The Spanish Council of Ministers has approved Royal Decree-law 7/2021 of 27 April 2021, transposing, among other European directives, Directive (EU) 2018/843 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing ( (the ‘5AMLD’).
The Decree-law entered into force on 29 April 2021, with the exception of certain provisions that do not affect the regulation of AML.
- What was the status of remote identification in Spain before the Royal Decree-law 7/2021?
- What are the main changes?
- Are businesses ready for these changes?
- What are the benefits for businesses and consumers?
What was the status of remote identification in Spain before the Royal Decree-law 7/2021?
Remote identification was allowed several years before the recent changes. However, obligated entities were required to obtain the photo or snapshot of the front and back of the ID document as one of the proofs of the customer due diligence process.
What are the main changes?
These new provisions introduce significant developments to the Spanish Law on the prevention of money laundering, terrorist financing and related regulations.
Among other developments, the new changes expand the means of identity verification of private clients. In the business relationship and transactions without physical presence, the institutions are no longer required to obtain a copy of the document proving the identity of the client in the cases when client’s identity has been certified with a means of a qualified electronic signature under the requirements of the eIDAS Regulation. However, it will be compulsory to keep the identification data that demonstrates that due diligence procedure was carried out.
Are businesses ready for these changes?
These were long awaited changes, as the deadline set in the 5AMLD for the transposition of the 5AMLD requirements into the national regulations, ended on January 10, 2020. However, only after the legislation is duly implemented on a national level, business can be sure about the certain adjustments needed.
Obviously, some preparations need to be carried out. Should entities like to involve third parties in the customer due diligence process, there's a requirement to make sure that third parties apply due diligence requirements and keep records appropriately equivalent to those provided for in the European AMLD, and their compliance is supervised by the competent authorities. In short, it is important for obliged entities to choose the trust service provider carefully.
What are the benefits for businesses and consumers?
For business and regular clients, it’s a step forward, as it enables easy remote identification and verification without a physical presence and a copy of the document as proof for identification needed. Adopting these rules enable customer identification in a much easier, simple, automated and regulated, trustful way.
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