The "identification of means of payment" means the way in which they are recorded in public instruments documenting acts or contracts having as their object a legal-real mutation with consideration in money. The identification of the means of payment used by the parties to acts and contracts that have access to the registers is therefore a matter of a private legal nature, in particular a matter of mortgages and notaries. However, Law 36/2006, of 29 November, on measures for the prevention of tax fraud, with the aim of mitigating fraud in the real estate sector by making it easier to obtain information for better monitoring of transfers and the effective use of real estate, established the obligation to record the means of payment used in notarial deeds relating to acts and contracts on real estate, as a necessary requirement for the registration in the Land Registry of such deeds - it states in its preamble - and, to this end, it amends arts. 24 of the Notaries Act (LN), 21 and 254 of the Mortgage Act (LH). Art. 177 of the Notarial Regulations (RN) develops Art. 24 LN, which, with the precedent of the Instruction of the General Directorate of Registries and Notaries (DGRN) of 28 November 2006, has been subject to various modifications, until the last one by Royal Decree 1/2010, of 8 January.
This anti-fraud purpose has been overtaken in recent times by the growth of organised crime, terrorism and related economic crimes, and the serious damage they cause to the financial system and the global economy, making the obligation to identify means of payment an effective instrument to avoid the opacity of their origin and use for illicit purposes.
Controlling the use and trafficking of certain payment instruments, due to their anonymity or difficult traceability and the ease with which they can be transported, especially transnationally - cash or cash-like assets, confiscated cash received, crypto-assets, foreign currencies, prepaid cards, etc. - is one of the objectives of the prevention of money laundering and terrorist financing (AML/CFT), due to the high risk they present of being used for these purposes. However, the LPBCFT is limited to regulating the compulsory declaration of means of payment movements, which we shall see below, and certain aspects related to it, and we must therefore refer, as regards the way to comply with this obligation, to the regulations on the identification of means of payment contained in civil, notary and mortgage legislation, essentially in Articles 24 of the Notaries Act, 21 and 254 of the Mortgage Act and 177 of the Notary Regulations.
As a result of the reform of Law 36/2006, a debate has arisen as to the scope of the registry qualification with regard to the obligation to identify the means of payment, and it has come to a head as to whether the lack or defective identification of the means of payment can lead to the closure of the registry.
Law 10/2010, of 28 April, on the prevention of money laundering and terrorist financing (LPBCFT) attributes to the registrars the role of obliged subjects in its art. 2.1.n), which makes the importance of the registry qualification as a control of the obligation to identify the means of payment imposed by the same law unquestionable.
The limiting or restrictive theory of the registry qualification on this point is based on the premise that, as this is not a real legal matter, there is no qualification in the technical legal sense, and, therefore, the possibility of the registrar suspending the registration for lack of accreditation of the means of payment is restricted to the case in which the refusal of the parties to identify the means of payment is recorded in the deed, according to art. 254.3 LH. -vid. DGRN Res. of 18 May 2007 and 26 May 2008-.
However, and especially since the subsequent reforms of the Notarial Regulations (RN), both the majority doctrine and the DGRN follow the broad or affirmative thesis of the registry qualification of the means of payment - Res. 2 June, 6 July and 5 September 2009, 5 March 2010, 22 November 2013, 9 December 2014, 11 March, 22 July and 8 November 2016, 12 April 2018 and Res. DGSJFP of 8 September 2023, among many others; even the decisions defending the restrictive theory admit that the registrar must examine whether there are omissions in this identification and check that the notary has recorded the points referred to in Art. 24 LN. Law 36/2006 itself states in its preamble that the effectiveness of its prescriptions is guaranteed by the obligation to record the means of payment used in notarial deeds relating to acts and contracts concerning real estate, "as a necessary requirement for their registration in the Land Register". And RD 1/2010 in its Explanatory Memorandum states that its purpose is to specify, in relation to certain means of payment, what specific data must be included in the public deed, either by means of documentary accreditation or by declaration before the notary, "so that said means of payment is understood to be sufficiently identified, allowing access to the Land Register of the public deed". Thus, the DGRN states that, with regard to the qualification of the Land Registrars, Law 36/2006 focused on two aspects: a) the obligation to check whether the public deeds relating to acts or contracts by which ownership and other rights in rem over real estate referred to in Article 24 LN are declared, transferred, encumbered, modified or extinguished, for valuable consideration, express not only the circumstances that the registration must necessarily contain but also the identification of the means of payment used, in accordance with Article 21.2 LH; and b) the obligation to check whether the public deeds relating to acts or contracts by which ownership and other rights in rem over real estate referred to in Article 24 LN are declared, transferred, encumbered, modified or extinguished, for valuable consideration, express not only the circumstances that the registration must necessarily contain but also the identification of the means of payment used, in accordance with Article 21.2 LH. 21.2 LH; and b) the closure of the register with regard to public deeds in which, if the price consists of money or a sign representing it, the notary has recorded the refusal of the parties to identify, in whole or in part, the data or documents relating to the means of payment used - Art. 254.3 LH-, deeds that will be understood to be affected by a rectifiable defect, the lack of which will only be understood to be rectified when a deed is presented in the register in which all the means of payment used are identified in accordance with Art. 254.4 LH. The DGRN Resolution of 11 March 2016 - clarifying the aforementioned DGRN Resolution of 18 May 2007 - expressly affirms the competence of the registrar, who must examine and, if necessary, suspend the registration when any omission has been made in the identification. The Resolution of 12 April 2018 points out that the closure of the register under art. 254.3 LH does not respond to a substantive legal assessment of the ineffectiveness of the legal transaction to be registered, but rather that, "regardless of its civil validity, it constitutes an instrument of collaboration with the public interest aim of preventing tax fraud in the real estate sphere" - an idea that is perfectly applicable to the field of CBPP/FT. The most recent Resolution 8 September 2023 of the DGSJFP marks a milestone by expressly referring to the closure of the registry "due to non-compliance with anti-money laundering regulations" with respect to the identification of the means of payment, and maintains the same line of argumentation as the previous resolutions.
As for the specific scope of the registry qualification and the closure of the Register, the reiterated doctrine of the DGRN/DGSJFP - see Res. DGSJFP 8 March 2022 among many others -, states that art. 177 RN, pfo. 5º applies, since pfo. 2 and 4 refer to the notary's obligations with regard to the identification of the means of payment, non-compliance with which will result in the corresponding liabilities. Accordingly, the means of payment will be understood to be identified if their essential elements are stated in the deed, either by documentary support or manifestation; if it is a cheque, it will be sufficient to state the drawer, drawee, beneficiary, if it is nominative, date and amount; if it is a transfer, originator, beneficiary, date, amount, issuing and originating institution and receiver or beneficiary.
1.- VAT: although the amount of Value Added Tax does not, strictly speaking, constitute the price of the sale, Res. DGRN of 9 July 2009 equates it to the price with regard to the justification of the means used by the buyer, since, due to its obligatory repercussion, a credit for its amount arises at the time of purchase in favour of the seller, which he makes his own at the time of payment, and, as both amounts - the price and the amount due by passing on the tax - are civilly constituent elements of the total amount to be paid by the buyer as monetary benefits arising from the contract, they must be understood to be assimilated and subject to the same regime for making the payment for the purpose of payment in lieu of payment.
2.- Mortgage cancellations: this is perhaps the most debated case. In 2007, the Qualification Criteria Commission of the Association of Registrars denied the need for accreditation of the means of payment in the cancellation of the mortgage for payment, as it is not an act for valuable consideration or free of charge, but an act due, and, in the same sense, the RDGRN of 18 May 2007 already mentioned - albeit obiter dicta -, considering that the cancellation does not imply the extinction of the real right, (the mortgage), by an act for valuable consideration - ex art. 21.2 LH- but rather this is produced by the extinction of the secured obligation, given its accessory nature. However, the subsequent doctrine, without entering into technical discussions, is in favour of the requirement to identify the means of payment also in mortgage cancellations, since, although the finalist perspective cannot be the only and main one taken into account, it is the position most in keeping with the spirit of Law 36/2006, which is to obtain information by the public authorities on the traceability of transfers in order to avoid fraud; Thus, as the cancellation of a mortgage is an act that implies a payment, at least in those deriving from a loan for the acquisition of a property, the identification of the means of payment must be required. In particular, the means of payment must be identified in early cancellations, or in successive cancellations, which are the most likely cases to conceal an illicit purpose. The Association of Registrars (CORPME) includes early cancellation of mortgage loans and successive cancellations of mortgages without a logical explanation among the scenarios parameterised in alerts that may give rise to notification to the Anti-Money Laundering Registry Centre (CRAB). The Commission for the Prevention of Money Laundering and Monetary Offences (CPBCIM) also includes repeated cancellations of mortgages well in advance of the final date initially agreed in its catalogue of exemplary risk operations for notaries, registrars, lawyers, auditors and other professionals in the legal sector.
3.- Cancellations of resolutory conditions: what has been said about mortgage cancellations is applicable to cancellations of resolutory conditions due to payment of the secured obligation. However, the DGRN Resolution of 25 July 2019 denies the need to identify the means of payment in the cancellation of the resolutory condition due to agreed expiry, as it is not an act or contract for valuable consideration, but rather the extinction of a right of guarantee due to agreed expiry that meets the requirements agreed by the parties, in accordance with art. 82 LH, with the expiry of the term being the essential prerequisite agreed for cancellation, not in the fulfilment of the guaranteed obligation; and this, regardless of whether or not the payment of the deferred amount has taken place and even if there are uncredited payments. Despite the negative stance of this ruling, it could be inferred from it a sensu contrario that if the reason for the cancellation of the resolutory condition were the fulfilment of the secured obligation, the requirement of accreditation of the means of payment would be appropriate.
4.- Deferred price: the DGRN considers it unnecessary to identify the means of payment in this case, as it understands that articles 21 and 254 LH and 24 LN and 177 RN refer to payments made at the time of granting the deed or prior to it, but in no case to payments of deferred amounts, regardless of whether the registration states the form in which the contracting parties have agreed the future payments in accordance with article 10 LH, and without prejudice to the fact that the registration does not include the form in which the contracting parties have agreed the future payments in accordance with article 10 LH. 10 LH, and without prejudging whether or not the registry record by marginal note of the payment of any amount by the purchaser after registration, in accordance with art. 58.1 of the Mortgage Regulation (RH), is subject to the requirements of record of the means of payment - see Res. DGRN of 9 July and 12 November 2009, 10 July and 12 November 2012 and Res. DGSJFP of 28 July 2021 and 8 March 2022-. However, the deferral or instalment payment of a significant part of the price in a short period of time without establishing a payment guarantee or accrual of interest is one of the indicative cases that gives rise to the corresponding parameterised alert, for the purpose of a possible communication to the CRAB; and the CPBCIM also includes in its catalogue of exemplary risk transactions the deferral of payment to a date very close to the time of authorisation, without logical explanation, and especially if no guarantee is established to ensure it.
5.- Acknowledgements of debt: the issue is particularly relevant when it gives rise to a transfer of real estate -or movable property- in payment of the acknowledged debt. The DGRN, in Res. 11 March 2013, 9 December 2014, 2 September 2016 and 19 May 2017, states that the requirement to identify the means of payment extends to the deeds of acknowledgement of debt; in other words, the means or instruments through which the debtor received the money that generated the debt must be identified; except in the cases, as stated in the Res. 22 November 2013 and 2 September 2016, where no money was involved in the origin of the debt, such as in a contract for the supply of services in guarantee of payment of which the debtor constitutes a mortgage in favour of the creditor. The DGRN Resolution of 11 March 2013 declares the requirement of accreditation of the means of payment to be applicable to the recognition of the debt of a mutual loan, as it is a contract for valuable consideration with monetary benefits; and that of Resolution 9 December 2014 warns that, as the loan is the cause of the debt that is recognised and which provokes the subsequent transfer, "a fictitious recognition that makes it impossible to control possible money laundering must be avoided, which is why the effective transfer of assets that constitutes the debt must be accredited".
6.- Assignment of assets: the above doctrine is applicable to the case of the delivery of real estate by a company to the shareholders as a result of a loan that the latter made to the company, and it must be stated and, where appropriate, accredited how the loan was delivered and, in the meantime, the registration must be suspended - Catalonia Seminar of 17 December 2013-. And the same must be understood in the case of transfer of real estate assets in payment between companies, since, as the consideration does not consist of shares or holdings, as in mergers, proof of the price of the transfer - monetary or otherwise - must be required, and the form and means of payment must be specified - articles 10 and 254 LH and concordant articles-.
7.- Offsetting of credits: in the case of the sale of a property between companies in which the price is paid "by offsetting credits", the obligation to identify the means of payment is also applicable, insofar as the legal relationship has involved a transfer of money, in the terms provided for in articles 254 LH and 177 RN - Seminar of Catalonia of 3 May 2018-. However, the case in which part of the price is paid by means of the cancellation of a debt that the buyer has contracted with the seller - e.g., for unpaid rent - is considered to be different, since, as such prior debts are alien to the transfer of ownership contract whose registration is sought, and therefore to the registration, in principle, the means of payment would remain outside the registry qualification, without prejudice to the circumstances of the operation making it advisable to notify the CRAB - Hdez. Crespo Seminar, no. 30, April-June 2011-.
8.- Private documents: although arts. 21 LH and 24 LN refer to "public deeds relating to acts or contracts by which ownership and other rights in rem over real estate are declared, constituted, transferred, encumbered, modified or extinguished for valuable consideration", the DGRN understands that the legal requirements regarding the identification of the means of payment are also applicable to the deeds of conversion to public deeds of private documents authorised after the entry into force of Law 36/2006, and this even if the contract had been concluded or the payments to which they refer had taken place at an earlier time, and declares that, given that the purpose of art. 177 NR is not to regulate the form of the payments, but that of their recording in the public instruments documenting acts or contracts whose object is a legal-real mutation with consideration in money, the successive wordings given to it will be applied to the documents granted during their respective periods of validity - see Res. 5 September 2009, 2 June 2010, 11 March 2013, 8 November 2016-. The aforementioned DGSJFP Resolution of 8 September 2023, in relation to a deed of elevation to public deed of a private document as a prior title for registration under art. 205 LH, in which no mention is made of the means of payment used, confirms the application of this requirement to prior deeds that are transferable and for valuable consideration, such as the elevation to public deed of a private document that serves as a preliminary title for the purchase and sale, and declares that "failure to comply with the regulations on laundering will result in the closure of the registry". This calls into question the thesis that the requirements concerning the identification of the means of payment and, in particular, the scope of the registry qualification and the closure of the register are only applicable to public deeds. This may lead to the question of their application to the purchase and sale signed in a private document and subsequently included in an order approving an immatriculation proceedings, due to the analogy with the case contemplated in Res. 8 September 2023.
