This Royal Decree-Law was published in the Official State Gazette on 27 April and is therefore fully in force as of 28 April 2022. From that day on, preventive annotations of prohibition of disposal can be made in the Spanish Public Registers, under the protection of its content.
This is a complementary regulation to Council Regulation (EU) 269/2014 of 17 March 2014 concerning restrictive measures against actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
Within the framework of this Regulation, following the outbreak of military hostilities in Ukraine by the army of the Russian Federation, a List of Persons Subject to Extraordinary Measures Prohibiting the Disposal of Property and Rights Located in the European Union has been adopted and extended.
The only article of the Royal Decree-Law with effects on Russian citizens is the first one. The other article, the second, regulates a formal problem of the movement of money between different diplomatic or consular services of Spain in other countries, which is of no interest to us here.
Given the guarantees existing in Spanish law, it was not possible to make preventive annotations in the Public Registers without the consent of the registered owner or, in the absence of such consent, without judicial authorisation, unless expressly permitted by law.
The Spanish authorities have stated that it is frequent, moreover, that such property, which belongs to one of the persons on the List, is not registered in their name in the Spanish public registers, but in the name of interposed persons or companies, which makes it even more difficult to register such preventive annotations of prohibition of disposal.
This Royal Decree-Law allows Registrars to make entries on these assets when they receive a prior report stating that there are rational indications that the true owner is the one appearing on the aforementioned List.
The regulation adds that this report will be drawn up by the State Security Forces and Corps and communicated to the Centralised Body for the Prevention of Money Laundering and the Financing of Terrorism of the Association of Property, Mercantile and Movable Property Registrars, which will notify the Registrar competent to make the note in the margin of the registration, with the prohibition of disposition.
The registered owners will not be aware of the existence of the process until the annotation has already been registered, at which point the Royal Decree-Law provides for them to be notified so that they can make any objections they deem appropriate.
Naturally, the registrant of the affected property can appeal against the annotation and can even ask the judge hearing his claim to lift it as a precautionary measure if there is any urgency that justifies it, even if he has to provide sufficient security for this purpose.
As can be seen, the essential issue is the assessment by a Spanish police body (National Police, Civil Guard, regional or local police) that “there are rational indications” that the property or right in question belongs to a person on the List and that the registered owners are interposed persons. In fact, this rule foresees that the annotation with the prohibition to dispose of is maintained indefinitely until the name of the true owner disappears from the lists.
Such a “rational” assessment will obviously be deduced from indications. And it cannot be ruled out that, in a large number of cases, these indications do not correspond to reality. In the challenge, therefore, it will be a question of alleging and proving that these indications are not consistent or are disproved by others or by direct evidence that the property in question does not belong to the person on the list, but another person or the registered owner. Although the Royal Decree-Law does not foresee any other way of cancelling the annotation than that the name of the true owner disappears from the lists, it is clear that it may also be cancelled when the competent judge issues a judgement declaring that the “rational indications” alleged do not correspond to reality, or when the annotation itself lapses.
The legal regime applicable to circumstantial evidence, or evidence of presumptions, in the Spanish legal system, requires that there be a precise and direct link between the circumstantial fact and the presumed fact according to the rules of human judgement, which proscribes any arbitrariness and allows the courts to carry out the appropriate control at the request of the appellant.
This regulation is everywhere in Spanish law, both in the civil and criminal prosecution laws and, for example, in the extremely predatory tax regulations, which contemplate a similar case in Article 170.6 of the General Tax Law, which also allows preventive annotations of prohibition to dispose of assets of a non-debtor company, when there are indications that the debtor controls that company, but which expressly orders that such indications must respect the requirements on the proof of presumptions that we have just mentioned.
In this rule, only the prohibition to sell or encumber property and its entry in the Register is at stake. We are not talking about the loss of possession, by seizure or any other type of executive order.
Provided that the registered holder has evidence to prove the reality and regularity of his ownership (or that of a third party, not included in the lists), he does not have to endure the practice of such annotations on the basis of “prima facie evidence” provided by an official or a police body.
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