On 30 August 2018, the Spanish Council of Ministers approved Royal Decree 11/2018 on the transposition of directives on the protection of pension commitments with workers, prevention of money laundering and requirements for entry and residence of third-country nationals (RDL 11/2018) (http://www.boe.es/boe/dias/2018/09/04/pdfs/BOE-A-2018-12131.pdf).
RDL 11/2018, which entered into force on 4 September 2018, incorporates 4MLD within Spanish law. In light of Spain’s failure to meet the EU’s deadline for transposition (26 June 2017), the Government opted to incorporate 4MLD into national law via Royal Decree as opposed to statute. This is despite the draft statute having been held in Public Hearing until 16 January 2018 (the text of the draft statute can be found here: http://www.mineco.gob.es/stfls/mineco/ministerio/participacion_publica/audiencia/ficheros/ECO_Tes_171222_AP_Ley_BCFT_fin.pdf).
RDL 11/2018 amends Law 10/2010 on the prevention of money laundering and the financing of terrorism (Law 10/2010). The main additions in the Spanish legislation are as follows:
Beneficial ownership. The concept of “control” is specified for the purposes of the obligation to identify the ultimate beneficial owner of assets. Likewise, the Royal Decree outlines what is meant by the “real ownership” of trusts or analogous structures, namely:
(i) the settlor;
(ii) the trustee(s);
(iii) the protector (if any);
(iv) the beneficiaries, or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates; and
(v) any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.
Due Diligence Measures. The obligation to apply enhanced due diligence measures is incorporated with respect to countries specified by the European Commission in accordance with Article 9 of the Directive.
Gambling sector. Control over transactions in the gambling sector has now been expanded. Gambling providers (not only casinos) are required to apply AML measures in transactions of EUR 2,000 or more (whether the threshold is reached in a single transaction or series of transactions).
Politically Exposed Persons. Prior to the introduction of 4MLD, PEPs were divided into two broad categories: (i) individuals with international public responsibility who were subject to enhanced due diligence; and (ii) those with national public responsibility who were subject to enhanced due diligence measures on a case by case basis. A tougher regime is now applicable to those exercising public responsibility or public functions in the domestic arena, with all individuals now being subject to enhanced due diligence measures as a matter of course. In addition, the concept of a politically exposed person (persona de responsabilidad pública) is extended (to include directors, deputy directors and members of the board of directors, and positions of senior management within political parties represented in Parliament).
Cash use. There has been a reduction in the threshold at which persons trading in goods that use cash as a means of payment are obliged to comply with the obligation to prevent money laundering, with the threshold falling from EUR 15,000 to EUR 10,000.
Sanctions increase. The sanctions applicable to money laundering breaches now match the maximum thresholds established by the EU regulations.
Mechanisms to encourage reporting. Those subject to RDL11/2018 are now required to establish internal systems enabling them to report breaches to the Commission for the Prevention of Money Laundering and Monetary Offenses (Comisión de Prevención del Blanqueo de Capitales e Infracciones Monetarias).
Register. Corporate service providers (those offering services to companies and trusts) are now obliged to register with the Spanish Commercial Registry.
Correspondent banking relationships. Finally, the scope of the legislation’s application to due diligence measures in relation to correspondent banking relationships is extended to include all financial institutions, which are now required to comply with certain specified due diligence measures when engaging in correspondent banking.