The seven are being investigated by Spain's High Court for alleged money laundering and smuggling, Irish press have reported.
They also face possible charges of financing a terrorist organization, Spanish daily El Mundo claimed on Monday, although this has not been confirmed, and details of the investigation are yet to be released publicly.
Among those arrested are five Irish nationals, a Norwegian woman and a Spanish lawyer.
The suspects include former IRA members husband and wife pair Leonard Hardy and Donna Maguire.
Hardy and Maguire were both sentenced to prison terms over IRA attacks on continental Europe in the late 1980s, Maquire was dubbed 'the angel of death' by UK tabloid after her arrest in 1990.
Hardy was on January 1st remanded in custody with bail set at €250,000 ($300,000) while Maguire has been released without charges.
Another Irish national has been remanded in custody with bail of €100,000.
The suspects are thought to have laundered money obtained through the smuggling of tobacco via shady property deals in Spain, El Mundo reported.