In order to perform certain transactions in Spain, the parties thereto, before performing them, must provide specific documents relating to their identity and their business or professional activity, pursuant to the legislation applicable in relation to anti-money laundering and counter-terrorist financing (“AML/CTF”).
The main obligations applicable in Spain in relation to AML/CTF are established in Law 10/2010, of April 28, 2010, on the prevention of money laundering and of the financing of terrorism (“Law 10/2010”) and in Royal Decree 304/2014, of May 5, approving the Regulations of Law 10/2010 (“Royal Decree 304/2014”).
Spanish AML/CTF legislation is the result of the transposition of EU legislation on the subject, in particular, of Directive 2005/60/EC of the European Parliament and Council, of 26 October 2005, and Commission Directive 2006/70/EC of August 1, 2006, laying down the implementing provisions of the former. Current Spanish AML/CTF legislation also includes the recommendations issued by the Financial Action Task Force (“FATF”) on money laundering and terrorist financing.
The legislation enacted in relation to AML/CTF applies to the transactions carried out by the parties bound by it (“relevant persons”), such as financial institutions, notaries, lawyers or real estate developers, with their customers and potential customers, regardless of whether those customers are persons resident in Spain or nonresidents. Thus, where a party seeks to carry out in Spain procedures such as opening a current account, executing a public deed or acquiring real estate, the relevant persons must perform certain formalities to identify their customers and the origin of their funds.
In particular, the relevant persons must have procedures in place for identifying and accepting customers, and classifying them according to risk. In this regard, although each relevant person has specific AML/CTF procedures tailored to the characteristics of their activity, the information generally required pursuant to AML/CTF legislation can be summarized as follows:
» Legally valid documents for formal identification purposes23.Admissible identifying documents are the following:
- Spanish nationals: national identity card.
- Foreign national: residence permit, foreign identity card, passport or, in the case of citizens from the European Union or the European Economic Area, official letter or personal identity card issued by the authorities of origin.
Exceptionally, other personal identity documents issued by a governmental authority could be accepted, provided they have appropriate guarantees of authenticity and include a photograph of the holder.
— For legal entities: the public documents proving their existence and containing their corporate name, legal form, address, the identity of their directors, their bylaws and tax identification number.
— Authorized representatives: a copy of the legally valid document relating to the representative and to the represented person or entity, and the public document evidencing the powers conferred.
The identification documents must be in force when business relationships are established or occasional transactions are executed.
» Identification of the beneficial owner24. The identification and verification of the identity of the beneficial owner may generally be carried out through a solemn declaration by the customer or the authorized representative of the legal entity.
» Information on the purpose and nature of the business relationship. Such information shall be gathered in order to know the nature of the customer’s professional or business activity. In this regard, in order to evidence the activity, it will suffice to provide, among others, some of these valid documents:
— Salaried employees or pensioners: last pay slip, pension or subsidy, certificate of labor history or employment contract in force.
— Customers with liberal professions or self-employed persons: proof of payment of social security contributions, professional association membership card or receipt of membership dues.
— Legal entities: last corporate income tax return, financial statements, annual business report or annual external auditors’ report.
» Information and, as appropriate, evidence of the origin of the funds to be contributed.
The relevant persons shall carry out enhanced verifications of the information provided to them in those situations in which, given the nature and characteristics of the transaction and in view of the criteria established in legislation, they consider that there is, in principle, a higher risk of money laundering or terrorist financing.
23 The relevant persons shall identify and verify, through legally valid documents, the identity of all the individuals or legal entities that seek to establish business relationships or carry out occasional transactions the amount of which is €1,000 or more. The identity shall be verified in all cases of transactions for sending money and managing transfers.
24 The relevant persons shall identify the beneficial owner and adopt the appropriate measures in view of the risk in order to verify its identity before establishing business relationships, executing electronic transfers for amounts over €1,000 or executing other occasional transactions for amounts above €15,000.