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  1. A refugee wants to open a bank account in Spain: What documentation would you require to him? 

First of all, we may consider if the refugee is from a high-risk third country or not, in order to ensure the highest degree of safety. We have two options: 

If the refugee is from a country that does not appear on the list provided for DELEGATED REGULATION (EU) 2016/1675, so we should look at the discipline contained in Chapter II, Section I, articles 10 to 14 of the EU Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

If the refugee is from a high-risk third country, then we have to look at the articles of Chapter II, Section III, articles 18 to 24, about enhanced customer due diligence.

Considering the refugee concerned as not coming from a high risk third country; in conformity with what provided for Directive 2015/849, article 13 and 14, paragraph 1, we should require the refugee the following documentation:

  1. The refugee’s identity, on the basis of documents, data or information obtained from a reliable and independent source;
  2. If the refugee wants to open a bank account as a legal person, we should identify the beneficial owner and take reasonable measures to verify that person’s identity;
  3. If necessary, to require him information on the purpose and intended nature of the business relationship;
  4. Conducting ongoing monitoring of the business relationship including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the knowledge of the customer, the business and risk profile, including where necessary the source of funds and ensuring that the documents, data or information held are kept up-to-date.

Article 10 considers that members States shall prohibit their credit institutions and financial institutions from keeping anonymous accounts or anonymous passbooks and to undertake to the identification of those anonymous account or passbooks that have not been recognized yet. 

As referred to in article 14, paragraph 3, we could proceed with the identification of the customer during the establishment of the business relationship so as not to interrupt the normal conduct of business, in the specific case in which there is a low risk of money laundering or terrorism financing. The identification has to be ensured as soon as possible during the business relationship.

As mentioned by article 14, paragraph 4, if we are unable to comply with the customer due diligence requirements, then we shall not carry out a transaction through a bank account, establish a business relationship or carry out the transaction, and shall terminate the business relationship and consider making a suspicious transaction report to the FIU.

  1. A Syrian student wants to open a bank account in Spain: What documentation would you require to him?

As reported in the list provided for the DELEGATED REGULATION (EU) 2016/1675, we find that Syria is included in the list of high-risk third country, which means that Syria is a country with strategic deficiencies in its national AML/CFT regime that poses significant threats to the financial system of the Union, in relation to: 

  1. the legal and institutional AML/CFT framework of the third country, in particular:
  1. criminalisation of money laundering and terrorist financing;
  2. measures relating to customer due diligence;
  3. requirements relating to record-keeping; and
  4. requirements to report suspicious transactions;
  1. The powers and procedures of the third country’s competent authorities for the purposes of combating money laundering and terrorist financing;
  2. the effectiveness of the AML/CFT system in addressing money laundering or terrorist financing risks of the third country.

Chapter II, Section III, articles 18 to 24 state the discipline to apply at the present case.

When dealing with a person coming from a high-risk third country, as in the present case, we shall apply enhanced customer due diligence measures to manage and mitigate those risks appropriately.

Article 18, chapters 2 and 3, state that Member States shall analyse the background and purpose of all complex and unusually large transactions, and all unusual patterns of transactions, which have no apparent economic or lawful purpose. In particular, obliged entities shall increase the degree and nature of monitoring of the business relationship, in order to determine whether those transactions or activities appear suspicious.

Furthermore, when determining if money laundering and terrorism financing risk, Members States shall consider the factors of potentially higher-risk situations set out in Annex III.

So, when the Syrian student wants to open a new bank account, we shall proceed through an enhanced customer due diligence, in order to identify and verify the customer and insert him in a determined risk group. This process is necessary for limiting the risk of money laundering and terrorism financing.

With regard to the Spanish national legislation, we need to mention the article 20 of the “Reglamento de la ley 10/2010”, that describes the enhanced procedure and the additional documentation required:

  1. Update the data obtained in the customer acceptance process.
  2. Obtain additional documentation or information on the purpose and nature of the business relationship.
  3. Obtain additional documentation or information on the origin of the funds.
  4. Obtain additional documentation or information on the origin of the client’s assets.
  5. Obtain documentation or information on the purpose of the operations.
  6. Obtain executive authorization to establish or maintain the business relationship or execute the transaction.
  7. Strengthen the monitoring of the business relationship by increasing the number and frequency of controls applied and selecting patterns of operations for review.
  8. Examine and document the consistency of the business relationship or operations with the documentation and information available about the client.
  9. Review and document the economic logic of operations.
  10. Require payments or income to be made into an account in the name of the customer, opened at a credit institution domiciled in the European Union or in equivalent third countries.
  11. Limit the nature or amount of transactions or means of payment used.
  1. Mr. Perez, a Spanish citizen, is a computer technician. He has an IT company in Guinea Equatorial. This company has contracts with the Guinean government. He lives in Guinea Equatorial. He pays taxes in this country. He is not a tax resident in Spain. He has a non-resident account in a Spanish bank. In his banking records you can see the following operations:
  • Weekly purchases in Spain paid by card. 
  • International transfers. 

His Spanish bank account receives almost 30.000 euros every month from his bank account in Guinea Equatorial. Spanish Financial Crime Unit requires you a record of his banking operations. However, they don’t say if Mr. Perez is being investigated as a criminal or as a victim. 

What questions would you ask to the client? What documentation would you require him? What if the client doesn’t want to provide that info and docs? What would you say if the client asks you about the legal grounds supporting your requirements?

In the present case, Mr. Perez could be identified as “persons known to be close associates”, because he has business relations with the Guinean government, as provided for article 3, number 11, letter a). Article 23 do extend the discipline of article 20 to the present case, because in addition to require the customer due diligence measures provided for article 13, requires obliged entities to:

  1. obtain senior management approval for establishing or continuing business relationships with such persons;
  2. take adequate measures to establish the source of wealth and source of funds that are involved in business relationships or transactions with such persons;
  3. conduct enhanced, ongoing monitoring of those business relationships.

Nevertheless, considering that Mr. Perez receives more than €15.000 per month on his bank account in Spain and the suspicion of money laundering or terrorism financing, we should initiate a widespread control on his activity.

As obliged entity, we shall provide to the FIU a full collaboration and any necessary information. Article 33, paragraph 1, letters a) and b) provides for the obligation to:

  1. informing the FIU, including by filing a report where we know, suspect or have reasonable grounds to suspect that funds, regardless of the amount involved, are the proceeds of criminal activity or are related to terrorist financing, and by promptly responding to requests by the FIU for additional information in such cases; and
  2. providing the FIU, directly or indirectly, at its request, with all necessary information, in accordance with the procedures established by the applicable law.

So, we shall ask to the customer any additional information and justification about his economic activity; the reason why he is sending these amounts of money to his Spanish bank account and the proof of origin of his legal assets. More specifically, we shall ask him for a “declaración previa” (previous declaration) within 30 days before the money transfer exceeding €10.000 (article 34, reglamento de ley 10/2015).

According to article 40, paragraph 1, letter a) and b), we should provide to the Spanish FIU:

  1. A copy of the documents and information which are necessary to comply with the customer due diligence requirements laid down in Chapter II
  2. The supporting evidence and records of transactions, consisting of the original documents or copies admissible in judicial proceedings under the applicable national law, which are necessary to identify transactions.

It has to be considered that obliged entities are not required to inform the investigated person about the information sent to the FIU or about the analysis of his bank activity, as ruled in the article 39, paragraph 1. Mr. Perez could be not informed about the investigation carried out about the FIU on his behalf. When asking us the reason why we are asking him additional documentation and proofs about his activity, we may not give him any other information.

In case Mr. Perez would refuse to provide the information and docs required, as well as the “declaración previa”, Spain national legislation states a series of sanctions, laid down in article 42, reglamento de ley 10/2015, including:

  1. a) Prohibit, limit or condition the movement of capital and its associated collection or payment operations, as well as transfers, from or to the third country;
  2. b) Subject to prior authorisation capital movements and associated payment operations;
  3. c) Freezing of funds and economic resources;
  4. d) To prohibit the making available of funds or economic resources owned, held or controlled by natural or legal persons who are nationals or residents of the third country;
  5. e) Require the application of enhanced due diligence measures in the business relationships or operations of nationals or residents of the third country.