LESSON 2: FINES AND PENALTIES
The Law on the Prevention of Money Laundering and Terrorism Financing establishes three types of penalties according to the level of non-compliance with the obligations contemplated in the law: minor, serious, and very serious.
Sanctions may be imposed on both the company and its managers.
Within the penalty regime, the AML/CTF framework contemplates two types of penalties:
- Financial penalties. The financial penalties to be imposed vary depending on the type of offense committed. The maximum penalty to be imposed is 10 million euros, a limit that may be exceeded according to the different calculation formulas included in the law (e.g., 10% of the company’s annual turnover, five times the amount of the benefits derived from the infringement, etc.). Regarding administrators and executives, the financial penalties are very similar to those imposed on the company.
- Simultaneous penalties to the financial penalty. The law provides, among others, the suspension of administrative authorization to operate, the issuance of a public or private warning, or, in the case of administrators and executives, disqualification from exercising administrative or management positions in any company whose activity is subject to the AML/CTF regulations.
IMPORTANT:
In lesson 1, we saw that legal persons can be considered perpetrators of a money laundering offense, even due to gross negligence, if the company has been used as a means to carry out the conduct. Therefore, the provisions relating to penalties in Article 33.7 of the Penal Code must be considered.
In addition, a company may commit a terrorism-related offense (Article 576.4 of the Penal Code) if it has not adopted sufficient measures to prevent the commission of the crime (e.g., not having procedures in place for AML/CTF) or, being specifically subject to the law, does not collaborate with the competent authority to detect or prevent conduct related to money laundering or terrorism.
