Money Laundering in Spain: What You Need to Know
Spain has implemented strict regulations to prevent money laundering and terrorist financing, requiring parties involved in certain transactions to provide specific documents. These regulations are based on EU directives and recommendations from the Financial Action Task Force (FATF).
Laws Governing Anti-Money Laundering and Counter-Terrorist Financing
The main laws governing anti-money laundering and counter-terrorist financing (AML/CTF) in Spain are:
- Law 10/2010: Outlines the obligations of financial institutions, notaries, lawyers, and real estate developers.
- Royal Decree 304/2014: Provides further guidance on AML/CTF regulations.
Obligations of Relevant Persons
Relevant persons, including those involved in transactions worth €1,000 or more, must:
- Identify their customers
- Verify their identity
- Classify them according to risk
To do this, relevant persons must obtain legally valid documents, such as:
- National identity cards
- Residence permits
- Passports
- Public documents proving the existence of legal entities
Information Gathering and Enhanced Verification
In addition to customer identification, AML/CTF legislation requires relevant persons to gather information on the purpose and nature of the business relationship, including evidence of the customer’s professional or business activity. This can include:
- Last pay slips
- Pension certificates
- Proof of social security contributions
- Financial statements
Relevant persons must also carry out enhanced verifications in situations where they deem there is a higher risk of money laundering or terrorist financing. This includes:
- Verifying the origin of funds to be contributed
- Adopting appropriate measures to verify the identity of beneficial owners
Identification Documents and Verification
In Spain, identification documents must be in force when business relationships are established or occasional transactions are executed. Relevant persons shall identify and verify the identity of all individuals or legal entities that seek to establish business relationships or carry out occasional transactions worth €1,000 or more.
Purpose of AML/CTF Regulations
The legislation is designed to prevent money laundering and terrorist financing by ensuring that financial institutions and other relevant persons have procedures in place to identify and monitor suspicious activities. As such, it is essential for parties involved in certain transactions to understand their AML/CTF obligations and comply with the relevant regulations.
By following these guidelines, you can ensure compliance with Spain’s anti-money laundering and counter-terrorist financing regulations and help prevent illegal activities.