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U.S. Department of State
Spain Country Commercial Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE - SPAIN 1996
NOTE: This Country Commercial Guide (CCG) presents a comprehensive look
at Spain's commercial environment through economic, political and market
analyses.
The CCGs were established by recommendation of the Trade Promotion
Coordinating Committee (TPCC), a multi-agency task force, to consolidate
various reporting documents prepared for the U.S. business community.
Country Commercial Guides are prepared annually at U.S. Embassies
through the combined efforts of several U.S. government agencies.
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY
II. ECONOMIC TRENDS AND OUTLOOK
- Major Trends and Outlook
- Principal Growth Sectors
- Government Role in the Economy
- Balance of Payments Situation
- Infrastructure Situation
III. POLITICAL ENVIRONMENT
- Political Relationship with the United States
- Major Political Issues Affecting Business Climate
- Political System, Schedule for Elections, and Orientation of
Political Parties
IV. MARKETING U.S. PRODUCTS AND SERVICES
- Marketing Channels
- Agents/Distributors: Finding a Partner
- Franchising
- Direct Marketing
- Joint Ventures/Licensing
- Steps to Establishing an Office
- Selling Factors/Techniques
- Advertising
- Pricing Product
- Sales Service/Customer Support
- Selling to the Government
- Protecting your Product from YAPPER Infringement
- Need for a Local Attorney
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
- Best Prospects for Non-Agricultural Goods and Services
- Best Prospects for Agricultural Products
- Investment Opportunities
VI. TRADE REGULATIONS AND STANDARDS
- Trade Barriers, including Tariffs, Non-Tariff Barriers and Import
Taxes
- Customs Valuation
- Import Licenses
- Export Controls
- Import/Export Documentation
- Temporary Entry
- Labeling, Marking Requirements
- Prohibited Imports
- Standards
- Free Trade Zones/Warehouses
- Special Import Provisions
- Membership in Free Trade Arrangements
VII. INVESTMENT CLIMATE
- Openness to Foreign Investment
- Conversion and Transfer Policies
- Expropriation and Compensation
- Dispute Settlement
- Political Violence
- Performance Requirements/Incentives
- Right to Private Ownership and Establishment
- Protection of Property Rights
- Regulatory System: Laws and Procedures
- Bilateral Investment Agreements
- APACHE and other Investment Insurance Programs
- Labor
- Foreign Trade Zones/Free Ports
- Capital Outflow Policy
- Major Foreign Investors
VIII. TRADE AND PROJECT FINANCING
- Banking Systems
- Foreign Exchange Controls Affecting Trade
- General Financing Availability
- How to Finance Exports/Methods of Payment
- Available Export Financing and Insurance
- Project Financing Available
- Banks with U.S. Banking Arrangements
IX. BUSINESS TRAVEL
- Business Customs
- Travel Advisory and Visas
- Holidays
- Business Infrastructure
X. APPENDICES
A. Country Data
B. Domestic Economy
C. Trade
D. Investment Statistics
E. US and Country Contacts
F. Market Research
G. Trade Event Schedule
I. EXECUTIVE SUMMARY
Spain is once again enjoying economic growth. Although still faced with
serious structural problems, the economy has begun a slow but steady
recovery: industries which had become moribund during several years of
recession, are now showing increased signs of life and activity. U.S.-
Spain bilateral relationships are excellent. The government is moving
ahead again with major infrastructure projects and privatization in a
number of key sectors. U.S. firms are responding to these changes and
stepping up their activities in Spain.
The Spanish economy is catching up along with the rest of Western Europe
with moderate economic growth following the recession of 1993 and slow
recovery in 1994. Real GDP is likely to grow by about 3 percent in
1995. The recovery has shifted from export-led to investment-led
growth: the government forecasts growth of nearly 4 percent for 1996.
The government has not, however, been able to bring the economy in line
with macroeconomic objectives set forth in the European Union's (EU)
Maastricht Treaty of 1992. Unless it can bring these factors under
control, Spain will have difficulty in sustaining long-term growth, and
will not be able to join the Economic and Monetary Union, including a
common EU currency in 1999.
Inflation continues to run at over 5 percent in 1995. Short-term
interest rates were recently raised to 9.25 percent and long-term rates
remain at 400-500 basis points above comparable rates in Germany. Plans
to bring down the public sector deficit from a projected 5.9 percent of
GDP in 1995 to 4.4 percent in 1996 will require politically painful
spending cuts which have yet to be identified. The public debt was 62.7
percent of GDP at the end of 1994. Unemployment stands at 18 percent.
As a consequence of these structural problems and continued political
scandals, the Spanish peseta has continued its strong fluctuations,
having been devalued five times between September 1992 and March 1995.
The economic recovery is being fueled by increased industrial
production, which rose 7.1 percent in 1994 - the largest increase in 20
years. The recovery was led by the automotive components, chemical, and
electrical machinery sectors.
Agriculture's contribution to Spain's overall economy is substantially
less important now than it was in the years prior to Spain's accession
to the EU in 1986. Nevertheless, agriculture still plays an important
role in the Spanish economy, accounting for approximately 5 percent of
GDP. Spain is now subject to EU agricultural policies, which do not
always favor their most competitive crops. EU reforms, coupled with a
four year drought, have combined to give Spain one of its worst years in
agriculture. This has, however, resulted in an increase in food
imports, primarily from the EU; although the United States also
maintains a healthy 10-13 percent agricultural market share.
Overall, the United States enjoys a $3.2 billion trade surplus with
Spain which ranks as our 22nd largest export market and among our top
ten agricultural markets. In 1994, U.S. exports to Spain totalled $6.8
billion: they are expected to increase 10 percent to $7.5 billion in
1995, and an additional 19 percent to $8.9 billion in 1996. Major U.S.
manufactured exports to Spain include: aircraft and parts,
telecommunications equipment, computers, coal and environmental
equipment. Good opportunities also exist for electric power systems,
medical equipment, building products, chemical machinery, industrial
controls, and franchising, telecommunications, and
architectural/engineering services. U.S. agricultural exports, which
totalled $1.3 billion in 1994, continue to be dominated by oilseeds and
products, grain and feed, and forestry products, with a good market also
for consumer-oriented processed products, seafood, poultry, tobacco, and
apples.
U.S. exporters face stiff competition from the European Union. The
market leaders are France, Germany and Italy, followed by the U.S. (6.8
percent) and the U.K. Although Spain maintains an open and relatively
transparent trading system and U.S. products and services are well
regarded in Spain, U.S. companies are disadvantaged vis-a-vis their
competitors by duties imposed on products from outside the EU, higher
transportation costs and often the entrenched presence of domestic and
EU firms in the Spanish market. However, U.S. companies can compensate
with high quality products, new technology, fast delivery, and reliable
after-sales service.
According to the U.S. Department of Commerce, the direct U.S.
accumulated investment in Spain totalled $8.048 billion at 1994 year
end, with $1.2 billion of this investment made during 1994.
550 U.S. companies have established subsidiaries in Spain. The U.S.
(6.9 percent of total foreign investment) ranks third among investor
nations after the Netherlands and France. The Spanish central,
regional, and local governments all actively encourage foreign
investment, and have eased regulations and increased incentives. High
labor costs, old and inflexible labor laws and continuing IPR concerns
in some sectors continue to be the main disincentives.
U.S. firms should find increased opportunities for trade and investment
as the Spanish government moves ahead with privatization in the
telecommunications, power, and oil and gas sectors. Best opportunities
exist in the telecommunications sector, especially for voice telephony
and cable TV equipment and services. An estimated $100 billion will be
spent on roads, air and seaports, and railroads, and an estimated $15
billion on environmental infrastructure over the next 10 years; opening
up significant opportunities for aggressive U.S. equipment and service
suppliers.
Country Commercial Guides are available on the National Trade Data Bank
on CD-ROM or through the Internet. Please contact STAT-USA at 1-800-
STAT-USA for more information. To locate Country Commercial Guides via
the Internet, please use the following world wide web address: WWW.STAT-
USA.GOV. CCGs can also be ordered in hard copy or on diskette from the
National Technical Information Service (NTIS) at 1-800-533-NTIS.
II. ECONOMIC TRENDS AND OUTLOOK
Major Trends and Outlook
The Spanish economy has joined the rest of Western Europe with moderate
economic growth following the recession of 1993 and slow recovery in
1994. Real GDP is likely to grow by about 3 percent in 1995, following
the 1.7 percent registered last year. The recovery has shifted from
export-led (last year) to investment-led. The government is forecasting
growth of nearly 4 percent in 1996. Sustained recovery, however, may
be questionable if private consumption does not pick up faster, and if
high interest rates continue to be necessary to control inflation.
The Maastricht Treaty of 1992 set out specific macroeconomic objectives
for countries in the European Union. These objectives were established
as qualifications for participation in the Economic and Monetary Union,
including a common EU currency. In practice, they have become the
parameters by which the performance of the Spanish economy is judged.
The following table summarizes four of these objectives, and the latest
data on Spain's performance. A fifth criteria requires exchange-rate
stability for two years before participation in a common currency
begins.
(All figures are percentages)
Inflation Interest Rates Deficit/GDP Debt/GDP
April'95 March'95 1994 1994
Reference level 1.9 8.7 - -
Max. Limit 3.4 10.7 3.0 60.0
Spain 5.3 10.9 6.7 62.7
Inflation: Restraining inflation may be the most difficult challenge
facing the Spanish economy. The Maastricht Treaty sets the maximum
limit for acceptable inflation at 1.5 percentage points above the
average rate for the three lowest-inflation EU countries. In Spain, the
12-month rate of increase of the CPI slowed to about 4.3 percent at the
end of 1994, but during the first five months of 1995 drifted back up
to over 5 percent. Temporary factors contributed to this rebound,
including a VAT tax increase, devaluation of the peseta and effects on
food prices of a severe drought. Wage settlements so far this year have
lagged behind inflation, with settlements through mid-May averaging
about 3.5 percent. There is concern, however, that structural problems
in the Spanish economy may account for the difficulty in sustaining an
inflation rate closer to the EU average. In particular, barriers to
competition in parts of the services sector allow relatively higher
price increases in those areas.
Interest Rates: The Bank of Spain, projecting a continuation of
inflation above 5 percent through 1995, in early June raised short-term
interest rates by 0.75 percent, to 9.25 percent. The Maastricht
criteria, however, refers to long-term rates, which are not directly
manipulated by central banks, but are set by market forces.
Specifically, Maastricht requires that long-term rates be no more than
2 percentage points (200 basis points) above the average rate for the
three EU countries with the lowest inflation. The "shorthand"
comparison, widely used in the market, is with Germany. Spanish long-
term rates have oscillated in recent months around 400-500 basis points
above comparable German rates. This probably reflects the inflation
differential and increased concern about various "risks" of Spanish
debt, including devaluation risk and the risk that the budget deficit
might not be reduced as quickly as the Government projects.
Deficit: The Maastricht Treaty calls for public sector deficits to be
held below 3 percent of GDP. This is a major challenge for Spain, which
since 1981 has brought its public sector deficit below that level only
once, during the boom year of 1989. During the 1993 recession, Spain's
fiscal deficit exploded to 7.3 percent of GDP. The government's policy
is to bring the fiscal deficit down to 5.9 percent of GDP in 1995, then
to 4.4 percent in 1996 and to 3.0 percent in 1997. This probably cannot
be achieved simply through stronger economic growth, but requires
politically painful spending cuts, which have yet to be identified.
Debt: Maastricht also requires that the amount of government debt
outstanding be less than 60 percent of GDP. After growing steadily over
several decades, Spain's outstanding debt went over that level in 1994,
reaching 62.7 percent. The government contends that if the annual
fiscal deficit is reduced, as planned, to 3.0 percent of GDP, debt as a
share of GDP will stabilize, and will decline if the economy grows
strongly.
Exchange Rate Stability: Maastricht also requires that exchange rates
be "stable" for two years before a currency is allowed to join the final
phase of monetary union. While the precise meaning of exchange-rate
stability may be open to debate, the fact is that the Peseta has been
devalued against its "central rate" within the European Monetary System
(EMS) five times between September 1992 and March 1995. The "central
rate" has therefore moved from 65 pta/DM in 1992 to 85 pta/DM in mid-
1995. The actual rate has varied within a band around that central
rate; until July 1993 that band was 6 percent around the central rate,
now it is 15 percent.
The reform of the labor market implemented last year has introduced
greater hiring flexibility and has made the market more operative,
facilitating the functional and geographic transfer of employees. With
respect to nominal labor costs, various statistical sources indicate
that nominal costs in Spain are lower in Spain than in most EU
countries. Viewing from the employer's standpoint, however, the
relevant variables such as labor productivity and qualifications were
comparable to other OECD countries like Japan.
Investment in infrastructure has been a priority during the 1980s and
1990s during which period Spain made one of the greatest investment
efforts in the EU in infrastructure projects -nearly 5 percent of GDP-
thanks to which the country now ranks fifth in the entire world in terms
of transport capacity. The ambitious Master Infrastructure Plan for
1993-2007 lays down the objectives for the improvement of transport
networks, and requires an investment of $138 billion.
In addition to these reforms, important progress has been made in the
liberalization of key sectors such as telecommunications, a process
which will be completed in 1998. In this sector, Telefonica (the
national telephone company) faces a serious threat as 30 percent of its
projected revenue will be from mobile phones and data communications,
which are being opened up to competition.
After a continuous decline over the last three years, industrial
production in Spain rose by 7.1 percent in 1994, thus becoming the
engine for the economic recovery. This is the biggest increase of the
last 20 years. Automotive components, chemicals and electrical
machinery were the most important industrial sectors within the
manufacturing industry. All this was made possible by the sizable
increase in exports during 1994.
The opportunities in the Spanish market are characterized by a very fast
evolution to more sophisticated products and marketing. It is no secret
that the number of companies who are looking for quality certification,
flourish. There was just one company registered with ISO/AENOR Label in
1989, in 1994 there were more than 700. So the market is growing not
just in quantity but also in quality.
Since most economic indicators are pointing towards a continuing
recovery, this together with a healthy trend in the tourism industry and
an expected increase in exports -gives Spain cause for optimism.
The Government of Spain is carrying out a privatization program that
will affect government-owned companies operating in key industrial
sectors. There are significant investment opportunities from
privatization of companies in the telecommunications, power generation,
and oil and gas sectors.
The United States enjoys a $3.2 billion trade surplus with Spain which
ranks as our 22nd largest export market and among our top ten
agricultural markets. In 1994, U.S. exports to Spain totalled $6.8
billion: they are expected to increase 10 percent to $7.5 billion in
1995, and an additional 19 percent to $8.9 billion in 1996. Imports
from Spain totalled $3.6 billion in 1994 and are expected to remain
relatively stable over the next two years. Major U.S. exports to Spain
include: aircraft and parts, telecommunications equipment, computers,
coal and pollution control equipment. U.S. agricultural exports which
totalled $1.3 billion in 1994, continue to be dominated by oilseeds and
products, grain and feed, and forestry products. Consumer-oriented
processed products, seafood, poultry, tobacco and apples also have an
excellent growth potential. Major U.S. imports from Spain are fuel
oils, footwear, automotive parts and aircraft and parts.
U.S. exporters face stiff competition from the European Union. The
market leaders are France (17.4 percent of the market), Germany (14.6
percent) and Italy (8.8 percent). Although Spain maintains an open and
transparent trading system and U.S. products and technologies are in
demand, U.S. companies are disadvantaged vis-a-vis their competitors by
duties imposed on products from outside the EU, higher transportation
costs and often the entrenched presence of EU firms in the Spanish
markets. However, U.S. companies can compensate with higher quality
products, the latest technologies, quick and reliable delivery, and good
after-sales service.
Agriculture's contribution to Spain's overall economy is substantially
less important now than it was in the years prior to Spain's accession
to the EU in 1986. Nonetheless, agriculture still employs about 9
percent of the country's total active population and comprises about 4.6
percent of the country's total GDP.
Spain is subject to EU agricultural policies, which have not always
favored the most competitive Spanish crops. In 1992 the EU reformed its
farm policies for grains, milk, beef, oilseeds, and sheep, and these
reforms could have a major impact on Spanish agricultural production.
Most importantly for Spain, the EU is in the midst of reforming programs
that will affect many Mediterranean crops such as olive oil, rice,
almonds and others.
Spanish lamb, beef, grain, dairy, pulse and other sectors have had
difficulties competing with increased competition from other EU
countries, while for competitive sectors such as horticultural crops
production or exports have not significantly increased.
Livestock and poultry are the most important sectors in terms of value
of agricultural production in Spain, accounting for about 40 percent of
total farm output. Horticultural crops (citrus, deciduous fruit, olives
and olive oil, nuts, wine and vegetables) is the second most important
sector in value (35 percent) of output, but account for over 70 percent
of Spain's agricultural exports. Field crops (grain, tobacco, cotton,
forage, sugar beets and oilseeds) cover a larger proportion of total
planted area, but comprise only 25 percent of the value of total
production.
The most significant problems currently facing Spanish farmers are the
lack of stable support prices for key commodities, growing competition
from agricultural imports from other EU countries, high interest rates
and high production costs. Despite producer prices in ECUs for many key
products that remained static or even dropped in 1993, prices in pesetas
rose by about 15 percent due to a series of devaluations of the Spanish
peseta that have taken place since 1992.
The outlook for 1995 suggests continued difficult conditions for certain
farm sectors in Spain. A major challenge for Spanish agriculture is
adapting to the reality that other EU members may have a comparative
advantage in producing certain agricultural commodities, especially
grains, lamb, beef, poultry and beet-sugar. In addition, a devastating
drought which has plagued the Spanish countryside for 4 straight years
has resulted in a dramatic decline in corn, cotton, rice and other
irrigated crop production in southern Spanish production areas, leading
to substantial losses in income for certain producers which may not be
adequately compensated by present crop insurance programs.
Principal Growth Sectors
a) Agriculture
Seafood
Consumer oriented products
pet foods
snacks foods
nuts
candies and gums
herbal teas
low calorie products
prunes and raisins
beverages
frozen yoghurt
cheeses
frozen vegetables
table sauces
dietetic foods
Meats
Egg and egg products
Food products for heating with microwave
Wine
Apples
Edible pulses
b) Industry and services
Telecommunications is one of the principal growth sectors in Spain. A
second cellular telephone license was awarded to Airtel last December.
This company, which is partially owned by U.S. AirTouch, is committed to
provide digital cellular service by the early fall of 1995. Market
demand for cellular services is expected to increase six-fold by the
turn of the century.
Another area for growth within this sector is cable-TV. Cable-TV is not
regulated, and currently, only one percent of the population has access
to this service. The Government proposed a bill in January which is
under debate in Parliament. This law is expected to come out by the
Spring of 1996. Growth estimates for this market estimate a 5 percent
penetration by 1998.
Other growth areas include environment and aerospace. In order to
comply with EU environmental regulations, Spain has to invest an
estimated $15 billion in industrial clean-up, sewage treatment, water
and air pollution control, and water and soil treatment. In the
aerospace sector, the EU's "open skies" policy has added seven new
regular airlines operating to cope with increased demand for air
transport services.
The Government of Spain is carrying out large investments to upgrade
Spain's infrastructure. Roads, airports, sea ports and railroads will
receive over $100 billion till the year 2007. Construction and related
engineering services will benefit from these projects.
Government Role in the Economy
Spain's social-democratic Government exercises influence in the economy
more through regulation than through direct ownership, although the
Government does own part or all of several of Spain's largest companies.
In 1993, the Government began partial privatization of several major
parastatals. This process was interrupted in 1994 and the first half of
1995, but looks set to resume in mid-1995 after reorganization of the
Government's industrial holding companies. The Government tends to sell
off stakes in firms, keeping a significant interest for itself. Major
targets for additional (partial) privatization in the near future
include Argentaria (bank), Repsol (oil) and Telefonica (telecom).
Balance of Payments Situation
Spain in recent years has run a significant deficit in merchandise trade
-- equal to 3 percent of GDP in 1994 -- and a deficit in net investment
income (e.g. debt servicing). These deficits have been roughly balanced
by receipts from tourism and transfers from abroad (e.g. from the
European Union). The resulting Current Account deficit, therefore, has
been less than one percent of GDP for the last two years. During the
first quarter of 1995, imports of goods have been growing slightly
faster than exports (25 percent versus 21 percent). This is likely to
continue, as faster growth of private consumption in Spain will lead to
increased demand for imports. Tourism receipts have continued to
increase (up 17.5 percent over the first quarter of 1994), but the
current account deficit nevertheless is expected to widen somewhat.
Infrastructure Situation
Following are some facts and figures about infrastructure in Spain:
- Electricity: 46,600,000 KW capacity; 157,000 million KWh produced,
4,000 KWh per capita (1992)
- Railroads: 15,430 km total; Spanish National Railways (RENFE) operates
12,691 km (all 1.668-meter gauge, 6,184 km electrified, and 2,295 km
double track); FEVE (government-owned narrow-gauge railways) operates
1,821 km (predominantly 1.000-meter gauge, 441 km electrified);
privately owned railways operate 918 km (predominantly 1.000-meter
gauge, 512 km electrified, and 56 km double track).
- Highways: 150,839 km total; 82,513 km national (includes 2,433 km
limited-access divided highway, 63,042 km bituminous treated, 17,038 km
intermediate bituminous, concrete, or stone block) and 68,326 km
provincial or local roads (bituminous treated, intermediate bituminous,
or stone block).
- Inland waterways: 1,045 km, but of minor economic importance
- Pipelines: crude oil 265 km, petroleum products 1,794 km, natural gas
1,666 km.
- Ports: Algeciras, Alicante, Almeria, Barcelona, Bilbao, Cadiz,
Cartagena, Castellon de la Plana, Ceuta, El Ferrol del Caudillo, Puerto
de Gijon, Huelva, La Coruna, Las Palmas (Canary Islands), Mahon, Malaga,
Melilla, Rota, Santa Cruz de Tenerife, Sagunto, Tarragona, Valencia,
Vigo, and 175 minor ports.
- Merchant navy: 242 ships (1,000 GRT or over) which includes 2
passenger, 8 short-sea passenger, 71 cargo, 12 refrigerated cargo, 12
container, 32 roll-on/roll-off cargo, 4 vehicle carrier, 41 oil tanker,
14 chemical tanker, 7 liquefied gas, 3 specialized tanker, and 36 bulk.
- Airports: 105 total, usable: 99. Sixty of them have permanent-
surface runways. Four of these have runways over 3,659 meters, 22 have
runways between 2,440-3,659 meters; and another 26 have smaller runways
between 1,220-2,439 meters.
- Telecommunications: generally adequate, modern facilities; 15,350,464
telephones; broadcast stations - 190 AM, 406 (134 repeaters) FM, 100
(1,297 repeaters) TV; 22 coaxial submarine cables; 2 communications
satellite earth stations operating in INTELSAT (Atlantic Ocean and
Indian Ocean); MARECS, INMARSAT, and EUTELSAT systems; 1 satellite
HISPASAT, tropospheric links.
III. POLITICAL ENVIRONMENT
Political Relationship with the United States
Spain and the United States enjoy excellent bilateral relations as
befits close allies and industrial democracies. The two governments
share common views on a broad range of issues and are allies in the
North Atlantic Treaty Organization (NATO).
Major Political Issues Affecting the Business Climate
Three political issues affect the current business climate in Spain:
the need to create greater flexibility in the labor market; an
ideological split in the ruling Spanish Socialist Workers Party (PSOE);
and a minority government dependent upon ad-hoc coalitions to advance
its legislative program.
Labor market regulations in Spain are still too rigid, despite recent
modifications (June 1994). Companies in Spain faced with economic
difficulties have problems downsizing staff, and are faced with high
Social Security and redundancy payments. Government efforts to
eliminate these rigidities have been opposed by trade unions.
Two ideological tendencies compete for supremacy within the PSOE--one
calls for increased liberalization of the economy, while the other
stresses more traditional socialist policies and state intervention in
the market. The dispute is reflected in the conflicting positions
adopted by the Finance and Public Works Ministries on such matters as
cellular telephone licenses and cable TV regulation. The debate has
taken on increased significance in light of PSOE electoral misfortunes.
Finally, the Socialists must depend on other parties to form a majority
in the Congress. These informal coalitions are increasingly unstable,
complicating Government action on pressing economic and political
matters.
Political System, Schedule for Elections, and Orientation of Political
Parties
Based on its constitution of December 1978, Spain is a parliamentary
democracy. President of Government (Prime Minister) Felipe Gonzalez
Marquez, Secretary General of the PSOE, was first elected to his
position in 1982; his party governed with absolute parliamentary
majorities from 1982 - 1993. After the June 1993 general election,
Prime Minister Gonzalez won an unprecedented fourth consecutive term,
although his Socialist Party now presides over a minority government,
seeking legislative accords on a case-by-case basis with all parties,
but especially with the Catalan nationalist party, CiU, itself a
coalition. Continued party factionalism, high unemployment, a series of
corruption scandals, and the GAL case involving extra-legal security
force operations against ETA terrorists in the early '80s, have led to a
significant decline in Gonzalez's popularity. Also worthy of mention is
a recent scandal involving the phone-tapping (by the Spanish
intelligence unit, CESID) of leading politicians, prominent businessmen
and even the King of Spain. The Prime Minister claims to have first
heard of this when the news broke in the press, but it has further
undermined his government, causing the resignation of the Minister of
Defence and the Vice President of the government.
The principal opposition party is the center-right Popular Party (PP).
In the June 1994 European Parliament elections, the PP picked up 40
percent of the vote vis-a-vis 30 percent for the PSOE. In the
Andalucian elections held the same day, the Socialists lost their
absolute majority and now form a minority government. During the May
1995 regional and municipal elections, for the first time ever, the PP
fielded more candidates than PSOE, and Spanish banks offered a larger
credit line to the PP for campaign financing. The PP won pluralities in
10 of the 13 autonomous regions having elections, and in 42 of 50
provincial capitals, including Madrid. The Socialists also lost the
absolute majority in the Senate which they had enjoyed since 1982.
The electoral term for national government is a maximum four years, but
elections can be called before that term expires. Elections will be
required on or before June 6, 1997. Opinion polls suggest that PP would
beat PSOE in a hypothetical general election. Nonetheless, the CiU is
publicly committed to supporting Gonzalez through 1995, allowing
Gonzalez to remain in office through the Spanish EU presidency (July-
December 1995). Pundits predict that general elections will take place
in spring 1996.
IV. MARKETING U.S. PRODUCTS AND SERVICES
Marketing Channels
The Spanish market is a series of regional markets joined to two major
hubs--Madrid and Barcelona. The vast majority of agents, distributors,
foreign subsidiaries, and government-controlled entities that make up
the economic power block of the country operate in these two hubs.
Dealers, branch offices, or government offices located outside of these
two hubs will
almost invariably obtain their supplies from their Madrid and Barcelona
contacts rather than engage in direct importation. The key to a foreign
firm's sales success in Spain is to appoint a competent agent or
distributor or to establish an effective subsidiary in either Madrid or
Barcelona.
However, investment incentives which reward investors for establishing
manufacturing operations in the less developed areas of the country have
resulted in some dispersion of U.S. investment in recent years.
The major competitors of U.S. exporters and investors in Spain are
Western European firms, but Japanese companies are swiftly becoming
formidable competitors in Spain. Cost, financing terms, and after-sales
servicing play important roles in marketability of a firm in Spain.
Since Spain acceded to the EU, member states' exports to Spain have
benefited from lower tariffs than U.S. exports. The dutiable rate for
almost all EU goods entering Spain is zero since January 1, 1993, while
U.S. goods are subject to the EU's Common External Tariff.
American products retain competitiveness, in comparison to other
exporters to the EU, because of lower production costs achieved through
economies of scale. European exporters provide generous financing and
engage in extensive cooperative advertising. Their governments also
support exporters' efforts by assisting with trade promotion events.
Although U.S. products are well respected for their high level of
technology and overall quality, U.S. firms often fall short of their
competitors in terms of flexibility on financing, adaptation of product
design to local market needs, assistance with marketing, and after-sales
service. Spanish procedures follow those of the rest of Western Europe,
where price remains paramount. However, credit terms, after-sales
service, and marketing assistance are key factors in any successful
transaction.
Use of credit to purchase consumer goods is now widely accepted in
Spain, particularly in the cities, and banks compete aggressively to
offer coverage. All major U.S. credit cards, including Visa, Master
Card, American Express, and Diners Club, are used. Department stores
and some upscale retailers sometimes offer their own credit,
particularly for purchases of large ticket items. Consumer credit is
commonly used for the purchase of cars and homes. Housing developers,
automobile dealers, and some manufacturers offer consumer financing
directly.
The Madrid hub principally serves the central, southern, and western
parts of Spain, while Barcelona serves the north and east. Some
overlapping occurs in Zaragoza, Bilbao, Valencia, and the Canary
Islands. Barcelona usually encompasses the Balearic Islands and the
enclave cities of Ceuta and Melilla in North Africa.
Regional characteristics influence buying patterns. A competent agent
or distributor takes this into account when marketing his products. The
Basque Country, part of Spain's north coast, and Catalonia, which
includes Barcelona, have long traditions as autonomous regions with
their own official languages and customs. There are 15 other autonomous
communities (similar to U.S. states) with varying but lesser degrees of
autonomy and cultural identity.
Madrid is Spain's center for banking, administration, and
transportation, and it serves as the headquarters of many large
international companies. Barcelona is the capital of Catalonia which
boasts a strong industrial tradition. The primary industries have
historically been textiles, paints, chemicals, printing, plastics,
fertilizers, electrical engineering, and machinery manufacture.
Barcelona and Bilbao, the Basque Country's industrial center, are
Spain's leading ports.
As an important container port, the Bilbao region has extensive
shipyards, steel-works, iron-ore mines, chemical and cement works, pulp
and paper mills, and oil refineries. In eastern Spain, Valencia is the
center of the Spanish furniture and ceramics industries, as well as a
major center for citrus fruits and vegetables.
Seville, the center of Andalucia with its river port, is a major source
of olive oil, cork, wines, and other agricultural products. The free
port city of Vigo, in the far northwest, is Spain's most important
fishing and fish-canning center.
Agents/Distributors - Finding a Partner
Most U.S. exporters sell their products in Spain through distributors.
Agents and distributors are generally exclusive, covering the entire
country. Although a majority of Spanish distributors have their head
offices in Madrid or Barcelona, many are located in Bilbao, Valencia,
and other Spanish industrial cities where a particular industry may be
concentrated.
Distributors normally have sub-offices, enabling them to cover other
parts of the country. In general, a distributorship is governed by the
conditions agreed upon between the parties. Spain applies the "freedom
of contract" theory, by which the contracting parties may establish any
stipulation, condition, or undertaking provided that it does not violate
Spanish law, morals, or public policy.
The principal-agent relationship is governed by Spanish Civil and
Commercial Codes and Spanish labor laws. On May 4, 1982, the Spanish
Government amended Royal Decree 203381, regulating the "special labor
relationship" between a principal and its agent. An amendment (R.D.
11951982) was published in the Boletin Oficial del Estado (Official
State Bulletin, published daily as in the U.S. Federal Register) on June
14, 1982.
This decree requires a principal and agent to execute a written contract
in which they stipulate the agreed terms, including provisions for
cancellation of the agreement. A copy of the contract should be filed
with the sales representative's local Office of Employment. A fixed-
term, written contract normally does not raise any relevant issue with
respect to its termination. By contrast, termination of an indefinite
duration agreement may raise a number of legal issues. Successive
renewals of a fixed-term contract may be interpreted by the courts as an
indefinite-duration contract.
It also provides that, in the case of a definite term appointment, the
term will be automatically renewed upon expiration for an identical
term, unless either party objects to the renewal in writing at least one
month before the end of the initial term. The amendment limits all
definite term appointments to a year, which can be automatically renewed
only once. However, upon the expiration of the renewal term, the
appointment will be automatically converted into an indefinite-term
appointment, unless either party objects to the conversion in writing at
least one month before the end of the renewal term.
Unwritten agreements for all legal purposes are enforceable contracts,
but require burden of proof. Under Spanish law, no one is bound in
perpetuity. Should a party grant indefinite, exclusive rights, it is not
bound forever by the initial commitment to the point that it cannot
revoke the original, exclusive mandate. Nevertheless, an ongoing,
indefinite relationship cannot be terminated without a reasonable cause.
If it is terminated, damage compensation may apply, particularly if the
termination is viewed by the court as being without reasonable notice or
abusive. Historically, the Spanish courts have been extremely
conservative in awards.
U.S. firms seeking foreign distributors may contact the nearest U.S.
Department of Commerce district office for an Agent Distributor Service
or for assistance in requesting "Gold Key" service. The Gold Key
service is tailored to the needs of a visiting U.S. businessman, and
assists in reaching potential agents and/or distributors. Participation
in trade events often leads to contracting with an agent or distributor.
Franchising
There are 250 franchises in Spain, with over 25,000 outlets opened.
They account for over 5 percent of total retailing. It is forecast that
they will grow to 7 percent of all retail stores by 1998. Around 62
percent of franchises are Spanish, followed by French, American, British
and Italian. Around 73 percent of all franchises are in the commercial
retail sector. Within commercial retail, consumer apparel is the
highest with 44 percent of that total. Franchised food stores are next
in terms of numbers.
Franchising is a great tool for traditional small retail stores to face
the stiff competition posed by larger retailing stores. In large urban
areas, small retailers are faced with few traditional options;
specialize, associate with other retailers or close down. Franchising
offers them a safe and most promising new option.
Domestic statistics show that out of every five new independent retail
operations opened each year; three or four either change business,
ownership or close down before their first anniversary. The same survey
shows quite a different outlook for franchised outlets. Four out of
five remain open and still working with the same brand and promoter
after their first anniversary.
Several reasons have allowed franchising to maintain a non-stop
sustained growth since the mid-1970's. The most important ones are a
continued improvement in the living standards of Spaniards and improved
training and education of professionals in the retail trade.
Franchising will remain popular in Spain. Although its present growth
rate has been slowed by the current recession, all analysts believe that
demand will be sustained in the future. As the market becomes more
segmented and requires further specialization in retailing, demand for
franchising will continue.
Direct Marketing
In the past, companies started to switch from massive media advertising
campaigns to more cost effective and "measurable" promotional campaigns
offered by direct marketing. This change helped boost direct marketing
demand in recent years. Companies are finding out that in many cases,
some of the marketing strategies used by direct marketing are more
effective and less costly than a TV ad. This trend will continue in the
future. Under current economic conditions, companies look for solutions
that are less expensive.
The direct marketing sub-sector has maintained high growth in recent
years. Specifically, this market grew 10 percent to $1.5 billion last
year (1993), and growth estimates for 1994 are 6 percent. It is
forecast to increase at a compound annual average growth rate of 15
percent through 1997.
One of the fastest growing segments in direct marketing is mail-order.
The total mail-order market for 1993 was $667 million, almost a 12
percent increase over the previous year. Marketing by mail-order
represents only 0.4 percent of Spain's total distribution sales, lagging
far behind the European Union average of 3-5 percent. It is estimated
that Spaniards spend an average of fifteen dollars in mail-order
purchases compared to EU's average of $150. Sector analysts forecast
that Spain will catch-up with the EU's average mail-order spending in 15
years time.
Tele-marketing is the fastest growing segment within the direct
marketing activity. Tele-marketing receipts amounted to $83 million in
1993, about 20 percent of total direct marketing billings. Sales
estimates for 1994 indicate a 15 percent growth.
Mail order and tele-marketing spearhead this sub-sector's growth. They
make up 44 percent of total direct marketing billings at present, and it
is forecasted that they will have an even bigger share of total revenue
in the near future. Large and better known distribution companies are
entering the mail-order activity while growing sophistication in the
telephone services offered by the public telephone company, Telefonica,
brighten tele-marketing's future.
There are no specific regulations on distributing products through
direct marketing. There is a law called LORTAD that regulates data
privacy. Companies interested in developing a direct marketing
operation in Spain should contact and join the Spanish Direct Marketing
Association (AEMD - Asociacion Espanola de Marketing Directo).
Asociacion Espanola de Marketing Directo
Avda. Diagonal 437
08036 Barcelona
tel: (34-1) 414-0538
fax: (34-1) 201-2988
Joint Ventures/Licensing
Joint ventures in Spain can operate under different forms. A group of
companies can form temporary associations (uniones temporales de
empresas - UTE), designed to exist for only a limited time, to undertake
specific projects. This type of association does not have separate
legal personality, rather companies maintain their legal status while
allowing common operations under a set of regulations. Foreign
companies can enter this type of arrangement.
An Economic Interest Group (agrupacion de interes economico -AIE) is a
vehicle for a joint venture between Spanish participants. It is similar
in concept to a partnership, its participants having joint and separate
liability for its debts. To form an AIE, the participants must execute
a public deed, incorporating bylaws, and record it at the commercial
register. The internal operation of an AIE is similar to that of a
corporation, and an AIE can be transformed at any time into any other
type of commercial entity.
There is also a European version of the AIE, the European Economic
Interest Group (agrupacion europea de interes economico -AEIE). This is
a cross-border version of the Spanish AIE, introduced by EU Regulation
2137 of 1985. A local AEIE is a separate legal entity and must be
incorporated in Spain. It must be recorded in the commercial register,
and in almost all respects it is similar in constitution and operation
to an AIE.
These three models of joint venture are tax transparent; that is, their
income is apportioned among their members. In all of these cases losses
as well as profits can be attributed to the members.
Licensing agreements are similar to those in the United States and the
rest of Europe, and are contemplated under local business law.
Licensing agreements are reviewed by the General Directorate of Foreign
Transactions (DGTE) in the Ministry of Economy.
Payments for licensing fees, technical assistance, consultants' fees,
trademarks, patents, technology transfers, and other non- patented
matters, are freely transferable abroad. In most cases such payments
are subject to Spanish taxation and normally taxes will be withheld at
the time of payment. The procedure to recover amounts withheld are
established in the double taxation agreement between the United States,
implemented on January 1, 1991. This treaty follows the OECD Draft
Convention on Double Taxation.
Steps to Establishing an Office
The first decision a foreign investor in Spain must make is whether to
incorporate a subsidiary (i.e. a separate corporation) or a branch.
Both have full legal status for any kind of operation, and their profits
are taxable in Spain.
If the investor decides to incorporate a subsidiary, the next decision
is whether to incorporate a public limited-liability company (sociedad
anonima, or SA) or a private limited company (sociedad de
responsabilidad limitada or SL or SRL). The SA is structured for larger
operations; the SL for smaller.
In both of these companies the shareholders are not liable for the
company's debts. The main differences are in their capital (10 million
pesetas versus half a million), the number of founding members (3 versus
2), flexibility permitted at general meetings, transfer of shares and
management of an SL.
Companies interested in setting up an operation in Spain must consider
legal advice. Major consulting groups as well as law firms are
available to carry out the necessary steps to incorporate in Spain. A
summary of the steps needed to carry out such an operation follows.
(A) To acquire legal status, an American firm must follow the following
steps:
- Registration of company name: promoters must acquire a certification
that the name chosen for the future company is not already registered.
Applications must be presented at the Central Mercantile Registry. The
certification is valid for two months.
- Public deed or incorporation charter: the founding partners proceed to
sign the constitution deed for the business according to the company's
charter. This is done at any of the public notaries that exist in
Spain. The name certification is required as well as the company's
charter.
- Pay asset transfer tax and legal proceedings document tax: these are
taxes paid up for new incorporation (they amount to roughly one percent
of capital stock). These taxes have to be paid up at the provincial tax
delegation where the company has incorporated. Needed documents are a
completed form model 600, both a legalized and simple copy of the Public
Deed (provided by the public notary). This must be done within 30
working days from the date of Public Deed.
- Acquire the Tax Identification Code (locally called CIF - Codigo de
Identificacion Fiscal): this number becomes the company's identification
and is required for all the transactions. The provincial tax delegation
provides it. Needed documents are form model 036, a copy of the public
deed and a photocopy of applicant's I.D. if it is a partner, or
photocopy of the power of attorney authorizing the applicant. This must
be done within 30 working days from the public deed. The CIF number
must be withdrawn within 6 months of application.
- Registering the company: the company must be registered at the
Corporate registry corresponding to the incorporation address. Needed
documents: first copy of the Public Deed (provided by public notary) and
certificates that taxes (look above) have been paid up. There is a two
month period for completing registration.
(B) In order to start any economic activity the following are required:
- A fiscal license: companies and individual businessmen must acquire a
fiscal license. This is a local tax levied on fiscal year's activities.
This can be acquired at the local tax administration. Needed documents:
I.D. of individual person or C.I.F. (tax identification code) for
companies, I.D. of legal representative and motor vehicle tax and
technical inspection card if it is a transport enterprise. In some
professional services the approved seal of the professional association
or bar is required. This license must be requested 15 days before
starting any economic activity.
- Census declaration: companies and individual businessmen must register
in the corporate census for value added tax purposes and to be included
under personal tax declaration system. This is done at the local tax
administration. Necessary documents: Photocopy of C.I.F. (tax
identification code) and identity card. It must be done prior to the
beginning of business activity.
- Tax books: regulations establish that companies must reflect different
internal operations in special books; (a) income and sales book; (b)
expenses or purchase book and (c) inventory book. Books have to be
legalized at the local tax administration. Necessary documents: fiscal
license and photocopy of I.D. These books have to be legalized 30
natural days after fiscal license.
(C) Social Security Registration
- Registration of a company: once incorporated and ready to start
operations, companies have to register with Social Security. This
registration is unique for each province where there is a work center.
The self-employed have to register as well. Documents are a copy of the
deed of constitution of the company and photocopy of the applicant's ID
or power of attorney. For individual businessmen, an ID is required. A
contract with a Workers Compensation Fund is also needed for this
procedure. These procedures are carried out at the local Social Security
delegation.
- Opening communication: communication of the opening of the work center
or resumption of economic activity. Must be done within 30 days
following the beginning of activity. Companies and individual
businessmen must keep two logs; (a) visitor's log and (b) a personnel
registration book. This needs to be done at one of Social Security's
provincial delegations. Necessary documents: details of the company and
work center plus description of the activities to be carried out.
(D) The following procedures may be required by the town council (it
varies from town to town).
- Municipal tax liability depending on the street category.
- Construction licenses if there is going to be any work carried out in
the premises to adapt it to the new economic activity.
- Opening license that accredits that the project's installations
conform with municipal regulations.
- Town council is required to be notified every time there is a change
in ownership.
(E) Other specific requirements
- Industry Property Registry for trademarks, patents, commercial names,
distinguishing signs, industrial models, etc.
- Industrial Registry for industrial activities, workshops, toxic or
dangerous substance warehouses, as well as manufacturing operations of
any product.
- Company Qualification Certificate for construction, installations
and/or electrical repairs, wood and cork sectors, and activities of
engineering and consulting.
- Identification papers or certificate for individual persons or
companies involved in electrical installations, gas, air conditioning
and compressors.
- Special Registry for food industries and wholesale establishments
(except supermarkets and hyper-markets).
- Special Registry for industries involved in the transformation and
storage of agricultural products.
- Special registry for manufacturers, importers, retailers and
distributors of gambling equipment.
- Commencement authorization for bars, cafeterias, restaurants and
hotels.
- Application license for travel agencies.
- Special registry for companies involved in the security sector.
Selling Factors/Techniques
Client satisfaction is not a big issue in Spain. Foreign distribution
companies that have entered this market have introduced this concept.
Only recently are consumer groups beginning to appear. A new product
liability law was passed in July of this year (1994) which will
effectively protect consumers.
Relationships are still very important in selling U.S. products
successfully in Spain. This factor is sometimes more important than
price or quality, especially in large account sales. The decision making
process within a Spanish company is different from that in the United
States. It is usually centralized in the leading executive of the
company. This person will take action after it is reviewed by different
departments, making the sales process longer. An initial "yes" usually
means that they will study the situation, and not necessarily that they
will buy the product.
New selling techniques are becoming very popular. Vending machines have
sprouted all over Spain in the last decade. Direct marketing by mail
order, telephone, TV or computer are growing considerably. Demand for
logistical services is rising sharply. Otherwise, selling techniques,
taking into consideration local tastes, are very similar to those in the
Western World.
Advertising
There are approximately 15 million television sets in use in Spain. The
average daily television audience is 23 million. The relative success
of the private networks since 1990 has weakened the domain of TVE (TVE:
30 percent, Autonomous: 15 percent, Private: 55 percent).
Until 1990, Television Espanola (TVE) was the only national television
network. It operates two channels, TVE1 which concentrates more on news
and popular entertainment programs and TVE2 which more closely
approximates the offerings of a U.S. PBS station. It also carries more
sports coverage than TVE1.
Catalonia, the Basque Country, Galicia, Andalucia, Valencia and Madrid
operate regional (autonomous) government TV stations. In 1990, the
Federation of Autonomous Radio and Television (FORTA) was formed to
centralize film and sports rights acquisition for regional television
stations and to coordinate their planning and programming processes.
In 1989, the Government of Spain authorized the creation of commercial
television and issued licenses to three new private commercial channels:
Antena 3 TV, Canal Plus, and Telecinco.
Antena 3 TV: This was the first private national network to begin
broadcasting, in December 1989. Today it broadcasts 24 hours per day,
reaches 82 percent of Spain and is the leader in terms of size of
audience.
Telecinco: TV 5,the second private channel, began broadcasting in March
1990. It has a hold on children's programming.
Canal Plus: Controlled by Prisa/El Pais, it broadcasts a mixed set of
free and coded programs. For the latter, viewers pay a users fee. It
has close to one million subscribers but its encoded programs are
available to anyone with a television and a de-codifier supplied by
Canal Plus.
Cable is slowly growing in Spain. Legislation to regulate cable
television is being debated in Parliament. It is expected that by the
Spring of 1996 there will be a cable TV regulation. The Mexican
satellite service, Galavision, and the British Sky network are also
widely available. In mid-1992 the first of two Spanish Hispasat
satellites was launched in an effort to promote cable TV within Spain
and send a signal to Latin America.
Spain has a well-developed chain of radio stations. There are 35
million (estimated) receivers in use and the estimated average daily
audience is 16 million. The majority of Spaniards obtain their news
from radio, not television, placing radio as the most important medium
for the dissemination of information concerning the U.S. The principal
radio networks are:
AUDIENCE
SER (private)....................................... 6,735,000
Radio Nacional (Government)......................... 3,245,000
COPE (Catholic Church).............................. 2,492,000
Antena 3 (private).................................. 1,305,000
Catalunya Radio..................................... 422,000
In Madrid, five major daily newspapers and three economic/financial
dailies receive international and national coverage from the major world
wire services and three Spanish news agencies, one of which is the
government-owned EFE service. Most also have U.S.-based correspondents.
Madrid dailies:
DAILY NEWSPAPER CIRCULATION
EL PAIS (liberal-left) ............................. 407,000
ABC (conservative) ................................. 327,000
EL MUNDO (centrist)................................. 255,000
DIARIO 16 (centrist) ............................... 163,000
YA (center-right) .................................. 46,000
EXPANSION (economic)................................ 34,000
CINCO DIAS (economic). ........................... 21,000
LA GACETA DE LOS NEGOCIOS (economic),(est.) ....... 16,000
The three major Madrid-based news agencies are: EFE, Colpisa and Europa
Press.
Barcelona has five daily newspapers. They also receive international
coverage from international wire services and the three news agencies
headquartered in Madrid. Barcelona dailies:
TITLE CIRCULATION
EL PERIODICO (center-left).......................... 181,000
LA VANGUARDIA (independent)......................... 206,000
EL OBSERVADOR ...................................... 50,000
AVUI (Catalan/nationalist) ......................... 35,000
DIARI DE BARCELONA (Catalan/nationalist) ........... 30,000
About 40 magazines are published in Spain. Some of the more important
are:
TITLE CIRCULATION
HOLA (social)....................................... 656,410
TIEMPO (left-independent)........................... 179,017
CAMBIO 16 (centrist)................................ 143,000
TRIBUNA (independent) .............................. 95,000
EPOCA (conservative) ............................... 78,203
ACTUALIDAD ECONOMICA (econ conservative)............ 31,479
EL SIGLO (centrist) ................................ 25,000
MERCADO (economic conservative)..................... 15,000
POLITICA EXTERIOR (foreign affairs)................. 12,000
U.S. non-government correspondents and media representatives:
The Associated Press, Time, LA Times, The International Herald Tribune
and The Wall Street Journal are represented in Madrid although only AP
has a full-fledged correspondent in residence. Among broadcast media,
CBS, ABC, and CNN are all represented by stringers.
Broadcast Media
Television is fast becoming the preeminent advertising medium, replacing
newspapers in peseta volume of ads shown. With 300 television sets per
1,000 inhabitants, television reaches 96 percent of Spanish households.
The standard TV commercial is 20 seconds, and 10 seconds is the minimum.
Rates are reasonable. Radio advertisements last 10 to 30 seconds and
are generally used by local merchants in urban areas.
Printed Media
Full color advertisements are offered in all the leading dailies and
magazines, and rates are considered low by U.S. standards. Newspapers
publish regular supplements on topics such as high technology,
communications, education, and science, and these are often the media of
choice for advertisements by leading multinationals in these fields. The
technical press also has reasonable rates, but circulation is
considerably smaller than in comparable magazines in the United States.
Billboards are commonplace in urban areas. They are prohibited along
main roads. Rates are reasonable.
Ads may be placed directly in the media or through an ad agency.
Commissions average 15 percent, and many agencies have creative staffs
to develop ads likely to appeal to the Spanish population, including
regional tastes. In general, U.S. multinational ads are successful,
once adapted to Spanish tastes. There are no standard rates for ad
placement or creative development, and competition is strong for
multinational and foreign clientele. Ad agencies are located mainly in
Madrid and Barcelona.
Management Consulting Firms
National and multinational market research agencies offer their services
mainly in Madrid and Barcelona, with expertise in key sectors such as
footwear, textiles, processed foods, metallurgy, shipbuilding, and
electronics. Most major American consulting and auditing firms are
present in Spain, including KPGM Peat Marwick, Arthur Andersen, Price
Waterhouse, Deloitte & Touche, and Ernst & Young.
Pricing Product
Pricing a product in Spain is similar to that in the United States,
although mark-ups tend to be slightly higher. Products and services in
Spain are subject to Value Added Tax. At present it stands at 16
percent. A reduced rate of six percent is applied to sales and imports
of human or animal foodstuffs, water, books, newspapers, magazines,
pharmaceutical products, personal dwellings, and school supplies.
Payments are based on 90 day terms. Large corporations (including large
retailers) negotiate or impose larger payment terms that can go up to 6
months. The Government defers all payments. Depending on which
department, payments can be deferred by as much as one year. So,
financial charges must also be factored into product pricing.
Sales Service/Customer Support
Demand among Spanish consumers for sales and customer service is
growing. All technical products as well as most consumer products have
sales service/customer support. Regulations require that sales service
is available for government procurement.
Customer support is not as developed as in the United States. Many shops
have no return policies. Only large department stores and new retailers
(usually foreign) have as liberal return policies as in the United
States.
Selling to the Government
Even though Spain automatically acceded to the GATT Government
Procurement Code when it joined the EU in 1986, it did not implement the
code until late 1992. EU directives on the Procurement Code,
particularly EU Directive 88295 of March 1988, provide the framework for
Spanish legislation on government procurement. These directives outline
procedures for awarding contracts for construction and supply of public
works, as well as procurement for entities operating in the fields of
telecommunications, water, transport, and services.
A proposed directive will open up procurement of services such as
insurance, architecture, and waste disposal.
Although a law on consolidating and rationalizing public-sector
purchases was passed in 1985, there is still no central purchasing
agency within the Spanish Government or its controlled industries. Each
government ministry, agency, or government-owned company procures
supplies and services independently. Regional and local government
agencies follow the same general procedures regarding foreign purchases
as the central government.
Various types of tenders are used in government procurement:
a) the auction (subasta), in which the contract is awarded to the lowest
bidder;
b) the selective tender (concurso-subasta), in which the contract is
awarded to the lowest of pre-qualified bidders;
c) the tender (concurso), in which the contract is awarded on the basis
of most advantageous overall proposal in which price may not be the
determining factor; and
d) the private tender, in which the contract is awarded to whatever firm
the government chooses.
International tenders are announced at least 40 days prior to the
submission date and domestic tenders 20 days before the submission date.
Validating documentation may be requested at submission. All
requirements are published in the Official State Bulletin. For major
procurement, especially military systems, the Spanish Government
generally asks vendors to offer substantial offsets. An offsets package
may combine transfer of technology, investment, or additional Spanish
export transactions. Typical offset commitments for military sales
reportedly range from 100 to 130 percent of the purchase price.
U.S. firms seeking contracts from Spanish Government-controlled entities
must have an established agent, distributor, or subsidiary in Spain
before bidding on contracts. Under Spanish law, foreign companies
seeking contracts with the Spanish Government enjoy the same
opportunities as do Spanish firms. The foreign enterprise must,
however, be a legal entity (for example, corporation or partnership) in
accordance with its own national laws.
The foreign firm must also be prepared to accept jurisdiction of the
Spanish courts in legal issues that may arise in implementing the
contract. Supply and service contracts are approved by the ministry
having jurisdiction. Approval of the Ministry of Economy and Finance is
required for contracts resulting in payments in foreign currencies.
Protecting your product from IPR infringement
Spain is a signatory to the Paris Convention for the Protection of
Industrial Property. The Spanish Patents Act of March 20, 1986 brought
Spain into conformity with the European Patent Convention and the
anticipated EU Patent Convention as a requirement for its entry into the
EU. Both the Trademark Law of November 1988 (Law 32) and the
Intellectual Property Law 1750/87 address protection for brand names and
trademarks. Spain is also a party to the Madrid Agreement on
Trademarks. These laws are in accordance with EU standards. The
Intellectual Property Law of November 1987 offers copyright protection.
a) Patents
A non-renewable 20-year period for working patents is available, and the
patent must be worked within three years of patenting. Spain is
revising its patent laws pertaining to chemicals, pharmaceutical, and
biotechnology to conform with EU standards.
b) Industrial Designs
These are known by their form or external characteristics and are
eligible for exclusive exploitation for renewable periods of 10 years.
Although third parties may oppose registration on basis of similarity to
already registered models, registration is not forfeited because of non-
use.
c) Trademarks
The Industrial Property Registry provides protection of trademarks for a
10-year period from the date of application, although such protection
may be renewed. Trademarks must be registered to be protected.
Protection is not granted for generic names, geographic names, those
violating Spanish customs, or other inappropriate trademarks.
d) Copyrights
Copyright protection is extended for all literary, artistic, or
scientific creations, including computer software. Spain and the United
States are members of the Universal Copyright Convention. To be accorded
protection, U.S. authors must register with this organization.
Need for a Local Attorney
Foreign companies and individuals are advised to hire legal advice for
any operation they intend to do in Spain. Either to set up a subsidiary
or a branch, to carry out business transactions or to acquire residency
in Spain. Regulations are complex and legal help is useful in many
every day commercial activities.
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
Best Prospects for Non-agricultural Goods and Services
List of Best prospects
1. Pollution Control and Water Resources Equipment
2. Franchising
3. Computers and Peripherals
4. Aircraft and Parts
5. Telecommunications Services
6. Electric Power Systems
7. Medical Equipment
8. Building Products
9. Architectural/Engineering Services
10. Telecommunications Equipment
11. Chemical Machinery
12. Industrial Controls
Rank of Sector: 1
Name of Sector: Pollution Control and Water Resources Equipment
ITA Industry Code: POL/WRE
Estimated average annual growth rate of imports from the U.S. is 30
percent through 1998. The Spanish Government has given top priority to
the expansion of sewage treatment systems throughout the country. Spain
is expected to spend over $15 billion for sewerage treatment
systems/hardware from 1993 to the year 2005. Around $11 billion will be
from the private sector and be spent before the year 2000. American
businesses will have an opportunity to bid on these contracts, but
should be fully prepared to compete with companies based in the EU.
Since January 1, 1993, when the Single European Market was established,
Spain has to fully comply with all EU Environmental Directives. In
addition to the Central Government, there are 17 Autonomous or Regional
Governments in Spain which issue environmental laws and regulations and
that are mandatory for their territories. The Regional Governments
incorporate the laws issued by the Central Government as well as the
Directives of the Community, and they are actually the ones that
enforce all of them within their territories.
The Spanish Central Government budget for Pollution Control Projects in
1995 call for the expenditure of almost $2 billion, for industrial
clean-up as well as for research, development and new technology. In a
recent study prepared by several Spanish banks, the annual national
investment in environment is of over $5 billion, most of which is from
the public sector in civil environmental works and water treatment. The
environmental market is expected to grow 12 percent annually.
The new National Criminal Code which has just been presented to the
Congress, and which most probably will be approved and implemented from
the first quarter of 1996, calls for fines of up to $300,000 and one to
four years imprisonment for those responsible for creating emissions,
dumps, wastes, radiations, noises, vibrations, injections or deposits to
the atmosphere, soil, sub-soil, and sea and continental waters, which
result in ecological damages. Government officials who permit or favor
these actions will be punished with up to one year imprisonment, fines
of up to $ 300,000, and the inability to hold any public office for
eight to twelve years. This new regulation will force Spanish industry
to look for cleaner technologies and pollution control equipment to
treat their emissions and industrial wastes, etc. This will mean new
and greater opportunities for U.S. environmental technologies over the
next eight years.
The Spanish Government estimates that the investment required to meet EU
Environmental Standards could be over $ 12 billion. The major sectors
that have to make the biggest investments are: oil and energy,
chemicals, plastics, motor vehicles, mining, metallurgy, tanning,
textiles and other basic industries.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total Market Size: 4,000 9,648 10,800
B. Total Local Production: 2,800 6,756 7,500
C. Total Exports: 600 700 800
D. Total Imports: 1,200 2,800 3,300
E. Imports from the U.S.: 360 800 1,000
F. Exchange rate $1 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 2
Name of Sector: Franchising
ITA Industry Code: FRA
The number of franchises established in Spain in 1994 was approximately
250, representing a growth of almost 20 percent compared with 1993. The
total number of franchise units extends just over 23,500; a 30 percent
growth compared with 1993. This trend will continue through 1996.
The franchise sector in Spain is relatively underdeveloped compared to
the rest of the EU. Approximately 4 percent of retail sales are
conducted through franchises. The retail/distribution sector is
undergoing a dramatic transformation which greatly benefits franchising.
Many believe that the survival of the traditional shop lies through
conversion to franchise. The potential for U.S. franchising in Spain is
very promising. U.S. franchisers have strong representation in the fast
food and service oriented markets. However, there are proportionally
fewer U.S. franchises in the remaining sectors.
With an average growth rate of 20 percent, franchises in Spain offer
excellent new business opportunities to expanding companies. The service
sector: Real estate, temporary employment, cleaning services, parcel and
mail deliveries, management services, language teaching, software
applications, travel agencies, car services etc. are hot prospects for
the Spanish market.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total Sales 6,000 7,200 8,500
B. Sales by local firms 3,600 4,200 4,800
C. Sales by local firms abroad 150 200 250
D. Sales by foreign owned firms 2,400 3,000 3,700
E. Sales by U.S. owned firms 660 800 1,000
F. Exchange rate $1 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 3
Name of sector: Computers and Peripherals
ITA Industry Code: CPT
Following a period of crisis, the computer sector has now begun a sound
recovery. Annual average growth in this sector is estimated at 10
percent though 1997. Most industrial and service sectors (banking,
insurance, communications) are generating increased demand due to
renovations of equipment and the introduction of new, more efficient
systems.
CD-ROMs account for a large part of the recovery in this sector. The
CD-ROM market has made its entry into the Spanish market and annual
growth rates of over 300 percent are expected for the next three years.
The largest growth is expected in the industry/business segment, but the
home sector is also expected to experience impressive growth. There are
also good opportunities in specific segments like laser printers,
plotters, graphic cards, laptops, as well as in LAN hardware.
U.S. brands dominate the market, and face little competition from EU and
Japanese manufacturers. The current U.S. dollar exchange rate also
favors U.S. brands. Most brands of U.S. hardware come from plants in
South East Asia.
The Spanish "n" must be physically present in all keyboards.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size 3,158 3,500 3,850
B. Total local production 1,148 1,380 1,600
C. Total exports 400 510 650
D. Total imports 2,390 2,630 2,900
E. Imports from the U.S. 1,000 1,120 1,255
F. Exchange rate $1 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 4
Name of Sector: Aircraft and Parts
ITA Industry Code: AIR
Recent EU "open skies" policy has brought competition in the Spanish air
transport market. The liberalization of Spain's internal air transport
has resulted in an increase of new airlines. Seven new regular airlines
have started operations since January 1994. There are eight more
companies requesting airline licenses from the Civil Aviation
Authorities. This has resulted in an increase in the total number of
airplanes operating in Spain, and a steady reactivation of the spare
parts market. This trend is expected to continue as underdeveloped
regional market is growing rapidly.
About 80 percent of Spain's civil airplanes come from the U.S.
manufacturers Boeing and McDonald Douglas. Even the most recent players
in this market have chosen American airplanes versus European ones.
Spanish airlines prefer financial leasing versus outright acquisition.
Leading financial companies in Spain are involved in buying aircraft to
lease to airlines.
In the drive to decrease operating costs, several airlines are
considering operational leasing from U.S. companies. This service
market is expected to increase dramatically in the short term.
U.S. aircraft manufacturers face competition from domestic companies
(small aircraft) and from Airbus. Nonetheless, estimated average annual
growth rate of U.S. exports in this sector is 12 percent through 1997.
The recent agreement by the Spanish Government to acquire surplus F-18s
from the U.S. Navy, to complement the 75 units of this model that the
Spanish Air Force already has, will greatly boost engine, system
upgrades and spare parts exports. The Spanish Armed Forces are also
considering the acquisition of "Black Hawk" helicopters, that will
greatly enhance opportunities for U.S. air parts manufacturers.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size: 1,431 1,615 1,780
B. Total local production: 302 345 370
C. Total exports: 21 25 25
D. Total imports: 1,149 1,300 1,440
E. Imports from the U.S.: 900 1,000 1,110
F. Exchange rate $1: 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 5
Name of Sector: Telecommunications Services
ITA Industry Code: TES
The telecommunications market is still dominated by Telefonica, Spain's
national operator. Gradual deregulation is slowly opening up
opportunities for U.S. firms, although not as quickly as hoped for since
the long-awaited cable telecommunications bill will not be passed until
Spring 1996. Cable TV programming and services will benefit enormously
from U.S. know-how, and once the regulatory framework is finally
approved, activity will be frenetic in a quest to develop and offer
services to the Iberian Information Superhighway.
Two GSM cellular networks will begin operating in 1995 (one has a U.S.
technological partner), although until 1997 anticipated growth will
still be in the TACS900 analog service run by Telefonica, whose
subscriber rate is growing at a spectacular rate of 70 percent. By
1997, a PCN cellular license may be offered, although not until the GSM
network expands.
The big money spinner is voice telephony. Although this market will not
be open to competition until 1998, U.S. firms can get their foot in the
door by offering voice telephony as a value added service for those
corporate clients who have U.S. equipment linking their closed group
network for data transmission (liberalized service). For domestic
clients, U.S. firms can join those already offering callback and calling
card services for long distance calls.
Satellite transmission will be free to competition in 1995, opening
opportunities to Spanish program providers and operators. It is worth
noting that radio-paging services (liberalized in 1993) are struggling
to keep their heads above water due to lack of clients.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size: 10,400 10,920 11,466
B. Total local sales: 11,180 11,740 12,327
C. Sales abroad by local owned cos. 2,900 3,045 3,197
D. Local sales by foreign owned cos. 1,500 1,950 2,450
E. Local sales by U.S. cos.: 450 525 620
F. Exchange rate $1: 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 6
Name of Sector: Electric Power Systems
ITA Industry Code: ELP
The Government of Spain has just made some modifications to the National
Energy Plan 1991-2000, adjust some of the objectives to current market
realities. The changes stress the need to develop even further
renewable energy in line with the update of the EU Thermie Plan. The EU
plan promotes projects in renewable energy through subsidies . There
are good opportunities for U.S. exporters in wind and solar energy, and
biomass.
Spain offers good potential for wind energy development. Several U.S.
and Spanish companies are already developing projects that will build
close to 700 MW of wind farms, throughout Spain. According to
estimates, there is good potential to develop even more wind energy.
U.S. companies can benefit from the opportunities arising in this sector
thanks to their long experience in wind technology.
The National Energy Plan establishes large investments in utilities
using gas as the primary source of energy. There are also good
opportunities in small co-generation equipment.
U.S. equipment makes up roughly 41 percent of total imports. They face
very strong competition from EU manufacturers such as German (20 percent
of import share) and French equipment suppliers (15 percent share).
Estimated average annual growth of imports from the U.S. is 10 percent
through 1997.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size: 2,675 2,905 3,000
B. Total local production: 1,541 1,723 1,800
C. Total exports: 240 245 250
D. Total imports: 1,426 1,550 1,600
E. Imports from the U.S.: 570 620 685
F. Exchange rate $1: 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 7
Name of Sector: Medical Equipment
ITA Industry Code: MED
Public health care institutions are the predominant end-users of medical
equipment accounting for 75-80 percent of total purchases. The market
is heavily import dependant. U.S. medical devices and hospital
equipment are the most highly regarded among Spanish M.D.'s and domestic
importers/distributors. U.S. exports in the sector should be even more
enhanced by two factors: 1) the fact that the Spanish National Health
Care Service has been able to reduce the payment time to their suppliers
from 14-15 months to 6-7 months (a long-standing problem). However,
U.S. companies entering this market still require good cash-flow to
adjust to long payment periods. 2) The current favorable U.S. dollar
exchange rate also favors U.S. firms over their main competitors from
Germany, Japan, Italy, the U.K. and France. Domestic industry is
growing very slowly and is not able to keep pace with growing demand,
reducing domestic suppliers' share of the market.
Improvements have been made in the registration process for sterilized
medical supplies. The process of registration has been reduced from 10-
12 months to 6-8 months and the EU directive on the common EU seal is
being applied in Spain with the advantage that registration is
recognized by the other EU countries.
Several U.S. companies (mainly the large manufacturers) are developing
the strategy of concentrating either production or central distribution
in a single EU country. This masks imports of medical equipment into
individual EU countries.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size 1,250 1,500 1,650
B. Total local production 250 275 290
C. Total exports 50 60 65
D. Total imports 1,050 1,290 1,415
E. Imports from the U.S. 395 440 495
F. Exchange rate $1 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 8
Name of Sector: Building Products
ITA Industry Code: BLD
The recovery in the construction sector is expected to continue during
1995. New government housing incentives; the continued implementation
of the government's Infrastructure Master Plan (which includes
improvement of the country's highways and waterway systems, airport and
port facilities, etc.); the demand from end-users (professionals and
individuals) for buildings of better quality, comfort, and improved
security and safety (as established by new EU standards) are increasing
demand for new buildings and reactivating a building products market.
U.S. products have a good reputation in this sector, but face strong
competition from both local and foreign manufacturers (mainly from
within the EU).
Data 1994 1995 1996
A. Total Market Size: 10,000 11,000 12,100
B. Total Local Production: 10,000 11,200 12,320
C. Total Exports: 1,000 1,200 1,440
D. Total Imports: 1,000 1,200 1,440
E. Imports from the U.S.: 320 350 385
F. Exchange rate $1 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 9
Name of Sector: Architectural/Construction/Engineering Services
ITA Industry Code: ACE
The recent approval of the Infrastructure Master Plan calls for a total
investment of $147 billion until its expected completion in 2010. Major
projects will include: the massive refurbishment and revitalization of
Spain's airport system, with special emphasis on Madrid's Barajas
International Airport; seaport and coast refurbishment; water works,
with special emphasis on the redistribution of water throughout Spain;
highway construction and maintenance; and the upgrading of
environmentally degraded areas.
New and innovative techniques offered by U.S. firms are well regarded,
but face strong competition from both domestic (Spanish engineers are
well considered and experienced professionals) and foreign (mainly
French and German) counterparts. It is recommended that U.S. firms
enter this market sector in association with a well-established local
firm.
Data 1994 1995 1996
A. Total Market Size: 910 1000 1100
B. Total Local Production: 650 700 770
C. Total Exports: 200 220 242
D. Sales by foreign owned companies: 460 520 595
E. Sales by U.S.-owned firms: 175 200 220
F. Exchange rate $1 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 10
Name of Sector: Telecommunications Equipment
ITA Industry Code: TEL
According to GOS officials, Spain's telecommunications sector has the
highest annual growth rate of all the European countries at the present
time (10 percent over the next three years before voice liberalization).
Telefonica, Spain's telecommunications giant continues to be the major
end-user and retailer for equipment, although those sectors which are
already liberalized, such as data transmission and radio-paging, offer
alternative clients.
The boom sector in 1995 is cellular transmission (terminals and
infrastructure) with the inauguration of the two GSM networks.
Competition is strong from both domestic and European suppliers, with
the U.S. still leading the field in cellular terminal sales.
The delay in approval of the cable network bill means a limited market
at present for those companies ready to enter the market. Although
eager to position themselves, many companies are waiting to enter the
market until they can be guaranteed return on their investment.
By 1997 there may be a PCN license (opening up a niche for U.S.
suppliers) which will complement Telefonica's ISDN expansion, which now
can service 70 percent of Spain's network. Almost 50 percent of the
cities are digitalized.
All equipment for the network requires certification that can take up to
6 months.
Data (all figures in US Dols millions)
1994 1995 1996
A. Total Market Size: 2,760 2,898 3,043
B. Total Local Sales: 2,725 2,861 3,004
C. Total Exports: 1,098 1,152 1,210
D. Total Imports: 1,130 1,186 1,245
E. Imports from the U.S.: 396 415 436
F. Exchange rate $1: 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 11
Name of Sector: Chemical Machinery and Equipment
ITA Industry Code: CHM
Estimated average growth rate of imports from the U.S. is 5 percent
through 1996. Although total estimated market for 1996 is still below
1992 levels, the sector is showing signs of steady recovery in terms of
production and investment in capital goods.
Main reasons for the increase of investments in chemical machinery are
the updating of the existing equipment, improvement in quality
standards, environmental regulations and energy savings.
Nearly 60 percent of the market is served by local industry, while the
main foreign supplier is the U.S. (around 25 percent of total imports),
followed by Germany (20 percent) and France (10 percent). Imports are
primarily in the following sub-sectors: basic chemicals machinery
(around 39 percent), treated chemicals, basically gum, plastics and
soaps (29 percent), and pharmachemicals (19 percent).
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size: 1,054 1,129 1,158
B. Total local production: 636 684 701
C. Total exports: 77 85 87
D. Total imports: 495 531 544
E. Imports from the U.S.: 124 133 136
F. Exchange rate $1: 134 130 130
(The above statistics are unofficial estimates)
Rank of Sector: 12
Name of Sector: Industrial Controls
ITA Industry Code: PCI
Estimated average growth rate of imports from the U.S. is 5 percent
through 1996. The sector is expected to grow due to increasing use of
automatization by Spanish industry (Spain currently has an estimated 75
percent automatization level out of an optimal level of 80 percent,
often cited by industrial sources).
Approximately 80 percent of the market is served by local industry,
while the main foreign supplier is the U.S. (around 20 percent of total
imports). Imports are primarily in the following sub-sectors:
automatization components (43 percent of total imports) and equipment
for automatization (30 percent).
Data (all figures in US Dols millions)
1994 1995 1996
A. Total market size: 1,499 1,590 1,631
B. Total local production: 1,188 1,271 1,304
C. Total exports: 291 321 329
D. Total imports: 603 640 656
E. Imports from the U.S.: 128 131 137
F. Exchange rate $1: 134 130 130
(The above statistics are unofficial estimates)
Best Prospects for Agricultural Products
Grain and Feed and By-Products
Oilseeds and Oilseeds By-Products
Poultry
Forestry Products
Marine Fisheries Products
Consumer-Oriented Products
Edible Pulses
Fresh Fruits
Tobacco
Commodity: Total Oilseeds (2230000) (1000 HA) (1000 TREES) (K MT)
Beg. Month/Year of Marketing Year: 00 / 93 00 / 94 00 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Planted 0 2,111 0 1,463 0 1,204
Area Harvested 0 1,746 0 1,345 0 1,108
Beginning Stocks 0 47 0 9 0 31
Production 0 1,283 0 1,110 0 783
MY Imports 0 1,989 0 3,060 0 3,029
MY Imp. from U.S. 0 914 0 1,649 0 1,557
MY Imp. from the EC 0 38 0 30 0 35
TOTAL SUPPLY 0 3,319 0 4,179 0 3,843
MY Exports 0 42 0 17 0 7
MY Exp. to the EC 0 38 0 17 0 7
Crush Dom. Consumption 0 2,646 0 3,422 0 3,232
Food Use Dom. Consump. 0 77 0 79 0 77
Feed,Seed,Waste Dm.Cn. 0 545 0 630 0 518
TOTAL Dom. Consumption 0 3,268 0 4,131 0 3,827
Ending Stocks 0 9 0 31 0 9
TOTAL DISTRIBUTION 0 3,319 0 4,179 0 3,843
Calendar Year Imports 0 2,423 0 2,970 0 3,004
Calendar Yr Imp. U.S. 0 1,290 0 1,605 0 1,567
Calendar Year Exports 0 28 0 8 0 5
Calndr Yr Exp. to U.S. 0 0 0 0 0 0
Commodity: Total Oils (4240000) (1000 METRIC TONS)
Beg. Month/Year of Marketing Year: 00 / 93 00 / 94 00 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Crush 0 2,667 0 3,461 0 3,160
Extr. Rate, 999.9999 0 0 0 0 0 0
Beginning Stocks 0 319 0 307 0 237
Production 0 1,292 0 1,372 0 1,149
MY Imports 0 148 0 160 0 175
MY Imp. from U.S. 0 0 0 0 0 0
MY Imp. from the EC 0 42 0 43 0 34
TOTAL SUPPLY 0 1,759 0 1,839 0 1,561
MY Exports 0 400 0 538 0 359
MY Exp. to the EC 0 210 0 150 0 146
Industrial Dom. Consum 0 72 0 87 0 58
Food Use Dom. Consump. 0 962 0 956 0 957
Feed Waste Dom. Consum 0 18 0 21 0 20
TOTAL Dom. Consumption 0 1,052 0 1,064 0 1,035
Ending Stocks 0 307 0 237 0 167
TOTAL DISTRIBUTION 0 1,759 0 1,839 0 1,561
Calendar Year Imports 0 184 0 145 0 175
Calendar Yr Imp. U.S. 0 0 0 0 0 0
Calendar Year Exports 0 390 0 490 0 449
Calndr Yr Exp. to U.S. 0 11 0 15 0 35
Commodity: Total Oilmeals (0810000) (1000 METRIC TONS)
Beg. Month/Year of Marketing Year: 00 / 93 00 / 94 00 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Crush 0 2,646 0 3,422 0 3,232
Extr. Rate, 999.9999 0 0 0 0 0 0
Beginning Stocks 0 278 0 172 0 97
Production 0 1,753 0 2,393 0 2,247
MY Imports 0 2,202 0 1,812 0 2,022
MY Imp. from U.S. 0 77 0 55 0 50
MY Imp. from the EC 0 41 0 40 0 42
TOTAL SUPPLY 0 4,233 0 4,377 0 4,366
MY Exports 0 84 0 80 0 68
MY Exp. to the EC 0 81 0 63 0 58
Industrial Dom. Consum 0 0 0 0 0 0
Food Use Dom. Consump. 0 0 0 0 0 0
Feed Waste Dom. Consum 0 3,977 0 4,200 0 4,031
TOTAL Dom. Consumption 0 3,977 0 4,200 0 4,031
Ending Stocks 0 172 0 97 0 267
TOTAL DISTRIBUTION 0 4,233 0 4,377 0 4,366
Calendar Year Imports 0 2,166 0 1,922 0 2,037
Calendar Yr Imp. U.S. 0 81 0 55 0 55
Calendar Year Exports 0 100 0 80 0 70
Calndr Yr Exp. to U.S. 0 0 0 0 0 0
Commodity: Tobacco, Unmfg., Total (1211000) (HECTARES) (METRIC TONS)
Beg. Month/Year of Marketing Year: 01 / 93 01 / 94 01 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Planted 18,570 17,603 18,570 16,050 0 16,200
Beginning Stocks 43,380 43,380 23,880 31,790 0 14,358
Farm Sales Weight Prod 41,600 41,600 42,300 42,283 0 42,300
Dry Weight Production 34,112 34,112 34,686 34,672 0 34,686
U.S. Leaf Imports 9,622 9,622 11,000 15,263 0 15,000
Other Foreign Imports 35,047 35,047 41,500 38,247 0 45,000
TOTAL Imports 44,669 44,669 52,500 53,510 0 60,000
TOTAL SUPPLY 122,161 122,161 111,066 119,972 0 109,044
Exports 14,791 14,791 13,200 25,102 0 15,200
Dom. Leaf Consumption 28,500 20,500 28,000 24,000 0 24,000
U.S. Leaf Dom. Consum. 9,300 9,300 10,500 11,500 0 12,200
Other Foreign Consump. 45,690 45,780 42,400 45,012 0 44,100
TOTAL Dom. Consumption 83,490 75,580 80,900 80,512 0 80,300
TOTAL Disappearance 98,281 90,371 94,100 105,614 0 95,500
Ending Stocks 23,880 31,790 16,966 14,358 0 13,544
TOTAL DISTRIBUTION 122,161 122,161 111,066 119,972 0 109,044
Commodity: Total Edible Fishery Prods. (0300000) (METRIC TONS)
Beg. Month/Year of Marketing Year: 01 / 93 01 / 94 01 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Landings/Comm'l Catch
88,0617 880,617 854,000 854,000 854,000 850,000
Fresh/Frozen Productn.
79,2555 792,555 768,000 768,000 768,000 764,400
Canned Production
22,1500 221,500 223,000 223,000 224,000 224,000
Cured Production
9,000 39,000 10,300 40,000 10,500 41,000
Total Production
1,023,055 1,053,055 1,001,300 1,031,000 1,002,500 1,029,400
Fresh/Frozen Imports
71,7300 754,406 730,000 861,500 750,000 850,000
Canned Imports
43,300 28,554 49,300 30,000 57,000 80,000
Cured Imports
49,700 14,758 45,000 16,000 45,000 16,500
TOTAL Imports
810,300 797,718 824,300 907,500 852,000 946,500
Fresh/Frozen Exports
271,300 291,646 290,000 366,047 300,000 400,000
Canned Exports
37,300 23,460 39,000 25,000 39,300 26,000
Cured Exports
8,400 13,881 8,600 15,000 8,600 15,000
TOTAL Exports
317,000 328,987 337,600 406,047 347,900 441,000
Domestic Consumption 1,452,155 1,521,786 1,473,200 1,532,453 1,493,600
1,534,900
Commodity: Softwood Lumber (2482000) 1000 CUBIC METERS
Beg. Month/Year of Marketing Year: 01 / 92 01 / 93 01 / 94
SPAIN Revised 1992 Prelim 1993 Forecast 1994
Old New Old New Old New
Production 1,700 1,700 1,500 2,200 0 2,000
Imports 1,150 1,150 1,100 919 0 950
TOTAL SUPPLY 2,850 2,850 2,600 3,119 0 2,950
Exports 46 46 100 55 0 50
Domestic Consumption 2,804 2,804 2,500 3,064 0 2,900
TOTAL DISTRIBUTION 2,850 2,850 2,600 3,119 0 2,950
Commodity: Temperate Hardwood Lumber (2483020) 1000 CUBIC METERS
Beg. Month/Year of Marketing Year: 01 / 92 01 / 93 01 / 94
SPAIN Revised 1992 Prelim 1993 Forecast 1994
Old New Old New Old New
Production 630 765 630 575 0 800
Imports 381 381 300 301 0 320
TOTAL SUPPLY 1,011 1,146 930 876 0 1,120
Exports 10 10 15 7 0 10
Domestic Consumption 1,001 1,136 915 869 0 1,110
TOTAL DISTRIBUTION 1,011 1,146 930 876 0 1,120
Commodity: Wheat (0410000) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 10 / 93 10 / 94 10 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 2,035 2,035 2,013 1,995 0 2,051
Beginning Stocks 250 250 120 120 0 0
Production 5,001 5,001 4,300 4,311 0 4,000
TOTAL Mkt. Yr. Imports 2,294 2,294 2,200 2,200 0 2,700
Jul-Jun Imports 2,294 2,294 2,200 2,200 0 2,700
Jul-Jun Import U.S. 22 22 20 20 0 20
TOTAL SUPPLY 7,545 7,545 6,620 6,631 0 6,700
TOTAL Mkt. Yr. Exports 1,050 1,050 1,150 1,150 0 1,100
Jul-Jun Exports 1,050 1,050 1,150 1,150 0 1,100
Feed Dom. Consumption 2,435 2,435 1,530 1,541 0 1,600
TOTAL Dom. Consumption 6,375 6,375 5,470 5,481 0 5,600
Ending Stocks 120 120 0 0 0 0
TOTAL DISTRIBUTION 7,545 7,545 6,620 6,631 0 6,700
Commodity: Barley (0430000) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 10 / 93 10 / 94 10 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 3,484 3,484 3,581 3,602 0 3,662
Beginning Stocks 700 700 1,400 1,400 0 100
Production 9,520 9,520 7,500 7,596 0 7,000
TOTAL Mkt. Yr. Imports 32 32 100 500 0 1,000
Oct-Sep Imports 32 32 100 500 0 1,000
Oct-Sep Import U.S. 0 0 0 0 0 0
TOTAL SUPPLY 10,252 10,252 9,000 9,496 0 8,100
TOTAL Mkt. Yr. Exports 800 447 900 900 0 0
Oct-Sep Exports 800 447 900 900 0 0
Feed Dom. Consumption 6,952 7,305 7,000 7,396 0 7,000
TOTAL Dom. Consumption 8,052 8,405 8,100 8,496 0 8,100
Ending Stocks 1,400 1,400 0 100 0 0
TOTAL DISTRIBUTION 10,252 10,252 9,000 9,496 0 8,100
Commodity: Sorghum (0459200) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 10 / 93 10 / 94 10 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 4 4 21 20 0 10
Beginning Stocks 0 0 0 0 0 0
Production 20 20 82 74 0 40
TOTAL Mkt. Yr. Imports 375 375 400 400 0 500
Oct-Sep Imports 375 375 400 400 0 500
Oct-Sep Import U.S. 175 175 205 205 0 305
TOTAL SUPPLY 395 395 482 474 0 540
TOTAL Mkt. Yr. Exports 0 0 0 0 0 0
Oct-Sep Exports 0 0 0 0 0 0
Feed Dom. Consumption 395 395 482 474 0 540
TOTAL Dom. Consumption 395 395 482 474 0 540
Ending Stocks 0 0 0 0 0 0
TOTAL DISTRIBUTION 395 395 482 474 0 540
Commodity: Corn (0440000) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 10 / 93 10 / 94 10 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 274 274 342 342 0 270
Beginning Stocks 300 300 200 200 0 100
Production 1,698 1,698 2,200 2,269 0 1,600
TOTAL Mkt. Yr. Imports 2,782 2,782 2,300 3,100 0 3,100
Oct-Sep Imports 2,782 2,782 2,300 3,100 0 3,100
Oct-Sep Import U.S. 1,175 1,175 1,300 2,000 0 2,000
TOTAL SUPPLY 4,780 4,780 4,700 5,569 0 4,800
TOTAL Mkt. Yr. Exports 0 0 0 0 0 0
Oct-Sep Exports 0 0 0 0 0 0
Feed Dom. Consumption 3,580 3,580 3,500 4,469 0 3,800
TOTAL Dom. Consumption 4,580 4,580 4,500 5,469 0 4,800
Ending Stocks 200 200 200 100 0 0
TOTAL DISTRIBUTION 4,780 4,780 4,700 5,569 0 4,800
Commodity: Rice, Milled (0422110) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 10 / 93 10 / 94 10 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 50 50 63 63 0 55
Beginning Stocks 88 88 45 38 0 71
Milled Production 221 221 270 273 0 242
Rough Production 316 316 386 390 0 346
MILLING RATE (.9999) 7,000 7,000 7,000 7,000 0 7,000
TOTAL Imports 100 154 150 160 0 160
Jan-Dec Imports 150 177 150 150 0 160
Jan-Dec Import U.S. 14 17 20 20 0 14
TOTAL SUPPLY 409 463 465 471 0 473
TOTAL Exports 90 135 150 100 0 100
Jan-Dec Exports 90 82 150 170 0 80
TOTAL Dom. Consumption 274 290 270 300 0 300
Ending Stocks 45 38 45 71 0 73
TOTAL DISTRIBUTION 409 463 465 471 0 473
Commodity: Lentils (0542300) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 07 / 93 07 / 94 07 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 31 31 36 34 0 50
Beginning Stocks 19 19 18 28 0 39
Production 20 20 26 19 0 25
TOTAL Mkt. Yr. Imports 52 65 45 73 0 55
Jul-Jun Imports 52 65 45 73 0 55
Jul-Jun Import U.S. 22 18 20 17 0 17
TOTAL SUPPLY 91 104 89 120 0 119
TOTAL Mkt. Yr. Exports 0 1 0 1 0 1
Jul-Jun Exports 0 1 0 0 0 0
Feed Dom. Consumption 0 0 0 0 0 0
TOTAL Dom. Consumption 73 75 72 80 0 80
Ending Stocks 18 28 17 39 0 38
TOTAL DISTRIBUTION 91 104 89 120 0 119
Commodity: Peas (0542400) (1000 HECTARES)(1000 MT)
Beg. Month/Year of Marketing Year: 07 / 93 07 / 94 07 / 95
SPAIN Revised 1993 Prelim 1994 Forecast 1995
Old New Old New Old New
Area Harvested 7 7 50 70 0 85
Beginning Stocks 0 0 0 0 0 0
Production 10 10 50 70 0 80
TOTAL Mkt. Yr. Imports 280 280 290 470 0 500
Jul-Jun Imports 280 280 290 470 0 500
Jul-Jun Import U.S. 1 1 1 3 0 3
TOTAL SUPPLY 290 290 340 540 0 580
TOTAL Mkt. Yr. Exports 0 0 0 0 0 0
Jul-Jun Exports 0 0 0 0 0 0
Feed Dom. Consumption 285 285 335 535 0 575
TOTAL Dom. Consumption 290 290 340 540 0 580
Ending Stocks 0 0 0 0 0 0
TOTAL DISTRIBUTION 290 290 340 540 0 580
Commodity: Fresh Apples (0574000) (HA) (K TREES) (MT)
Beg. Month/Year of Marketing Year: 07 / 92 07 / 93 07 / 94
SPAIN Revised 1992 Prelim 1993 Forecast 1994
Old New Old New Old New
Area Planted 56,000 54,035 55,900 54,035 55,900 53,000
Area Harvested 53,600 52,314 53,500 52,314 52,000 51,000
Bearing Trees 51,300 49,700 51,200 49,700 51,200 48,450
Non-Bearing Trees 2,200 1,635 2,200 1,635 22,00 1,900
Total Trees 53,500 51,335 53,400 51,335 53,400 50,350
Commercial Production
1,034,300 1,034,300 839,200 839,200 721,700 694,400
Non-Comm. Production
61,100 61,100 34,900 34,900 32,300 30,000
TOTAL Production 1,095,400 1,095,400 874,100 874,100 754,000 724,400
TOTAL Imports 100,300 100,300 102,000 147,000 100,000
160,600
TOTAL SUPPLY 1,195,700 1,195,700 976,100 1,021,100 854,000
885,000
Domestic Fresh Consump
762,300 762,300 710,100 740,100 605,000 655,000
Exports, Fresh Only
28,600 28,600 20,000 32,000 19,000 20,000
For Processing 260,600 260,600 200,000 200,000 200,000 180,000
Withdrawal From Market
144,200 144,200 46,000 49,000 30,000 30,000
TOTAL UTILIZATION
1,195,700 1,195,700 976,100 1,021,100 854,000 885,000
Commodity: Poultry, Meat, Total (0114000) (1000 METRIC TONS)
Beg. Month/Year of Marketing Year: 01 / 94 01 / 95 01 / 96
SPAIN Revised 1994 Prelim 1995 Forecast
1996
Old New Old New Old New
Beginning Stocks 0 0 0 0 0 0
Production 860 880 885 895 0 895
Whole, Imports 30 29 31 28 0 30
Parts, Imports 70 65 74 62 0 65
Intra EC Imports 70 68 74 70 0 75
TOTAL Imports 100 94 105 90 0 95
TOTAL SUPPLY 960 974 990 985 0 990
Whole, Exports 4 7 4 7 0 6
Parts, Exports 8 8 9 9 0 8
Intra EC Exports 10 12 10 13 0 12
TOTAL Exports 12 15 13 16 0 14
Human Consumption 948 957 977 966 0 973
Other Use, Losses 0 2 0 3 0 3
Total Dom. Consumption 948 959 977 969 0 976
TOTAL Use 960 974 990 985 0 990
Ending Stocks 0 0 0 0 0 0
TOTAL DISTRIBUTION 960 974 990 985 0 990
SPAIN: IMPORTS OF SPECIFIED U.S. HIGH - VALUE PRODUCTS
Millions of Dollars
1991 1992 1993
Milk and Cream 1/ 1/ 1/
Yogurt and Buttermilk 1/ 1/ 1/
Butter 0 0 0
Cheese 1/ 1/ 1/
Ice Cream 1/ 0 1/
Table Eggs 2 2 3
Beef 1/ 1/ 0
Pork 0 1/ 0
Poultry 16 12 12
Puffed and roasted cereals 2 2 1/
Bakery Products 1/ 1 1
Pasta Products 1/ 1/ 1/
Soups and soup preparations 1/ 1/ 1/
Sauces and Seasonings 5 2 1
Baby Foods 1/ 1/ 0
Sugar, confectionery 1/ 1 1/
Chocolates and preparations 1/ 1/ 1/
Nuts 47 57 33
Raisins 1 2 1
Dates 1/ 1/ 0
Figs 0 0 0
Prunes 4 5 3
Peanuts 10 14 13
Confectionary Sunflowerseed 16 19 15
Apples 1/ 2 1/
Kiwifruit 1/ 1/ 0
Fruit Juices 1/ 1/ 1/
Canned Fruit and Vegetables 5 7 7
Beer 2 3 1
Wine and Vermouth 1/ 1 1
Bourbon 7 6 2
-TOTAL 118 136 96
1/ Less than $1 million
Peseta/US$ exchange rates: 1991 - 103.8; 1992 - 102.38; 1993 - 127.26.
Source: Spanish Customs Office
Investment Opportunities
Several sectors in Spain are experiencing large growth which justifies
investment in Spain and which also generate export sales. These sectors
are telecommunications and infrastructure development. Note that
products manufactured in Spain can be marketed without any duties or
restrictions in the remaining EU countries.
The telecommunications market is undergoing a liberalization process.
There are already two operators competing for cellular telephone
service. Value added services are already liberalized. Several
companies already offer paging, trunking and satellite services. Basic
voice telephony will be fully liberalized in 1998. Cable TV is
practically non existent.
Both voice telephony and cable TV offer the best opportunities for
American investors. In voice telephony only Government owned Telefonica
is allowed to offer that service. From 1998, any company may provide
that service in direct competition with Telefonica.
Cable TV offers even greater opportunities. There is a cable TV law
being debated in Parliament, which will clarify the current unclear
status of cable. At present, there is only a one percent penetration
rate for cable TV, but experts believe this rate will increase rapidly
to five percent in two years. The law is expected by Spring 1996.
There are good opportunities for architect and engineering service
companies. The Government of Spain is going to spend over $100 billion
in the next 10 years in public works, mainly road construction, airport
and port renovation and development of high speed train lines. Demand
for the latest engineering techniques for these works will increase.
The Government of Spain has a large privatization program that will
affect companies operating in every industrial sectors. Significant
investment opportunities can be found in telecommunications, power
generation and oil. The Government intends to reduce its share of the
capital in Telefonica, Endesa and Repsol.
Telefonica is one of the largest telecommunications operator in the
world. Around 25 percent of its stock is already listed in the NYSE.
Its international affiliate has interests in telecommunications
companies in Argentina, Peru, Chile and Puerto Rico. Although it has
not been announced, the Government plans to privatize around 10 percent
of its assets during 1995.
Endesa is another company that the Government plans to privatize. It is
the largest power utility in Spain. It is diversifying into
telecommunications and broadcasting as well, it is involved in the
consortium to provide cable TV to the Baleares islands. It is also
negotiating the acquisition of a stake in private TV station Antena 3
TV. Details of the privatization will most probably be published after
this Summer.
Repsol is the largest petroleum and gas company in Spain. It has retail
distribution networks in other EU countries such as the U.K., France and
Portugal. A significant stake was just privatized during the first
quarter of this year, but the Government is considering privatization of
another package before the end of 1995.
The Government of the United States acknowledges the contribution that
outward foreign direct investment makes to the U.S. economy. U.S.
foreign direct investment is increasingly viewed as a complement or even
a necessary component of trade. For example, roughly 60 percent of U.S.
exports are sold by American firms that have operations abroad.
Recognizing the benefits that U.S. outward investment brings to the U.S.
economy, the Government of the United States undertakes initiatives such
as Overseas Private Investment Corporation (OPIC) programs, investment
treaty negotiations and business facilitation programs, that support
U.S. investors.
VI. TRADE REGULATIONS AND STANDARDS
Trade Barriers, Including Tariffs, Non-Tariff Barriers and Import Taxes
Spanish tariffs for EU countries have been zero since January 1, 1993,
while those third-country goods, including those from the United States
and Japan, receive the EU's Common External Tariff. Since 1988, Spain
has used the Harmonized System of tariff nomenclature for applying
duties. U.S. goods are taxed according to the standard EU duty rate.
Spain has adhered to the GATT code since 1963. In December, 1994, Spain
ratified adherence to the Marrakesh accord, which concluded the Uruguay
Round of international trade negotiations and established the World
Trade Organization.
For agricultural products, import documentation and tariffs are exactly
the same as for other EU countries. While a few agricultural
commodities are duty free or subject to minimal duties (soybeans,
sunflower seed, corn by-product, lumber) the great majority of
agricultural products (those covered by the CAP) and food products are
subject to high duties or variable import levies which significantly
restrict access into the Spanish market.
In 1993, during the Uruguay Round negotiations, the EU committed itself
to implementing a permanent basis the compensation it had been providing
to the United States since 1987 for Spain's accession to the EU. The EU
had owed the United States compensation due to Spain's breach of its
GATT tariff binding on imports of corn and sorghum when Spain joined the
Common Agricultural Policy. The compensation came in the form of
minimum import commitments for corn and sorghum, as well as tariff
reductions on about 25 products.
Non-tariff barriers have been identified in the audiovisual and
intellectual property areas. Spain has a system of screen quotas and
"dubbing licenses" which increase costs and limit access of U.S. film
distributors. Piracy of audiovisual products (principally through
unregulated "community video" cable television networks) and of computer
software are of concern here.
Customs Valuation
Spanish Customs values shipments at C.I.F. prices. For American
products the tariff rate averages 5 percent. A shipment has to be
cleared through customs by a registered customs agent. Usually, total
costs to clear customs fall in the range of 20 to 30 percent of the
shipments's C.I.F. value. This includes tariffs, value added tax (16
percent), custom agent and handling fees.
Import Licenses
Spain was obligated under its EU accession agreement to transform its
structure of formal and informal import restrictions for industrial
products into a formal system of import licenses and quotas. While
Spain does not enforce any quotas on U.S.-origin manufactured products,
it still requires import documents, which are described below. Neither
of these documents constitute a trade barrier for U.S.-origin goods.
- Import Authorization, (Autorizacion Administrativa de Importacion -
AAI) is used to control imports which are subject to quotas. Although
there are no quotas against U.S. goods, this document may still be
required if part of the shipment contains products or goods produced or
manufactured in a third country. In essence, for U.S.-origin goods, the
document is used for statistical purposes only or for national security
reasons.
- Prior notice of imports (Notificacion previa de importacion) which is
used for merchandise that circulates in the EU Customs Union Area, but
which is controlled for statistical purposes only. The importer must
obtain the document and present it to the General Register.
Importers apply for import licenses at the Spanish General Register of
Spain's Department of Commerce or any of its regional offices. The
license application must be accompanied by a commercial invoice that
includes freight and insurance, the C.I.F. price, net and gross weight
and invoice number. Customs accepts commercial invoices by fax. The
license, once granted, is normally valid for 6 months but may be
extended if adequate justification is provided.
Goods that are shipped to a Spanish customs area without proper import
licenses or declarations are usually subject to considerable delay and
may run up substantial demurrage charges. U.S. exporters should ensure,
prior to making shipment, that the necessary licenses have been obtained
by the importing party. Also, U.S. exporters should have their importer
confirm with Spanish customs whether any product approvals or other
special certificate will be required for the shipment to pass customs.
Export Controls
Spain has been a member of COCOM since 1985, and is active in the
creation of the New Forum that will replace COCOM. Spain is also a
member of the Australian Group for Chemical Products Controls and a
signatory of the Chemical Weapons Convention which will be effective in
1995.
Exports controls are regulated by Organic Law 3/1992 and Royal Decree
824/1993. The Royal Decree establishes both the regulations and the
COCOM lists applicable, as well as the procedures to follow.
Import/Export Documentation
Several different forms of documentation may be required for shipments
to Spain. Exporters are required to present one commercial invoice, one
bill of lading, and three copies of a certificate of origin for all
shipments. Other certificates are needed for exporting pharmaceutical
goods, perishable foods, live animals and some medical goods.
Sanitary Certificates:
U.S. Animal and Plant Health Inspections certificates are required from
the U.S. Animal and Plant Health Inspection Service (APHIS) for
importation of living plant material (including plants, plant products,
and seeds) into Spain. Health inspection requirements also govern the
importation of animals and parts of animals (including meat products,
skins, hides, and similar products), marine mammals, fish, crustaceans,
or mollusks and parts.
Spanish regulations are subject to provisions of the Spanish Ministry of
Agriculture. Inspections usually are carried out in local offices of
APHIS, which are located in major U.S. ports and airports. Export
agents or brokers may present products for inspection. Inspection of air
shipments may be handled by the airlines.
Pharmaceutical Certificates:
These are required by Spanish Customs for drugs and certain sanitary
items. A standard analysis bulletin issued by the manufacturer, listing
product composition is acceptable for customs purposes.
Other certificates:
Sea vessels require a certificate of compliance from the Marine
Authority (Ministry of Transport) to bring boats ships into Spain. In
order to acquire this certificate, the manufacturer has to demonstrate
the vessels sea-worthiness. The National Marine Manufacturers
Association issues a sea-worthiness affidavit that is accepted by the
Spanish authorities for the certificate of compliance.
Fines and Penalties:
Regulations establish fines for whatever actions delay the normal
customs procedure. Fines are not very big, usually around $30 or 40.
These do not include fraudulent actions.
Anti-dumping and Countervailing Duties:
As a signatory to the Anti-dumping and Countervailing Duty Codes of the
GATT, Spain, through the EU Anti-dumping Committee, penalizes products
imported at less than their normal value which cause injury to domestic
industry. The anti-dumping duty will be the difference between the
dumped price and comparable domestic price of the exported product. The
duration of the countervailing duty imposition varies from case to case
and the duty imposed currently ranges from 5 to 33 percent.
Temporary Entry
The Spanish reexport system is regulated by Order of July 24, 1987,
conforming to EU regulations. Reexport inquiries must be addressed to
the port's Customs Director. Re-exports of U.S. goods from Spain follow
the same procedures as exporting Spanish products. Goods reexported to
other EU member states are subject to statistical surveillance.
Reexports outside the European Union not covered by specific EU
regulations are exported with an accompanying Customs Export Declaration
at the exit point. A limited number of goods require a Prior Notice of
Export.
Exporters of high-technology goods subject to U.S. export control
procedures must ensure that Spanish clients and subsidiaries are aware
of U.S. export controls requirements.
There are four types of procedures for handling the re-export of goods:
1) Temporary Imports -- Goods imported for a limited period of time
under an ATA carnet. A bank guarantee in the form of a bond equivalent
to duties owed must be provided to Customs, which will be refunded once
the goods leave the country.
2) Temporary Admission -- Goods which will be incorporated into a final
product for export. Prior approval by the Ministry of Commerce is
necessary. The same procedure as for temporary imports applies for re-
export.
3) Replacement Goods -- Companies with continuing needs for primary
materials, commodities, or intermediates can request prior approval from
the Ministry of Commerce for replacement goods after the second year of
operation. They must deposit a bond with Customs on the compensatory
tax only. Replacements for defective goods destroyed under Customs
supervision are also admitted duty-free, but requires extensive
supporting documentation.
4) Drawback -- Duties are paid simultaneously with presentation of a
list of the products to be re-exported eventually. Later, a rebate
(drawback) is made upon customs clearance out of Spain. This procedure
also requires prior approval by the Ministry of Commerce.
Companies are advised to use the carnet procedure to temporarily bring
goods into Spain for demonstration purposes without paying duties or
posting bond. The carnet must be presented to the customs authorities
whenever entering or leaving the country. Consumable items and give-
away samples are not included under carnet procedures. ATA carnets are
predominantly used for commercial samples, tools of trade, advertising
material or cinematographic, audio visual, medical, scientific, or other
professional equipment that will be imported for a period of less than a
year. The advantage of the ATA carnet is that it allows exporters to
avoid normal customs clearance formalities.
The carnet also provides a financial guarantee to foreign customs
officials that, if the goods are not re-exported, the duty will be paid.
A bond equivalent to the duty is charged.
The ATA carnet is used internationally and should be distinguished from
the EU carnet, sometimes referred to as the ESC carnet. Introduced in
July 1985, this carnet is used for the temporary movement of certain
types of goods between EU countries, usually equipment and working
materials. Unlike the ATA carnet, it does not require posting a bond.
Carnet applications are available from all district offices of the U.S.
Department of Commerce, most U.S. chambers of commerce, and authorized
export insurance companies. They are also issued by the U.S. Council of
the International Chamber of Commerce in New York.
Advertising material, catalogs, price lists, and similar printed items
are admitted duty free. However, to avoid any problems such items
should always be labeled, "no value." Otherwise, a customs duty is
likely to be levied on the sample.
As a signatory to the International Convention to Facilitate the
Importation of Commercial Samples and Advertising Matter, Spain admits
samples of negligible value duty free. Those items of commercial value
and not covered under carnet procedures may be imported for up to a year
by business people upon payment of bond. Upon presentation of the
customs receipt and re-export, the deposit is refunded.
Qualifying business people bringing commercial samples should come
equipped with a letter from his or her principals attesting to this
status, identifying the samples, and certifying that the samples are not
for sale. The letter should be certified by the nearest Spanish
Consulate.
Labeling, Marking Requirements
In view of the complexity and rapid change in marking, labeling, and
testing requirements in Spain, U.S. exporters should request pertinent
instructions from their importers prior to shipment. In general, special
requirements exist for foodstuffs, beverages, textiles, drugs and
pharmaceutical, fertilizers, precious metals, tires, and firearms.
Following are specific categories of goods, for which marking, labeling,
and/or testing requirements are applicable:
Foodstuffs -- The Directorate General of Health sets human consumption
standards for the preparation, residual content, and storage media for
virtually all classes of foodstuffs. The labels on the container must
include the product designation, list of ingredients, weight or volume,
dates (manufacturing, packing, minimum shelf life, and expiration
dates), directions for food preservation (if applicable), identification
of the firm involved (manufacturer, packer, or importer), and country of
origin. If the original label is not in Spanish, a similar one must be
prepared in Spanish, firmly affixed to the container. Milk products,
margarine, chocolate, and soaps have other, more technical labeling
requirements. Wines and other alcoholic beverages must meet Spanish
standards.
Textiles -- Customs and point-of-sale regulations require that all
textile goods and ready-made clothing have a Spanish label. Standard
Spanish textile nomenclature and content requirements must be stated on
the label. Requirements relating to textile content, labeling, and
packaging are specific and extensive. They are regulated by R.D.
928/1987, dated June 5, 1987. Manufacturers' trademarks, duly
registered, are permitted on textile products.
Drugs, Pharmaceutical, and Cosmetics -- These goods are subject to
technical inspection and registry by the Directorate General of Health
prior to entry. There are also detailed marking and labeling
requirements, somewhat similar to those for foodstuffs, but which also
include detailed chemical composition.
Fertilizers and Fungicides -- Imported fertilizers must be registered
with the local Agriculture Department Office. Inspection and analysis
will be performed prior to customs clearance. All printed advertising
and publicity materials must be approved by the Department of
Agriculture, and labels must be in Spanish and include detailed
precautions.
Firearms -- All firearms must be cleared by the Spanish Government
Proving Grounds and bear the stamp of that organization.
Metals -- The Spanish Guaranty Bureau provides assay services and
affixes its hallmark for all imported precious metals.
Motor Vehicles -- Each vehicle will be inspected for engraved serial
numbers on both the engine and chassis. If one of these is not
available, Spanish customs levies a special charge for stamping the same
number.
Tires and Tubes -- All tires and inner tubes must be marked with a
serial number.
For agricultural products, labeling requirements are fully harmonized
with the EU labeling system, however, label must be in Spanish.
Eco-labels:
In March of 1992, the EU Council approved law 880/92, establishing a
community-wide system for granting eco-labels (green label) to products
that satisfy environmentally conscious standards.
The EU's objectives for setting up a system for issuing green labels are
twofold. To inform consumers of products that are environmentally safer
than others in all aspects of a product's life-cycle and to improve the
design, production, marketing and increase the use of products that have
low or non-adverse effects on the environment, and that use natural
resources wisely.
In all, it is hoped that these objectives will increase the standards of
health, security, and the condition of the environment of the eu
countries. Products imported into the eu that wish to obtain a green
label must follow the same strict criteria as eu members.
Spain will introduce this piece of legislation sometime during 1995.
Companies that want to qualify their products as environmentally
friendly must acquire this label. The Spanish Association for Quality
Standards (AENOR) will be issuing them.
Prohibited Imports
Spanish regulations ban the import of illicit narcotics and drugs. They
also set up very restrictive regulations for imports of explosives, fire
weapons, defense equipment and material in general, tobacco, and
gambling material.
EU regulations on hormones ban U.S. beef and beef products from entry
into the EU. In addition, EU health regulations on live cattle ban U.S.
high genetic cattle imports.
Standards
At present there are no requirements for either ISO 9000 certification
or its EU equivalent. Nonetheless, demand for products that meet these
standards is growing.
Spain has established specific certification for certain products. This
certification procedure is referred to as "homologation" and involves
cumbersome product testing by approved laboratories. Although most of
the local homologation requirements and testing standards are gradually
disappearing as Spanish legislation conforms to EU directives, certain
homologation and other special requirements remain for some products.
Generally, a product that meets the standards and certification
requirements of any other EU country can be imported and sold in Spain
without further testing. Spanish homologation requirements remain in
force for computer keyboards and screens, dot matrix printers,
teleprinters, medical equipment, electric typewriters,
telecommunications equipment, motor vehicles, bicycles, pleasure boats,
gas connectors, etc.
Applications for homologation are processed by the Ministry of Industry
and Energy and by the Ministry of Transport and Telecommunications.
These national standards will be phased out as EU norms take effect.
The Spanish Standards Certification Association (AENOR - Asociacion
Espanola de Normalizacion y Certificacion) is responsible for developing
voluntary standards and certification programs. It represents Spain in
international standards bodies. The Spanish Government publishes a list
of approved laboratories for testing and certification each year.
Electrical products which operate in a voltage range of 50 to 1,000
volts alternating current or 75 to 1,500 volts direct current have to
meet the EU low voltage directive. There are three accepted forms of
proofs of conformity with this regulation: a mark issued by an
authorized EU agency; a certificate issued by an approved EU authority;
or a declaration issued by the manufacturer. In the latter, the
manufacturer self-certifies that the product, manufactured with good
engineering practices, will not endanger the safety of persons, domestic
animals, or property when properly installed and maintained and used in
applications for which it was made.
Spain now allows the entry of used equipment, material, and goods.
However, they are subject to the same standards concerning safety as
apply to any new import. Additionally, there may exist regulations
specific to the particular type of equipment, such as computers and
peripherals, that is being imported.
Free Trade Zones/Warehouses
There are three different customs regulations in Spain. The EU common
customs apply to the mainland and Balearic Isles. The Canary Islands,
previously a customs free area, is undergoing a transition period
(expected to last until the end of the century) to meet EU customs
regulations. There is a customs free trade area in the two northern
Africa enclaves of Ceuta and Melilla, which are under Spanish
sovereignty.
Both in the mainland and islands there are numerous free trade zones (in
most of Spanish airports and sea ports) where manufacturing, processing,
sorting, packaging, exhibiting, sampling, and other commercial
operations may be undertaken free of any Spanish duties or taxes. The
largest free trade zones are the ones in Barcelona, Cadiz and Vigo.
Others vary in size from a simple warehouse to several square
kilometers. Spanish customs legislation allows for companies to have
their own free trade areas. Duties and taxes are payable only on those
items imported for use in Spain.
Special Import Provisions
Goods are cleared by customs agents or brokers who handle the necessary
formalities on behalf of the importing firm or individual. A bill of
lading, an original invoice with a copy, a certificate of origin, and an
import declaration are required for most clearances through Customs for
products which will remain in Spain.
Import declarations are made at the Secretariat of Commerce or its
branch delegations in major port cities throughout the country.
Declarations must use the exact terminology of the tariff classification
under which the goods are being imported. A 3-month grace period is
allowed for U.S.-origin goods arriving without proper documentation,
subject to a written guarantee by the customs agent.
Goods in transit need only be listed on the vessel or aircraft manifest
and do not have to be unloaded. Transit goods may also be unloaded for
shipment to a Customs-approved warehouse prior to reshipment from Spain
or to another customs house in Spain for declaration or further
reshipment.
Membership in Free Trade Arrangements.
Spain has been a member of the European Union since 1986, allowing for
free trade with fellow members: Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Sweden, and the UK. The EU's European Economic Area Agreement
in turn provides a high level of mutual market access with the European
Free Trade Association states (Iceland, Liechtenstein, Norway and
Switzerland).
VII. INVESTMENT CLIMATE
Openness to Foreign Investment
The Spanish Government is interested in attracting new foreign
investment to modernize the economy. It has come up with new
regulations for investment and foreign exchange to make the country more
attractive to new investors. Spanish law permits foreign investment of
up to 100 percent of equity, except in a small number of strategic
sectors. Capital movements have been completely liberalized.
The 1991 Budget Act (law 31 of December 27, 1990), established that EU-
resident companies receive the same treatment as Spanish companies in
strategic sectors (national defense, radio and TV broadcasting, air
transportation, and gambling). Previously, non-Spanish companies
required prior authorization from the Executive for investments in these
areas and some foreign ownership ceilings existed. Most of these
barriers were lifted except investment by foreign investors in munitions
companies and telecommunications service which still require prior
authorization.
Remaining foreign exchange and capital controls were eliminated by royal
decree 1816/1991 which came into force on February 1, 1992. This
legislation provides complete freedom of action in financial
transactions between residents and non-residents of Spain. Previous
requirements for prior clearance of technology transfer and technical
assistance agreements were eliminated. The liberal provisions of this
law apply to payments, receipts or transfers generated by foreign
investments in Spain.
The adoption of royal decree 671/1992 of July 2, 1992, reduced the types
of foreign investment requiring previous government authorization. At
present, previous authorization is required only in the following cases:
1) Direct investments over 500 million pesetas if the foreign holding
exceeds 50 percent of the capital stock of the Spanish company;
2) Certain forms of investments made by parties in tax havens;
3) Real estate investments in rural land, urban land or business
premises if the investment exceeds 500 million pesetas; and
4) Various forms of joint investments which exceed 500 million pesetas.
Under the new regulation, previous authorization for all forms of
portfolio investments have been eliminated.
After the investment is made, the law establishes that it must be
registered. Registration requirements are simple and straight forward,
except in sectors subject to special consideration. The aim is to
verify the purpose of the investment. This procedure does not block any
investment whatsoever.
The law regulates specific safeguards for investments that may be
considered to go against the interests of Spain because of its size,
nature of the investment or financial aspects of such investment.
Depending upon the size of the investment, either the Minister of
Economy or the Council of Ministers will invoke these safeguards.
This regulation brings Spain in line with EU directive 88/361 which
classifies investors according to residence rather than nationality.
However, EU-resident companies will not be exempt from existing
authorization requirements if it is controlled, directly or indirectly,
by a non-EU resident. There is effective control if it holds more than
5 percent of the EU company's capital or directly participates in the
firm's management.
Conversion and Transfer Policies
There are no controls of capital flows. Capital controls on
transferring funds outside of the country were abolished in 1991.
Remittances of profits, debt service, capital gains, royalties from
intellectual property can all be effected at market rates using
commercial banks.
Expropriation and Compensation
Spanish legislation sets up a series of safeguards that almost prohibit
the nationalization or expropriation of foreign investment. No
expropriations or nationalizations have taken place in recent history.
Dispute Settlement
There have been no major disputes involving foreign investment interest
and the Spanish Government in recent history. In any case, legislation
establishes mechanisms to solve such disputes if they ever arise. The
Spanish judiciary system is independent from the executive, and the
Government is obliged to follow court rulings. Prosecution and criminal
investigation is also carried out by judges, which allows for greater
independence. The Spanish prosecution system allows for successive
appeals to a higher Court of Justice; the final appeal is heard by the
European Court of Justice. The Government of Spain also abides by some
of the rulings of the International Court of Justice at The Hague.
Political Violence
The Government of Spain is involved in a long-running campaign against
Basque Fatherland and Liberty (ETA), a terrorist organization founded in
1959 and dedicated to promoting Basque independence. ETA regularly
targets Spanish Government officials, members of the military and
security forces, and moderate Basques for assassination. The group has
carried out numerous bombings against Spanish Government facilities and
economic targets. In recent years, the Spanish Government has had more
success in controlling ETA due in part to increased security cooperation
with French authorities.
There is another smaller leftist terrorist group, called GRAPO that acts
occasionally, mainly against Government interests.
Performance requirements/incentives
Performance requirements are not used in determining the eligibility or
level of incentives granted to investors. There exist a whole range of
investment incentives in Spain. Types of incentives that exist in Spain
are provided on the following criteria:
- According to the authorities granting incentives;
- According to the type and purpose of the incentives.
Authorities that provide incentives in Spain:
- European Union
The European Union provides incentives in the form of subsidies in
general development programs such as FEDER, F.S.E. FEOGA- Guarantee.
They also provide programs targeting specific sectors such as SPRINT,
JOULE, VALOREM, ESPRIT, DRIVE, BRITE-EURAM, ECLAIR, COMETT II, STAR,
etc. These incentives are managed locally by the Government of Spain.
- The central government
These incentives are granted by the central government out of its annual
budget. Usually, these incentives match EU financing. Central
government incentive programs are easily available for direct investment
plans. Both the Ministry of Industry and the Ministry of Commerce play
an active part in granting them.
The Foreign Investment Directorate under the Ministry of Commerce
counsels new to market investors in the proceedings to apply for
government incentives. The Ministry of Industry's sectorial departments
negotiate directly with the old to market investors the incentives
available for new investment.
- Regional government
Regional governments, called Autonomous Communities, also have specific
programs to attract investment. Often, they are designed to complement
central government incentives.
- Municipal aid
Municipal corporations offer incentives to direct investment usually in
the form of facilitating infrastructure needs, granting licenses,
operation and transaction of permits. Usually they are designed to
facilitate a direct investment's initial operations.
There is a trend to leave management of each type of incentive to
regional governments. This benefits investors since each Autonomous
Community is especially interested in attracting investment that
enhances its economy.
Types of incentives available:
- Financial subsidies
- Exemption of certain taxes
- Preferential access to official credit
- Reduction of burdens, as well as discounts of social security to
companies
- Bonuses for acquisition of certain material
- Exemption from customs for import of certain goods
- Real estate grants and land granted gratuitously or in especially
favorable conditions
- Guarantees granted in credit operations
- Loans with low interest and long maturities and grace periods
- Guarantee of dividends
- Professional training and qualification
- Indirect aid by means of supplying infrastructure facilities
(accesses, services, communications, etc.)
Incentives granted by national, regional, or municipal governments and
the EU are granted to Spanish and foreign companies alike without
discrimination.
Right to Private Ownership and Establishment
Private ownership is protected by the Constitution. Spanish law
establishes clear rights to private ownership. Except for some
limitations in "strategic" sectors (national defense, radio and
television broadcasting, air transportation, and gambling), foreign
firms receive the same legal treatment as Spanish companies.
Competitive equality exists between public and private sector firms with
respect to local access to markets, credit, licenses, and supplies.
Foreign firms have participated in the privatization process on equal
footing with Spanish buyers.
Protection of Property Rights
Property rights are protected by law. Enforcement is carried out at the
administrative and judicial level. Any decision pertaining to a
property right by the Administration can be appealed first at the
administrative level, and then can be taken to the judiciary system,
which has three levels of court appeals. Property protection is
effective in Spain, although the system is slow. Certain property
rights, because of their complexity, are more difficult to protect than
other, i.e. intellectual property rights.
Public and private sector enforcement actions (especially private sector
initiatives), using Spain's new patent, copyright, and trademark legal
framework, have increased sharply the number of criminal and civil
actions taken against intellectual property pirates. Pirated video
cassettes at present are only 25 percent of the market compared to 85
percent just five years ago. Spain's annual video cassette retail
market, which is heavily
dominated by U.S. production, is estimated at $200 million.
Overall, Spain's illegal market for videos, records, and tapes has
declined sharply. In 1984, according to trade association sources,
illegal videos, records, and tapes constituted 50 percent of Spain's
market. In 1990, according to the same source, illegal products in this
market declined to 5 percent. Trade associations attribute this decline
to the application of Spain's new intellectual property laws;
particularly successes in some criminal cases, and enhanced efficient
policing.
Despite overall improvement, software piracy remains a serious problem
in Spain; the Business Software Alliance (BSA) estimates that eighty
percent of PC software in use has been copied illegally. An amendment
to the law in December 1993 allows unannounced civil search procedures
that permit software developers having a reasonable suspicion of an
infringement of their copyright to get a judge to allow a search of the
alleged wrongdoers' premises without warning. This measure has already
produced two well publicized searches and prosecution of software
pirates. This amendment which was previously called for by U.S.
software developers, should help decrease software piracy.
The United States has held informal consultations with Spain regarding
the importance the United States attaches to the protection of
intellectual property. In 1989, Spain was one of the countries placed
on the "watch list" under the "special 301" provision of the 1988 trade
act, and has continued on the "watch list" every year since then.
Regulatory System: Laws and Procedures
Spain has modernized its commercial laws and regulations following its
1986 entry into the EU. Local regulatory framework compares favorably
with other major European countries. Bureaucratic procedures have been
streamlined and most red tape eliminated. Labor law and regulations are
the exception; although there has been new legislation implemented in
May 1994 liberalizing some labor procedures, there are still many old
labor regulations that inhibit the rational utilization of labor.
Bilateral Investment Agreements
Spain has concluded bilateral investment agreements with Argentina
(1991), Bolivia (1990), the Czech Republic (1990), Chile (1991), China
(1992), Hungary (1989), Morocco (1989), Tunisia (1991), Russia (1990),
and Uruguay (1992).
OPIC and Other Investment Insurance Programs
As Spain is a member of the European Union, OPIC insurance is not
applicable, nor are other insurance programs. Various EU directives, as
adopted into Spanish law, adequately protect the rights of foreign
investors.
Labor
The Active Population Survey (EPA) indicated over 15 million Spaniards
in the work force at the end of 1993. National Employment Institute
(INEM) unemployment figures for year-end 1994 (the most recent
available) reveal a static employment situation, with unemployment
hanging at about 18 percent.
Spain's two unemployment indexes (EPA and INEM) vary by as much as five
percentage points and neither is generally accepted as precisely
accurate. What is clear is that Spain continues to have a real
unemployment that is among the worst in the European Union.
Employers have long criticized Spanish labor law (much of which
originated in the Franco era) as unusually inflexible and with very high
severance payments, thus discouraging new hiring. Labor market reform
legislation introduced in 1993 and passed in 1994 over the objection of
the unions, liberalizes old work rules and makes the transfer of workers
from one task to another easier. The legislation went into effect on
June 12, 1994 and the Government hopes it will boost hiring and reduce
lay offs.
Every four years Spanish workers elect delegates to represent them to
management. If a certain proportion of those delegates are union-
affiliated, those unions form part of the workers' committees. Dues-
paying union membership is among the lowest in the EU (generally
estimated at about 10 percent of the work force), but unions are
involved in negotiating collective agreements for over half of the work
force.
Large employers generally have individual collective agreements, but in
industries characterized by smaller companies, collective agreements are
often industry-wide or regional.
The right to strike is guaranteed in the constitution and has been
interpreted to include general strikes called to protest Government
policy. There have been several such strikes in recent years, the most
recent being a one-day nation-wide strike held collectively by Spanish
trade unions on January 27, 1994 to protest the Government's proposed
labor market reform legislation.
Foreign-Trade Zones/Free Ports
Free ports, Foreign-Trade Zones and other customs-free areas are used
basically by manufacturers for exporting purposes. Manufacturers that
set up an operation in this area enjoy the advantages of importing their
supplies without any customs duties. These companies do have to abide
by Spanish labor laws.
Capital Outflow Policy
The Government has encouraged greater Spanish investment abroad as a way
to diversify the Spanish industrial base. The public sector has taken
the lead with investments in companies being privatized in Latin
America; Iberia, the Spanish flag air carrier, has bought into carriers
in Argentina, Chile, Venezuela, and the Dominican Republic; RENFE, the
national railroad, has made investments in Argentina; Telefonica,
Spain's semi-public phone company, has bought portions of local
companies in Chile and Argentina and has recently won a bid to operate
in Peru. Spanish banks are the largest foreign investors with branches,
subsidiaries, and representation offices throughout the Americas, and to
a lesser degree in larger European capitals.
Investments outside these sectors are infrequent, with most in the food
and beverage industry. The Spanish Government has frequently supported
investments in developing countries through use of tied-aid credits or
development assistance programs.
Major Foreign Investors
The largest investors during 1993 in Spain were the Netherlands, France,
the United States, The United Kingdom and Germany. According to Spanish
statistics, in the period between January to November 1993, direct
investment from the Netherlands amounted to $2.7 billion, 22.3 percent
share of total foreign investment in Spain during that period. French
direct investment's share was 11 percent during this period and amounted
to $1.4 billion. Direct investment from the U.S. amounted to $975
million, a 7.9 percent share of total direct investment. British direct
investment share is 7.4 percent and amounted to $908 million. German
direct investment was only 6.6 percent of total direct investment during
January - November 1993 and reached $812 million.
The European Union is by far the largest investor in Spain. Overall, its
member countries invested $6.7 billion between January and November of
1993, a 54.68 percent share of total direct investment.
VIII. TRADE AND PROJECT FINANCE
Banking System
Spain has a diversified modern financial system which is integrated with
international financial markets. The system comprises credit, stock and
money markets together with derivative markets.
Operators in the Spanish financial system can be classified as follows:
1. The central issuing bank: Bank of Spain
2. Banks:
- Spanish and foreign banks
- Savings banks
- Credit cooperatives-rural savings banks
3. Financial entities:
- Leasing, factoring and installment sale finance companies
- Mortgage loan entities
4. Investment institutions:
- Collective investment entities
- Venture capital funds and companies
- Other investment entities
5. Brokers:
- Stock market
- Money market
- General
6. Insurance and re-insurance companies
A) Banks
Private banks and savings banks are very important because of the volume
of their business and because they are active in every segment of the
economy. Currently, there are over 150 officially registered private
banks in Spain with close to 17,000 branch offices within Spain. Many
of them have an international presence as well.
Most Spanish banks provide a full range of services and operations for
corporate and private customers, including the handling of collections
and payments outside of Spain through their organizations abroad.
Around 50 foreign banks have offices in Spain.
There are close to 60 confederated savings banks, with over 13,700
branch offices. They attract a substantial portion of the volume of
private savings in Spain, and they tend to lend their funds preferably
to private customers (mortgage, loans, etc.). However, they are very
active in financing major public and private projects by subscribing and
purchasing fixed-interest debt securities.
Foreign companies established in Spain have access to the Spanish
financial system under the same conditions as Spanish companies.
B) Investment and brokerage entities
Prospective investors can call on the expertise of numerous investment
and brokerage entities that ensure ease and flexibility in making the
investment and achievement of risk/return ratios to meet the investor's
requirements. New regulations governing collective investment operators
have been enacted in the last few years to strengthen the requirements
for financial reporting to the public in this field, and new kinds of
investment organizations (most notably venture capital funds and
companies) were officially recognized, with tax relief measures to
eliminate the extra costs involved in using this medium for
investments.
These tax relief measures have led to a notable increase in number of
these institutions and in the volume of their investment. Property
investment funds are also developed in Spain, thus completing the
process of adaptation to and standardization with collective investment
instruments in the EU.
C) Credit market
The Spanish credit market is structured around the private banks, which
attract most private and corporate savings and use their funds to
provide financing for the private sector. The banks also operate as
investors and underwriters in the stock market, and adjust their
liquidity by interbank and money market transactions.
The process of liberalization of capital movements in the EU is making
it easier for Spanish companies to obtain finance from abroad.
D) Stock market
Following a period when stock exchanges in Spain dealt only in share and
bond issues, the stock market has undergone a process of renovation
during the last few years which has brought new ways of operating and
new types of financial assets.
The issuers are mainly leading Spanish private companies and banks.
Guaranteed bills, promissory notes issued by the Spanish branches of
foreign banks, and some foreign companies' shares are also listed on
Spanish stock exchanges. Certain non-resident entities may also issue
bonds denominated in pesetas (matador bonds) in the Spanish market,
subject to certain conditions.
Market regulation has established a market based on the British/US
model, aimed at protecting small investors and the market itself. A
single computerized and centralized continuous stock market has been
created, insider trading is penalized, and a National Stock Exchange
Commission supervises the system and cooperates in developing its
regulations.
The more competitive securities market has a new 7-day settlement
system. Trading on credit and new hedging instruments (including index
and warrant options) are available while stricter and more comprehensive
regulations for takeover bids have been enacted.
Other positive developments for the stock market in Spain have included
the establishment of markets for options and futures and an unofficial
second market for trading in fixed-income assets. All these advances
have made the securities market in Spain more transparent, safer and
more liquid.
E) Money market
The money market is based fundamentally on the issuance of short-term
securities by the Bank of Spain, which are taken up by banks, finance
companies and money market operators that place a portion of them with
individuals and corporations with cash surpluses for short-investment.
In a broader sense, the money market covers also interbank deposits (the
interest rates for which are used as benchmark for other transactions)
and trading in short-term corporate securities (although these are dealt
through stock exchanges).
The money market has become increasingly important as a result of the
liberalization and greater flexibility of the Spanish financial system
as a whole in recent years. This is evident from the fact that interest
rates are ordinarily higher than the rate of inflation and from the
substantial volume of trading in money market securities.
The Government debt market is important in Spain and used by both
resident and foreign investors. Favorable tax arrangements for
investments by non-residents in these securities is making this market
attractive.
F) Pension plans and insurance companies
Development of security investment companies and funds in Spain has
taken place during the last five years.
The Pension Plans and Funds Law introduced a new form of saving in
Spain, trying to create a sound instrument for long term financing.
This law contemplates the existence of pension plans promoted by
employers, certain associations and financial entities. These plans
include favorable tax treatment and restriction on use of the funds
until the underlying contingency (retirement, death or disability) takes
place.
The life assurance market in Spain has also grown substantially in
recent years, mainly because of the similarity of survival insurance
contracts to traditional saving formulae and the more favorable tax
treatment of the former. The sale of short-term survival insurance with
scant actuarial content is prohibited.
In recent years major international insurance companies have set up
operations in Spain, either by forming subsidiaries or branches here or
by buying existing companies, and in most cases have achieved profitable
results and excellent positioning in the market.
Foreign Exchange Controls Affecting Trading
Adoption in recent years of EU regulations has brought major change and
liberalization to the Spanish financial sector. Exchange controls have
been virtually eliminated. Freedom of action is the basic principle
applied in international transactions. Informational requirements have
been established with regard to large cash transactions. The processing
of foreign payments has been speeded-up as a result of this
liberalization.
General Financing Availability
Spanish importers generally obtain finance from commercial banks. The
most important types of short-term financing are made through loan
agreements (polizas de credito), discounting of commercial bills, and
loans made against bills drawn on the borrowing company to the order of
the bank (efectos financieros).
Under a "poliza de credito", whose usual term is six months, the
borrower has access to credit up to the maximum negotiated in the loan
agreement. Spanish borrowers prefer "polizas" to loans made against
bills (efectos financieros or letras financieras), because the latter
are subject to stamp tax. Commercial bills and other trade paper are
generally discounted under an overall credit line agreed upon between
the bank and its client.
Banks usually offer these lines for one year and prefer that short term
paper (30, 45 or 90 days) be passed through the line. Local companies
that wish to raise their discount ceilings can normally do so by opening
term or savings accounts equal to 5-20 percent of their drawings.
Opening irrevocable letters of credit is a straightforward process in
Spain. Importers can insure exchange risk at their banks.
How to Finance Exports/Methods of Payment
Payment deferrals are normal in Spain. Usually importers wait a
considerable amount of time (up to one year in some cases) until their
customer pays them. This usually happens to agents/distributors that
supply goods and equipment to the Administration or to large
distribution chains. Importers will want certain credit from the U.S.
exporter.
Nonetheless, U.S. exporters need to weigh carefully the credit or
financing they extend to Spanish importers. Exporters are advised to
follow the same careful credit principles they follow for domestic
customers. Services of credit reporting agencies such as Dun and
Bradstreet are available; World Traders Data Reports (WTDR's) are also
a useful tool. This service is under consideration for privatization.
Available Export Financing and Insurance
Apart from Commercial Banks and other financial private sources such as
factoring, forfeiting and confirming services, there are some Government
programs available to the U.S. exporter. Several federal government
agencies, as well as a number of state and local ones, offer programs to
assist exporters with their financing needs. Some are guarantee
programs that require the participation of an approved lender; others
provide loans or grants to the exporter or a foreign government.
Government guarantee and insurance programs are used by commercial banks
to reduce the risk associated with loans to exporters. Lenders
concerned with an exporter's ability to be paid, often use government
programs to reduce the risk that would otherwise prevent them from
providing finance.
For assistance in determining which financing options may be available,
the following sources may be consulted:
- The Exporter's international or domestic banker.
- The Exporter's state export promotion or export finance office.
- A Department of Commerce district office.
- The Export-Import Bank of the United States (Eximbank).
Project Financing Available
The Export-Import Bank of the United States is the federal government's
trade finance agency, offering numerous programs to address a broad
range of financial needs. Other agencies fill various market niches.
The Department of Agriculture offers a variety of programs to foster
agricultural exports. The Trade and Development Agency provides grant
financing for project planning activities conducted by U.S. firms. The
Small Business Administration offers programs to address the needs of
smaller exporters. The Overseas Private Investment Corporation provides
specialized assistance to U.S. firms. The Agency for International
Development provides grants to developing nations that can be used to
purchase U.S. goods and services.
Banks with U.S. Banking Arrangements
All the banks listed in Appendix E have agreements with one or several
U.S. banks.
IX. BUSINESS TRAVEL
Business Customs
There is no substitute for face-to-face meetings with Spanish business
representatives to break into this market. Spaniards expect a personal
relationship with suppliers. Initial communication by phone or fax is
far less effective than personal meetings. Mail campaigns generally
yield meager results. Less than thirty percent of local managers are
fluent in English.
Spaniards are more formal in personal relations than Americans but much
less rigid than they were ten years ago. The biggest mistake a U.S.
business person can make is to assume that doing business in Spain is
comparable to business practices in Mexico and Latin America; Italy or
France would be better comparisons. A hand-shake is customary upon
initiating and closing a business meeting, accompanied by an appropriate
greeting. Professional attire is expected. Business dress is suit and
tie and business cards are required.
Spaniards tend to be "conservative" in their buying habits. Known
brands do well. Large government and private sector buyers appear more
comfortable dealing with other large, established organizations or with
firms that are recognized as leaders within their sectors.
Travel Advisory and Visas
Spain is a developed and stable democracy with a modern economy. Tourist
facilities are widely available.
Entry requirements: a passport is necessary but a visa is not required
for tourist or commercial stays of up to three months; visitors may
subsequently apply for an extension of stay at a Spanish immigration
office. Holders of official or diplomatic passports need a visa. For
further information concerning entry requirements for Spain, travellers
may contact the Embassy of Spain at 2375 Pennsylvania Avenue NW,
Washington, DC 20037, tel: (202) 728-2330, or the nearest Spanish
consulate in Boston, Chicago, Houston, Los Angeles, Miami, New Orleans,
New York, San Francisco, or San Juan.
Medical facilities: good medical care is available. U.S. medical
insurance is not always valid outside the United States. Travelers have
found that in some cases, supplemental medical insurance with specific
overseas coverage has proved to be useful. Further information on
health matters can be obtained from the Centers for Disease Control's
international travelers hot line on (404) 332-4559.
Crime information: Spain has a very low rate of violent crime.
Nevertheless, minor crimes such as pick-pocketing, robbery, and theft
from cars are a problem and are often directed against unwary tourists.
Thieves often attempt to distract their victims by squirting mustard on
their clothing, asking for directions on the street, or otherwise
diverting attention from an accomplice. Theft of small items like
radios, luggage, cameras, briefcases, and even cigarettes from parked
cars is a common problem.
This Embassy has issued a notice to U.S. citizens stating that it
frequently receives reports of roadside thieves posing as "good
samaritans" to persons experiencing car and tire problems. The thieves
typically attempt to divert the driver's attention by pointing out a
mechanical problem and then steal items from the vehicle while the
driver is looking elsewhere. The problem is particularly acute with
vehicles rented at Madrid's Barajas Airport. The Embassy notice advises
drivers to be extremely cautious about accepting help from anyone other
than a uniformed Spanish police officer or civil guard. Travelers who
accept unofficial assistance are advised to protect their valuables by
keeping them in sight or locking them in the vehicle.
The loss or theft abroad of a U.S. passport should be reported to the
nearest U.S. Embassy or consulate. U.S. citizens may refer to the
Department of State's pamphlet "A safe trip abroad" for ways to promote
a more trouble- free journey. It is available from the Superintendent
of documents, U.S. Government Printing Office, Washington DC 20402.
Drug penalties: U.S. citizens are subject to the laws of the country in
which they are traveling. In Spain, penalties for possession, use, or
dealing in illegal drugs are strict, and convicted offenders can expect
jail sentences and fines.
Terrorist activities: civil disorder in Spain is rare. Although a few
small terrorist groups, including ETA (Basque separatists) and GRAPO (a
marxist group) are occasionally active, their efforts are primarily
directed against police, military and other Spanish Government targets.
Americans have not been targets of these attacks.
Registration: U.S. citizens who register in the consular section at the
U.S. Embassy or consulate may obtain updated information on travel and
security within Spain.
Embassy and consulate locations: The U.S. Embassy in Madrid is located
at Serrano 75 from 9:00am to 6:00pm; telephone (34-1) 577-4000. There
are U.S. consulates in Barcelona, at Paseo Reina Elisenda 23, telephone
(34-3) 280-2227; and in Bilbao, at Lehendakari Aguirre 11, telephone
(34-4) 475-8300 both open from 9:00am to 6:00pm. There are also
consular agencies in the following locations:
- Malaga, at Centro Comercial "Las Rampas" Fase 2, Planta 1, locales 12-
G-7 and 12-G-8, Fuengirola, telephone (34-52) 474-891, hours 10:00 a.m.
to 1:00 p.m.;
- La Coruna, at Canton Grande 16-17, telephone (34-81) 213-233, hours
10:00 a.m. to 1:00 p.m.;
- Las Palmas, at Franchy y Roca 5-5, no. 13, telephone (34-28) 222-552,
hours 10:00 a.m. to 1:00 p.m.;
- Palma de Mallorca, at Av. Jaime 111, 26 entresuelo, telephone (34-71)
725-051, hours 4:00 p.m. to 7:00 p.m.;
- Seville, at Paseo de las Delicias 7, telephone (34-54) 231-885, hours
8:30 a.m. to 1:30 p.m. and 2:30 p.m. to 4:30 p.m.
- Valencia, at Cl. de la Paz 6-5, local 5, telephone (34-6) 351- 6973,
hours 10:00 a.m. to 1:00 p.m.
Holidays
The Government of Spain publishes a list of holidays every year. The
list for 1996 is not available yet. In any case, it will not differ
much from the following 1995 list.
National Holidays
Jan. 6 (Epiphany); March 20 (Saint Joseph); Apr. 14 (Good friday); May
1 (Labor day); Aug. 15 (Assumption day); Oct. 12 (National day); Nov. 1
(All saints); Dec. 6 (Constitution day); Dec. 8 (Immaculate conception),
December 25 (Christmas).
The work-days abutting the Spanish holidays and vacation periods are not
"prime time" for business meetings; this could include the month of
August and the several vacation periods between Christmas and Easter.
Business hours in Spain are generally 9:00 AM to 6:00 PM (banking hours
8:30AM-2:30PM, Saturdays open in the morning) Monday through Friday
while stores are generally open 10:00 AM to 8:00 PM, Monday through
Saturday. To ensure availability, advance
appointments are recommended.
Business Infrastructure
Communications.
Telecommunications to and from Madrid compare favorably with those in
any large U.S. city. A direct-dial telephone system links Spain to the
U.S. and most of the world. Calls to the United States may be charged
to international telephone cards such as AT&T, MCI and Sprint;
international directory inquiries may be reached by dialing 900-99-00-11
(AT&T Direct U.S. operator). Public phones in Spain accept coins and
pre-paid Telefonica credit cards. Some public phones also accept
commercial credit cards.
Transportation
Frequent direct air service is available to major U.S. from Madrid and
Barcelona. Airports in both Madrid and Barcelona have good bus services
to downtown. Taxis are easily available at major cities all over Spain.
There is a good highway network linking major cities in Spain.
Secondary roads are poor in Galicia and Asturias (Northwest of Spain).
The Spanish railway system is slow and old with some exceptions. There
is a high speed train line linking Madrid and Sevilla. There is a very
good railroad network linking Madrid and Valencia. Madrid and Barcelona
enjoy excellent railway systems in their metropolitan areas.
Buses and the Metro (subway) in Madrid and Barcelona may be crowded
during rush hours but they provide fast and efficient service.
Electrical Characteristics
Electric current in Spain is 220 volts AC, 50 cycles. A transformer is
needed for most U. S. electrical equipment and appliances.
Climate and Clothing
Despite differences among various regions, Spain has a typical
Mediterranean climate. The weather in the northern coastal regions
(looking onto the Atlantic and the Bay of Biscay) is temperate and
generally rainy throughout the year, and temperatures are neither very
low in winter nor very high in summer. The climate on the Mediterranean
coastline, including the Balearic Islands, is mild in winter and hot and
dry in the summer. The most extreme differences take place in the
interior, where the climate is dry, with cold winters and hot summers.
Finally, the Canary Islands have a climate of their own, with
temperatures constantly around 20 degree celsius and little difference
between summer and winter or day or night.
Tipping
Tipping in Spain is largely optional since a service charge is normally
included in restaurant bills. Small, additional tips are often left for
particularly good service. Taxi drivers may be tipped by rounding up
the payment to include up to 10 percent of the fare. At no time in
Spain are tips obligatory.
Commercial Language
While Spanish is the official language in Spain, many business people
speak English. Product literature, correspondence and negotiations in
the Spanish language provide a distinct advantage over competitors who
use only English. There are certain regions in Spain that have a second
official language: Catalan in Catalonia, Valencia, and the Balearic
Islands; Galician/Portuguese in Galicia; Basque in the Basque region.
Hotels and other tourist infrastructure
Spanish hotels are comparable to those found in the rest of the EU.
Spain has a good network of hotels all over the country. A hotel is
always easy to find when traveling in Spain.
Car rental services can be found in major cities, airports and hotels.
Most of the large U.S. car rental companies are established in Spain.
X. APPENDICES
Appendix A: Country Data
1994 1995 1996
proj. est.
1. Profile
- Population (million) 39.2 39.3 39.4
- Population growth rate (%) 0.4 0.4 0.4
- Religion 90% Catholic
- Government System Parliamentary Monarchy
- Languages Spanish (official), Catalan, Basque
and Galician/Portuguese.
- Work week 40.0 40.0 40.0
Appendix B: Domestic Economy
1994 1995 1996
proj. estimate
- GDP current prices (tril. pta) 64.7 68.3 73.4
- GDP current prices ($ bil.) 483.1 546.4 587.2
- GDP growth rate (%) (real) 2.0 3.0 3.5
- GDP per capita ($) 12,323 13,903 14,904
- Government spending (% GDP) 6.7 6.0 4.4
- CPI (% chg. Dec/Dec) 4.3 4.0 4.0
- Unemployment (Avg.) 24.3 24.0 23.0
- Foreign Exchange reserves ($ bil.) 44.5 45.0 45.0
- Avg. Exch. rate (pta/$) 133.9 125.0 125.0
- Foreign debt N/A N/A N/A
- Debt service ratio N/A N/A N/A
Appendix C: Trade
1994 1995 1996
proj. estimate
(USD bil.)
- Total Spanish exports 73.3 85.0 105.0
- Spanish exports to U.S. 3.6 4.2 5.1
- Total Spanish import 92.7 110.0 130.0
- Spanish imports from U.S. 6.8 8.0 9.5
- U.S. share of total exports 4.9 4.9 4.9
- U.S. share of total imports 7.3 7.3 7.3
Appendix D: Investment Statistics
Investment (US$ millions)
1992 1993 1994
Tot. foreign dir. investment 13,386 8,063 9,780
U.S. direct investment 1,057 628 674
U.S. direct investment (pct.) 7.9 7.8 6.9
Spanish Investment in U.S. 438.8 183.9 399.9
Spanish invest. (pct. of total) 8.6 5.3 5.3
- Foreign Direct Investment: Geographic Breakdown
European Union: 63.2 percent
Of which:
The Netherlands 39.6%
France 24.4%
United Kingdom 11.4%
Germany 11.2%
Italy 6.0%
Other EU countries 7.4%
- Foreign Direct Investment: Breakdown by sector (percent)
Manufacturing 37.4%
Financial & other Services 33.7%
Commerce & Hotels 12.0%
Extraction & Chemical Industries 10.8%
Other 6.1%
Source: Bank of Spain.
Appendix E - U.S. and Country Contacts
United States Embassy in Spain
Address: Serrano 75
28006 Madrid
tel: (34-1) 577-4000
fax: (34-1) 577-5735
Mailing Address: American Embassy
(from the U.S.) PSC#61
APO AE 09642
Ambassador: Richard N. Gardner
Deputy Chief Of Mission: David N. Greenlee
Counselor for Agricultural Affairs: Franklin Lee
Counselor for Cultural Affairs: Brian Carlson
Counselor for Economics Affairs: Emil Castro
Counselor for Political Affairs: Harry Jones
Defense Attache: Capt. James Tinsley III
Office of Defense Cooperation: Col. Judy George
THE COMMERCIAL SERVICE
- Madrid:
Address: Serrano 67, 4th floor
28006 Madrid, Spain
tel: (34-1) 576-0602
fax: (34-1) 575-8655
Mailing Address: American Embassy
(from the U.S.) FCS Madrid
PSC#61, Box 21
APO AE 09642
Counselor for Commercial Affairs: Emilio Iodice
Commercial Attache: Rajendra Dheer
Assistant Commercial Attache: (vacant)
Barcelona:
Address: P. Reina Elisenda de Montcada 23
08034 Barcelona, Spain
tel: (34-3) 280-2227
fax: (34-3) 205-7705
Mailing Address: American Consulate General
(from the U.S.) Commercial Section
PSC#61, Box 0005
APO, AE 09642
Commercial Consul: Dorothy Lutter
USDOC Country Desk:
Ann Corro
Spain and Portugal Desk Officer
U.S. Department of Commerce
tel: (202) 482-5341
fax: (202) 482-2897
TPCC Trade Information Center: 1-800-USA-TRADE
FOREIGN AGRICULTURAL SERVICE
Address:
American Embassy
Serrano 75 (Box 20)
28006 Madrid
Tele: (34-1) 431-2998
Fax: (34-1) 576-8063
Mailing Address from the United States:
Office of Agricultural Affairs
American Embassy-Madrid
PSC-61 (Box-20)
APO AE 09642
American Officers:
Agricultural Counselor: Franklin D. Lee
Agricultural Attache: Hugh J. Maginnis
Area Officer
Philip A. Letarte
Southern Europe Area Officer
U.S. Department of Agriculture
Foreign Agricultural Service
Room 5092 South Bldg..
14th and Independence Ave. S.W.
Washington, D.C. 20250
Tele: (202) 720-2144
Fax: (202) 690-1149
U.S. Department of Agriculture
Foreign Agriculture Service
Trade Assistance and Promotion Office
tel: (202) 720-7420
Spanish Government Organizations
Ministerio de Agricultura, Pesca y Alimentación
Paseo de la Infanta Isabel, 1
28014 Madrid
Phone (1) 347 5000
Secretaría General de Producciones y Mercados Agrarios
Ministerio de Agricultura, Pesca y Alimentación
Jose Abascal, 4
28003 Madrid
Phone(1) 347 66 00
Direccion General de Sanidad Agraria
Velázquez, 147
28002 Madrid
Phone (1) 347 82 33/4 Fax 577 62 32
Dirección General de Salud Pública
Paseo del Prado, 18
28014 Madrid
Phone (1) 596 20 38
Fax (1) 596 20 47
Subdirección General de Comercio Exterior de
Productos de Origen Animal y sus Derivados
Ministerio de Comercio y Turismo
Phone (1) 349 37 80
Fax (1) 349 38 06
Secretaria de Estado Para las Comunidades Europeas
Ministerio de Asuntos Exteriores
Maria de Molina, 39 Pta 10
28006 Madrid
Phone (1) 41163 41/ 563 71 10
Instituto de Comercio Exterior (ICEX)
- Spanish institute for Forign Trade
P. de la Castellana 14
28046 Madrid, Spain
Phone: 34-1-431-1240
Fax: 34-1-431-6128
Direccion General de Inversiones Exteriores
- Directorate General of Foreign Investment
P. de la Castellana 162
28046 Madrid, Spain
Phone: 34-1-583-7400
fax: 34-1-583-5329
CHAMBERS OF COMMERCE
CONSEJO SUPERIOR DE CAMARAS
DE COMERCIO, INDUSTRIA Y NAVEGACION
(Higher Council of Chambers of Commerce)
Contact: Mr. Guillermo de la Dehesa
Presidente
Claudio Coello 19
28006 Madrid
Tel: (34-1) 575-3400
Fax: (34-1) 435-2392
CAMARA OFICIAL DE COMERCIO E INDUSTRIA DE MADRID
Contact: Mr. Adrian Piera Jimenez
Presidente
Huertas 13
28012 Madrid
Tel: (34-1) 538-3500
Fax: (34-1) 538-3677
CAMARA OFICIAL DE COMERCIO, INDUSTRIA Y NAVEGACION DE BARCELONA
Antoni Negre
President
Avda. Diagonal 452-454
08006 Barcelona
tel: (34-3) 416-9300
CAMARA OFICIAL DE COMERCIO, INDUSTRIA Y NAVEGACION DE BILBAO
Patricio de la Sota
President
Avda. de Recalde 50
48008 Bilbao
tel: (34-4) 410-4664
AMERICAN CHAMBER OF COMMERCE
Mr. Jose A. Manrique
Executive Director
Av. Diagonal 477
08036 Barcelona
tel: (34-3) 405-1266
fax: (34-3) 405-3124
SPAIN US CHAMBER OF COMMERCE
Mr. Andrew Whist
President
Spain U.S. Chamber of Commerce, Inc.
500 Fifth Avenue
New York, N.Y. 10110
Tel: (212) 354-7848
Mr. Kevin Callahan
Executive Director
Spain U.S. Chamber of Commerce, Inc.
500 Fifth Avenue
New York, N.Y. 10110
Tel: (212) 354-7848
MARKET RESEARCH FIRMS
ARTHUR ANDERSEN
Raimundo Fdez. Villaverde 65
28003 Madrid
tel: (34-1) 597-0000
fax: (34-) 556-6469
ARTHUR D. LTTLE, SRC
General Peron 40-A
28020 Madrid
tel: (34-1) 597-3375
fax: (34-1) 555-4531
A.T. KEARNEY
Castellana 31
28046 Madrid
Tel: (34-1) 319-9796
fax: (34-1) 310-2292
THE BOSTON CONSULTING GROUP
Alcala 95
28009 Madrid
tel: (34-1) 520-6100
fax: (34-1) 520-6222
DUN & BRADSTREET SA
Salvador de Madariaga 1
28027 Madrid
tel: (34-1) 377-9100
fax: (34-1) 377-9101
ERNST & YOUNG
Torre Picasso
28020 Madrid
tel: (34-1) 572-7200
fax: (34-1) 572-7427
PRICE WATERHOUSE
Castellana 43
28046 Madrid
tel: (34-1) 308-3500
fax: (34-1) 308-3566
SPANISH BANKS
ARGENTARIA
Corporacion Bancaria de Espana
Contact: Mr. Francisco Luzon
President
Paseo de Recolestos, 10
28004 Madrid
Tel: (34-1) 537-7000
BANESTO
Contact: Mr. Alfredo Saenz
President
Paseo de la Castellana, 7
28046 Madrid
Tel: (34-1) 338-1000
BANCO CENTRAL HISPANO
Contact: Jose María Amusategui
President
Alcala, 49
28014 Madrid
Tel: (34-1) 522-4040
Fax: (34-1) 521-9703
BANCO DE ESPANA
Contact: Mr. Luis Angel Rojo
Governor
Alcala, 50
28014 Madrid
Tel: (34-1) 338-5000
BANCO GUIPUZCOANO
Contact: Mr. Jose Maria Aguirre
President Paseo de la Castellana 77
28046 Madrid
BANCO HIPOTECARIO DE ESPANA
Contact: Mr. Carlos Llara
Director General
Paseo de Recoletos, 10
28001 Madrid
Tel: (34-1) 575.46.00
BANCO DE BILBAO-VIZCAYA
Contact: Mr. Emilio de Ybarra
Presidente
Paseo de la Castellana, 81
28046 Madrid
Tel: (34-1) 374 80 00
BANCO DE MADRID
Contact: Mr. Jose Luis Fominaya
Presidente
Carrera de San Jeronimo, 13
28014 Madrid
Tel: (34-1) 429-2443
BANCO POPULAR ESPANOL
Contact: Mr. Luis Valls Taberner
Presidente
Alcala, 26
28014 Madrid
Tel: (34-1) 435-3620
BANCO DE SANTANDER
Contact: Mr. Emilio Botin Sainz de Sutuola
Presidente
Paseo de la Castellana 75
28046 Madrid
Tel: (34-1) 435-0455
CAJA DE MADRID
Contact: Mr. Jaime Terceiro Lomba
Presidente
Plaza de Celenque, 2 - 2da.
28013 Madrid
Tel: 532-0000
AMERICAN BANKS IN SPAIN
BANK OF AMERICA, S.A.E.
Contact: Mr. Ralph Schauss
President and Director General
Capitan Haya 1
28020 Madrid
Tel: (34-1) 455-6600
BANKERS TRUST COMPANY
Contact: Mr. Angel Garcia Altozano
General Manager
Paseo de la Castellana 31
28046 Madrid
Tel: (34-1) 538-7500
CHASE BANK ESPANA
Timothy W. Davis
General Director
C/ Peonias 2, planta 7
28042 Madrid
Tel: (34-1) 321-9100
Jose Conti
Regional Director
Passeig de Gracia, 60
08007 Barcelona
tel: (34-3) 487-1050
CITIBANK, N.A.
Amador Huertas y Ortega
President for Spain and Portugal
Jose Ortega y Gasset 29
28006 Madrid
Tel: (34-1) 431.3479
Enrique Santamaria
Vice-President
Diagonal 427 bis-429
08036 Barcelona
CITIBANK ESPANA, S.A.
Mr. Rafael Gil Tienda
Presidente
Country Corporate Officer
Avenida de Europa, 19
Parque Industrial La Moraleja
Alcobendas
Madrid
Tel: (34-1) 663-1100
CHEMICAL BANK ESPANA
Contact: Mr. Jose A. Garay
Manager Director
Paseo de la Castellana 51
28046 Madrid
Tel: (34-1) 349-2800
NEW YORK CHEMICAL BANK
Contact: Ms. Amparo Garcia De Cuadro
Vice President (Representative Office)
Paseo Castellana, 51
28046 Madrid
Tel: (34-1) 349-2800
Morgan Guaranty Trust of New York
Contact: Mr. Victor Arbulu
General Manager & Vice President
Jose Ortega y Gasset, 29
28006 Madrid
Tel: (34-1) 435-6041
Fax: (34-1) 577-5814
Agricultural Associations
Asociación Espanola para el Comercio
Exterior de Cereales
Pedro Muguruza, 3
28036 Madrid
Phone (1)350 31 60/3503093/Fax 345 05 27
Dry Miller Association
Felix Boix 7-Tercero F
28036 Madrid
Phone(1) 345 16 85
Asociación de Industrias de la Carne
General Rodrigo, 6-Planta 12
2803 Madrid
Phone (1) 554 70 45/46/
Fax (1) 554 78 49
Asociación Espanola de Empresas de la Carne (ASOCARNE)
Infanta Mercedes, 13-4
28020 Madrid
Phone (1) 571 68 55/53/04/56
Fax (1) 571 68 54
Telex 43950 ASOC-E
Federación Catalana de Industrias Cárnicas (FECIC)
Via Layetana, 36
08003 Barcelona
Phone (3) 268 26 31
Fax (3) 268 03 90
Confederación Espanola de Alimentos Compuestos
para Animales
Gran Via, 68
28014 Madrid
Phone (1)542 05 05/Fax 248 02 17
Federación de Industrias Lácteas
Ayala, 10
28001 Madrid
Phone 5762 100
Asociación Espanola de Productores de
Ganado Vacuno de Carne (ASOVAG)
Cambios Viejos, 15 entresuelo
08003 Barcelona
Phone (3) 310 17 00/Fax 310 03 48
Asociación Nacional de Productores de Ganado Porcino
Juan Brabo, 69 Entreplanta
28006 Madrid
Phone 402 22 72/Fax 402 22 68
Asociación Nacional de Productores de Pollos
Diego de leon, 33-Cuarto
28006 Madrid
Phone 562 24 88/561 44 71/Fax 261 31 76
AFOEX - Oilseed Crushers Assn.
Principe de Vergara, 80-1ºA
Phone: 563 10 33
Fax: 262 14 24
ASOCIACION ESPANOLA
DE IMPORTADORES DE MADERAS
Flora, 3
28013 Madrid
Phone:547 97 45
Fax: 547 39 80
AITIM
Asociación de Investigaciones de Industrias de la Madera y el Corcho
Flora, 3
28013 Madrid
Phone:542 58 64
Fax: 559 05 12
APROSE (Seed Producers Assn.)
Desengano, 10
28004 Madrid
Phone: (1)521-5517
Fax: (1)521-1238
ASOCIACION GENERAL DE FABRICANTES
DE AZUCAR DE ESPANA
522 84 32/531 06 08
Montalban, 11 - 4º piso
28014 Madrid
ASOCIACION DE DESMOTADORES DE
ALGODON DE ESPANA (A.D.A.E.)
Castelló, 115-52
28006 Madrid
Phone:564 29 30
Fax: 564 29 28
Grain Marketing
Llotja de Cereales de Barcelona
Lonja de Cereales
Casa Lonja del Mar
Paseo de Isabel II, 1
08003 Barcelona
Phone (3) 3 19 65 25/319 24 12/Fax 319 27 80
Appendix F: Market Research
A complete list of market research is available on the NTDB
a) International Market Insights
Title Code
- AT LAST DUNKIN DONUTS IN SPAIN........... IMI950612
- SOME COMPUTER MANUFACTURERS ARE ABANDONING
SPAIN.................................... IMI950609
- SHOWCASE EUROPE INITIATIVE: "MADRID 21".. IMI950608
- PRIVATE AIRLINES MARKET SECTOR IN SPAIN.. IMI950607
- START UP AND COVERAGE OF GSM
(GLOBAL SYSTEM MOBILE)................... IMI950607
- BILBAO INTERNATIONAL TRADE FAIR AUTHORITY IMI950602
- ENVIRONMENT AS PART OF THE SPANISH
INFRASTRUCTURE MASTER PLAN.............. IMI950526
- ANDALUCIA 'S FUTURE BEGINS TO SHINE..... IMI950524
- ANDALUCIA'S ENVIRONMENTAL DIFFICULTIES.. IMI950524
- PUBLIC WORKS MINISTER BORRELL SPEECH
ON TELECOMMUNICATIONS................... IMI950524
- MARKET GROWTH IN PHOTOGRAPHIC INDUSTRY IMI950519
- THE SPANISH MARKET FOR PETFOODS......... IMI950519
- THE SPANISH RECREATIONAL BOAT INDUSTRY.. IMI950519
- RECOVERY OF SPANISH PLASTICS INDUSTRY... IMI950516
- SPAIN'S CONSTRUCTION COMPANIES DIVERSIFY. IMI950505
- WASTE REDUCTION FOR ENERGY GENERATION SYSTEMS IMI950421
- SPAIN'S CONSTRUCTION INDUSTRY:AN OVERVIEW IMI950420
- RENFE: SPAIN'S RAILROAD NETWORK......... IMI950420
- MAINTENANCE SERVICES FOR HELICOPTERS .... IMI950419
- GOVERNMENT ENVIRONMENTAL BUDGET ......... IMI950417
- 1995 SPANISH ENVIRONMENTAL BUDGET........ IMI950417
- WATER TREATMENT PROJECT ................. IMI950413
- EXPORTS OF USED/REFURBISHED MEDICAL/
DIAGNOSTIC/MONITORING EQUIPMENT IN SPAIN. IMI950411
- SPANISH PACKING AND PACKAGING INDUSTRY... IMI950407
- CALIFORNIA/CATALUNYA PARTNERSHIP......... IMI950405
- DETERGENT MARKET OVERVIEW ............... IMI950403
- GOS REDEFINE CABLE TELECOMMUNICATIONS ... IMI950331
- ORGAN DONATION AND TRANSPLANTATION ...... IMI950331
- VENDING MACHINES SALES SKY ROCKETING..... IMI950331
- AN OVERVIEW OF THE SUNGLASSES MARKET .... IMI950331
- CABLE TELECOM LAW VIEWS ................. IMI950331
- E.U. MACHINE TOOLS PURCHASE ............. IMI950331
- ANDALUCIA ECONOMIC PROFILE .............. IMI950327
- E.U. COMPUTER PROCESSING PROJ ........... IMI950327
- E.U. CONSTRUCTION MANAGEMENT PROJ ....... IMI950327
- PLASTICS MARKET TRENDS .................. IMI950330
- RECOVERY OF THE SPANISH PLASTICS MARKET.. IMI950330
- E.U. TELESCOPE PURCHASE ................. IMI950323
- E.U. AIRPORT SYSTEMS PURCHASE ........... IMI950322
- E.U. COMPUTER PURCHASE................... IMI950317
- AIRPORT PROJ............................. IMI950317
- TELEPHONE COMPANY OVERVIEW .............. IMI950317
- COGENERATION OVERVIEW ................... IMI950317
- AIRPORT EQUIPMENT PURCHASE .............. IMI950317
- AIRPORT PROJ ............................ IMI950317
- ENVIRONMENTAL PROGRAM ................... IMI950228
- E.U. MEDICAL EQUIPMENT PURCHASE ......... IMI950207
- E.U. COMPUTER REPAIR PROJ ............... IMI950203
- BIOMASS ENERGY RESEARCH ................. IMI950130
- COMPUTER MARKET OVERVIEW ................ IMI950123
- ENVIRONMENTAL LABELLING REGS ............ IMI950123
- ENERGY PROJ FINANCING ................... IMI950110
- CATALONIA SOLID WASTE OVERVIEW .......... IMI941219
- FRANCHISE JV PROJ ....................... IMI941216
- COMPUTER TRADE SHOW ..................... IMI941209
- ENVIRONMENTAL REGS SUMMARY .............. IMI941207
- ENVIRONMENTAL REGS OVERVIEW ............. IMI941207
- ENVIRONMENTAL CONTACTS .................. IMI941207
- ENVIRONMENTAL LAWS ...................... IMI941205
- ENVIRONMENTAL INVESTMENT TRENDS ......... IMI941201
- SWIMMING POOL TRADE SHOW ................ IMI941201
- FISH MARKET OVERVIEW .................... IMI941201
- COAL IMPORT TRENDS ...................... IMI941129
- POWER GENERATION TRADE SHOW ............. IMI941129
- ENERGY PROJ FINANCING ................... IMI941123
- E.U. WATERWAY CONSTRUCTION PROJ ......... IMI941121
- INK MARKET OVERVIEW ..................... IMI941110
- RESTAURANT EQUIPMENT TRADE SHOW ......... IMI941102
- PAPER INDUSTRY OVERVIEW ................. IMI941028
- MAIL ORDER OVERVIEW ..................... IMI941028
- COMPETITION OVERIVEW .................... IMI941021
- CONSUMER ELECTRONICS MARKET OVERVIEW .... IMI941017
- AUDIO/VIDEO TRADE SHOW .................. IMI941017
b) Industrial Subsector Analysis
Title Code
- VIRTUAL PRIVATE NETWORK ..................... ISA9411
- WIND ENERGY EQUIPMENT ....................... ISA9410
- FRESH AND FROZEN FISH ....................... ISA9411
- PRINTING INKS ............................... ISA9410
- WASTEWATER POLLUTION CONTROL EQUIPMENT ...... ISA9409
- EYE GLASSES FRAMES .......................... 11/94
- HOUSEHOLD AND SANITARY PAPERS ............... 01/95
- CAD/CAM/CAE ................................. 01/95
- GOLF COURSE MAINTENANCE EQUIPMENT ........... 02/95
- CD-ROM (MULTIMEDIA) ......................... 03/95
- CELLULAR TELEPHONE TERMINALS ................ (in draft)
- CABLE TV SERVICES ........................... (in draft)
- DEFENSE ELECTRONICS EQUIPMENT ............... (in draft)
- SOLAR ENERGY ................................ (in draft)
- AIR TRAFFICK CONTROL EQUIPMENT .............. (in draft)
- CONTACT LENSES .............................. (in draft)
- ELECTRODIAGNOSTIC AND PATIENT MONITORING .... (in draft)
- AIR POLLUTION CONTROL ....................... (in draft)
- AIRPORT INFRASTRUCTURE ...................... (in draft)
- EDUCATION IN THE US ......................... (in draft)
- WATER TREATMENT CHEMICALS ................... (in draft)
c) Industrial Subsector Analysis for FY'96
- PREFABRICATED HOUSING
- FOREST FIRE FIGHTING EQUIPMENT
- INDUSTRIAL POLLUTION CONTROL EQUIPMENT
- SOIL TREATMENT EQUIPMENT
- DIRECT MARKETING SERVICES
- MARINE PORTS & PORT EQUIPMENT AND SERVICES
- FOOD PROCESSING & PACKAGING EQUIPMENT
- INDUSTRIAL CONTROLS
- CHEMICAL MACHINERY & EQUIPMENT
- AIRPORT GROUND SUPPORT EQUIPMENT
- AIRCRAFT AND PARTS
- CENTRAL OFFICE EQUIPMENT
- BROADCAST EQUIPMENT
- CD-ROM SOFTWARE
- VITAMINS
- SOFTWARE FOR INDUSTRIAL AUTOMATION
d) Agricultural market research
01/01/95 Fresh Deciduous Fruit - Semi-Annual SP9509B
01/15/95 Kiwifruit - Annual SP9548A
01/31/95 Grain Voluntary - Update SP9511V
01/31/95 Oilseeds Voluntary - Update SP9506V
02/01/95 Tree Nuts - Semi-Annual SP9514B
02/01/95 Livestock - Semi-Annual SP9552B
02/28/95 Grain Voluntary - Update SP9511V
02/28/95 Oilseeds Voluntary - Update SP9506V
03/15/95 Canned Deciduous - Semi-Annual SP9516B
03/15/95 Seafood - Semi-Annual SP9554B
03/15/95 Strawberry - Annual SP9532A
03/31/95 Grain Voluntary - Update SP9511V
03/31/95 Oilseeds Voluntary - Update SP9506V
04/10/95 Grain & Feed - Annual SP9511A
04/10/95 Sugar - Semi-Annual SP9519B
04/30/95 Grain Voluntary - Update SP9511V
04/30/95 Oilseeds Voluntary - Update SP9506V
05/01/95 Citrus Semi-Annual SP9508B
05/01/95 Tobacco Annual SP9521A
05/30/95 Tomatoes - Annual SP9522A
05/31/95 Grain Voluntary - Update SP9511V
05/31/95 Oilseeds Voluntary - Update SP9506V
06/01/95 Oilseeds - Annual SP9506A
06/15/95 Asparagus - Annual SP9545A
06/20/95 Cotton - Annual SP9504A
06/20/95 Poultry - Annual SP9553A
06/30/95 Grain Voluntary - Update SP9511V
06/30/95 Oilseeds Voluntary - Update SP9506V
07/31/95 Grain Voluntary - Update SP9511V
07/31/95 Oilseeds Voluntary - Update SP9506V
08/01/95 Livestock - Annual SP9552A
08/20/95 Tree Nuts - Annual SP9514A
08/31/95 Grain Voluntary - Update SP9511V
08/31/95 Oilseeds Voluntary - Update SP9506V
08/31/95 Planting Seed - Annual SP9501A
09/10/95 Fresh Deciduous Fruit - Annual SP9509A
09/15/95 Canned Diciduous Fruit - Annual SP9516A
09/15/95 Seafood - Annual SP9554A
09/30/95 Annual Situation Report SP9524A
09/30/95 Grain Voluntary - Update SP9511V
09/30/95 Oilseeds Voluntary - Update SP9506V
10/01/95 Sugar - Annual SP9519A
10/31/95 Grain Voluntary - Update SP9511V
10/31/95 Oilseeds Voluntary - Update SP9506V
11/01/95 Citrus - Annual SP9508A
11/30/95 Avocado - Annual SP9541A
11/30/95 Dairy - Annual SP9551A
11/30/95 Grain Voluntary - Update SP9511V
11/30/95 Oilseeds Voluntary - Update SP9506V
12/10/95 Wine - Annual SP9549A
12/15/95 Forest Products SP9555A
12/15/95 Tomatoes - Semi-Annual SP9522B
12/31/95 Grain Voluntary - Update SP9511V
12/31/95 Oilseeds Voluntary - Update SP9506V
Appendix G: Trade Event Schedule
Please note that the Embassy's trade event schedule may change, so firms
should consult the export promotion calendar on the NTDB or contact the
Post for the latest information.
a) Events organized by the Commercial Service
OCTOBER 95
* DESTINO USA 96 (Tourism)
* FERIA INTERNATIONAL DE LAS COMUNICACIONES
Barcelona, 24-27, U.S. Pavilion. (Telecommunications)
NOVEMBER 95
* DIMA - DIRECT MARKETING TRADE MISSION, Barcelona, 19 - 21
* CASE DAYS, and Barcelona, 13-19 (American States in Europe)
FEBRUARY 96
* SUNBELT INITIATIVE FOR FRANCHISING, Spain, Portugal, Greece and Italy
* INFRASTRUCTURE SEMINAR, Madrid
APRIL 96
* STUDY USA 96, Barcelona
* FLORIDA STATE TM, Barcelona and Madrid
MAY 96
* SPORTING GOODS MATCHMAKER - TM, Madrid/Barcelona
JUNE 96
* ENVIRONMENTAL - TF/PIP (Madrid, 13)
b) Events organized by the Foreign Agricultural Service
MARCH 96
* ALIMENTARIA '96 (Barcelona, 4-9)
Coordinator Madrid: H. Maginnis/M. Escudero
tel: (34-1) 431 2998
fax: (34-1) 576 8063
APRIL 96
* Feria del Gourmet (Madrid, 19-22)
Coordinator Madrid: H. Maginnis/M. Escudero
tel: (34-1) 431 2998
fax: (34-1) 576 8063
SEPTEMBER 96
* EUROFRUIT (Lerida, third week of September)
Coordinator Madrid: H. Maginnis/M. Escudero
tel: (34-1) 431 2998
fax: (34-1) 576 8063
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