Spain transposes the 5th Directive on the prevention of money laundering
The V Directive (2018/843) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, has been incorporated into our legal system by means of Royal Decree-Law 7/2021, of April 27, on the transposition of European Union directives approved this Tuesday, April 27, 2021 by the Council of Ministers and published in the BOE on April 28.
The transposition avoids the initiation by the European Commission of a sanctioning procedure before the Court of Justice of the EU against Spain for the failure to transpose the 5th Directive into our national legislation, whose deadline for its transposition ended on January 10, 2020.
Furthermore, the publication of Royal Decree-Law 7/2021, as stated in its preamble, has the double objective of perfecting the mechanisms for the prevention of terrorism and improving the transparency and availability of information on the beneficial owners of legal persons and other entities without legal personality that act in the legal traffic.
The main amendments to Law 10/2010, of April 28, 2010, on the prevention of money laundering and terrorist financing (hereinafter, "Law 10/2010") included in Royal Decree-Law 7/2021 for the transposition of the V Directive are the following:
The inclusion of new obliged subjects:
Those who professionally exercise agency, commission or intermediation activities in real estate leasing involving a transaction for a total annual rent equal to or greater than 120,000 euros or a monthly rent equal to or greater than 10,000 euros.
Providers engaged in exchange services between virtual currencies and fiat currencies, as well as custodian wallet providers or safeguarding of keys, with the consideration of financial entities for the purposes of Law 10/2010.
Any person who undertakes to provide, directly or through other related persons, material aid, assistance or advice on tax matters as a main business or professional activity.
The reinforcement of the system of identification of the beneficial owners of legal entities, for which a single registry system is created, which will include the information of the beneficial owners already existing in the Commercial Registry and in the notarial databases, and will incorporate the mandatory registration of trusts and entities of similar nature operating in our country and their beneficial owners.
It establishes the duty for obliged entities to request this registry information in their business relations with legal entities, and the duty for legal entities and entities without legal personality to obtain keep and update their beneficial ownership information and provide it to authorities and obliged entities when so required.
The clarification of the information requirements to be provided in relation to the Financial Ownership File (Fichero de Titularidades Financieras), existing in Spain since 2016. Specifically, the regulation clarifies the obligations of declaration in the file by the reporting entities and extends this obligation to safe deposit boxes and all payment accounts, including those existing in electronic money institutions and in all payment institutions.
Persons who perform important public functions in international organizations accredited in Spain are incorporated to the definition of politically exposed persons. These organizations must draw up and keep updated a list of these public functions.
In business relationships and transactions without physical presence, it will not be mandatory to obtain a copy of the document proving the identity of the client when it has been accredited by means of a qualified electronic signature under the terms regulated in the EIDAS Regulation.
The data protection regime when complying with due diligence obligations is included, expressly stating that the processing of personal data that is necessary to comply with the obligations established in Chapter II of Law 10/2010 is covered by the provisions of article 8.1 of Organic Law 3/2018, of December 5, and article 6.1 c) of Regulation (EU) 2016/679 of the European Parliament and of the Council, of April 27, 2016, not requiring the consent of the data subject.
Once this amendment has been approved by the royal decree-law, the entities and groups that are considered as "obliged entities" must carry out an evaluation exercise and, if necessary, adapt their models and procedures for the prevention of money laundering and the financing of terrorism to the new regulatory requirements.
The transposition by this means has left behind the option of the Draft Law amending Law 10/2010, of 28 April, on the prevention of money laundering and financing of terrorism, which was published in our country on 12 June 2020, with which the V Directive was transposed and which included additional improvements to our system for the prevention of money laundering, which are not included in the text of Royal Decree-Law 7/2021, which only contemplates the urgent provisions incorporated in the V Directive.
Some of the improvements envisaged in the draft bill that have been left out by opting to approve a royal decree-law are: (i) the inclusion of new obliged entities such as management companies of securization funds, management companies of banking assets funds, the Real Estate Investment Trusts (REIT or Spanish SOCIMIS), and participatory financing platforms; (ii) the approval of a new liability system for external experts; and (iii) the development of common data storage services between entities.
Most of these additional improvements were already included in the previous draft proposal for the transposition of the IV Directive (2015/849), which was not finally approved due to the lack of consensus in the Congress of Deputies due to the political context and the urgency of the deadline for the transposition of the regulation.