Anti-money laundering law
We are all familiar with the situation where banks ask customers for proof of financial activity and identification. If the depositor does not cooperate, there is a risk that the bank account will be closed. All banks claim to enforce the Anti-Money Laundering Law published in Spain in 2010.
Related article on: Anti-money laundering law: foreigners bank account blockage
Anti-money laundering obligations of banks
Articles 3 to 8 of the Anti-Money Laundering Law require banks and other financial institutions to implement a series of anti-money laundering measures. The general content is as follows:
1. Verification of the identity of the user. The person who opens an account through the bank must be identified. The law does not say that you must have a legal identity in Spain to open an account with a bank, but only requires the bank to ask the user for proof of identity documents. It is up to the bank to decide how to implement this, but most banks require that the user has a legal identity in Spain or at least a foreigner identification number (NIE).
Nowadays, only few banks allow you to open an account with a passport. There are even many banks that will not allow you to open an account if your residence has expired and is in the process of renewal.
It should be noted here that the law only requires the bank to verify the identity of the user, the specific measures are at the discretion of the bank.
2.Check the purpose of the user’s account opening as well as economic activity. Banks are required by law to know the economic purpose of the user (for example, opening an account for daily use, savings, salary deposit, etc.) and the user’s economic activity or source of income.
On this point, the law only requires banks to obtain economic information from users, and does not specify specific documents required. Most of the time, when banks enforce it, they ask the user for documents that prove the origin of the funds (e.g. pay slips, tax slips, form 036, etc.). Copyright WestLaw.com
3.Continuous monitoring of the user’s activity. Here it means that the bank is obliged to monitor the user’s money coming and going at all times, especially if there is a large flow of funds or cash deposit. For cmpanies or businees owner, if the cash deposits significantly exceeds the tax return , then the bank is obliged to report the tax office.
Why do banks need financial documents?
Banks are in business, and the more money depositors put in, the better. According to the bank’s intention, they will not even ask for these financial proof of income or identity. It’s just that the law says so and they have to comply. If someone uses the convenience of the bank to launder money, then the bank is also responsible. Banks can also be subject to huge fines. So the banks have become very strict in order to avoid liability.
The law does not specify what kind of information banks can ask from depositors, but only stipulates that banks are obliged to monitor the financial behavior of account holders. Therefore, each bank enforces different standards. Some are stricter, some are more lenient.
Banks are private businesses that need customers to open their doors for business, and from a bank’s perspective they can indeed choose not to provide services based on objective factors. For example, a bank refuses to serve you because it feels for objective reasons that your funds are of unknown origin and have frequent running accounts.
Will my account be closed if I do not provide proof of income?
In fact, the Anti-Money Laundering Law only stipulates that banks should use reasonable or effective ways to avoid money laundering activities when implementing anti-money laundering obligations. The exact enforcement depends on the bank, some banks are more lenient and some will be more strict.
Let’s say that since it is the bank’s responsibility to know the source of the user’s funds, it can ask the user for supporting documents. If the user refuses to provide it, then it is indeed possible for the bank to block the account from the user if it deems it necessary. Nevertheless, if the user submits valid documents even then, the block should be lifted in a timely manner.
Actually, the financial income claimed by the bank is not considered onerous. They just want to know where you get your money from. Whether it is from your own work, a business or someone else. They won’t make it difficult as long as they show a basis.
If you are a worker, banks that are not too strict will only ask for your work contract, your last few months’ pay stubs and RENTA (personal income tax).
Since the employer does not have a work contract and payroll, you need to submit the last few months of employer’s insurance deductions and quarterly tax statements. Of course, RENTA is also indispensable.
There are many different types of quarterly tax forms for companies or self-employed individuals, such as MODELO 130 or MODELO 131, and depending on the situation, the bank may also ask for tax retention (115), workers’ tax (111) and IVA (303 and 330).
In addition, the tax office registration form MODELO 036 is also a common document, as it contains information about the user’s business and industry, as well as details of the taxes to be paid.
If you do not have income in Spain, you can submit a certificate of income from your home country. If you don’t have any income, but the money is financed by a family member, you can also submit a certificate of donation (donation contract or donation tax return) and a certificate of income of the family member.
