In­for­ma­tion re­quired by banks for com­pli­ance with money laun­der­ing reg­u­la­tions

Costa Blanca News (South Edition) - - Residents' Advice Desk -

Le­gal and Tax ad­vice from Fer­nando Aliaga Al­most cer­tainly many read­ers will have re­ceived over the past few years a let­ter from their bank ask­ing for in­for­ma­tion about the hold­ers of their bank ac­counts. Many peo­ple af­ter hav­ing re­ceived such a let­ter con­tact us ask­ing why this in­for­ma­tion is re­quired and if one should pro­vide it or not.

Law 10/2010 on Money Laun­der­ing and the Pre­ven­tion of Ter­ror­ism obliges Span­ish banks to:

Cor­rectly iden­tity their clients,

To ob­tain in­for­ma­tion about their fi­nan­cial ac­tiv­i­ties (by means of tax re­turns for ex­am­ple), and in the case of com­pa­nies or en­ti­ties,

To iden­tity the “real owner” of the com­pany, namely the in­di­vid­ual who ul­ti­mately holds a con­trol­ling in­ter­est in the com­pany.

The bank is obliged to col­lect this in­for­ma­tion and if it is not pro­vided, the bank may freeze the cor­re­spond­ing ac­counts. In ad­di­tion to the banks, in­surance com­pa­nies are also obliged to re­quest the same in­for­ma­tion as well as in­vest­ment com­pa­nies, cur­rency ex­change com­pa­nies, bro­kers in­volved in ob­tain­ing loans, prop­erty de­vel­op­ers and those peo­ple who carry out in­ter­me­di­ary or agency ac­tiv­i­ties in the real es­tate mar­ket, au­di­tors, fis­cal ad­vi­sors and ex­ter­nal ac­coun­tants, no­taries and reg­is­trars in Land Registry, lawyers, court proc­tors and other in­de­pen­dent pro­fes­sion­als who are in­volved in the pro­vid­ing of ser­vices re­gard­ing the pur­chase of real es­tate, fund man­age­ment, the open­ing and man­age­ment of bank ac­counts and other sim­i­lar ac­tiv­i­ties.

Ad­di­tional leg­is­la­tion has reg­u­lated in fine de­tail the gen­eral re­quire­ments of Law 10/2010 that es­tab­lishes a pro­hi­bi­tion to carry out com­mer­cial ac­tiv­i­ties with en­ti­ties, with re­gard to which the ul­ti­mate in­di­vid­ual with a con­trol­ling in­ter­est can­not be iden­ti­fied, due to the re­fusal of the client to pro­vide the nec­es­sary in­for­ma­tion or due to the client’s ob­struc­tive be­hav­iour.

Specif­i­cally, the leg­is­la­tion ap­pli­ca­ble es­tab­lishes that in the case of the typ­i­cal Bri­tish in­sti­tu­tion of the “Trust”, those pro­fes­sion­als men­tioned above are obliged to iden­tify the trus­tees and ben­e­fi­cia­ries of the trust and any other in­di­vid­ual that ex­er­cises the ef­fec­tive ul­ti­mate con­trol over the trust, even if this is ex­er­cised by means of a chain of dif­fer­ent en­ti­ties/in­di­vid­u­als.

The per­sons obliged to com­ply with money laun­der­ing reg­u­la­tions must ob­tain from their clients in­for­ma­tion that per­mits them to be aware of the na­ture of the client’s pro­fes­sional or com­mer­cial ac­tiv­ity and will make a record of this prior to start­ing their pro­fes­sional re­la­tion­ship with the client. A check will be car­ried out on the client’s pro­fes­sional or com­mer­cial back­ground in the fol­low­ing cases:

when the client is in­volved in a busi­ness ac­tiv­ity that is con­sid­ered to con­sti­tute an above av­er­age risk on the ba­sis of the risk anal­y­sis of the client,

when the na­ture and vol­ume of the ac­tive and pas­sive trans­ac­tions of the client are not con­sis­tent with their de­clared ac­tiv­ity,

when a large num­ber of de­posits in cash are made in an ac­count by the same per­son or by many dif­fer­ent per­sons,

when mul­ti­ple trans­fers are made by sev­eral dif­fer­ent per­sons to the same ben­e­fi­ciary out­side of Spain or by one per­son out­side of Spain to sev­eral ben­e­fi­cia­ries within Spain,

when trans­fers are re­ceived from places that are marked down as high risk coun­tries.

when trans­fers are re­ceived with­out any iden­ti­fi­ca­tion of the or­der­ing party or with­out the iden­tity de­tails of the or­der­ing ac­count. The per­sons obliged to com­ply with the money laun­der­ing reg­u­la­tions must ex­am­ine with spe­cial at­ten­tion all those trans­ac­tions which show un­usual be­hav­iour, an un­usual de­gree of com­plex­ity or which do not re­veal an ob­vi­ous eco­nomic or licit ob­jec­tive. If indicators of the above are ev­i­dent, they must be no­ti­fied to the Ex­ec­u­tive Ser­vice of the Com­mis­sion for Pre­ven­tion of Money Laun­der­ing (SEPBLAC). The com­pli­ance with the money laun­der­ing reg­u­la­tions re­ferred to above is given such im­por­tance by the banks due to the pos­si­ble fines that could be ap­plied which, in the case of se­ri­ous breaches of the leg­is­la­tion, may amount to 150.000€ ris­ing to a po­ten­tial 1.500.000€ or ei­ther dou­ble the amount of the trans­ac­tion or 5% of the net wealth of the per­son who breached their money laun­der­ing obli­ga­tions.

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