LESSON 8: SIMPLIFIED MEASURES

The AML/CTF regulations establish some assessed assumptions in which the obliged subjects may apply simplified due diligence measures when they understand that there is a reduced risk of money laundering and terrorism financing.

The assumptions contemplated are the following:

1. Public law entities of the member states of the European Union or equivalent third countries (e.g., the Ministry of the Interior of Spain or Agència l’habitatge de Catalunya).
2. Companies or other legal persons controlled, or majority owned, by public law entities of the member states of the European Union or equivalent third countries (e.g. Canal Isabel II).
3. Financial institutions, except payment institutions, domiciled in the European Union or in equivalent third countries that are subject to supervision to ensure compliance with the obligations to prevent money laundering and terrorism financing (e.g. Banco Santander).
4. Branches or subsidiaries of financial entities, except payment entities, domiciled in the European Union or in equivalent third countries, when they are subject by the parent company to procedures for the prevention of money laundering and terrorism financing (e.g. Openbank).
5. Listed companies whose securities are admitted to trading on a regulated market of the European Union or equivalent third countries as well as their branches and majority-owned subsidiaries (e.g. investment funds that are regulated by the CNMV).

Article 16 of the regulation also establishes a list of products or operations susceptible to the application of simplified due diligence measures, mainly aimed at the field of insurance, money orders, collections in the tourism sector, syndicated loans, etc. In these cases:

• The identification of the real owner is not mandatory.
• It will not be necessary to collect information about the professional or business activity.
• It will be necessary to prove that simplified measures can be applied to the client.

Simplified due diligence measures may only be applied as long as there is no indication or certainty that the client or transaction is linked to money laundering or terrorism financing, or when risks above average are appreciated.

IMPORTANT:

Simplified measures cannot be applied to any individual client, and it is always necessary to keep evidence of the reasons why simplified diligence measures have been applied.