Attempts to use the financial system for money laundering and terrorist financing are a well-known reality. For this reason, extensive regulations, both national and European, have been adopted since the 1990s to prevent them. No fewer than five Directives have already been approved and incorporated into Spanish law, although the fifth is awaiting parliamentary processing.
Institutions such as the Group of 20 (G20), the Financial Stability Board, the International Monetary Fund, and the Basel Committee have participated in this process. More recently, European supervisory authorities (ESAs) have joined, particularly the EBA (Autoridad Bancaria Europea-European Banking Authority), around which a process has begun to articulate the possible creation of a central body that would assume full powers in the prevention of money laundering, superseding the current national authorities.
A single EU supervisor, accompanied by greater harmonization of the regulatory framework for combating money laundering, could adopt a single market perspective on risks and key strategy, and would constitute a point of contact for key stakeholders in the fight against money laundering.
In this scenario, the Financial Action Task Force (FATF), an intergovernmental organization whose main objective is to set standards and promote the effective implementation of legal, regulatory, and operational measures to combat money laundering and terrorist financing on a global scale, has been particularly relevant since its establishment in 1989.
The FATF has developed “the 40 Recommendations” which form the international standard in the fight against money laundering and constitute a complete and consistent framework of measures that countries should implement, adapting them to their particular circumstances, and has produced numerous guides and orientations.
Also noteworthy are its evaluation reports on the quality of the systems, measures, and regulations for preventing money laundering risks adopted by each country, which are carried out and periodically reviewed by its independent experts. These reports analyze both the level of compliance with the 40 recommendations and the level of effectiveness in preventing money laundering and terrorist financing in each country, while identifying each country’s vulnerabilities to protect the international financial system from misuse.
In the current environment, marked by news of serious money laundering cases through the banking systems of some countries, the FATF has just published its assessment of the situation in Spain, which reflects excellent results and ratings.
The Spanish system is one of the best in international evaluation and continues to advance in its measures to combat money laundering and terrorist financing. It fully complies with almost all of the FATF Recommendations, according to the latest 2018 assessment now released.
Spain stands out for the high level of effectiveness achieved, which ensures that financial institutions and other market players apply preventive measures to address the risks of money laundering and terrorist financing.
Another of the FATF’s conclusions is Spain’s demonstrated ability to prevent individuals and entities involved in the proliferation of weapons of mass destruction from raising, moving, and using funds, in accordance with relevant United Nations Security Council resolutions.
These results currently place Spain as one of the highest-rated countries in the world in its prevention and prosecution systems against money laundering and terrorist financing, to which Spanish banks have contributed significantly. Their work has been recognized by the Ministry of Economy and Business. Banks have long dedicated great efforts and resources to equip themselves with instruments that allow them to identify and prevent actions related to these practices, something they will undoubtedly continue to do.
María Peco, AEB Legal Advisor
