After several months of uncertainty, the Spanish government finally posted on the official gazette (Boletín Oficial del Estado) the Royal Decree-Law 7/2021 of 27th April whereby several directives of the European Union on competence matters, on prevention of money laundering, on financial entities, on telecommunications, on tax measures, on prevention and remediation of environmental damages, on movement of workers when rendering cross border services (“AMLD5”) were transposed to the Spanish legal order from the 28th of April of 2021 onwards. Given the severity of the potential fines that the unjustified delay in so adapting the Spanish rules to those abovementioned directives issued by European Parliament might have caused, the enactment of such Royal Decree-Law will lead the relevant organisms to close the sanctioning proceedings filed by the European Commission in the meantime. Thus, the former Spanish Act 10/2010 on Anti-Money Laundering and on the Prevention of the Financing of Terrorism activities is amended, byadding a sort of significant additions for the Real Estate market.
As the ruling of the mentioned European Directive and its subsequent transposition in the Spanish legal system was in the limelight somehow, Afiens have been warning and informing its clients of the content of these new standards, since it directly impacts on both new and existing investing entities operating in the Real Estate market, that have become obliged subjects to comply with the AML5 hereinafter.
WHICH ARE THE MAIN AMENDMENTS INTRODUCED BY THE AML5?
The AML5 introduces a sort of measures focused on strengthening the preventive systems of the member States of the European Union. Amongst those novelties, we highlight the following ones:
- Increase of the range regulated entities by the AMLD5. Particularly in the Real Estate business, this new rule will affect not only to the property developers or the real estate brokers, but also to those professionals such as agencies and brokers who act as intermediaries in real estate leasing. Nevertheless, the obliged subjects are so considered provided that they perceive rental incomes equal or higher than €10,000 a month or €120,000 a year (what applies in turn to those companies comprising a corporate group that reaches those thresholds).Although this new rule does not foresee the following subjects as regulated entities its draft law did, and despite of the fact that they are not obliged subjects nor fall under the scope of the AMLD5, consequently it is remarkable to mention this surprising omission should the concerned entities deem appropriate to implement preventive measures and guidelines in a proactive manner:
- Real Estate Investment Trusts (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria – SOCIMIS);
- Holding entities of stake of shares of two or more regulated entities, that ought to fulfil with the same obligations that the companies that they participate, so that the implementation of these due diligence measures is encouraged.
- With regard to the scheme of penalties to directors and managers who are liable of breaching the AMLD5, they shall be punished to pay fines up to €10,000,000 when committed very serious infringements while the fines shall be determined up to €5,000,000 in case of serious infrigements.
- The mechanisms pursuing transparency and the availability of information on the ultimate beneficial owners of legal entities and entities without legal status that operate in the commercial trade are enhanced, so that these are obliged to collect, keep, and update the information regarding their ultimate beneficial owner and to report it to the relevant organisms if required, and the regulated subjects’ should the former establish a business relationship with the latter. Besides, the Ministry of Justice has launched a unique Registry that shall collect information directly and centralize the data stored in the existing records of the General Council of Notaries (Consejo General del Notariado) and the Companies House (Registro Mercantil). Through this Registry the interconnection with other member States’ of the European Union shall be ensured.
- The regulated subjects shall be able to enter into business relationships or to execute transactions with their clients that are not physically in the same place provided that the client’s identity is sufficiently verified through several mechanisms, among which the qualified electronic signature foreseen in the provisions set forth in Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC,
is one of them.
- The processing and transfer of personal data that is essential to comply with the AMLD5 is allowed according to Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data, and on the free movement of such data, and repealing Directive 95/46/EC and to the Spanish Act 3/2018 of December 5th, on the Fundamental Right of Data Protection and the guarantee of digital rights.
I AM/BECAME A REGULATED SUBJECT, WHAT SHOULD I DO NOW?
In the event that you need further information the team at Afiens will be glad to assess your circumstances and render the support you may need by applying the legal process management method plus the appropriate technology through our platforms Afiens Collaborate and Afiens Aprende, to provide bespoke compliance solutions for you.
This is a mere newsletter that encompasses a brief summary but not a depth analysis of the matters addressed herein. For more details, please contact us at your best convenience.
AFIENS LEGAL, S.L.P. team
0034 91 192 00 63