Financial Crime World

Financial Crime Reporting Obligations in Spain: Understanding the Regulations and Compliance Requirements

Introduction

Spain has emerged as one of the wealthiest nations in Europe, with a highly developed economy that attracts businesses and investment interests from around the world. However, this growth and development have also made Spain a target for financial crimes such as money laundering and terrorism financing.

The Anti-Money Laundering (AML) Framework in Spain

In response to these threats, the Spanish government has established a robust anti-money laundering (AML) and counter-financing of terrorism (CFT) framework to protect its economic system and meet its international obligations. The country’s AML regulator, Servicio Ejecutivo de la Comisión de Prevención de Blanqueo de Capitales (SEPBLAC), has been at the forefront of this effort.

Key Articles of AML Legislation in Spain

  • Law 10/2010: Imposes reporting and record-keeping obligations on firms within Spain, as well as requirements for customer due diligence (CDD) and beneficial ownership verification.
  • Anti-Money Laundering Directives (AMLD): As an EU member state, Spain is required to transpose into law the EU’s Anti-Money Laundering Directives. The most recent AMLD, the Sixth Anti-Money Laundering Directive (6AMLD), included a new definition of the crime of money laundering and set out a harmonised list of money laundering predicate offences.

Penalties for Money Laundering in Spain

Penalties for money laundering in Spain are severe, with prison sentences of up to 6 years and fines of up to three times the value of the assets involved. Authorities may also impose business prohibitions of up to 3 years on persons found guilty of money laundering.

Compliance Requirements

To comply with Spain’s AML regulations, businesses must take a risk-based approach that includes:

  • Customer identification: Verify the identity of customers and beneficial owners.
  • Beneficial ownership verification: Identify and verify the beneficial owner(s) of a customer.
  • Suspicious transaction screening: Monitor transactions for suspicious activity.
  • Customer screening against international sanctions lists and watchlists: Check customers against international sanctions lists and watchlists.

Adverse Media Screening

Adverse media screening is also an essential part of this compliance effort. Firms should dedicate resources to capture a wide range of adverse media from around the world, including news stories, social media posts, and forum comments that may reveal customer AML/CFT risk.

Conclusion

Understanding Spain’s AML regulations and compliance requirements is crucial for businesses operating in this market. By taking a proactive approach to compliance, firms can mitigate the risks associated with financial crime and protect their reputation and assets.