Spanish Property 🔍 Understanding the Reform of the Ultimate Beneficial Owner Registry in Spain 🇪🇸💼

🔍 Understanding the Reform of the Ultimate Beneficial Owner Registry in Spain 🇪🇸💼

In April 2021, Spain incorporated Directive (EU) 2018/843, known as the EU Fifth Directive on Anti-Money Laundering, into its law via Royal Decree-Law 7/2021. This directive aims to prevent money laundering and terrorist financing through the financial system. 💰🚫

One significant change brought by the Fifth Directive is the reform of the Ultimate Beneficial Owner (UBO) Registry, making this information accessible to the public for the first time. This move towards transparency is rare in the EU and marks a significant step forward. 📜🌐

Under the new system, Spain’s Ministry of Justice will establish a single registry, consolidating data from existing databases. This includes beneficial ownership information of all Spanish legal entities and entities without legal personality with operations in Spain. 🏛️🔒

The Registry will contain comprehensive details such as name, date of birth, identification document details, nationality, and criteria defining beneficial ownership. It will also include information on shareholding percentages and voting rights. 📝👤

To ensure accuracy, the Registry will be updated annually by relevant persons, with records maintained for up to 10 years following dissolution. Access to the Registry will be overseen by the Ministry of Justice, facilitating free access to authorized entities. 🔄🔐

While public access will be limited, authorized individuals can request specific information, subject to identification and payment of a fee. However, access may be denied in cases of excessive risk or special circumstances, with an avenue for appeal available. 🚫🔑

The reform signifies a commitment to transparency and regulatory compliance, aligning Spain with international standards in combating financial crime. It underscores the importance of transparency and accountability in financial transactions. 💡🤝

Here’s what you need to know:

1. Creation of the Central Registry: A single central registry is established nationwide, and its operating rules are approved.
2. Incorporation of Historical Data: The Ministry of Justice will include historical data on legal entities or entities without legal personality, such as trusts, in the Central Registry as information becomes available from other databases centralized in accordance with its regulations.
3. Non-Compliance Consequences: Failure to identify or provide information to the Central Registry will result in the closure of registration as per the Commercial Registry Regulation.
4. Data Transfer Between Registries: Various registries collecting real ownership data must coordinate with the Central Registry to transfer data within nine months of its entry into force. This includes providing updates on real owners regularly.
5. Transitional Procedure: Until the first data transfer is complete, authorities, obligated parties, and interested parties can obtain information on real owners from other registries. Access to the Central Registry will be free until the registration fee is established.
6. Modification of Existing Regulations: Article 9.6 of the Regulation of the Law 10/2010 on money laundering and terrorist financing prevention is amended to allow obligated parties to access information from the Central Registry.

7. Final Provisions

   Third Provision: Incorporation of European Union Law 🇪🇺

   This royal decree completes the integration of Directive (EU) 2018/843 of the European Parliament and of the Council of May 30, 2018, into Spanish law. It amends Directive (EU) 2015/849 on the prevention of the use of the financial system for money laundering or terrorist financing, and modifies Directives 2009/138/EC and 2013/36/EU. Additionally, it incorporates into national legislation the rulings declared by the Court of Justice of the European Union in joined cases C 37/20 and C 601/20, concerning Directive (EU) 2018/843 of the European Parliament and of the Council of May 30, 2018, which amends Directive (EU) 2015/849 on the prevention of the use of the financial system for money laundering or terrorist financing, and modifies Directives 2009/138/EC and 2013/36/EU.

   Fourth Provision: Authorization to the Head of the Ministry of Justice 🏛️

   The Head of the Ministry of Justice is authorized to issue any necessary regulations for the implementation of this royal decree.

   Fifth Provision: Entry into Force 📅

   This royal decree shall enter into force on September 19, 2023. The authorization contained in the third additional provision, sections 1 and 2, shall enter into force on the day following its publication in the “Official State Gazette,” and access to information regarding ultimate ownership provided for in Article 5.3 of the regulation shall enter into force on October 19, 2023, except for the provision of accreditation by the media or civil society organizations related to the prevention and combating of money laundering and terrorist financing of their status for the presumption of legitimate interest in accessing information and the subsequent designation of individuals who may access the Central Registry of Ultimate Beneficial Owners on their behalf and representation, which shall also enter into force on September 19, 2023.

   Given in Madrid, on July 11, 2023.

   FELIPE R.

   The Minister of the Presidency, Relations with the Courts, and Democratic Memory,

   FÉLIX BOLAÑOS GARCÍA

   REGULATION OF THE CENTRAL REGISTRY OF ULTIMATE BENEFICIAL OWNERS

   Article 1: Purpose and Scope 🎯

   1. The Central Registry of Ultimate Beneficial Owners is the electronic, central, and unique registry nationwide aimed at collecting and disclosing information on ultimate beneficial ownership referred to in Articles 4, 4 bis, and 4 ter of Law 10/2010, of April 28, on the prevention of money laundering and terrorist financing, concerning all Spanish legal entities and entities without legal personality as provided for in the same Law 10/2010, of April 28, which have their effective headquarters or main activity in Spain, or which are administered or managed by natural or legal persons residing or established in Spain, in the terms developed in this regulation. Additionally, other data provided for in this regulation shall be subject to registration. All of this aims to protect the integrity of the financial system and other sectors of economic activity by preventing money laundering and terrorist financing.
   2. In this registry, a special section shall also include data on entities or structures without legal personality, such as trusts, which, not being managed or administered from Spain or another European Union Member State, and not being registered by another European Union Member State, intend to establish business relationships, carry out occasional transactions, or acquire real estate in Spain, which must be declared electronically to the Central Registry of Ultimate Beneficial Owners before commencing said activities.
   3. In addition to the data declared directly to it or supplied to it in accordance with this regulation, the registry shall centralize real ownership information available in the Registries of Foundations, Associations, Cooperatives, Agricultural Transformation Societies, and other registries that may collect information from registered legal entities, as well as that obtained by the Real Owners Database managed by the General Council of Notaries and the Mercantile Registries managed by the College of Registrars of Property, Mercantile and Movable Property of Spain, all of which are reliable and independent sources.
   4. Foundations, associations, and in general, all legal entities, trusts, and entities or structures without legal personality, such as trusts, that have not declared their ultimate beneficial ownership through the Mercantile Registry or the Registries of Foundations, Associations, Cooperatives, or others where they were registered, due to the absence of such declaration channels, must declare electronically to the Central Registry of Ultimate Beneficial Owners the information related to Articles 4 bis and 4 ter of Law 10/2010, of April 28, on the prevention of money laundering and terrorist financing, as well as that established in this regulation, within one month from their establishment, and in the case of trusts and entities or structures without legal personality, such as trusts, within one month from the obligation to identify the ultimate beneficial owners, and subsequently update the data within ten days when changes in ultimate beneficial ownership occur.

   In any case, an annual declaration must be made electronically in January, and if no changes in ultimate beneficial ownership have occurred, a declaration confirming this fact must be made.

   5. The obligation to communicate ultimate beneficial ownership shall not extend to funds, but it shall apply to their management company.

       

      📝✨ Article 2: Organization and Operation of the Registry ✨📝

      1️⃣ The Central Registry of Ultimate Beneficial Owners will be managed by the Ministry of Justice, located within the Directorate General of Legal Security and Public Faith.

      2️⃣ The Directorate General of Legal Security and Public Faith will oversee its management and be responsible for it.

      3️⃣ The Registry will operate electronically, 24/7, all year round. All interactions with the Central Registry of Ultimate Beneficial Owners will be conducted electronically. However, matters requiring human intervention, such as assessing legitimate interest or resolving queries or appeals, will adhere to the Ministry of Justice’s office hours and administrative procedure regulations, with specific provisions outlined in this regulation and Law 10/2010, of April 28, on the prevention of money laundering and the financing of terrorism.

      4️⃣ Decisions made by the person in charge of the Central Registry of Ultimate Beneficial Owners, whether denying access or deciding on a request for access restriction, may be appealed to the higher hierarchical authority, whose decisions will conclude the administrative process.

      📝✨ Article 3: Treatment of Stored Information ✨📝

      1️⃣ Individuals whose personal data are stored in the Central Registry of Ultimate Beneficial Owners as ultimate beneficial owners shall be informed electronically, in accordance with current data protection regulations. A valid email address of the affected individual must be provided for the delivery of electronic notification alerts. The processing of this data by the Registry does not require the consent of the data subject.

      2️⃣ Information entered into the Central Registry of Ultimate Beneficial Owners will be retained and updated for the duration of the legal entities or entities without legal personality’s existence and for ten years after their dissolution. In cases outlined in Article 1.2 of this regulation, information will be maintained for the duration of the business relationship or property ownership, plus ten years after its termination, sale of the property, or completion of the occasional operation, which must be communicated to the registry. Additionally, information on ultimate beneficial owners will be retained for ten years from the cessation of their status or, if the date is not recorded in the Central Registry, from the date it is recorded that they are no longer ultimate beneficial owners. This retention period cannot exceed the timeframes specified in the preceding paragraphs of this section and those derived from the ultimate beneficial ownership. The information will be stored electronically and automatically deleted after the specified period. Once deleted, the data will remain blocked except for access by judges and courts, the Public Prosecutor’s Office, or competent Public Administrations, particularly data protection authorities, for the enforcement of potential liabilities arising from the processing, for a period of three years.

      3️⃣ Information stored in the Central Registry of Ultimate Beneficial Owners must be adequate, accurate, and up-to-date. Registry information should sufficiently identify the individuals who are the ultimate beneficial owners and the means through which they exercise effective ownership or control. If information provided to the Central Registry of Ultimate Beneficial Owners from any of the sources indicated in Article 1 of this regulation contradicts or is discrepant with that provided by any of the others, the principle of the most relevant data will be considered, based on its date or the reliability of how it was obtained. The most recent data will prevail for information provided by the Central Registry of Ultimate Beneficial Owners, without prejudice to any necessary actions in the event of discrepancies between information provided by different sources, which will be resolved by the Directorate General of Legal Security and Public Faith of the Ministry of Justice.

      📝✨ Article 4: Data to be Provided to the Central Registry of Ultimate Beneficial Owners ✨📝

      1️⃣ Data of ultimate beneficial owners to be provided electronically by the management bodies of the legal entity to the Central Registry of Ultimate Beneficial Owners or to the relevant registries for registration, if they have a declaration procedure regulated, as well as to the database of the General Council of Notaries through notarial public documents, will include:

      a) First name b) Last name c) Date of birth d) Type and number of identification document (for Spanish nationals or residents in Spain, the document issued in Spain will always be included) e) Country of issuance of the identification document, if the National Identity Document or resident card in Spain is not used f) Country of residence g) Nationality h) Qualification criterion as an ultimate beneficial owner i) In the case of ultimate beneficial ownership through direct or indirect ownership of shares or voting rights, the percentage of ownership, including, in the case of indirect ownership, information about the interposed legal entities and their participation in each of them j) A valid email address for the sending of electronic notification alerts.

      When there is no ultimate beneficial owner in the strict sense, the administrator or administrators will be considered as such, and if the administrator is a legal entity, the natural person appointed by the legal entity administrator will be considered the ultimate beneficial owner.

      2️⃣ For trusts and similar legal instruments, data to be separately provided electronically regarding ultimate beneficial owners will include:

      a) First name b) Last name c) Date of birth d) Type and number of identification document (for Spanish nationals or residents in Spain, the document issued in Spain will always be included) e) Country of issuance of the identification document, if the National Identity Document or resident card in Spain is not used f) Country of residence g) Nationality h) Qualification criterion as an ultimate beneficial owner i) A valid email address for the sending of electronic notification alerts.

      In particular, regarding trusts, information on all of them will be considered ultimate beneficial owners. Information on settlors, trustees, protectors, beneficiaries, and any other natural person ultimately exercising control over the trust, through direct or indirect ownership or other means, will be provided. The obligation to report on trusts lies with the trustee and manager of the trust, and if not, with the settlor; and finally with the beneficiaries. Documentation justifying the information provided must be supplied alongside the data to ensure its adequacy, accuracy, and currency.

      3️⃣ Concerning the legal entity or entity without legal personality regarding which ultimate beneficial ownership is communicated, the identifying data considered necessary by the registration authority must be provided, particularly: the corporate name or, in the case of an entity without legal personality, its name; EUID (European Unique Identifier), Tax Identification Number, or, in its absence, entity registration number; legal form of the entity; nationality; and registered address.

      4️⃣ Information to be provided to the Central Registry of Ultimate Beneficial Owners, outside of that originating from different registries of legal entities or databases, will be done through standardized forms approved by resolution of the person in charge of the Registry and electronically.

      📝✨ Article 5: Authorized Persons to Access Information in the Central Registry of Ultimate Beneficial Owners ✨📝

      1️⃣ The Ministry of Justice is responsible for ensuring and controlling access to information contained in the Central Registry of Ultimate Beneficial Owners under the conditions established by law and those provided for in this regulation, particularly by establishing protection measures against automated searches and record copying. This information will be accessible, free of charge and without restriction, to authorities with responsibilities for the prevention, detection, investigation, and prosecution of terrorism financing and money laundering, including but not limited to:

      a) The State Security Forces and Corps. b) The judiciary. c) The Public Prosecutor’s Office. d) The Tax Agency. e) The Customs Surveillance Services. f) The General Secretariat of the Treasury and International Financing.

      2️⃣ Additionally, access to the Central Registry of Ultimate Beneficial Owners will be granted to:

      a) The Bank of Spain. b) The Directorate General of Insurance and Pension Funds. c) The Directorate General of the Registry and Notary Business. d) The General Council of Notaries. e) The College of Registrars. f) The Ministry of Economy, Finance, and Digital Transformation.

      3️⃣ Access to the Central Registry of Ultimate Beneficial Owners by the authorities and organizations listed in sections 1 and 2 will be carried out through electronic means, using the telematic services provided by the Ministry of Justice. The Ministry of Justice will ensure that these entities can access the information they need in a timely manner and in accordance with the regulations in force regarding data protection and privacy.

      4️⃣ Access by any other public or private entity will be limited to obtaining the following data:

      a) Verification of the identity of the legal entity or entity without legal personality in question. b) The appointment, cessation, or amendment of data on the legal representative of the legal entity or entity without legal personality. c) The name of the ultimate beneficial owner or owners, where applicable. d) The percentage of ownership or control held by the ultimate beneficial owner or owners, where applicable. e) The fulfillment of a legal or regulatory requirement. f) The express consent of the ultimate beneficial owner or owners.

      5️⃣ Access to the Central Registry of Ultimate Beneficial Owners may be requested by submitting a request to the Ministry of Justice, providing the necessary identification and justification for the request. The Ministry of Justice will evaluate each request on a case-by-case basis, taking into account the legal and regulatory framework, as well as the necessity and legitimacy of the request.

      6️⃣ Any access to the Central Registry of Ultimate Beneficial Owners will be logged and recorded, including the identity of the requester, the purpose of the request, and the data accessed. These logs will be kept for auditing and accountability purposes and will be subject to the same data protection and privacy regulations as the registry itself.

      7️⃣ Unauthorized access to the Central Registry of Ultimate Beneficial Owners or misuse of the information contained therein will be subject to penalties as provided for in the regulations governing data protection, privacy, and the prevention of money laundering and terrorism financing.

      📝✨ Article 6: Registry of Entities Obliged to Report Ultimate Beneficial Ownership Information ✨📝

      1️⃣ The Ministry of Justice will maintain a registry of all entities obliged to report ultimate beneficial ownership information to the Central Registry of Ultimate Beneficial Owners. This registry will include:

      a) The corporate name or, in the case of an entity without legal personality, its name. b) The Tax Identification Number. c) The registration number in the relevant registry, if applicable. d) The type of legal entity or entity without legal personality. e) The date of registration in the registry of obliged entities. f) Any other relevant information deemed necessary by the Ministry of Justice.

      2️⃣ The registry of entities obliged to report ultimate beneficial ownership information will be publicly accessible and will be regularly updated by the Ministry of Justice. Any changes to the status of an entity, such as dissolution, merger, or acquisition, must be reported to the Ministry of Justice within the timeframes specified in the regulations.

      3️⃣ Entities obliged to report ultimate beneficial ownership information must register with the Ministry of Justice within the timeframe specified in the regulations. Failure to register or update registration information may result in penalties as provided for in the regulations governing the Central Registry of Ultimate Beneficial Owners.

      📝✨ Article 7: Cooperation with International Authorities ✨📝

      1️⃣ The Ministry of Justice will cooperate with international authorities responsible for the prevention, detection, investigation, and prosecution of money laundering and terrorism financing, including but not limited to:

      a) The Financial Action Task Force (FATF). b) The European Union Agency for Law Enforcement Cooperation (EUROPOL). c) The European Union Agency for Criminal Justice Cooperation (EUROJUST). d) National financial intelligence units of other countries. e) Any other relevant international organizations or authorities.

      2️⃣ Cooperation with international authorities may include the exchange of information, mutual assistance in investigations, joint operations, and any other measures deemed necessary to combat money laundering and terrorism financing effectively.

      3️⃣ The Ministry of Justice will ensure that any cooperation with international authorities complies with the regulations governing data protection, privacy, and the sovereignty of the Spanish legal system.

      📝✨ Entry into Force ✨📝

      This regulation will enter into force on the day following its publication in the Official State Gazette.

      🔍🔒 Access to Information in the Registry

      1. Access to the information in the Central Registry of Ultimate Beneficial Owners will always be electronic, requiring authentication through identification. Access may also be provided to groups of authorities mentioned in Article 5 and obligated subjects, upon accreditation of the individuals making the request on behalf of those entities.

      Requests for information will follow a computer model with fields for identifying the requester. Alongside basic identification data of the individual requester (name, surname, Tax Identification Number or Foreigner Identity Number), and if applicable, data of the represented legal entity (Tax Identification Number and company name), professional data, email address, and phone number must be provided.

      Requesters’ identification will be done through identification systems established in Article 9 of Law 39/2015, in line with the system’s security level.

      2. For requests made by individuals or organizations other than authorities and obligated subjects, electronic signatures must be provided either in the requester’s name or representing the interested legal entity. Electronic signatures will be conducted through signature systems established in Article 10 of Law 39/2015, corresponding to the system’s security level.
      3. When the requester acts based on their position, they are responsible for ensuring the consultation aligns with their duties as per current legislation.
      4. If the real ownership information relates to trust ownership of real estate, the requester must demonstrate a legitimate interest, evaluated by the registry manager. Authorities mentioned in Article 5.1 and obligated subjects according to Article 2 of Law 10/2010 do not need to demonstrate legitimate interest as their access is for anti-money laundering purposes or related to European Funds.
      5. The above doesn’t affect the publicity obtained by authorities, obligated subjects, and individuals or organizations from different registries or databases competent in real ownership matters, following their specific legislation.
      6. Access to information in the Central Registry by authorities mentioned in Article 5.1 and 5.8 can be via employee public electronic certificates or, for mass, automated, and unattended access, through qualified electronic certificates for legal entity representatives or seals, based on technological system capabilities.
      7. Machine-to-machine telematic access for simultaneous multiple queries may be provided for authorities mentioned in Article 5.1 of this regulation.

      ✨📊  Connection with the Central European Platform

      The Ministry of Justice will ensure connection with the central European platform according to specified technical procedures determined under articles 30.10 and 31.9 of Directive (EU) 2015/849, for the prevention of money laundering or terrorism financing.

      🔒📝 Article 8: Personal Data Protection

      In line with personal data protection regulations:

      a) Data in the Central Registry serve the purposes outlined in Law 10/2010, as well as specific missions by national or EU authorities managing, verifying, paying, or auditing European Funds. The Ministry of Justice is the data controller.

      b) Personal data will be obtained from Spanish legal entities, entities or structures without legal personality mentioned in Law 10/2010, and real owners when applicable.

      c) Data for registration and processing include name, surname, ID or Foreigner ID, nationality, residence country, birthdate, percentage of ownership, and other data as per regulations.

      d) The registry’s structure and data comply with Law 10/2010 and this regulation.

      e) Indicated data is public as per this regulation.

      f) Data obtained from the Central Registry by public authorities cannot be transferred to third parties unless for purposes linked to the accessing authority’s functions.

      g) Data subjects have rights concerning their data, exercisable through the Ministry of Justice.

      h) Security measures will comply with the National Security Framework.

      i) Relevant provisions on data protection in Law 10/2010 and other applicable regulations will be considered.

      🔍🔄 Article 9: Information Processing

      Information stored in the Central Registry and its exchange will comply with the National Security and Interoperability Frameworks.

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