Law 10/2010 of 28th April on money laundering and terrorism financing (hereinafter referred to as “LML”) is applicable in Spain on a number of subjects, such as banking entities, real estate developers, notary publics, registrars of property, etc. In article 4 thereof, the following is established:
(i) The obligation of certain subjects (defined in the LML as “obligated parties”) to identify the so-called “beneficial owner”, for the purpose of verifying its identity prior to establishing business relations or the execution of any kind of operation;
(ii) What is meant by “beneficial owner”, defining it as the natural person or persons who ultimately own or control, directly or indirectly, more than 25% of share capital or voting rights in a legal entity, or who otherwise exercise control, directly or indirectly, over a legal entity.
Therefore, the LML expressly establishes the need to identify the beneficial owner of a company, unless the latter has no beneficial owner (because no natural person holds more than 25% of share capital, and when not exceeding 25% neither does he/she exercise by other means, directly or indirectly, the control of the legal entity), in which case it will be understood that the control is held by the directors of the company (article 4.2 b bis) of the LML). And in the case of listed companies in regulated markets that are subject to information requirements in accordance with the Law of the Union or equivalent international laws, it will not be necessary to identify beneficial owners (article 4.2 b of the LML).
Recently, on 12th July Royal Decree 609/2023 was published regarding the creation of a central registry of beneficial ownership and the approval of the corresponding rules of operation (hereinafter, the “Royal Decree”), with the aim of developing what is set forth in the third and fourth additional provisions of the LML.
A beneficial ownership registry is created pursuant to the approval of the Royal Decree, which will be central and unique for the national territory (hereinafter, the “Beneficial Ownership Registry”), and likewise its rules of operation are approved (hereinafter, the “Rules of Operation”).
The Royal Decree principally establishes the following:
(i) That the Ministry of Justice will incorporate the existing historical data regarding legal entities or structures without legal identity into the Beneficial Ownership Registry;
(ii) That in the case of non-compliance of the identification of the beneficial owner, the closure of the commercial registry as set forth in article 378 of the Commercial Registry Regulation will occur;
(iii) That the different registries with competence in the area of the collection of the data of beneficial owners must put at the disposal of the Beneficial Ownership Registry, in a coordinated manner, all of the data on beneficial owners kept on its databases;
(iv) That in the event that the data on beneficial ownership provided by the different registries are not complete pursuant to the Rules of Operation of the Beneficial Ownership Registry, they must be completed by the parties obligated to communicate the data (through their management bodies, in the case of legal entities);
(v) That in the case that there are changes made to the beneficial ownership, a new declaration of identification of beneficial ownership must be filed with the Commercial Registry, by the directors of the legal entity, within the term of 10 days as from the day after the change becomes known, in order to avoid discrepancies between the Beneficial Ownership Registry and the Commercial Registry.
The Rules of Operation, which are incorporated into the Royal Decree as an annex, establish the rules of operation of the Beneficial Ownership Registry, such as the processing of the stored information, the data which must be facilitated to the Beneficial Ownership Registry and the form of access thereto and the protection of personal data.
As for the legitimate parties who may access the information held on the Beneficial Ownership Registry, as well as the public authorities and the obligated parties, any third parties or organisations that demonstrate a legitimate interest will have access to the information, even if the information is limited in this case to certain data regarding the beneficial owners (name and surname, month and year of birth and country of residence and nationality).
From the above it becomes clear on the one hand, that uncertainty is created by the concept of “demonstration of legitimate interest” (the fact that it is not specified when interest can be deemed to have been demonstrated and what criteria must be followed to be understood that it has been demonstrated) and on the other, that a risk of indiscriminate access is generated due to the criteria of legitimate interest being unclear.
As for the obligated parties, they must access the Beneficial Ownership Registry in order to comply with the LML and the Royal Decree, which shall be carried out electronically pursuant to article 14.3 of Law 39/2015, of 1st October, on the Common Administrative Procedure of the Public Administrations. In accordance with article 2.1.ñ) of the LML, lawyers who advise clients regarding purchase and sale operations of real estate or commercial entities, the opening of bank accounts, etc. are obligated parties, amongst others. Therefore, this Royal Decree will also be applicable to lawyers who provide this type of legal advice.
In order to access the Beneficial Ownership Register, the obligated parties, and any third party or organisation which demonstrates a legitimate interest, must pay a tax. Currently, the tax has not been approved, therefore until it is approved, access will be free of charge.
The Royal Decree will enter into force shortly on 19th September.
For more information related to the passing of the Royal Decree and its Rules of Operation, please contact us by email at: va@vila.es.
Albert Zúñiga Carulla
Vilá Abogados
11th August 2023
