IF YOUR BANK HAS frozen your Spanish bank account, you have probably wondered whether this measure is legal and what the reason for the closure is. Spanish Lawyer, Alina Lenoir from Inmo Investments Real Estate in La Zenia explains this often-misunderstood practice.
The answer is that it is legal, and the bank has the right to do so. This is because money laundering and terrorist financing regulations require banks to request the documentation, they consider necessary to identify and monitor the account holder and their operations.
According to the Bank of Spain, there are different reasons why a bank can block its customers' accounts.
Freezing a bank account due to a lack of identification documents
If your Passport, Residence Card, Foreigners Identity Card, or Personal Identification Card has expired, be careful, because you could end up with your bank account blocked. Banks are required by law to identify all their customers and ensure that their documentation is up to date.
So, if the bank detects that your personal identification document is not up to date, it can block your account, as by law this is considered a justified cause.
Freezing a bank account for the prevention of money laundering
The bank is legally obliged to ask you for information about your economic activity, a process known as “Know Your Customer”. This is an anti-fraud measure that all banks must follow to prevent money laundering and terrorist financing.
If the bank asks you for information related to your professional activity and you do not provide it, your bank can take measures such as freezing your account until you provide the required documentation.
Blocking an account due to discrepancies between account holders
If you share an account with one or more account holders and you all issue contradictory orders, the bank can place a block on the account if it detects an incompatibility between transactions, in order not to take sides in a dispute (such as during a divorce or the breakdown of a business).
A frozen bank account when the account holder dies
This is very common for non-residents living in Spain who die leaving assets and open bank accounts. In this case, their partner or relatives find that the bank has frozen the deceased's account and that the bank has cancelled all direct debits and payment cards.
It is important to note that the bank must notify the account holder(s) before blocking the account and, if this is not possible, the announcement must be made immediately afterwards.
The problem here is that many bank account holders receive a letter at their registered home address in Spain, and often relatives living overseas only find out that the bank account has been frozen upon arrival.
Others, on the other hand, receive an email instructing them on the documentation and how to submit it digitally, which for many people is more technologically complicated than simply taking the documentation to the bank in person.
It is for these reasons that many of our clients who do not live permanently in Spain ask us for help from their country to unfreeze their frozen bank accounts.
The solution to this problem is to grant a Power of Attorney to your lawyer in Spain beforehand. With this power of attorney, your lawyer can easily unfreeze your account on your behalf and remove temporary stops or blocks that might be in place.
In this way, you will not have to wait until you return to Spain to do it yourself, bearing in mind the serious consequences of closing the account, such as non-payment of local taxes or utility bills, or generating unnecessary surcharges or penalties for the account holder, which could have been avoided in a simple way.
If your Spanish bank account has been frozen and you need help reactivating or unfreezing your bank account in Spain, you can request more information by sending an email to alina@inmoinvestments.com directly. Alina will be happy to help you.
Find out more about Inmo Investments Real Estate, La Zenia's leading estate agent. Visit their website now to view their selection of beautiful homes in Orihuela Costa and the Costa Blanca areas of Spain.
Photo credit: LaZenia.com
