On April 28, 2021, the Royal Decree-Law 7/2021 of April 27 was published in the Official State Gazette (BOE), which transposes, among other European texts, the 5th Anti-Money Laundering Directive and Financing of Terrorism (AML/CTF). This regulation consequently amends the current AML/CTF Law 10/2010.
The executive power had to resort to "extraordinary and urgent necessity" to use a Royal Decree-Law to incorporate European Union requirements into Spanish legislation, despite the directive to be transposed being dated May 30, 2018.
The Royal Decree-Law 7/2021 departs in certain aspects from the previous legislative proposal published as a Draft Law, although to a greater or lesser extent, it fulfills what Europe demands regarding AML/CTF.
The main modifications included by this Royal Decree-Law are as follows:
Definition of virtual currency and providers of electronic wallet custody services
The legislator begins to incorporate certain legislation on crypto-assets and virtual currencies defined as digital representations of value not issued or guaranteed by a central bank or public authority.
At Summons, we believe this is just the beginning of a regulatory avalanche in this regard.
New obligated entities
The main change involves considering providers engaged in exchanging virtual currency for fiat currency and custodians of electronic wallets as obligated entities.
Additionally, certain aspects regarding the following obligated entities are clarified: (i) insurance entities, (ii) entities providing payment services, (iii) loan or credit intermediaries, (iv) real estate developers, (v) auditors, external accountants, and tax advisors, and (vi) dealers in art or antiques.
As a notable point, it is surprising that the Royal Decree-Law did not take the opportunity to include SOCIMIs (nor Participatory Financing Platforms) as obligated entities - as anticipated by the Draft Law.
Information on beneficial ownership
The obligation to provide information on the identification of beneficial ownership of legal persons, foundations, associations, and trust structures is reinforced.
Due diligence measures for existing clients must be updated during the calendar year.
Persons with Public Responsibility (PRP)
In addition to those already identified in the norm, individuals holding significant positions in international organizations accredited in Spain are considered PRP.
Modifications on Data Protection
Prior declaration of movements of means of payment
Obligation to declare, with 30 days' notice, movements of means of payment amounting to or exceeding €10,000 conducted without a bearer (e.g., through postal or courier services).
Expansion of SEPBLAC's competences
Modification of the list of serious offenses
Creation of a Register of providers engaged in exchanging virtual currency for fiat currency and custodians of electronic wallets
The creation of the register is planned, where registration of providers will require an analysis of the commercial and professional integrity of their executive positions, similar to that carried out in other financial institutions.
The registration competence belongs to the Bank of Spain, although this institution does not have other regulatory competences over the new obligated entities.
Currently, it is unclear how the register will be implemented and what means will be available for the Bank of Spain to identify entities obligated to register.
Creation of a Register of beneficial owners
The regulation foresees the creation, via Royal Decree, of a centralized and unique Register of Beneficial Owners under the Ministry of Justice. The register aims to centralize information from registers of foundations, associations, companies, etc., as well as information obtained by the General Council of Notaries.
All authorities with competences in AML/CTF and related offenses will have access to the register (e.g., Public Prosecutor's Office, judicial bodies, law enforcement agencies, National Intelligence Center, SEPBLAC, etc.).
The regulation entered into force on April 29, 2021, except for the Register of beneficial owners, which will enter into force upon approval of its regulatory development.
We will see how these changes affect and whether our public bodies have sufficient means (and intentions) to carry out the required practical implementations.
Borja García Rato
Summons Abogados
