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Amendments to the Prevention of Money Laundering Law

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Legal News, Fiscal News

Although the preliminary draft to amend Law 10/2010 on the Prevention of Money Laundering was published last June 2020, parliamentary approval concerning the text has not yet been granted.

We consider that this is a good opportunity to point out some of the main points that this modification of Law 10/2010 will bring, which will celebrate its eleventh anniversary next 28th of April.

The preliminary draft of the Prevention of Money Laundering (which has not yet been submitted to the Congress of Deputies) foresees several measures aimed mainly at improving Law 10/2010. This improvement is carried out in accordance with what is expressed in what is known as the V Directive on the Prevention of Money Laundering.

The main amendment made is of considerable interest to obliged parties, the possibility of access to the so-called Register of Owners, configured as a single register of beneficial owners. This Register is to be managed by the Ministry of Justice. One of the major operational problems in the application of due diligence measures is thus greatly simplified. On a day-to-day basis, obliged entities had to face a host of problems in obtaining identification of the beneficial owners of their customers. These include customer reluctance, the investment of investigative resources or merely the difficulty of certain corporate or similar structures.

The Preliminary Draft of the Prevention of Money Laundering Law provides for the following information to be contained for each beneficial owner:

  • First and last name.
  • Date of birth.
  • Type and number of the identification document.
  • Country of issue of the identification document, in case of not using the National Identity Card or Spanish Resident Card.
  • Country of residence.
  • Nationality.
  • Criterion which qualifies that person as beneficial owner.
  • When applicable, the reason for the beneficial ownership (direct or indirect ownership, percentage of voting rights, etc.).
  • Provision is also made for other information to be included by regulation.

The access to the Register is set out in the fourth additional provision of the Preliminary Draft. It states that obliged entities will have access to current information in the Register (and not to historical data). Furthermore, the outlined provision makes it possible for them to keep proof of the Register to evidence compliance with their beneficial ownership due diligence obligations. For customers of higher risk, in addition to accessing the Register of Beneficial Owners for the Prevention of Money Laundering, further measures should be sought. Third parties who are not obliged parties may also have access to the Register, although in this case they will only be able to see a limited part of the beneficial ownership information.

As we see, the exact way to access the register by the obliged parties has yet to be regulated. In this regard, the right to know the beneficial ownership as a money laundering prevention measure must be combined with a relative protection of the identity of the beneficial owners.

Complementarily, it is stipulated that access to the register will be free of charge and without restriction for authorities and notaries and registrars, including the access to historic data.

The Preliminary Draft is an important step forward in the Prevention of Money Laundering in Spain. In a future article we will analyse the rest of the main novelties that the new text will bring us, with the exception of the subsequent amendments that may be made during the parliamentary procedure.

At UHY Fay & Co we have a department specialized in compliance with the Money Laundering Prevention regulations, call us without obligation at any of our offices.

 

 

 

 

Manuel Azpeitia

Responsible of Corporate & Compliance

map@uhy-fay.com

 

Related Services:

Money Laundering Prevention

Compliance

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