11 Jan Money laundering offence and its regulation in Spain

In this post we are going to analyze a phenomenon of international significance such as money laundering. It is an operation wherein money that has been obtained through illicit activities becoming part of the financial assets of legal activities and of the global financial system.

In Spain, money laundering has been characterized as a specific crime in article 301 of the Criminal Code. Specifically it is talking about the person who “transfers the possession of, sends or delivers, transmits, alters, disposes of or otherwise deals with…” “knowing or believing that all or a part of that property or of those proceeds was obtained by an illegal activity…” shall be punished with…”

Can a legal person be charged for the commission of this crime?

The answer is affirmative, because of the fact that money laundering is an imputable criminal offense, not only to natural persons, but also to legal persons, ever since the parliament approved the reform of the Criminal Code made in 2015, which allows that certain offenses may also be imputable to legal persons, in cases wherein the companies have breached their obligations of “supervision, monitoring and control of their activity“ to which they are bound in accordance with article 31.bis Criminal Code

What kind of legal persons?

This would include not only mercantile companies but also those of public interest such as Associations and Foundations.

Entities without legal personality, such as a civil society, in case that they commit a money laundering crime, it would not apply the aforementioned article 31 bis, but 129, being equally responsible for it.

Can a legal person get to commit a money laundering crime without becoming aware of it?

The answer is yes, since it is one of the crimes that can be committed by a legal person if this one acts mediating serious negligence.

We are therefore faced with a possible situation wherein the fact of not having a correct Corporate Compliance Program can ultimately lead to a situation of a crime commission by not having fulfilled the duties of “supervision, monitoring and control “established in the Criminal Code

Against this backdrop, the international community tried to provide a coordinated, global and effective response.

In Spain specifically this matter is regulated by the Law 10/2010 of April 28 and the royal decree-law 304/2014, of May 5.

Which subjects/entities are bound by the provisions of Law 10/2020 of April 28?

The same body of law determines the 26 types of entities which are bound to comply with all these obligations included in the same. Here we can mention: credit institutions, insurance companies, investment corporates or dealers in jewellery, precious metals among others

In other words, there are a number of sectors in which due to the specific circumstances of their activity, the commission of the aforementioned offense is more likely to take place.

What kind of obligations are they?

Generally, the aforementioned regulation speaks about two blocks of obligations :(i) those referred to a due diligence and (ii) those referred to the clients and operation information’s.

Nevertheless, it is important to bear in mind the fact that this obligations are not a closed list, but each of the obligations will vary depending on different factors such as business type of the company, the products offered or the customers with whom business relationships are established

Each Corporate Compliance Program has to start from this first analysis of the sector’s own obligations. Once they were identified, you could start with the design of the concrete internal policies and procedures, which shall be adapted to the risk profile of each entity

Hence, the capital importance of knowing to adapt each Corporate Compliance Program to the specific obligations of each sector, because of the fact that they will not always the same. As an example, the aforementioned regulation introduces situations wherein it is necessary to apply enhanced measures of due diligence, or, on the other hand, situations in which a moderation of the due diligence is allowed if the obligated subject meets certain requirements specified in the regulation.

What if I do not comply with the obligations included in the aforementioned regulation?

It may lead to penalties which vary according to whether they are consider as (i) very serious, (ii) serious or (iii) weak, and, in the worst situation it may even reach amounts up to 1.500.000€ .

In Navarro Llima Abogados we have highly qualified lawyers specialized in Corporate Compliance with experience in the drawing up and implementation of Corporate Compliance Programs, including those referred to money laundering.

If you have any questions thereon, please do not hesitate to contact us.

Javier Navarro Lawyer & Compliance Officer.