Anti Money Laundering (AML) in Spain

The criminalization of money laundering was added to the penal code in 1988 when laundering the proceeds from narcotics trafficking was made a criminal offense. In 1995, the law was expanded to cover all serious crimes that require a prison sentence greater than three years. Amendments to the code on November 25, 2003 made all forms of money laundering financial crimes. The penal code can also apply to individuals in financial firms if their institutions have been used for financial crimes. An amendment to the penal code in 1991 made such persons culpable for both fraudulent acts and negligence connected with money laundering.

In December 1993, specific measures to prevent money laundering were adopted to regulate the legal entities in the financial sector and individuals moving large sums of cash (Law 19/1993). The regulations for enactment were established by Royal Decree 925/1995, which set the standards for regulating the financial system. The regulations were amended in January 2005 by Royal Decree 54/2005. Pursuant to these laws and regulations, the financial sector is required to identify customers, keep records of transactions, and report suspicious financial transactions. Spanish banks are required by law to maintain fiscal information for five years and mercantile records for six years.

The money laundering law applies to most entities active in the financial system, including banks, mutual savings associations, credit companies, insurance companies, financial advisers, brokerage and securities firms, postal services, currency exchange outlets, casinos, and individuals and unofficial financial institutions exchanging or transmitting money (alternative remittance systems). The 2003 amendments added lawyers and notaries as covered entities.

In February 2018 the Council of Ministers authorized the adaptation of Spanish legislation to the EU directive against money laundering and financing of terrorism. The transposition of the rule comes seven months late, after the European Commission threatened to sanction Spain for this reason. The Government changed the law with the purpose of adapting Spanish regulations to the European framework.

Although most of the elements of the European directive are already in force in Spain, the preliminary draft incorporates new features, such as the expansion of the groups affected by the law, the creation of mechanisms to facilitate complaints by the subject entities to the norm (banks, insurers or law firms), the implementation of a register of persons whose activity is the creation of partnerships for third parties, the reinforcement of controls for persons with public responsibility or the creation of common bases or systems storage of data collected during customer identification processes.

The Commission for the Prevention of Money Laundering and Financial Crimes (CPBC) coordinates the fight against money laundering in Spain. The Secretary of State for Economy heads the commission and all of the agencies involved in the prevention of money laundering participate.