KYC Policies in Spain: What You Need to Know
As a key player in the European Union, Spain has implemented strict regulations around Know Your Customer (KYC) and Anti-Money Laundering (AML) to prevent financial crimes. In this article, we will delve into the KYC policies in Spain, highlighting the requirements for organizations to ensure compliance with AML laws.
Understanding the Spanish Money Laundering Act
The Spanish Money Laundering and Terrorist Financing Prevention Act sets out the guidelines for AML and KYC regulations. Obligated entities are required to implement customer due diligence procedures, including identity verification, to prevent money laundering and terrorist financing. This involves verifying the identities of individuals establishing business relationships or transactions exceeding €1,000.
Sepblac’s Guidance on Identity Verification
Spain’s financial intelligence unit, Sepblac, has outlined guidelines for remote identity verification procedures. Regulated entities must verify identities through reliable documents, such as national ID cards. Additionally, Sepblac has approved the use of digital solutions for identity verification.
Identity Document Verification in Spain
In Spain, organizations can accept various forms of identification documents, including:
- National ID (Documento Nacional de Identidad): The most widely accepted form of identification.
- Driver’s licenses: Accepted as a valid form of identification.
- Passports: International travel documents are also accepted.
- Residence permits: Official documentation for foreign nationals living in Spain.
The Spanish government also offers a digital ID solution, Cl@ve, which enables users to authenticate themselves and access government services. This aligns with EU eIDAS requirements.
Business Verification Insights in Spain
To verify businesses in Spain, organizations must:
1. Register companies with the corporate registry and Spanish tax office
This step ensures that the company is registered and compliant with all relevant regulations.
2. Obtain a nine-digit VAT number from the tax authorities
This unique identifier is required for all businesses operating in Spain.
3. Collect ultimate beneficial owner (UBO) information annually, as required by law
Organizations must collect and maintain accurate UBO information to ensure compliance with AML regulations.
Optimal business verification often requires collecting VAT numbers and registered company names, while identity verification can provide a more efficient path for verifying sole proprietorships.
Overcoming Verification Challenges in Spain
Verifying people and businesses in Spain presents complex challenges. However, organizations can access a vast network of data sources, market expertise, and cutting-edge technology to accelerate due diligence and optimize verification performance. By blending these capabilities with services like watchlist screening and adverse media checks, organizations can create a holistic onboarding strategy that leads to industry-leading verification rates.
Conclusion
In conclusion, KYC policies in Spain are designed to prevent financial crimes while ensuring compliance with AML laws. By understanding the requirements for identity verification and business registration, organizations can navigate the complex regulatory landscape and optimize their verification processes. With the right expertise and technology, organizations can accelerate customer onboarding, improve match rates, and reduce the risk of non-compliance.