Anti-Money Laundering ALERT
On January 19, 2024, the Constitutional Court of Spain resolved an appeal filed by a company that had been convicted of failing to comply with the regulations on money laundering.
Specifically, the appellant was convicted of breaching certain anti-money laundering obligations in relation to conduct undertaken by a credit institution it had absorbed.
According to the Court, the full transfer of the business includes the transfer of responsibility for any violation of obligations regarding crime prevention, and, in the specific case, money laundering. The court based its conclusion on the substantial economic identity between the purchaser and the seller entities.
The ruling clearly stated that it is irrelevant whether the purchaser obtained any benefit from the violation. In fact, according to the Court, any benefit obtained will play exclusively as a criterion for grading the applicable sanctions.
This resolution reinforces the need to carry out compliance-related due diligence and assessment in the framework of M&A operations.
The full text of the ruling can be consulted here (in Spanish).
Questions? Reach out here.