What happens if a buyer refuses the documents requested?

If a buyer refuses the documents needed for KYC, you may not enter into or continue the business relationship. At the same time you must assess whether a suspicious transaction report to SEPBLAC is required — particularly where the refusal comes together with other red flags.

Under Art. 4.1 Ley 10/2010, diligencia debida must be complete before the business relationship is established. Where the client does not produce the documents required, the relationship is blocked as a matter of law.

The steps, five of them:

1. Set a deadline: ask the client in writing to supply the documents within a reasonable period, say 5 working days.
2. Refuse the relationship: once the deadline passes, decline the instruction. Document the refusal and your decision.
3. Suspicion analysis: consider whether the refusal is an indicator of money laundering. Further indicators: pressure for speed, willingness to pay inflated fees, attempts at anonymity.
4. Report to SEPBLAC: where indicators of suspicion are present, reporting is mandatory — including where the transaction never went ahead.
5. Documentation: all the correspondence (emails, letters, notes of calls) stays in the file.

Legal basis: Ley 10/2010, Art. 4.1, Arts. 17–18

Practical tip: Put a standard clause in your agency agreement: "Brokerage is conditional on the full production of KYC documents. Where these are refused, the instruction is not accepted." That heads off case-by-case argument.