Information Note
We present below an informational note regarding Prevention of Money Laundering.
How to prevent Money Laundering?
Money laundering is the legalization of money that was obtained illegally in front of government agencies.
Money that has been obtained illegally without control by the Administration is called black money and the process of legitimizing this black money is called money laundering.
To prevent this, according to Law 10/2010 of April 28 and Royal Decree 30/2014 of May 5 to avoid the use of the financial system, in the crime of money laundering.
Financial institutions and real estate agents are required to comply with the rules for the Prevention of Money Laundering and Terrorist Financing (PBC/FT). Similarly, the buyer of the property must provide the necessary documentation to comply with the law.
What does the process consist of?
The process consists of 3 steps
- Identification of the parties to the purchase
- Verification of your business
- VERIFICATION OF FUNDS
The real estate agent who is with the one with whom the buyer has a direct relationship will be responsible for requesting the necessary documentation that complies with the requirements established by the Buyer Identification Law and knowledge of the buyer’s economic activity.
1. How do you identify the people or companies involved in the purchase?”
In the case where the buyer is a natural person, he/she must:
- Provide a valid identity document (DN1 for the Spanish Buyer and passport and NIE in the case of a foreign buyer)
- Fill out the FIC (Client Information Form). The real estate agent who advises on the sale will simplify the model and help you fill it out.
2. How is the activity verified?”
The buyer must provide
- If you are an employed person, please provide payroll, pension or unemployment benefits.
- If you are a self-employed person, please provide:
– Certificate of self-employment.
– VAT declaration.
3. Demonstrate the origin of the Funds
А. If the funds derived from savings from the purchaser’s business, he/she also needs to provide in addition to payroll, pension or welfare:
I. Income tax of Individuals and
II. Service Term Report in case the payroll does not prove that the customer worked, sufficient time to receive that amount of savings, in that case the customer will be required to go with an audit.
В. In the event funds originate from inheritance, donation, loan, compensation, sale of real estate, etc., please provide documentation that supports the aforementioned origin.
It is important to point out that there are cases in which buyers are not only buyers. For example, if a family member provides part of the money that is provided for the purchase, becomes a participant and must identify themselves and go through the Money Laundering Prevention Process in exactly the same way as a purchaser.