Legal professionals and money laundering in Spain
| Published date | 14 August 2007 |
| DOI | https://doi.org/10.1108/13685200710763489 |
| Pages | 318-336 |
| Date | 14 August 2007 |
| Author | Patricia Faraldo Cabana |
| Subject Matter | Accounting & finance |
Legal professionals and money
laundering in Spain
Patricia Faraldo Cabana
University of A Corun
˜a, Spain
Abstract
Purpose – The purpose of this paper is to analyse those obligations to share information and deliver
assistance which flow from the legislation intended to prevent the money laundering as contained in
the Law 19/2003 of the 4 July, which transposes into Spanish law the provisions of Directive
2001/97/EC, which provisions set out the obligations of notaries, registrars, lawyers and court
attorneys and their compatibility with their duties of professional privilege.
Design/methodology/approach – The new law has provoked a debate centred in the compatibility
of the obligations of disclosure with legal professional privilege and the rights of the defence.
This issue is discussed in the paper.
Findings – With regard to lawyers there arises a conflict between the duty to maintain client
confidentiality and the obligations of disclosure in the prevention of money laundering which must
be resolved in favour of the former, it being established in Spain by a law of superior status. This
means that if a lawyer transfers the information concerning his suspicion he should therefore be
punished as committing the crime of disclosure of confidential material.
Research limitations/implications – Only Spanish literature is used.
Practical implications – With respect to the lawyers, the carrying out of the obligations of
disclosure imposed by the new Spanish Law 19/2003 breaches the duty of client confidentiality.
For notaries, registers and court attorneys the problem does not exist.
Originality/value – An overall view is offered of the difficult situation in which some legal
professionals find themselves in light of the prevention of money laundering in Spain.
Keywords Disclosure, Legalprofession, Crimes, Spain, Moneylaundering
Paper type Viewpoint
Introduction
The enormous possibilities offered by the current world financial structure has
favoured the proliferation of a type of conduct which aims to introduce in lawful
commerce the huge profits flowing from the commission of crime, that is to say that
conduct which seeks to launder the money flowing not only from drug smuggling but
also from every kind of criminal activity which is especially profitable. We find
ourselves confronted by a problem of international impact in that, as a general rule,
both the crimes from which the property flows and also the laundering activity
itself are not confined to one single country but rather both extend beyond national
borders.
This fact has led the adoption of international initiatives, some with the goal of
driving the harmonisation of the legislation of different states, others the coordination
of the international effort to suppress laundering (Souto, 2002; Pe
´rez, 2005) and the
passing of legislative measures by those countries affected. The area of criminal law in
the Spanish legal framework has not remained on the margin of this activity having
introduced in the Penal Code of 1995 (hereinafter PC) the crime of the laundering of
money proceeding from the commission of a crime:
The current issue and full text archive of this journal is available at
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JMLC
10,3
318
Journal of Money Laundering Control
Vol. 10 No. 3, 2007
pp. 318-336
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685200710763489
The immediate precursor of the current regulation on money laundering is found in the
amending provision contained in Art. 546 bis f) of the repealed PC of 1944/73 which was
introduced by the Organic Law (hereinafter OL) 1/1998, of 24 March (Ripolle
´s, 1994a;
Sa
´nchez, 1990a), which was later replaced by Art. 344 bis h) and 344 bis i) of the said legal text
incorporated by OL 8/1992, of 23 December[1] modifying the PC and the Law of Criminal
Procedure in the area of drug trafficking, which introduced into Spanish national law the
contents of Council Directive 91/308/EEC of 10 June, on prevention of the use of the financial
system for the purpose of money laundering, which instrument closely followed the
provisions of the Vienna Convention of 20 December 1988 against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances, and the Convention of the Council of Europe on
laundering, identification, seizure and confiscation of the proceeds from crime, available for
signature from 8 November 1990.
The PC of 1995 brings together under a single title, under the heading “On the
receiving and similar acts” those acts which found themselves previously dispersed
under titles as diverse as those dedicated to the crimes of risk in general or crimes
against property, which has been generally favourably received by academic
commentators:
The supposed “affinity” of money laundering with “receiving” (Caparro
´s, 1998; Aguado, 1994;
Gonza
´lez, 1998) has been questioned, a topic which it is not possible for me to explore at
this time.
The different forms of action which are brought together today in Art. 301 PC are
nothing more than a synthesis of those contained in Arts.344 bis h) and i) PC 1944/73,
except that the property may now be the proceeds of any kind of crime and not just
drug trafficking, and a specific aggravation of the penalty is foreseen when this is the
case which permits the continued relevance of those commentaries made prior to the
entry in force of the PC of 1995.
In support of the above penal norm of repressive nature the Law 19/1993, of
28 December which establishes certain means of prevention of money laundering,
and its implementing regulation, passed by the Royal Decree 925/1995, of 9 June
thereby giving effect to the contents of Directive 91/308/EEC on prevention of the
use of the financial system for the purpose of money laundering, institutes a
number of obligations to inform and collaborate with the public authorities which
principally affect those persons and entities involved in financial markets, but
which also affect notaries and property and mercantile (company) registrars. These
obligations are reinforced with strict administrative sanctions in the event of
non-compliance. Their extension to lawyers and court attorneys on foot of the
amendments brought by the Law 19/2003, of 4 July 2003, on the legal framework for
the movement of capital and economic transactions with the exterior and on certain
means of prevention of money laundering, and by the Royal Decree 54/2005 of the
21 January, which modifies the implementing regulation and which transposes into
Spanish Law the contents of Directive 2001/97/EC, of 4 December of the European
Parliament and of the Council, amending Directive 91/308/EEC, has provoked an
interesting debate centred, most particularly, in the compatibility of the aforesaid
with legal professional privilege and the rights of the defence. This issue is
discussed in the remainder of the paper.
Money
laundering in
Spain
319
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