Financial Law: Regulations, Legislative Decrees, and More

Financial Law: An Overview

Law in financial management encompasses regulations concerning income and expenditure. These laws serve as policy instruments to manage the financial system, addressing both revenue and expenditure. They highlight the prevalence and greater relevance of the law compared to other sources of legal guidance.

According to the European Community (EC), two types of laws must be distinguished: organic and ordinary.

Organic Laws

Under Article 81, Organic Laws are reserved for specific matters, such as the development of fundamental rights, statutes of autonomy, the general electoral system, and other matters provided for in other provisions of the EC. In general, financial matters are not reserved for Organic Laws. However, some issues covered under this format include those related to territorial estates referred to in the Statute of Autonomy. The financing of the Autonomous Communities (CCAA) is subject to AS 1980 (LOFCA), and the legal regime of the Court of Auditors.

Ordinary Laws

Ordinary laws are the typical instrument to regulate financial activity in our system.

It is important to emphasize that financial matters are governed by a series of laws, called General Laws. These laws reflect the basic principles of the financial system, such as the General Tax Law and the General Appropriations Act. Such laws are ordinary laws and cannot be considered a special category of laws within the system of sources of Spanish law. Therefore, they do not have a higher rank in the hierarchy of sources of financial law.

Legislative Decrees

Legislative decrees are characterized by the Parliament delegating to the Government the power to make rules with the force of law. This is done through framework laws (which give rise to texts in sections) and harmonization (to develop a consolidated text).

Texts Articulated

In such cases, a law fixes the base object and scope of the delegation, as well as the principles and criteria to be developed. The text article develops the principles and criteria set out in the basic law that dictate the courts.

Sections Merged

The government is only authorized to structure provisions already in force into a single text, even if scattered across a plurality of normative texts. The delegating law should state whether the government should be limited to the mere production of a single text or if it can clarify, regulate, and harmonize the legal texts that are to be consolidated.

In financial matters, there is no particularity in relation to the legislative decrees.

Decree-Laws

The EC authorizes the executive to make rules with the force of law when certain conditions are met:

1. That there is extraordinary and urgent necessity.
2. That the subjects covered do not affect the basic state institutions, rights, and freedoms in Title 1, the regime of the CCAA, and the general electoral system.
3. Adopted later by the courts. If yes, it is validated, and the Decree remains with the expected efficacy. If not validated, it loses its effectiveness and binding force.