Since last May 6, a central database of bank accounts is fully operational in Spain. Notwithstanding this significant improvement, Spain will continue its commitment to developing adequate tools to strengthen the ability to trace and recover stolen assets.
Themes: Asset recovery
Last updated: December 2020
Concrete: Concrete | New: Not New | Ambitious: Somewhat Ambitious
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Asset recovery and confiscation: Ensuring that crime does not pay
BEST PRACTICES ON BENEFICIAL OWNERSHIP FOR LEGAL PERSONS October 2019
Spanish Office of Asset Recovery and Management 2018-2020 Strategy
Commitment 20 as outlilned by the Spanish Government - Government unit training courses
The confiscation of criminal proceeds is an essential component of the fight against serious and organised crime, since it deprives criminals of their financial gains and ensures that crime does not pay. The asset recovery process includes several phases:
• identification and tracing of the illegally acquired assets;
• freezing and seizure of the assets with a view to their possible subsequent confiscation;
• management of frozen and seized assets to preserve their value;
• confiscation of the illegally acquired assets;
• disposal of the confiscated assets, which could include their reuse for public or social purposes.
In 2014, the European Parliament and the Council adopted Directive 2014/42/EU (‘the Directive’), which sets minimum rules for the freezing, management and confiscation of criminal assets. The Directive introduced a number of new and advanced asset recovery measures including the provisions on non-conviction based confiscation (at least if the accused or suspected person absconds or is ill).
Spain was one of the 8 countries that transposed the directive by the deadline of 2016.
1. Non-conviction based confiscation
Non-conviction based confiscation or confiscation without a sentence is regulated in article 127 ter of the Spanish Criminal Code and can only occur when: a) the subject has died or suffers a chronic disease that prevents prosecution and there is a risk that the facts may prescribe; b) is in “rebeldía” (default) and this prevents the facts from being prosecuted within a reasonable period of time, or c) is not sentenced for being exempt from criminal responsibility or for having expired/extinct.
The illicit patrimonial situation that justifies the confiscation must be accredited through a contradictory process and must be addressed only to whoever has been formally accused of a crime or is accused when the fact that prevents prosecution occurs, understanding that the accusation must be judicial, not merely formal, that is, the proceeding has been directed against that person because there are rational indications of criminality towards him.
In order to use this confiscation, it is required that the person or persons against whom it is directed have been formally accused or charged according to rational evidence of criminality and the circumstances explained in the previous paragraph would have prevented the continuation of the criminal procedure.
In these cases, confiscation is optional. The legislation does not explain any criteria to explain the judicial decision that is adopted.
2. Confiscation from a third party:
The art. 127c C.P. allows ordering the confiscation of assets, effects and profits transferred to third parties in the following cases:
• In the case of effects or profits: when third parties have acquired them knowing their illicit origin.
• In the case of other assets: when they have been acquired with the knowledge that confiscation is difficult.
“Good faith” of the third party is excluded from the application of this precept, provided that the reason for which the good, effect or profit has been acquired for free or at a price lower than the normal market is explained.
The jurisprudence has been applying the exception of good faith of the third party under the following argument provided by STS 512/2017:
"(...) The limit to its application would be determined by its membership of third parties in good faith not responsible for the crime who have legally acquired them, well understood that the criminal jurisdiction has the powers to delimit fraudulent situations and to verify the true reality that underlies an apparent legal ownership used to cover up or mask the reality of legal trafficking and to mask the illicit origin of the money spent on its acquisition. "
Likewise, knowledge of the criminal act is required to proceed to apply this precept. In the new article 127 quarter -reform introduced by the Ley Orgánica 1/2015 and la Ley 41/2015- the confiscation of assets and proceeds of crime in the hands of third parties is made possible as long as they know their illicit origin or have been able to know it by acting diligently. Regarding other assets (assets derived from the crime by substitution or transformation), the confiscation will be carried out when a diligent person had reasons to suspect, given the circumstances of the case, that the transformation made confiscation difficult. The closing clause is established as a iuris tantum presumption that "the third party has known or had reason to suspect that it was property from an illegal activity or that it was transferred to avoid confiscation, when the property or effects had been transferred free of charge or for a price lower than the real market price”.
3. Extended confiscation
The extended confiscation is regulated in arts. 127 bis, quinquies and sexies and falls on assets of illicit origin that have their origin in criminal conduct committed by the convicted person, but different from those for which he has been convicted.
The requirements for this are the following:
1. That the subject is or has been convicted of any of the crimes referred to in article 127 bis.1 of the Penal Code.
2. That the crime was committed in the context of a previous and continued criminal activity.
3. That there are well-founded (indicios) indications/signs that a relevant part of the property of the convicted person comes from a previous criminal activity.
Thus, for these purposes the following are considered relevant (indicios) indications or signs:
1. The disproportion between the value of the goods and effects in question and the income of legal origin of the convicted person.
2. The concealment of ownership or any power to dispose of the assets or effects through the use of natural or legal persons or entities without legal personality interposed, or tax havens or territories of null taxation that hide or hinder the determination of the true ownership of the goods.
3. The transfer of goods or effects through operations that hinder or prevent their location or destination and that lack a valid legal or economic justification.
Criminal Judges and Courts, ORGA and Public Prosecutor are the competent judicial authorities that take care of asset recovery.
It pertains to the Criminal Courts the recognition and execution of the decisions of confiscation transmitted by the competent authorities of other Member States of the European Union, when they must be fulfilled in Spanish territory (art 89 bis 4 LOPJ).
The government should systematically collect and publish data on their asset recovery efforts. Those should include information on assets frozen or confiscated, reparations or restitution ordered, and assets returned, as well as indications on the type of predicate offences and whether the decision to confiscate was the result of civil or criminal proceedings. ORGA shall make statistics on concluded cases and information on laws and results publicly available and accessible at a central location such as a dedicated website and issue timely press releases on specific cases. Data should be harmonised at EU level to facilitate cross-country comparison and effectiveness evaluation.
Updated: October 31, 2020
The Spanish Financial Ownership Files are included in the October 2019 FATF paper on Best Practices on Beneficial Ownership for Legal Persons, as one of the good examples of collecting this information. This database allows everyone to track all the bank accounts that are opened or closed. This information is provided monthly by all the banks in Spain. These are supplementary platform complementing the property registries. (This is info can be found on page 40 of the report in the evidence section.
The 2018-2020 Action Plan of the Office for Asset Recovery and Management:
Strategy I: Program I: Promote bilateral collaboration with third states and with the different international criminal cooperation networks, in order to establish contact points that guarantee a quick and effective response Program II: Regulation of the general procedure for locating assets Program III: Establish internal means and procedures that improve the response to the location assignments received Program IV: Training of staff in property investigation
Strategy II: Program I: Expand asset management, develop management procedures, and promote monitoring of the sale of goods in other countries Program II: Establish instruments that automate the management of the goods entrusted to the Office Program III: Continue with the shock action and expand it to other cases Program IV: Establish indicators that allow evaluating the quality, effectiveness and efficiency of asset management
Strategy III Program I: Constitution of the Commission for the Allocation of property resulting from crime and the regulation of its operating rules Program II: Call for aid.
Strategy IV Program I: Finalize the necessary agreements and institutional collaboration to improve the ORGA's response Program II: Establish common action criteria for both sub directions and improve coordination in international matters Program III: Review the ORGA instructions on data protection to bring them into line with Directive (EU) 2016/680 of the European Parliament and of the Council Program IV: Adjust the Relationship of ORGA Jobs to the needs derived from the fulfillment of its functions, in particular, the implementation of the award commission and those that arise as a result of the assignments. Program V: Develop the application EXPORTS in a web environment that incorporates file management functionalities.
Updated: April 30, 2020
No change since 2017