On Tuesday, June 12th the European Commission published a report on the on the impacts of restrictions on payments in cash. This report is the result of a 2-year consultation on the issue, which included a public consultation as well as the commissioning of an impact study to an external contractor.
This study was part of the Action Plan to further step up measures against the financing of terrorism and the Commission was asked “to explore the need for appropriate restrictions on cashMoney in physical form such as banknotes and coins. More payments exceeding certain thresholds”.
The combined results of the impact study and public consultation speak loud and clear against cash restrictions:
- limiting the use of cash would not prevent terrorism financing
- Europeans would consider any EU-level restrictions as a breach of their personal freedom (94.94% respondents said so)
- The heterogeneous nature of current restrictions at the national level have a negative impact on the internal market
- Restrictions could eventually be useful in combatting money launderingThe operation of attempting to disguise a set of fraudulently or criminally obtained funds as legal, in operations undeclared to tax authorities, and therefore not subjected to taxation. Money laundering activities are strongly pursued by authorities and in most countries, there are strict rules for credit institutions to cooperate in the fight against money laundering operations, to declare and report any transactions that could be considered suspicious. More, although “the impact of a cash restriction on moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More laundering in general, cannot be precisely quantified” (p.6)
Thanks to these finding, the European Commission “is not considering any legislative initiative on this matter” (p.9).