All professionals involved in the purchase and sale of real estate properties must comply with their obligations with regard to the prevention of money laundering.
KNOW YOUR CLIENT (KYC)
Real estate agents, Lawyers, Property Developers and Credit and Financing Institutions must abide by the obligations imposed under Law 10/2010, of 28 April, on the Prevention of Money Laundering and the Financing of Terrorism, and to its relevant Regulations.
The obligations imposed on those professionals by the Law are based on the “due diligence” principle, in the sense that, as individuals obliged by law, they are responsible for adopting relevant measures in order to detect and report any signs of money laundering crimes committed by their clients.
The purpose of the above is to prevent and report any transactions associated with any possible money laundering to the Executive Committee of the Spanish Commission for the Prevention of Money Laundering (Servicio Ejecutivo de la Comisi6n de prevenci6n del Blanqueo de Capitales (SEPBLAC)).
Lawyers, in particular, are obliged to: formally identify their clients and the actual owners of the respective business and/or transaction; know the business carried out by their clients and verify the authenticity of the related documents provided by them; and especially, in real estate transactions, to check the legitimate source of the funds used.
Identification of Clients
The Lawyer must request the relevant Tax ID Card, ID Card or Passport issued by the authorities of their country. Legal entities must be identified by their Deed of Incorporation.
Actual owner of the business
Lawyers must identify the individual on whose behalf they are acting, before accepting any professional engagement.
Business purpose
Specific knowledge of the professional or business activity of our client is required.
Legality of the funds used
The required documents must be gathered to support the lawful source of the funds, their traceability, i.e. the path followed by the money from the time it leaves its country of origin to the time it arrives in Spain, and finally, the purpose of the funds.
One of the most commonly used methods for the prevention of money laundering and terrorism financing is the “Know Your Client (KYC)” process.
Completing and signing the KYC forms produced by the individuals participating in a real estate transaction is not sufficient. All information supplied by clients must be carefully checked from the lawyer and by duly assessing the relevant supporting documents provided.
At the same time, we should not lose sight of the ongoing conflict between the limits of a Lawyer’s duty of confidentiality. Professional secrecy cannot be claimed in certain circumstances related to money laundering and terrorism financing, and Lawyers must always comply with their obligations regarding the prevention of money laundering, which must be construed in the strictest sense, without including any that go beyond those included in Act 10/2010.
In this context, the role of your Lawyer is absolutely essential. The lawyer will ensure the strictest KYC process as required by law, will advise the Client regarding the documents to be provided in order to follow the anti-money laundering protocol, and at the same time, he will be the intermediary between the client and the other agents involved in the transaction to ensure they comply with their respective obligations on prevention.
We make sure everything runs smoothly. Vogt Law Firm is handling legal matters associated with real estate, tax, inheritance and immigration to Spain as well as matters relating to Spanish and Norwegians business law. Vogt Law Firm was founded in 1999.
