EspañolPrevention of money laundering
Spain, in line with its counterparts in the European Union, has stringent rules and regulations on the prevention of money laundering. These regulations have extended the scope of the law on this matter so that it affects a greater number of activities and professions.
Our team of experts has long experience in the prevention of money laundering which allow us to carry out an in-depth revision of your company adding value to the directors and executives with recommendations oriented to comply with the law minimizing the investment on the measures requested to implement good internal controls.
UHY Fay & Co offers the following services for the prevention of money laundering:
¿What is Money Laundering?
According to the legal definition, Money Laundering refers to the acquisition, use, conversion or transmission of goods that are the result of the perpetration of a criminal activity or participation in acriminal activity that is punishable with over three years imprisonment. It also encompasses attempts to conceal or cover up the source of the crime or aid participants in the crime to avoid the legal consequences, and includes the concealment or covering up of the true nature of the crime, along with the source, location and movements of ownership or rights of ownership, even when the activities involved originate in another country.
¿Which activities are subject to the obligations established by law?
Entities subjet to the General Regime
- Credit entities
- Insurance companies - life insurance
- Societies and Stock exchange agencies
- Investment societies (excluding those delegated to a SGIIC - external investment society)
- SGIIC and Retirement pension societies
- Societies issuing credit cards
- Individuals or Legal entities with activities related to money transfer or exchange
Entities subjet to the Special Regime
- Casinos
- Activities related to real estate promotion, comission or intermediary in the buying or selling of properties
- Individuals or Legal entities acting as auditors, external accountants or legal advisors
- Notaries, lawyers or attorneys (when acting in specific operations)
- Activities related to commerce with jewels, precious stones and metals
- Activities related to commerce of art and antiquities
- Activities related to stamp and numismatic investments
- Activities related to professional transport of funds or payments
- Activities related to international credit transfer
- Activities related to commercialization of lotery or game of chance
The SEPBLAC (Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences), attached to the Bank of Spain, is coordinating all the activities related to the investigation and prevention of money laundering and the place where all communications of doubtful operations must be sent to.
¿Which are the obligations of the entities subject to comply with the law?
Entities subject to the General Regime
- Identification of the clients
- Requesting information on clients and verifying its veracity
- Examination of all suspicious operations
- Conservation of documents (6 years)
- Mandatory monthly declaration
- Comply with providing the information requested by the Executive Service
- Reporting of suspicious operations
- Refusal to carry out suspicious operations without making such a report
- Total confidentiality
- Establishment of bodies of control and communication
- Training of employees
- Exemption of responsibility in relation to foreign subsidiaries
Entities subject to the Special Regime
- Identification of clients
- Special exam on suspicious operations
- Conservation of documents
- Comply with providing the information requested by the Executive Service
- Refusal to carry out suspicious operations
- Total confidentiality
- Establishment of bodies of control and communication
- Training of employees
- Exemption of responsibility in relation to foreign subsidiaries
¿Which are the infringements of the law?
The infringements are classified as serious and very serious, according to the unfulfilled obligation.
Serious
- Obligation to identify clients
- Obligation to examine suspicious operations
- Obligation to conserve documents
- Obligation to colaborate with the SEPBLAC
- Obligation to refuse to carry out suspicious operations
- Obligation to establish bodies of control
- Obligation to train employees
- No adoption of measures recommended by the SEPBLAC
Very Serious
- Avoiding the confidenciality obligation
- Avoiding to comply with the obligation to provide information to the SEPBLAC
- Avoiding to comply with the obligation to provide information to the SEPBLAC when a member of the entity subject to the law has pointed out the existence of suspicious operations
- Refusal to provide written communication of information requested by the SEPBLAC
- Ones clasified as very serious, when in the five previous years, the entity subject to the law had been sanctioned
¿Which are the sanctions for non compliance with the law?
Serious
- Private warning
- Public warning
- Fine of a minimum of € 6,010.12 and a maximum of the bigger of: 1% of the entity's resources; double of the economic amount of the operation plus 50%, or € 150,253.06
Very Serious
- Public warning
- Fine of a minimum of € 90,151.82 and a maximum of the bigger of: 5% of the entity's resources; double of the economic amount of the operation or € 1,502,530.26
Responsibility of Executives and Directors. Penalties
Article 7 of Law 19/1993 says that apart from the responsibility of the entity subject to comply with the law on prevention of money laundering, the executives and directors of the entity are also responsible for the infringiments of the law. Therefore, they will also be subject to sanctions as follow:
Serious
- Public warning
- Private warning
- Fine to each of them for a minimum of € 3,005.6 and a maximum of € 60,101.20
- Dismissal from their post for a maximum period of 1 year
Very serious
- Fine to each of them for an amount between € 60,101.20 and € 601,012
- Dismissal from their post for a maximum period of 5 years
- Dismissal from their post and inability to work in any entity subject to comply with this law for a maximum period of 10 years
In addition to the administrative penalty system, the Criminal Code applies a prison sentence of 6 months to 6 years and a fine amounting to triple the value of the assets.
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