ESTA, the Association of Cash Management Companies, has responded to the EU public consultation on Cash Payment Limitations.
In January 2017, the European Commission released an Inception Impact Assessment in preparation for a possible Proposal for an EU initiative on restrictions on payments in cash. The Commission then launched an online public consultation process which ended on 30 May. The results of the survey are now available online.
Below are some key take-aways:
ESTA’s submission covers two main aspects. First, it reviews empirical evidence of what cash payment limitations have – or rather have not – achieved in Member States in areas of tax evasion, fighting crime and fighting corruption. Second, ESTA believes there are major pre-conditions required before the Commission can proceed with a legislative proposal.
The report concludes that:
Cash does not play a major role in terrorist funding
Cash is mostly obtained from legal sources which makes it very difficult to detect as these transactions cannot be seen as “suspicious”, since their purpose cannot be known
Seeking to prevent future terrorist attacks by focusing on cash use is not the most appropriate approach as the sums required are usually very low and unlikely to be detected; the attacks are self-financed, with a limited need to transfer sums; other, non-cash, payment instruments are commonly used by terrorists;
Therefore cash payment limitations contribute very little to the fight against terrorism. This is probably why none of the relevant counter-terrorism organisations, at national or international levels are proposing such measures. The reason is because, terrorist cells ”are almost impossible to detect through their financial activity”.