Spain Tightens its Anti-Money Laundering Rules

Spain has implemented one of the toughest anti-money laundering (AML) laws in Europe to strengthen its fight against money laundering and terrorist financing. The new regulation, which came into effect on May 6, aims to update the country’s AML legislation and align it with recent technological developments.

Key Changes

The Spanish AML law introduces several key changes, including:

The requirement for credit institutions to report information on current accounts, savings accounts, securities accounts, and term deposits to SEPBLAC, Spain’s supervisory body for the prevention of money laundering and terrorist financing.
E-money issued against cash is considered a product with a low risk of money laundering if certain quantitative limits are met. However, this has been criticized by some in the market for being hostile from a commercial perspective.

Financial Ownership File

The regulation also introduces the concept of a “Financial Ownership File,” which requires credit institutions to maintain detailed information on account holders. This includes:

Maintaining detailed records of account holders
Reporting monthly and within seven days of each natural month

Internal AML Manual

Companies subject to the law are obliged to include the following matters in their internal AML manual:

Carrying out internal audits of AML policies
Setting out internal AML policies and procedures
Periodically reviewing and updating them

Implementation Timeline

The regulation is expected to have significant implications for companies operating in Spain, particularly those in the financial sector. The Spanish authorities have been given two years to carry out formalities before the Financial Ownership File becomes operational, and credit institutions will be given at least six months’ notice before it starts operating.

Background

Spain’s move to strengthen its AML laws comes at a time when the country is seeking to improve its reputation as a hot spot for money laundering. The Spanish government has been under pressure to implement stricter measures to prevent financial crimes after being criticized by international bodies such as the Financial Action Task Force (FATF).

Conclusion

The new regulation is expected to have significant implications for companies operating in Spain, particularly those in the financial sector. As Juan Palomino, a lawyer at Pérez-Llorca, notes, “The current Spanish legislative context, along with Spain’s reputation as a hot spot for money laundering, has a great impact on the level of AML obligations that companies have to comply with.”

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