Police probe property buying in Spain
Thursday, March 31st, 2005Buying property in Spain is becoming problematic following the ‘White Whale’ police operation into money laundering.
Spanish police have been pointing their finger at the property market as a vehicle to launder money.
This is no secret but the Marbella probe has highlighted the issue, as police scrutinise company deals to see what surfaces.
A Spanish magazine report says that the participation of companies from the Rock is ‘common’ in the promotion and purchase of properties in the Costa del sol, ‘as in the case of operation White Whale’.
Only yesterday the news was published on how a local lawyer was trapped by a TV team posing as clients with a million euros to launder. Advice was given on how the money, once taken from Spain to a Swiss bank, could then be used to buy a property in Spain using a web of companies.
Ammunition
This will add ammunition to the long-held Spanish view that Gibraltar is used for such operations.
When the police operation hit the headlines in mid-March there was much talk of property investments being used to launder money from Cadiz to Malaga and beyond. The use of what the Spaniards term as ‘fiscal paradises, featured for such purposes - and in this context Gibraltar was mentioned.
Developments in places as close as La Linea, in areas such as La Alcaidesa and beyond, started to be mentioned.
The number of companies in Gibraltar, which has been put erroneously at 80,000, form part of a plan to raise suspicions about activities in Gibraltar.
It has been explained officially in Gibraltar that the number of companies is around 27,000, that is, companies that are active, with around 6,500 being offshore.
Small Fish
Gibraltar may be small fish compared to other offshore jurisdictions, but its proximity to Spain draws interest which may be disproportionate to what actually goes on here.
It remains to be seen how many of the companies which are said to have been uncovered in the police operation end up being based in Gibraltar.
The Gibraltar government has been saying that any requests for cooperation will be addressed.
Companies
Gibraltar aside, Marbella is the Andalusian city where more companies are incorporated. In January alone, there were over 700 new companies set up - more than the monthly average for Gibraltar - and the sum total of those incorporated in Almeria, Cadiz, Cordoba and Granada.
It is disclosed that 65% of new companies in Marbella had only one shareholder; many do not have any employees.
In 2003, as many as 2,209 companies were incorporated in Marbella, more than in Malaga (2,112) and Seville (1,936), which have larger populations. More than two-thirds of these companies are property related.
Meanwhile, the news has now emerged that Spanish police used moles to penetrate the activities of the Marbella legal firm at the centre of the operation.
The investigating judge has been handed a mountain of documents.
A fair amount of property purchases from Gibraltar, not necessarily linked to any wrongdoing whatsoever, will inevitably raise suspicions and put property deals under the police microscope.
Negative
The net result of all this negative activity about buying properties in Spain could well lead to a downtrend in property investment from Gibraltar, causing a slowdown in the market.
