CRIMINAL LAW DIVISION
A formally incorporated company, a capital increase or an intercompany loan are perfectly ordinary transactions in the course of business. But what happens when there is no genuine business activity behind that legal appearance to justify them? Can a transaction that is formally valid constitute an indication of money laundering?
These are among the issues addressed by Supreme Court Judgment (Criminal Chamber) No. 198/2026 of 5 March [ECLI:ES:TS:2026:1032], which once again considers the use of corporate structures and commercial transactions to channel funds of illicit origin and emphasises the importance of looking at the underlying economic reality of transactions, rather than merely at the legal form used to structure them.
This issue is particularly relevant in the context of money laundering, where there is not always direct evidence capable of reconstructing the movement of the money or immediately establishing the purpose pursued by those involved in the transactions. Hence the importance of circumstantial evidence and, in particular, of assessing as a whole those elements that make it possible to conclude that certain transactions, despite their ordinary appearance, lack genuine economic justification.
In this context, the Court attaches particular importance to the use of companies that have no genuine economic activity, no effective business structure or no recognisable business rationale. The absence of these elements may constitute a particularly significant indication when a company is used to receive, transfer or redistribute funds without any business activity capable of reasonably explaining those movements. The legal entity then ceases to perform the economic function that would apparently justify its existence and, in practice, becomes an instrument for channelling funds of illicit origin.
However, the existence of commercial or accounting documentation providing formal support for the movements is not, in itself, sufficient to neutralise their criminal-law significance. Intercompany loans, capital contributions or increases and other transactions that are perfectly valid in the abstract must be examined in light of the specific circumstances in which they take place. What matters is not merely whether the transaction is legally permissible, but whether it serves a genuine and reasonably explicable economic purpose.
Precisely for this reason, the Supreme Court rejects a fragmented analysis of the individual transactions. The judgment therefore places the emphasis on the assessment of the evidence as a whole: the existence or absence of actual business activity; the structure of the companies; the justification for the inflows and outflows of funds; the relationships between the individuals and entities involved; and the overall economic coherence of the transactions. The aim is not, therefore, to automatically turn an unusual commercial transaction into criminal conduct, but to determine whether there is a credible economic explanation for it that allows it to be understood independently of any purpose of concealing or integrating illicit funds.
The judgment also addresses another essential aspect of the offence of money laundering: knowledge of the illicit origin of the assets. It is not necessarily required that the perpetrator have detailed knowledge of every aspect of the predicate offence. Such knowledge may be inferred from the circumstances of the transactions themselves and from the cumulative indications, provided that these support the conclusion that the individual knew that the funds were of illicit origin and participated in actions aimed at introducing them into, or keeping them within, the economic system under an appearance of legality.
Ultimately, the judgment offers a conclusion of particular practical importance: legal form cannot be analysed independently of economic substance. The existence of companies, contracts, loans or accounting-documented movements may explain how a transaction was structured, but not necessarily why it was carried out.
