Money Laundering Lawyer Spain and EU Funds Fraud
If you are looking for a money laundering lawyer in Spain because you or your company are under investigation for blanqueo de capitales, or for the misuse of European funds, this page is for you. The two charges almost always travel together, and Spanish law goes considerably further than most foreign clients expect. Below we explain what the offence actually covers, what the penalties are, and what really determines the outcome.
Why these two charges always come together
Anyone who wrongly obtains public money then has to use it. That is where the second charge begins.
Prosecutors follow a consistent pattern in these cases. First the predicate offence, meaning subsidy fraud or the diversion of funds to a purpose other than the one approved. Then the use of what was obtained, meaning money laundering. The second charge doubles the sentencing range and, more importantly in practice, opens the door to frozen accounts and confiscation orders that can far exceed the original sum.
For the defence this means both levels must be worked together from day one. Anyone who deals only with the subsidy allegation and treats laundering as an afterthought loses the case on the second front.
What counts as money laundering in Spain?
The Spanish offence is far broader than most foreign clients assume.
It is committed by anyone who acquires, possesses, uses, converts or transfers assets knowing that they originate in criminal activity, whether committed by that person or by a third party. It also covers any other act intended to conceal or disguise that unlawful origin, or to help someone involved in the offence evade the legal consequences of their acts.
Three points deserve particular attention.
First, mere possession or mere use is enough. No concealment manoeuvre in the strict sense is required. Someone living in a property bought with tainted funds already falls within the offence.
Second, there is no closed list of predicate offences. Any criminal activity qualifies, not a defined category.
Third, concealing or disguising the true nature, origin, location, destination, movement or rights over such assets carries the same penalties.
What are the penalties?
The basic penalty is six months to six years in prison, together with a fine of between one and three times the value of the assets.
Look carefully at that fine, because it is where most people are caught out. It is not calculated on the profit obtained but on the value of the assets involved. For a property worth one million euros the fine can reach three million, regardless of the actual benefit the defendant derived.
The court may also impose disqualification from the relevant profession or business for one to three years, and the temporary or permanent closure of the premises. A temporary closure may not exceed five years.
The sentence is imposed in its upper half where the assets originate in drug trafficking or in certain other categories the Code lists, including corruption offences.
Self-laundering: punished twice for the same money
Spanish law expressly criminalises self-laundering, because the provision covers the predicate offence whether it was committed by a third party or by the defendant himself.
In practice this means the same person can be convicted twice. Once for the subsidy fraud and again for using the funds obtained through it.
This is one of the main battlegrounds for the defence. Case law requires the subsequent act to carry its own distinct wrongfulness rather than being the natural exhaustion of the predicate offence. Simply spending or enjoying the proceeds is not laundering. That distinction is worth years of imprisonment and has to be built from the outset, not at trial.
Negligent laundering: the offence nobody expects
Where the acts are committed through gross negligence, the penalty is six months to two years in prison and a fine of between one and three times the value.
It is a little-known provision and a dangerous one, because it requires no knowledge of the origin of the funds. It is enough that clear warning signs existed and were ignored.
It affects professionals and business owners who receive payments, administer companies, broker property transactions or hold shareholdings. An unusually structured purchase price, a payment from an account unconnected to the buyer, or a counterparty with no identifiable economic substance are often all the prosecution needs to build its case.
The defence here is not to deny knowledge but to evidence diligence. Someone who can document what checks were carried out is in an incomparably stronger position than someone who simply states that nothing seemed wrong.
The predicate offence may have been committed abroad
The Code says so expressly. The offender is punished even where the offence generating the assets, or the laundering acts themselves, were committed wholly or partly abroad.
For internationally active clients this is the single most significant sentence in the whole provision. Funds derived from an offence committed in another country and invested in Spain will generate Spanish criminal proceedings.
Several questions then arise and must be handled in parallel. The status of proceedings in the country of origin. The prohibition on double jeopardy. The scope of international judicial cooperation. And whether a European Investigation Order or a European Arrest Warrant is in play.
When is the sentence increased?
The custodial sentence is imposed in its upper half on those belonging to an organisation dedicated to these purposes. Leaders, administrators and managers of such organisations receive the next sentencing tier up.
The upper half also applies to persons who, being subject to anti money laundering obligations, commit any of these acts in the course of their professional activity.
That second aggravation goes directly to notaries, lawyers, tax advisers, estate agents, wealth managers and financial institutions. Anyone classified as an obliged entity carries a markedly higher risk in these proceedings.
Corporate liability
Companies bear criminal liability for money laundering in Spain, and the consequences are severe.
The fine runs from two to five years where the offence committed by the individual carries more than five years in prison, and from six months to two years in all other cases. Further sanctions may be added, including dissolution, suspension of activities, closure of premises, disqualification from public contracting and judicial supervision.
The central line of defence is the compliance programme. A prevention model implemented before the events, genuinely effective and actually supervised, can exclude or mitigate the company’s liability. A programme drafted after proceedings begin carries limited weight, though it is still better than none.
Confiscation: the consequence that hurts most
Where the offender has obtained gains, those gains are confiscated. And in these proceedings confiscation is usually more damaging than the sentence itself.
Accounts are frozen at the investigation stage, restrictions on disposal are registered against properties, and vehicles and shareholdings are seized. This reaches not only the person under investigation but often relatives and companies whose assets are treated as indirectly affected.
Third parties who acquired in good faith, or whose assets have been wrongly caught, have procedural routes to obtain release. Those routes must be used early. The longer a freezing measure stands, the harder it becomes to lift.
Property transactions: the most common scenario
A substantial share of these cases arises from property purchases, particularly in areas of heavy foreign investment such as the Balearics and the Mediterranean coast.
The triggers repeat themselves. Part of the price paid outside the notarial deed. Payments from accounts not belonging to the buyer. Intermediate companies with no economic substance. Purchase through a nominee, known in Spain as a testaferro. Or cash payments exceeding the statutory limits.
Remember that notaries, banks and property intermediaries are obliged entities and must report suspicious transactions. Many cases do not begin with a complaint at all, but with one of those reports, sometimes years after completion.
If you have doubts about the documentation behind a transaction, reviewing it in advance is vastly more effective than reacting once a search has taken place.
Fraud against the EU budget
Anyone who, by act or omission, defrauds the general budget of the European Union or other budgets administered by it, in an amount exceeding fifty thousand euros, faces one to five years in prison.
A fine of between one and six times the amount is added, together with loss of the right to obtain subsidies or public aid and of entitlement to tax or social security benefits for a period of three to six years.
Three forms of conduct are covered. Evading the payment of sums due. Applying funds received to a purpose other than the one for which they were granted. And unduly obtaining funds by falsifying the conditions required for their award or concealing conditions that would have prevented it.
Where the amount does not exceed fifty thousand euros but exceeds four thousand, the penalty falls to three months to one year in prison or a fine of one to three times the amount, with loss of aid entitlement for six months to two years. Note that threshold, because criminal liability begins at four thousand euros, a very modest figure.
Subsidy fraud: the hundred thousand euro threshold
Anyone who obtains subsidies or aid from public authorities, including the European Union, exceeding one hundred thousand euros, by falsifying the conditions required for their award or concealing conditions that would have prevented it, faces one to five years in prison and a fine of one to six times the amount.
The same penalties apply to anyone who, in an activity funded wholly or partly with public money, applies more than one hundred thousand euros to purposes other than those for which the aid was granted.
Where the amount does not exceed one hundred thousand euros but exceeds ten thousand, the penalty is three months to one year in prison or a fine of one to three times the amount.
One detail is frequently overlooked. In determining the amount, the total obtained, defrauded or wrongly applied is taken into account, regardless of whether it comes from one authority or from several combined. Several smaller grants can add up and cross the threshold.
Repayment: the most effective way out
In subsidy fraud the Code offers a route that changes everything in practice.
Criminal liability is excluded where the recipient repays the subsidies or aid wrongly received or applied, together with the late payment interest applicable to subsidies from the moment they were received.
Timing is everything. The repayment must be made before notification that inspection or control proceedings have begun, or, where no such proceedings have taken place, before the public prosecutor, the State Attorney or the authority’s representative files a complaint, and before the prosecutor or investigating judge takes any step giving the recipient formal notice that proceedings have started.
Someone who reacts as soon as the problem is identified can avoid criminal proceedings altogether. Someone who waits for the inspection letter cannot. This is precisely why criminal advice during an administrative audit is not a luxury. It is the single most consequential decision in the whole matter, and it is usually taken before any criminal lawyer has been involved.
The European Public Prosecutor’s Office
Offences affecting the financial interests of the Union normally fall to the European Public Prosecutor’s Office, represented in Spain by European Delegated Prosecutors.
This changes the proceedings noticeably. Investigations run across borders, cooperation between member states bypasses the traditional mutual legal assistance channels, and evidence from several countries is consolidated into a single case.
Two consequences follow for the defence. First, it must reason in several legal systems at once. Second, it must verify whether evidence gathered in another member state was lawfully obtained there and whether its use in Spain complies with Spanish safeguards. This is an underexplored area with genuine potential.
How do these proceedings unfold?
Unlike most offences, they rarely begin with an arrest.
Typically they start with an administrative audit, a report from an obliged entity, or information transmitted from another state. Months of investigation follow, frequently under a secrecy order and therefore without any involvement from the defence.
The case usually becomes visible through a search of home or business premises, seizure of documents and devices, frozen accounts and a summons to give evidence.
These are long cases. Several years commonly pass between the first search and the trial. That is draining, but it also creates room, because during that time the defence can commission expert reports, reconstruct the accounts and evidence the commercial logic behind the transactions in question.
Where the defence attacks
These cases are rarely won on a single line of argument. Usually several run in parallel.
At the level of the predicate offence, the question is whether criminal conduct exists at all, or whether this is an administrative breach falling below the statutory thresholds.
On the mental element, the argument turns on knowledge of the origin of the assets. Where the negligent form is charged, it shifts to evidence of the checks actually carried out.
On self-laundering, the aim is to deny that the subsequent act carries wrongfulness distinct from the exhaustion of the predicate offence.
On the evidence, the search warrant, the extraction of data from devices, the chain of custody and the scope of the examination all require review. Access to devices and communications demands a reasoned judicial authorisation confined to the subject of the investigation, and that control is scrutinised far less often than it should be.
Finally, on the asset side, the work consists of limiting freezing orders, obtaining the release of assets unconnected to the case and challenging the basis on which the fine is calculated.
What to do and what never to do
Keep all documentation on the origin of the funds. Contracts, bank statements, invoices, corporate resolutions, correspondence. In these cases documentation wins, not explanation.
Do not delete or reorganise anything. Tidying folders or mailboxes after the fact is invariably read as concealment and generates a separate allegation.
Do not make statements in an administrative audit without first assessing the criminal consequences. What is said there ends up in the criminal file.
And do not run your tax advice and your criminal defence separately. The most frequent mistake in these cases is that the accountants file submissions that destroy the criminal position before any criminal lawyer has seen the file.
Money laundering lawyer in Madrid, Palma de Mallorca, Ibiza and Alicante
Fechenbach Abogados is a criminal defence firm with offices in Madrid, Palma de Mallorca, Ibiza and Alicante. We act throughout Spain.
We work in economic crime, money laundering, subsidy fraud and corporate criminal liability, as well as extradition and European Arrest Warrant proceedings, which is what arises as soon as a case crosses borders.
We deal with you directly in English, with no intermediary. We also work in Spanish, German and Polish.
Speak to a money laundering lawyer
Have your accounts been frozen, your business premises searched, or have you been summoned to give evidence? Is there an ongoing audit into European funds you have received?
Get in touch. We will tell you clearly what the allegation is, what sentence and what asset consequences are genuinely in play, and what needs to be done now. In English, without evasion and in complete confidence.
