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The transparency register in the 4th AML directive in Spain

Table of contents
  1.  What is the current legal basis of the Transparency Register? To what extent has the Directive been implemented?
  2. Is there an obligation of a UBO or shareholder to proactively provide information on the UBO to the legal entity?
  3.  Is there an obligation of a legal entity to actively inquire with its shareholders / partners on the identity of the UBO(s)?
  4.  Who is required to make filings with the Transparency Register, the legal entity or the UBO?
  5.  Are there exemptions to the filing obligation?
  6.  What is the due date for the initial filing? Is there an obligation to update the filing?
  7. What are the sanctions in case of a breach of the transparency obligation?
  8.  Is the Transparency Register established as a separate register or part of an existing one?
  9.  Notable amendments (including through the Directive)
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Law 10/2010 of 28 April on the prevention of money laundering and the financing of terrorism (Ley 10/2010, de 28 de abril, de prevención del blanqueo de capitales y de la financiación del terrorismo). 

On September 2018, Law 10/2010 was urgently modified to implement the 4th Anti-Money Laundering Directive, in order to comply with the ultimatum of the European Union. Also Order JUS/319/2018 of 21 March was issued to create the Spanish Transparency Register (Registro de Titularidades Reales).

Additionally, Royal Decree-Law 7/2021 of 27 April, amended the Law 10/2010 of 28 April, in order to create a central and single Register of Real Property Ownership throughout the national territory within the Ministry of Justice. Implementation is still pending of further regulation.

No.

Yes.

Under the current Spanish legal regime, companies need to include information on the identity of their UBOs when filing the annual accounts with the Commercial Registry, information which is filed with the Transparency Register (Registro de Titularidades Reales).

When entering into business, the obligation to identify the UBO information currently lies with the counterparty (provided that it is an obliged entity according to Law 10/2010), and not the company itself.

Legal entities are responsible for filing UBO information with the Transparency Register (Registro de Titularidades Reales) when filing their annual accounts.

The UBO is not obliged to make such filings.

5. Are there exemptions to the filing obligation?

No.

6. What is the due date for the initial filing? Is there an obligation to update the filing?

The filing shall be made annually when submitting the annual accounts to the Commercial Registry (in general terms, within 6-7 months as from the end of the financial year).

7. What are the sanctions in case of a breach of the transparency obligation?

Breach of the obligation to identify the UBO under Law 10/2010 may constitute a serious or minor infringement, entailing the following sanctions:

Serious infringements:

  • Fines from EUR 60,000 to the greater of: (i) 10% of annual turnover, (ii) amount of the transaction plus 50%, (iii) three times the benefits from the transaction, or (iv) EUR 5,000,000.
  • Public or private reprimand.
  • Withdrawal of authorisation to operate.

Minor infringements:

  • Fines of up to EUR 60,000.
  • Private reprimand. 

Serious infringements also include sanctions for the directors, from EUR 3,000 to EUR 10,000,000, reprimands and disqualification from office.

8. Is the Transparency Register established as a separate register or part of an existing one?

Although the Transparency Register has been created as a separate registry, it is linked to the Commercial Registry and is managed by the Registral Association (Colegio de Registradores) and therefore is strongly linked to the rest of the Spanish public registries.

Also, agreements have been signed for the use of the Transparency Register with the Court of Auditors, the Public Prosecutor's Office, the Guardia Civil, the National Police, the Bank of Spain, the National Securities Market Commission (CNMV), the General Council of the Judiciary (CGPJ) and other official bodies involved in the fight against money laundering.

Although a new single Register of Real Property Ownership has been introduced by Royal Decree-Law 7/2021 of 27 April, it has nor been yet implemented, as further regulation is necessary and is still pending to be passed.

9. Notable amendments (including through the Directive)

Although no particular obligations have been introduced, it must be noted that new provisions on the right of listed companies to identify UBOs have been included in the Spanish Capital Companies Act, as a consequence of the implementation of the Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement