By Stephen Rae for AMLi
THE EUROPEAN Commission is exploring the introduction of a ceiling on cash payments in discussions with representatives of the Member States.
A discussion paper issued to national governments lists a limit of €10,000 as a possible effective measure against money laundering.
In particular, the Commission points out that such rules already exist in many EU countries.
“Thanks to its anonymity and lack of traceability, cash facilitates illegal money laundering,” the paper states.
Right now EU Member States deal with this risk very differently. In 18 of the 27 Member States the governments have either introduced or are in the process of introducing ceilings of between €500 and €15,000 for cash payments at national level. On average, these limits are €4,700 euros.
“Different national restrictions lead to distortions of competition in the internal market,” the Commission says in the document seen by media in France and Austria.
Traders in countries with cash caps feel disadvantaged against competitors in neighbouring countries where there are no restrictions. The Commission, according to a report in Austria’s Wiener Zeitung newspaper, believes there is a risk that criminals are “conducting their business where the rules are looser.”
The Commission presented the document, which is explicitly identified as a basis for discussion and not as a position paper, to the expert group of EU countries on money laundering and terrorist financing on Friday, it’s reported.
There is therefore still a long way to go before a concrete legislative proposal is to be implemented.
In Germany, where cash is even more important as a means of payment than in most other EU countries, the move has been met with resistance and some resentment. Wolfgang Steiger, general secretary of the Business Council of the ruling CDU party said the move from Brussels was “superfluous and irritating.”
Europe’s “cash heavy” countries or where “cash is king” are Germany, Austria, Spain, Portugal, Malta, Greece, Cyprus and Italy, according to European Central Bank figures.
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