LESSON 2: VIOLATIONS AND PENALTIES
The Law on the Prevention of Money Laundering and Terrorism Financing establish 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’s regime, the AML/CTF contemplate two penalty types:
- Economic penalties. The economic 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 economic penalties are very similar to those to the company.
- Simultaneous penalties to the economic penalty. The law provides, among others, the suspension of administrative authorization to operate, the public or private warning or, in the case of administrators and executives, the disqualification from the exercise of administrative or management positions in any company whose activity is subject to the AML/CTF.
IMPORTANT:
In lesson 1 we saw that legal persons can be considered the perpetrators of a money laundering crime, 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 crime of terrorism (article 576.4 Criminal Code) if it has not adopted enough measures to prevent the commission of the crime (e.g., not having procedures in matter of AML/CTF) or being specifically subject to the law, do not collaborate with the competent authority so that a conduct related to money laundering or terrorism is not detected or prevented.
