EU plans cash limit against money laundering

Money laundering is a billion dollar business in Europe. In order to standardize the fight against this, the EU is pressing ahead with a large package of measures. Cash payments over 10,000 euros should then only be possible in exceptional cases. Regulations are also planned for cryptocurrencies.

The EU Commission wants to fight money laundering and terrorist financing with an EU-wide limit for cash payments, a new surveillance authority and restrictions on crypto currencies. Specifically, bills should only be allowed to be paid in cash up to 10,000 euros, as the Brussels authority announced. However, exceptions are provided for transactions between private individuals or people without an account.

This is to ensure that you can pay for a used car from a private person in cash and do not have to rely on the money being transferred later or prepayment. In contrast to Germany and Austria, two thirds of the EU countries have already introduced upper limits for cash payments, according to the Commission. The EU states and the European Parliament still have to approve the plans.

Lessons from the Wirecard scandal

“The cash cannot be replaced”

In Germany, for example, the insolvency of the scandalous company Wirecard had shown that there were loopholes in the controls. Important information about money laundering and other suspicious factors were sent. In general, there are different national anti-money laundering regulations in the EU – this will now be addressed.

Crypto currencies such as Bitcoin are also to be regulated more tightly. “Today’s changes will ensure that transfers of crypto assets like Bitcoin can be fully tracked,” it said. Anonymous digital purses – so-called wallets – should be banned. The EU Commission describes the new anti-money laundering authority Alma (Anti-Money Laundering Authority) as the heart of the proposed legislative package. Among other things, it should be able to take over the supervision of certain financial companies if there is an increased risk of money laundering or terrorist financing.

Forced prostitution, human trafficking, drugs…

Slow farewell to cash

Sweden are testing their own country’s cryptocurrency
The problem of money laundering in Europe is enormous. “It is estimated that suspicious transactions within Europe amount to several hundred billion euros,” the European Court of Auditors recently announced. Money that is mostly earned in connection with suffering – for example through forced prostitution, human and arms trafficking, drug deals or extortion – is channeled into the normal economic cycle. “Almost every criminal activity is carried out with the aim of generating profit,” says the Federal Criminal Police Office.

Around 250 employees are planned for the new surveillance authority. According to plans, it could be established in 2023 and begin most of its work the following year. It should be fully occupied by 2026. Its tasks should also include the coordination and monitoring of national authorities.

Banks in Germany welcomed the efforts for Europe-wide uniform regulations. In view of the patchwork, the initiative was “a small turning point,” said the chief executive of the Association of German Banks, Andreas Krautscheid. “The European Commission’s package of measures has the potential to become groundbreaking for an EU-wide fight against money laundering and terrorist financing.”

The Federal Association of German People’s and Raiffeisen Banks announced that the new supervisory authority is in connection with an important realignment of EU money laundering regulations. The Federal Association of Public Banks in Germany also welcomed the plans, but criticized that the fight against money laundering would only be really successful if supervision of the “non-financial sector” was also strengthened. These include the hospitality industry, jewelers, toy stores and the car market.