EU To Cap Cash Payments at 10,000 Euros

Last Thursday, European Union (EU) member states agreed a new set of anti-money laundering (AML) measures. The countries met to set a new cap on cash transactions and strengthen control over cryptocurrency transactions, trade in luxury items, football clubs and agents, and so-called ‘golden visas’ issued by some EU nations to third-country property investors. The main aim of the new policies is to check where money for major purchases comes from and whether buyers are subject to EU sanctions.

The EU has long had AML rules in place, but these have to date been applied separately by each member state, which facilitated cross-border crime. The latest agreement introduces a single EU-wide AML regulatory regime, including the creation of a new EU Anti-Money Laundering Agency (AMLA), set up one month ago.

The bloc’s members have agreed a new cap for cash payments of 10,000 euros across the EU, but individual countries will be able to impose a lower maximum limit if they so desire. This policy is intended to make it less easy for criminals to launder money. Companies subject to the new rules will also have to identify individuals who regularly perform cash transactions of between 3,000 and 10,000 euros and subject them to due diligence.

The new set of measures does not only affect cash payments. Crypto-asset service providers (CASPs) will be required to perform due diligence on clients making transactions amounting to 1,000 euros or more and report any suspicious activity. Cross-border CASPs will have to conduct additional checks. Member states may extend the rules to cover football clubs and agents after 2029. Beneficial owners of businesses that own real estate in the EU must also be registered, with this rule applying retrospectively to transactions since January 2014.

Unveiling the new measures, Czech Finance Minister Zbyněk Stanjura said:

‘Large cash payments beyond €10.000 will become impossible. Trying to stay anonymous when buying or selling crypto-assets will become much more difficult. Hiding behind multiple layers of ownership of companies won’t work any more. It will even become difficult to launder dirty money via jewellers or goldsmiths.’

Lastly, the EU will also introduce a new classification that will reflect how compliant a country is with recommendations made by the Financial Action Task Force (FATF), including a ‘black’ and a ‘grey’ list.

Serbian law also contains similar provisions, including a due diligence requirement for clients making transactions amounting to the dinar equivalent of 15,000 euros or more, as well as transferring amounts larger than 1,000 euros in foreign or local currency.

Given Serbia’s declared intention of joining the EU, amendments to local legislation can be expected shortly for the country to align its rules with those of the bloc.