealment, common defences challenge the existence of a crime, intent to defraud, knowledge of illegal assets, or the defendant’s involvement.

In civil cases, defendants usually allege that the fraud did not take place because the purported victim was (or should have been aware) of the circumstances able to evidence the fraud. This argument is quite often in M&A litigation and, unfortunately, seems to have been accepted by Spanish courts, especially when the fraud took place in a contract between professionals and the seller carried out a due diligence. Following our extensive experience in this kind of disputes, we always recommend to pay special attention to the due diligence process as well as to the drafting of the contract, namely the provisions on W&I and the dispute resolution clause.

Upon a successful claim, the claimant may seek enforcement against the debtor’s assets. The court may use the information available through the Punto Neutro Judicial to identify assets and obtain financial, property, tax, banking or other relevant information.

It may also be possible to request insolvency proceedings against the debtor, whether an individual or a legal entity, where the applicable requirements are met.

If assets have been deliberately removed or concealed to avoid enforcement, this may give rise to private prosecutions of criminal actions or proceedings for fraudulent conveyance/concealment of assets (alzamiento de bienes). In addition, where assets have been hidden behind companies or corporate structures, it may be possible to seek piercing of the corporate veil (levantamiento del velo) in order to reach the assets or persons ultimately responsible.

In Spain, there are no constructive trusts or equitable liens specific to equity law. Instead, the system uses equivalent mechanisms: in civil matters, actions such as nullity, rescission, civil liability, or unjust enrichment, along with injunctive relief; and in criminal matters, forfeiture, which allows for the deprivation of assets derived from the crime, including those held by third parties or of equivalent value.

In criminal proceedings, recovered assets are managed under judicial supervision with ORGA’s support. They may be seized and sold, with proceeds used for costs, civil liabilities, or the State, while protecting good-faith third parties.

In civil proceedings, recovered assets are used to satisfy the judgment through seizure and sale if necessary, following claim priority and insolvency rules.

In Spanish criminal proceedings, the conviction judgment may, in addition to imposing a sentence, determine civil liability arising from the crime. Such liability may include restitution, compensation for damages, and compensation for losses.

Interest may accrue on the amount awarded, particularly when the judgment specifies a monetary sum and that amount is not paid voluntarily. During the enforcement phase, the amount owed may increase by the applicable increased procedural interest. As a general rule, this interest is calculated at the statutory interest rate plus two percentage points, unless a specific provision provides otherwise.

A criminal judgment may also order the convicted person to pay court costs. These may include, among other items, procedural expenses and, where applicable, the fees of the private prosecutor, provided that the private prosecutor’s involvement was relevant to the proceedings and was not improper or superfluous.

In the event of an acquittal, or when the case is dismissed, set aside, or withdrawn without a conviction being handed down, the general rule is that no costs are imposed on any of the parties. However, costs may be imposed on the private prosecution if it is determined that the charges were brought recklessly or in bad faith.

In civil proceedings, as a rule the losing party must afford the other party legal costs in the amount determined by the court, except if the court understands that the case was so difficult that he can be relieved from affording these costs.

Claimant’s nationality is irrelevant.

Spanish courts tend to act rapidly, even by granting ex parte protective measures which are subsequently subject to review at the defendant’s request.

Although the court’s ability to respond swiftly depends on a wide range of factors (namely, the same court burden of work), it can be said that prolonged delays are uncommon. The court’s standard time to decide the case ranges between a few days and a few months.

Litigation costs include lawyers’, court-representative’s and experts’ fees, as well as taxes related to the registration of certain protective measures. Except in exceptional circumstances (for example, where the case is exceptionally complex), the losing party is ordered to pay its counterparties’ legal costs. Litigation funding is not regulated in Spain and, therefore, permitted.

In Spain, the main procedural difficulties in fraud and asset recovery include choosing the appropriate legal route (criminal, civil or insolvency), the lack of the standard common law remedies such as global freezing orders, the inexistence of private discovery which complicates the gathering of evidence, and the need to act swiftly to secure assets. Also noteworthy are the complexity of proving beneficial ownership of hidden assets, coordination with insolvency proceedings, the international dimension—which is simpler within the EU—adapting to the system’s own remedies (without equity-based mechanisms), and the difficulties of effective enforcement of non-final injunctions.

The most distinctive and useful features of the Spanish legal system for fraud and asset-tracing matters are threefold. First, fraud is predominantly pursued through criminal proceedings, with civil remedies often playing a complementary role. Secondly, victims may act as private prosecutors, actively participating in the criminal case and exercising the criminal action alongside the public prosecutor. Thirdly, Spanish courts have direct access to the Punto Neutro Judicial, an electronic platform that centralises information from key public and private databases, enabling swift, comprehensive and cost-efficient identification of assets

Expanding as per the new criminal law provisions enacted since 2015.

Litigation involving international fraud is moving towards greater supranational cooperation and technical specialisation. Of particular note is the role of Organic Law 9/2021 in cross-border fraud, alongside the rise in cases linked to cybercrime, international money laundering and the use of technologies such as cryptoassets. Recent practice and reforms reinforce the importance of digital traceability, computer forensic evidence and the link between fraud and money laundering as key elements of litigation.