Key terms

What is the difference between KYC and AML?

KYC (know your customer) is one process within AML (anti-money laundering). KYC covers identifying the client and assessing risk; AML is the umbrella term for every measure aimed at preventing money laundering — reporting, supervision, penalties and internal controls included.

AML (Anti-Money Laundering / Prevención del Blanqueo de Capitales) denotes the whole body of rules and organisation aimed at preventing money laundering:

  • legislation (Ley 10/2010, the AMLR, the FATF Recommendations)
  • supervisory authorities (SEPBLAC, in future the AMLA)
  • obliged entities' internal control systems
  • reporting and investigation procedures
  • penalties

KYC (Know Your Customer / Conozca a su Cliente) is a specific process within that system:

  • identifying the client
  • verifying identity
  • establishing the beneficial owner
  • risk classification
  • ongoing monitoring

KYB (Know Your Business) extends KYC to legal entities. CDD and EDD, finally, are the intensity levels of KYC.

Legal basis: FATF Recommendations; Ley 10/2010, Cap. II

Practical tip: In many agencies "KYC" gets used as shorthand for the entire client file. The accurate description is: the client file contains KYC documents, and those in turn form part of the AML system. Precise terms help in a SEPBLAC inspection.

Related questions

AI-assisted tools were used in preparing these FAQs; the content was subsequently reviewed and approved by the Doxario editorial team. They reflect the general state of the law as at the review date shown and do not constitute individual legal or tax advice. To assess your own case — particularly where complex structures are involved (offshore companies, trusts, foundations, communities of heirs) or where the new EU rules leave room for doubt — we recommend consulting a lawyer specialising in Spanish anti-money-laundering law and, on tax questions, a tax adviser. Doxario is a deal management and compliance platform for estate agents in Spain, operated by Blue Pepper S.L.; we therefore have an economic interest in the solutions described in these FAQs. Doxario accepts no liability for decisions taken solely on the basis of these FAQs.

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