Money Mover Country Reports - Spain

Posted on the 15th July 2014 in Country Reports

Money Mover Country Reports - Spain

Spain – the Euro

Back in 1492 the modern united state of Spain was created, ending nearly 800 years of Muslim rule in the south. Spain is now composed of 17 autonomous communities and 2 autonomous cities with varying degrees of autonomy thanks to its constitution. It now has a population of approximately 47 million.

Spain signed up to the Euro in 1999 and in 2002 the Peseta was replaced by the Euro as the only currency of Spain.

In June 2012 Spain formally requested assistance from the Eurozone financial emergency facility. In August 2012 unemployment rose to over 25% of the workforce, with a youth unemployment (under 25s) rate of 52.9%.

Finally, in September 2013, the economy grew by 0.1%, formally lifting Spain out of recession. There is still a long way to go to reach economic stability, with many Spaniards choosing to seek employment abroad.

Political situation

Spain is a constitutional monarchy with a hereditary monarch and a democratically-elected parliament. It has the 13th largest economy in the world and is a member of the United Nations, NATO, OECD and WTO.

It is one of the most decentralised countries in Europe, for example all Autonomous Communities have their own elected parliaments, budgets and resources.

Whilst Roman Catholicism is the main religion of Spain, the constitution specifies that Spain does not have a state religion and its inhabitants are free to practise religion as they see fit.

Since the return of democracy following the death of Franco in 1975, Spain has expanded diplomatic relations and joined the European Community. This represents an important part of its foreign policy, with Spain often co-ordinating its efforts with its EU partners and taking part in multilateral missions and peacekeeping.

There are a few territorial disputes involving Spain, the most publicized of which is its claim to Gibraltar. UN resolutions call on the UK and Spain to reach an agreement over the status of Gibraltar.

Trade & Industry

Spain’s main exports are transport equipment and agricultural products.

Spain’s tourist industry is among the largest in the world – in 2006 tourism was worth approximately 40 billion Euros or 5% of GDP.

In 2013, Spain produced more wine than any other country in the world (see Guardian article here). Spanish vineyards managed to produce 50m hectolitres of wine which equates to a remarkable 6.7bn bottles of wine!

Spain is one of the world’s leading countries in production of renewable energy.

https://www.flickr.com/photos/cristinavalencia/6021020334

AML & CTF (Anti-Money Laundering and Countering Terrorist Financing)

Despite the Spain’s efforts to combat organized crime, the country is often targeted by criminals and is a major centre of money laundering in Europe. According to the US Department of State, it is a gateway country for illegal narcotics entering Europe from North Africa and Central and South America (refer to the US Department of State’s 2013 International Narcotics Control Strategy Report).

Spain has been a member of FATF (Financial Action Task Force) since 1990. It is also one of the Co-operating and Supporting Nations of CFATF (Caribbean Financial Action Task Force). Spain is also an observer of GAFISUD (Financial Action Task Force of South America Against Money Laundering) and MENAFATF (Middle East and North Africa Financial Action Task Force).

Spain was last evaluated by FATF in June 2006, with another evaluation due in 2014. The 2006 evaluation determined that:

  • “Spain has a comprehensive legal framework for combating money laundering.
  • Its structures for dealing with terrorist financing are generally sound and effective.
  • Requirements for customer identification are in place in financial institutions; however, these and some other preventive measures could be strengthened to fully meet FATF standards.
  • Spain applies anti-money laundering measures to an extensive range of financial service providers and financial institutions, although some of these measures are not yet fully effective.
  • Spain’s system for reporting suspicious financial transactions is adequate.
  • The supervisory regime monitoring compliance with AML/CTF measures for financial institutions and other types of financial services could be improved by adding more resources.”

A follow-up report in 2010 recognised that Spain had made significant progress in addressing deficiencies identified in the 2006 evaluation and removed Spain from the regular follow-up process.

Corruption

The Corruptions Perception Index 2013 ranks Spain 40 out of 177 countries and territories, with a score of 59 (0 being highly corrupt and 100 representing a very clean perception.) Spain’s score has dropped slightly from 65 in 2012.

Money Mover view

We are happy to process Euro payments to Spain. Although it is regarded as a target for money-launderers (mainly due to its geographical location), Spain has taken significant steps to combat both money-laundering and the financing of terrorism.

Our clients may wish to use our foreign exchange and international payments for a number of different reasons including:

  • The need to make Euro payments to suppliers based in Spain.
  • or the need to make mortgage payments for a holiday home in Spain.

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