Background
Since 2023, the Spanish judicial authorities have been investigating the existence of an alleged corruption scheme involving various public authorities and civil servants, in connection with the irregular award of public contracts in exchange for commissions and other unlawful benefits.
Initially, the facts under investigation were limited to the fraudulent award of contracts for the supply of medical equipment. Over time, however, the scope of the investigation broadened to include the allegedly unlawful award of public works contracts. Until recently, both investigations were conducted in separate judicial proceedings, in which we represent one of the parties.
Irregular award of medical supply contracts
The criminal proceedings concerning the irregular award of medical supply contracts relate to the alleged offenses of criminal organization, bribery, money laundering, influence peddling and tax fraud.
The public contracts under scrutiny were awarded by the General State Administration and by various regional administrations, and in some cases were co‑financed or fully financed with EU funds.
On this basis, the European Public Prosecutor’s Office (EPPO) exercised its right of evocation, considering that the facts under investigation fell within its material competence and affected the financial interests of the EU. The investigating court disagreed and raised a jurisdictional dispute before the Criminal Chamber of the Supreme Court.
The Criminal Chamber of the Supreme Court held that the court already conducting the investigation, and not the EPPO, was the competent authority to continue the criminal proceedings, relying on three main arguments:
- There were no sufficient indications of any actual harm to the financial interests of the EU arising from the irregular award of the contracts. Although EU funds were involved in some cases, the contracts were effectively performed. In the view of the Supreme Court, at that procedural stage there were no indications of a criminal offense of misappropriation of public funds.
- The harm caused to national financial interests outweighs any potential harm to the financial interests of the EU, both from a quantitative perspective -as the majority of the funding was national- and from a qualitative perspective -as the scheme involved Spanish public authorities and civil servants and lacked any significant supranational dimension-.
- The EPPO was not better placed to investigate and prosecute the case. On the contrary, its intervention may have resulted in a dilatory effect on an extremely complex investigation that was already at an advanced stage.
Accordingly, the Criminal Chamber of the Supreme Court resolved the jurisdictional dispute in a manner unfavorable to the EPPO, holding that the mere involvement of EU funds is insufficient to attribute jurisdiction to the EPPO, and that it is necessary to assess whether there has been genuine harm to the financial interests of the EU, as well as the other relevant circumstances of the case.
Irregular award of public works contracts
The same reasoning was later reaffirmed in the criminal proceedings concerning the alleged irregular award of public works contracts.
Following an EPPO’s information request, the Examining Judge of the Supreme Court identified the contracts under investigation and the individuals allegedly involved, and concluded that, at that early stage of the proceedings, there were no indications that EU funds had been implicated.
However, even if EU funds were to be identified at a later point, the case concerned a criminal organization operating exclusively within national territory, without any cross‑border dimension. In that context, any involvement of EU funds would be merely ancillary or incidental.
Key takeaways
Criminal investigations relating to alleged irregular awards of public contracts in which EU funds may have been involved do not necessarily fall within the competence of the EPPO; rather, the specific circumstances of the proceedings must be assessed on a case-by-case basis, considering:
- whether or not there has been actual harm to the financial interests of the EU;
- which interests (national vs. EU) are most affected;
- whether the matter has a cross‑border dimension; and
- which authority is best placed to conduct the proceedings efficiently.
