Financial Crime World

Financial Crime Risks in Spain: Government Takes Measures to Protect Country’s Integrity

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Spain is no stranger to financial crime risks, with money laundering and terrorist financing posing significant threats to the country’s economic, political, and social stability. To combat these risks, the Spanish government has implemented various measures to ensure its financial integrity.

Historical Context

In 1988, Spain criminalized money laundering as part of its penal code, aimed at curbing the drug trade that had plagued the country. Over time, the government expanded the scope of money laundering crimes and increased penalties through amendments in 1995 and 2003.

Regulatory Reinforcement

Regulations were reinforced by Royal Decrees 925/1995 and 54/2005, which imposed obligations on financial institutions to:

  • Implement Know Your Customer (KYC) procedures
  • Detect suspicious transactions
  • Maintain customer records for five and six years for fiscal and mercantile information, respectively

International Collaboration

International collaboration has been a key aspect of Spain’s anti-money laundering (AML) efforts. Recent decrees and laws have clarified the details of AML laws and the fight against fraud.

EU Directives and Compliance

Spain has eased the implementation of the Fourth and Fifth European Union (EU) AML Directives (4AMLD and 5AMLD) through Royal Decree 11/2018 and Law 5/2020. The country continues to develop its AML laws and regulations in line with international collaboration.

FATF Compliance

The Financial Action Task Force (FATF) has deemed Spain as a country without strategic AML deficiencies. In its latest Follow-Up Assessment Report on Spain in 2019, it noted that Spain is:

  • Compliant with 28 of the FATF’s 40 Recommendations
  • Largely compliant with 10

Financial Regulation and Supervision

Spain’s financial regulation covers a wide range of institutions, including:

  • Banks
  • Investment companies
  • Credit companies
  • Insurance companies
  • Brokerage companies
  • Securities companies
  • Money transfer companies
  • Payment institutions

These organizations are at high risk for money laundering and terrorist financing and must meet their AML obligations to protect themselves from financial crimes.

Supervision and Enforcement

The Bank of Spain supervises the financial environment through its financial intelligence unit, SEPBLAC. The regulatory agency imposes administrative fines on those that do not comply with their obligations. Non-compliance can lead to loss of reputation, customers, and market share.

Conclusion

Spain has made significant efforts to combat financial crime risks, including implementing robust regulations and collaborating internationally. As a member of the FATF and the EU, Spain has responsibilities and obligations to meet on an international scale. To ensure stability and security for your company, contact Sanction Scanner or request a demo today.

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