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The Spanish Money Laundering Law

By Armin Gutschick & Anja Sämann-Gutschick

Legal & Real Estate

Home, Garden & Decoration

Global Topics

Inside Ibiza

Health & Wellness

Ibiza Optimista

Published in Ibicasa Magazine on 15/04/2024

Some laws seem so far removed from the lives of normal citizens that people believe they can safely ignore them. The "Law on the Prevention of Money Laundering and the Financing of Terrorism" (Ley 10/2010 de prevención del blanqueo de capitales y de la financiación del terrorisimo) falls into this category. The term "money laundering" has been in our vocabulary for a long time. But if you think it is only associated with drug trafficking and arms smuggling, you need to rethink that assumption. Even though the title of the law seems to be directed only at criminals, it affects all of us, and has had a significant impact on our daily lives for almost 14 years. 
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The law 10/2010, which has undergone a series of amendments over the years, defines money laundering as, “a process by which money that has not been lawfully acquired or held is channelled into the economic cycle”. This means that any criminal offence, no matter how minor, is sufficient to trigger this law. It is not even necessary for a conviction to have been handed down for the transaction to be relevant under the law. The term “money that has not been lawfully acquired” even includes unpaid taxes.

Under this law many different professions including lawyers, notaries, bank employees, estate agents, car dealers and jewellers, are obliged to identify their customers and determine whether they are authorised to carry out the transaction. The recording of personal data, including a copy of their passport, is part of the identification process. This obligation continues to apply on an ongoing basis, meaning that subsequent business transactions between the same parties must also be checked. 

This law requires even more scrutiny in the case of a notarised purchase contract. Not only must the client provide a copy of their valid identity card to the lawyer and notary, but the precise details of the method of payment needs to be provided in the deed. This information includes the account number and owner of the bank account used for the purchase payment, and the same information for the bank account that is receiving the payment.

Furthermore, a company wishing to notarise a transaction must state to the notary who the "true beneficial owners" are ("titular real" in Spanish). This appears simple at first glance, but it can turn out to be complex in some cases. For instance, if the shareholders of the company are other companies, the notary needs to look further. He must follow this chain of ownership until he finally arrives at a natural person with at least 25% ownership, who can produce valid identification and a registered address. This process must be recorded by the notary in a separate document called an "acta de titularidad real". If there is no shareholder who holds 25 % of the shares (example: five shareholders with 20%  shares each), the managing director can be used as the "beneficial owner". However,  as an employee he is only acting on behalf of the company. The notary keeps the deed in his records and it can be requested by the tax authorities whenever they wish to see it.
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There are some other interesting effects of this law. Banks refuse to open accounts for companies where the exact ownership structure of the company, down to the natural persons behind it, is not proven. Foreign companies with a branch in Ibiza are finding it difficult to open a Spanish bank account for their companies. In addition, the use of cash in business transactions is currently limited to 1,000 euros per transaction. It is clear to see that the Spanish Money Laundering Act compels a wide range of professions to carry out control and information gathering measures that have a direct impact on many legal and economic transactions.

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