In April 2021, the Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 was incorporated into Spanish law by means of Royal Decree-Law 7/2021.
The directive, which is also known as the EU Fifth Directive on Anti-Money Laundering, focuses on the prevention of the use of the financial system for money laundering or terrorist financing.
In this article, we explain how this new directive impacts the Ultimate Beneficial Owner (UBO) Registry in Spain.
Why are the UBO changes significant?
Importantly, the Fifth Directive carries out a reform regarding the Ultimate Beneficial Owner Registry (Registro de Titularidades Reales), which sees this information become accessible to the public for the first time.
This is an important development as such a breakthrough is not common, even within the European Union. There are multiple countries, such as The Netherlands and Luxembourg, that are acting as safe havens when it comes to banking and taxation, plus other matters, and are resistant to changes that would require regulation for increased transparency.
What are the changes to the UBO Registry in Spain?
A single registry system will be created by Spain’s Ministry of Justice. This will centralise the entries of those beneficial owners already in existence from the databases of Spain’s Mercantile Registry and General Council of Notaries.
Included in this will be the names of the beneficial owners of all Spanish legal persons and entities, or those without legal personality that have their headquarters or effective management located in Spain. It will also include data of entities outside the EU that intend to establish business relations, operations, or acquire real estate in Spain.
What information will be included in the Registry?
The information compiled will cover:
- Name and surname
- Date of birth
- Type and number of identification document
- Country of issuance of the identification document, if this was not Spain
- Country of residence
- Nationality
- Criteria qualifying a person as the beneficial owner
- In the case of beneficial ownership by direct or indirect ownership of shares or voting rights, the percentage of participation, including, in the case of indirect ownership, information on the legal entities involved and their participation
- Any other information required under regulatory rule
How will the Registry be updated?
The list will be kept and updated throughout the life of an entity and maintained for 10 years following its dissolution. With regards to non-EU entities, the data will be kept for 10 years following the end of the business relationship or sale of property.
Relevant persons must make an annual declaration stating any changes affecting beneficial ownership, or to confirm that no changes have occurred.
How does access to the Registry work?
The Ministry of Justice will be responsible for guaranteeing and controlling access and will make information – both past and present – accessible, free of charge, and without restriction for all relevant authorities, notaries, and registrars. They will also guarantee the interconnection of the Spanish Registry of Beneficial Ownership with the associated central European platform.
Those required by law to obtain information regarding beneficial ownership will have access to current information and be able to obtain proof of the registry or an extract in order to comply with their obligations. They may also, in higher-risk situations, be compelled to carry out additional checks.
Third parties not included in these groups, such as members of the public, may access the data relating to the name and surname, month and year of birth, country of residence, and nationality of the current beneficial owners, as well as the nature of that beneficial ownership.
The prior identification of the applicant and conditions of the access must be submitted. Likewise, the payment of a fee will be mandatory for those outwith public authorities, notaries, and registrars
When might access be denied?
Should access to information expose a beneficial owner to excessive risk, or if the beneficial owner is a minor or person with special protection, the Registry may deny access to the information. This decision can be appealed to the General Directorate of Legal Security and Public Faith who will be in charge of the registry.
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