Organic Law 1/2019 of 20 February amending the Organic Law 10/1995 of 23 November on the Penal Code to transpose EU Directives in financial and terrorism matters and address international issues

OFFICIAL BULLETIN OF THE STATE No. 45 Thursday 21 February 2019 Sec. I. Page 16698 I. GENERAL PROVISIONS HEAD OF STATE 2363 Organic Law 1/2019, of 20 February, amending Organic Law 10/1995, of 23 November, on the Penal Code, to transpose European Union Directives in the financial and terrorism fields and to address issues of an international nature.

FELIPE VI KING OF SPAIN

To all who see and understand this. Know ye: That the General Courts have approved and I come to sanction the following organic law:

PREAMBLE I Timely transposition of Community directives currently constitutes one of the priority objectives established by the European Council. The fulfillment of this objective is even more urgent today given the scenario designed by the Treaty of Lisbon for failures to transpose directives on time, regarding which the Commission may request the Court of Justice of the European Union to impose significant economic sanctions in an accelerated manner (Article 260.3 of the Treaty on the Functioning of the European Union).

Spain has consistently complied with the timely transposition objectives committed to since their inception. However, at present, the immediate transposition of several criminal directives is necessary, either due to the expiration of deadlines or their imminent expiry.

This organic law aims to transpose into our internal legal order Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse, Directive 2017/541/EU of the European Parliament and of the Council of 15 March 2017 on combating terrorism, and Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud affecting the financial interests of the Union by means of criminal law, as well as to perfect the transposition of Directive 2014/62/EU of the European Parliament and of the Council of 15 May 2014 on the criminal protection of the euro and other currencies against counterfeiting.

The Penal Code is also modified to complete the regime for the prevention and prosecution of the crime of trafficking in human organs, adapting it to the provisions contained in the Council of Europe Convention on the fight against trafficking in human organs, opened for signature in Santiago de Compostela on 25 March 2015. Finally, the regulation of corruption offenses is completed in accordance with the guidelines of the Group of States against Corruption (GRECO).

In short, this organic law responds to the objectives of transposing pending directives with impact on criminal matters and addressing international issues of a criminal nature.

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OFFICIAL BULLETIN OF THE STATE No. 45 Thursday 21 February 2019 Sec. I. Page 16699 II In the case of Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse, the European Commission initiated the formal infringement procedure 2016/627, the advanced state of which requires the immediate adaptation of our legal order to that directive.

The transposition of Directive 2014/57/EU contemplates three differentiated criminal offenses in line with the directive itself, which requires Member States to classify as criminal offenses, at least in serious cases and when committed intentionally, insider dealing, including recommending or inducing another person to engage in insider dealing; the unlawful disclosure of insider information; and market manipulation, as specified in Articles 3 to 5. All of this aims primarily to guarantee the integrity of the financial markets of the Union and, secondarily, to increase investor protection and confidence in those markets. Furthermore, it requires the consideration as criminal offenses of acts of incitement, complicity, and attempt regarding the aforementioned operations, as well as the liability of legal persons in relation to the commission of such criminal acts.

The aforementioned directive is part of the package also including Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, which has been completed by two delegated acts: Delegated Regulation (EU) 2016/522 of the Commission of 17 December 2015 regarding exemptions for certain central banks and public bodies of third countries, market manipulation indicators, disclosure thresholds, the competent authority for notification of delays, authorization for trading during limited periods, and types of mandatory notification operations carried out by managers; and Delegated Regulation (EU) 2016/957 of the Commission of 9 March 2016 regarding regulatory technical standards applicable to appropriate mechanisms, systems, and procedures, as well as notification templates, to be used to prevent, detect, and report abusive practices or suspicious orders or operations.

Articles 284 and 285 of the Penal Code previously sanctioned specific criminal behaviors involving the use of insider information and market manipulation before the approval of Directive 2014/57/EU, but did not cover all scenarios specifically referred to in the European norm, which must now be expressly sanctioned to comply with the requirements of the principle of legality in criminal law. Criminal offenses are chosen such that, in the most serious cases of market manipulation and insider dealing, they are configured as serious crimes. The protected legal interest is configured not so much with regard to the patrimonial content or the socio-economic order itself, but rather to the integrity of the markets and the confidence of investors acting in them.

The transposition of this directive requires a specific modification of the Penal Code to adjust the content of Articles 284 and 285 to the provisions of that norm, as well as to incorporate a provision that extends, in the terms of this directive, the conceptual scope of those provisions.

The modification made to Article 284 of the Penal Code incorporates, in the means of commission, the use of artifices and the employment of information technologies for price alteration; in the object of protection, cash contracts on commodities related to financial instruments and reference indices; and in the punishment, an increase in sanctions to meet the directive's requirements. Additionally, a specific aggravation is provided for cases where the perpetrator is a worker or employee of an investment services company, a credit institution, a supervisory or regulatory authority, or a governing body of regulated markets or trading venues.

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OFFICIAL BULLETIN OF THE STATE No. 45 Thursday 21 February 2019 Sec. I. Page 16700 The reform of Article 285 of the current Penal Code is broader. New forms of commission of the criminal act are typified; scenarios are specified in which a person is legally understood to have reserved access to insider information; and a specific aggravation is also added for the case where the person responsible for the act is a worker or employee of an investment services company, credit institution, supervisory or regulatory authority, or governing bodies of regulated markets or trading venues.

Additionally, three new provisions are incorporated into the Penal Code: Article 285-bis to typify the unlawful disclosure of insider information when it endangers market integrity or investor confidence; Article 285-ter to refer, with full respect for the principle of legality, the conceptual contents (financial instruments, contracts, behaviors, operations, and orders provided for) to European and Spanish market and financial instrument regulations; and Article 285-quater to expressly establish the punishment for acts of proposal, conspiracy, and instigation regarding the three aforementioned crimes. The reproach for acts committed by a legal person, when criminal liability is declared, is also reordered in consonance with the gravity of the physical person's conduct.

On the other hand, the fulfillment of the other provisions contained in the directive does not require other modifications of the Penal Code. Thus, for the punishment of facts committed in the stage of attempt, there is the express provision of Articles 16 and 62 of this Code; the sanction of acts of inducement to commit those infractions is also provided for in Article 28 of the same legal body; and the punishment of acts of complicity in such illicit behaviors is articulated in the existing legal system through Articles 29 and 63 of the Penal Code. Similarly, the current Article 288 of this same norm also provides, in the sense required by the directive, the criminal liability of legal persons for the commission of the aforementioned criminal acts, applying, by virtue of the provisions of Article 31-bis, to the scenarios required by the European norm. Nevertheless, a specific modification of that provision has been made to equate the sanctions established in the cases provided for in Articles 284 and 285 of the Penal Code.

III The transposition of Directive 2017/541/EU of the European Parliament and of the Council of 15 March 2017 on combating terrorism requires adjusting criminal legislation to the provisions of that norm, since, although Organic Law 2/2015, of 30 March, amending Organic Law 10/1995, of 23 November, on the Penal Code, in matters of terrorist crimes, notably anticipated the content of the directive, some points diverge, which necessitates introducing slight adjustments.

Thus, Article 15.3 of Directive 2017/541/EU imposes a maximum penalty on leaders of a terrorist organization or group higher than the current regulation, which requires a modification of Article 572 of the Penal Code. Similarly, a modification is introduced regarding the penalty of disqualification, which becomes absolute, to avoid the antinomy produced with Article 55 of the Penal Code and in consonance with what is provided in Article 579-bis, introduced by Organic Law 2/2015, of 30 March.

Similarly, the directive, in Article 12(c), obliges including document forgery among terrorist crimes, which was not provided for in Article 573 of the Penal Code. On the other hand, travel for terrorist purposes has a much broader regulation in Directive 2017/541/EU than that fixed in Resolution 2178 (2014) of the United Nations Security Council, which inspired Organic Law 2/2015, of 30 March, as it does not require that the travel have as its destination a territory controlled by terrorists. Finally, the criminal liability of legal persons is extended to the commission of any type of terrorist crime, which was only previously provided for terrorist financing crimes.

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OFFICIAL BULLETIN OF THE STATE No. 45 Thursday 21 February 2019 Sec. I. Page 16701 IV Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud affecting the financial interests of the Union by means of criminal law provides for the harmonized regulation of these frauds, as well as the penalization of other behaviors intimately linked to them: money laundering, bribery, and embezzlement. The first regulation of this matter occurred in our legal order under the Convention on the protection of the financial interests of the European Communities, signed on 26 July 1995, and had its reflection in the original text of the current Penal Code. That convention and its additional protocols are replaced by the aforementioned directive.

One of the first novelties brought by the directive is the increase in the defrauded amount to establish the criminal offense against the European Union Treasury, for which effect the corresponding articles have been adapted. Similarly, and to solve concourse problems that practically occurred in the application of Articles 306 and 308, a joint regulation has been chosen.

One of the novelties introduced by the directive and provided for in Article 4.4(b) is the expansion of the concept of public official to be taken into account in the crimes of bribery and embezzlement. The new definition is more expansive than those regulated in previous directives and exceeds the concept provided for in Article 427 of the Penal Code, which precisely established the definition of foreign and European Union officials for bribery crimes. In the terms of the text to be transposed, a new Article 435-bis is introduced that serves as a basis to extend the liability of these officials in the scope of the directive, also in relation to the crime of embezzlement, to comply fully with what is provided in Article 4 of the European norm.

In turn, the directive requires that any of the crimes provided for in it, including the crime of embezzlement, be punishable when committed by a legal person. Therefore, without prejudice to the exceptions of Article 31-quinquies of the Penal Code, the liability of legal persons in the crime of embezzlement—the only criminal type regulated in the directive that did not admit it in our legal order—is also established for those legal persons that for any reason manage public resources or are otherwise in charge of the public treasury.

V It is necessary to perfect the transposition of Directive 2014/62/EU of the European Parliament and of the Council of 15 May 2014 on the criminal protection of the euro and other currencies against counterfeiting.

In this sense, it is necessary, on the one hand, to expand the range of sanctions that can be imposed on legal persons when they are criminally responsible for this type of criminal act. Likewise, it is convenient to improve the wording of Article 387 of the Penal Code for those cases where criminal protection of the currency is anticipated to the phases prior to its official circulation, with the aim of granting the wording of the provision greater technical concreteness and thus obtaining greater legal certainty. And, finally, it is also recommended to expand the criminal protection of the euro and any foreign currency when counterfeiting affects the borders of the European Union in general and not only those of our country.

VI With the present reform of Article 156-bis, the regime for the prevention and prosecution of the crime of trafficking in human organs is completed, which constitutes a serious violation of fundamental human rights and gravely attacks legal interests such as life, physical integrity, and human dignity, in addition to posing a great threat to public health. To this end, said regime is adapted to the provisions

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OFFICIAL BULLETIN OF THE STATE No. 45 Thursday 21 February 2019 Sec. I. Page 16702 contained in the Council of Europe Convention on the fight against trafficking in human organs, opened for signature in Santiago de Compostela on 25 March 2015.

It is true that, thanks to robust controls imposed by the principles of voluntariness, altruism, confidentiality, absence of profit motive, and gratuitousness, our country has been and continues to be a normative reference in Europe and Iberoamerica since the promulgation of the current law on the matter, Law 30/1979, of 27 October, on the extraction and transplantation of organs, which finds development in Royal Decree 1723/2012, of 28 December, regulating the activities of obtaining, clinical use, and territorial coordination of human organs intended for transplantation and establishing quality and safety requirements, through which Directive 2010/53/EU of the European Parliament and of the Council of 7 July 2010 on quality and safety standards of human organs intended for transplantation was transposed. However, in order to preserve this status and in light of increasing risks, such as the proliferation of transnational organized crime groups that use violence, deception, or threats, or take advantage of precarious situations of the supposed donor to acquire high profits, a system must be strengthened whose eventual failures would ultimately attack the confidence of the population in it, which is the basis of the success of this regulation.

In harmony with the provisions of the reference convention, a clearer delimitation of typical behaviors is thus carried out, penalties are aggravated in scenarios of special reproach, and scenarios of action by an organization or criminal group are made explicit in a manner analogous to the treatment in these scenarios of the crime of human trafficking, including, additionally, the aggravating circumstance of international recidivism.

VII The Group of States against Corruption (GRECO) was constituted in 1999 by the Council of Europe to ensure the compliance of member states of said group with anti-corruption parameters at all levels, with the objective of improving the capacity of its members in the fight against corruption through a dynamic process, helping to identify any existing deficiencies.

Spain, in its firm commitment to the fight against corruption, has permanently collaborated with GRECO in this mutual process of seeking measures. As a result of this process, in the Third Round of evaluation carried out by said group, some omissions were detected in the reforms operated by Organic Law 1/2015, of 30 March, amending Organic Law 10/1995, of 23 November, on the Penal Code, which could represent a limitation for legal operators to carry out this fight.

From the analysis carried out, doubts remained as to whether any of the corruption behaviors in the private sector, collected in Section 4 of Chapter XI of Title XIII of Book II of the Penal Code, on crimes of corruption in business, could be excluded if not described in certain terms. It was also considered appropriate to review the corruption of jurors and arbitrators to ensure their incrimination, not only when acting in the exercise of public functions, but also when operating as collaborators to perform those functions or performing private functions, both in the active and passive aspects. Finally, it was highlighted that the definition of foreign public officials provided for in Article 427 of the Penal Code was not applicable in cases where the crime committed by them was the crime of trafficking in influence, so a specific clarification regarding the liability of such foreign officials who could commit the crimes of Chapter VI of Title XIX of the special part of the Penal Code was necessary; a clarification that is now introduced in Article 431.

With the present reform, those cracks detected in the regulation of our legal order would be solved, in accordance with GRECO criteria.

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OFFICIAL BULLETIN OF THE STATE No. 45 Thursday 21 February 2019 Sec. I. Page 16703 Single Article. Modification of Organic Law 10/1995, of 23 November, on the Penal Code.

Organic Law 10/1995, of 23 November, on the Penal Code, is modified as follows:

One. A new letter a bis) is incorporated into paragraph 1 of Article 127-bis, with the following wording:

"a bis) Crimes of trafficking in organs."

Two. Article 156-bis is modified, which shall have the following wording:

"1. Those who in any way promote, favor, facilitate, advertise, or execute the trafficking of human organs shall be punished with imprisonment of six to twelve years if it concerns the organ of a living person and imprisonment of three to six years if it concerns the organ of a deceased person.

For these purposes, trafficking in human organs shall be understood as: a) The illicit extraction or obtaining of other people's human organs. Such extraction or obtaining shall be illicit if any of the following circumstances concur:

1. It has been carried out without the free, informed, and express consent of the living donor in the form and with the requirements legally provided;

2. It has been carried out without the necessary authorization required by law in the case of the deceased donor,

3. In exchange for the extraction or obtaining, for one's own benefit or that of another, the donor or a third party, directly or through an intermediary, solicited or received gifts or remuneration of any kind or accepted an offer or promise. Gifts or remuneration shall not be understood as compensation for expenses or loss of income derived from the donation. b) The preparation, preservation, storage, transport, transfer, reception, import, or export of illicitly extracted organs. c) The use of illicitly extracted organs for the purpose of transplantation or for other purposes.

4. The same penalty shall be imposed on those who, for their own benefit or that of another: a) solicit or receive, directly or through an intermediary, gifts or remuneration of any kind, or accept an offer or promise for proposing or recruiting a donor or recipient of organs; b) offer or deliver, directly or through an intermediary, gifts or remuneration of any kind to medical personnel, public officials, or private individuals on the occasion of the exercise of their profession or position in clinics, establishments, or offices, public or private, with the aim that the illicit extraction or obtaining or the implantation of illicitly extracted organs be carried out or facilitated.

5. If the recipient of the organ consents to the transplantation knowing its illicit origin, they shall be punished with the same penalties provided for in paragraph 1, which may be reduced by one or two degrees taking into account the circumstances of the fact and the offender.

6. Higher penalties than those provided for in paragraph 1 shall be imposed when: a) the life or physical or psychological integrity of the victim of the

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