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Introduction and Export of Cash or Bearer Cheques

marbella-lawyers.com
1st of June 2000

A person entering Spain with for an amount of over one million pesetas with the purpose of using these funds in transactions which by law require the investor to certify the origin thereof (for example, the purchase of property by a non-resident or to credit a non-resident account) will have to declare it in order to justify the import. Likewise, a person leaving Spain is free to transport cash or payable to bearer cheques or drafts through the borders of a maximum of one million pesetas.

Conversely, the transportation of an amount over a million pesetas will have to be declared either at Customs directly, or by means of the form B1 directed to the Bank of Spain or to the financial entity where the cash, cheques or bankers drafts was obtained from. In addition to this limitation, Royal Decree 1861/1991 establishes another limitation to the principle of freedom of movement of capitals. Article 4 requires prior administrative authorisation (not a mere declaration or verification) for any exportation of cash, bearer cheques or drafts through the borders of amounts exceeding 5 million pesetas.

The purpose of the obligation of this authorisation is obvious: given the anonimity of cash (as well as payable to bearer cheques and bankers drafts), these controls allow the Administration access to valuable information of movements of capital through the borders which could otherwise cover tax evasions or transfer of funds obtained from criminal acitivies, such as drug dealings or terrorism. Spanish legislation, although establishing a freedom for those movements of capitals from and into Spain where the transferor can be identified (for example, by means of bank transfers), has been traditionally more restrictive towards import and export of anonymous funds.

This authorisation has to be applied for to the General Directorate for Foreign Investments, using the form B2. This authorisation will have to presented at customs to certify the legality of the export, and has a maximum validity of 15 days, after which it is ineffective.


Penalties contemplated for non-compliance with the above obligations


The liberalization of foreign transactions in Spain has had the effect of limiting the cases on which penalties may be imposed. The exceptions stem precisely from a breach of the above requirements regarding movements of cash and bearer cheques or drafts.

Criminal offence

Not obtaining the required authorisation for the export of cash or bearer cheques or drafts for amounts over five million pesetas per person and trip could, in principle, constitute a criminal offence under the provisions of the laws. Within the EC, the Court of Justice of the European Community has ruled that the obligation of obtaining a prior authorisation for exporting cash and cheques is against the Directive 88/361, and articles 73B and 73D of the European Union Treaty, and in consequence, the Spanish regulations can be contested before a national court and render those provisions inapplicable.

Administrative infractions

The following are considered as administrative infractions, and they apply equally to actions of private individuals and financial institutions.

To not properly declare:
  • Import or export of cash or bearer cheques or drafts for amounts over one million pesetas.
  • Information relating to foreign payments, collections and transfers.
  • Information relating to the opening and movements of bank accounts abroad by Spanish residents.
  • Payments between residents and non-residents in cash, bearer cheques or drafts.

The second obligation to declare affects banks, and the remaining three private individuals. Banks are closely monitored and the norm is specially severe with these infractions given the role of the financial entities in obtaining first hand information of foreign payments, collections and transfers. The third and fourth obligations have been rendered almost inoperative due to practical reasons.

Tax Infractions

Irrespective of the abovementioned, non-compliance with the provisions of the laws relating to foreign payments, collections and transfers via banks, opening of bank accounts by residents and declaration of import and export of cash, bearer cheques and drafts, will be considered as a simple tax infraction as per the General Tax Act.
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