Money laundering problem: eu wants cash limit in germany too

In Germany and other EU countries, large stores are to be equipped with Cash soon to be largely banned: For cash payments with bills and coins, there should be in principle a legal limit of 10.000 euros. Only a traceable money transfer, for example by bank transfer or credit card, would then be permitted, for example, at the used car dealership. This is what a draft law presented on Tuesday by the EU Commission to combat money laundering provides for.

With this initiative, Brussels is also targeting Germany in particular – because many other EU countries already have national cash limits. "We want clean euros, not dirty ones," said Financial Market Commissioner Mairead McGuinness.

EU Commission: Money laundering threatens economy and financial system

Most people do not carry 10.000 euros around with them, which are also "quite heavy". Large cash payments are a threat to Criminal on the other hand, an easy way to launder money. The EU Commission sees money laundering as a "clear threat" to the economy and financial system, says McGuinness.

A comprehensive package of measures from the Commission is intended to close existing loopholes. Experts estimate that in Germany alone, between 50 billion and 100 billion euros are laundered from criminal transactions every year; however, this also involves black money from tax evasion a considerable role.

The black money billions often flow into real estate

Transparency International suspects that 15 to 30 percent of all criminal assets in this country are in Real estate be invested. In Berlin, for example, a case made headlines in 2018 in which bank robbers suddenly bought apartments, houses and land from their loot for nine million euros and paid cash until the authorities found the buying spree suspicious. Cash cap should make it harder for criminals to feed their wealth into the legal economy.

Until now, cash payments in Germany have been subject to a minimum of 10.000 euros of ID card but such transactions are not forbidden. Different in other EU countries: 18 of the 27 EU states have caps. In Greece, for example, the limit is 500 euros, in Portugal and France – there for locals – it is 1000 euros, Belgium has a limit of 3000 euros, and Croatia has raised the bar to 15 euros.000 euros. Transactions between private individuals are partially exempt.

Cash payments between private individuals are not capped

This is also what the EU Commission is planning: Cash payments between private individuals should continue to be possible without a limit according to their draft law. According to the EU plan, states should be free to stick to stricter regulations.

Germany must now follow suit? Affected would be for example the Trade in used cars or horses, where cash is widely. The German government is hesitating: A cap would have to be examined intensively and then a position taken, according to a letter from the Finance Ministry to the Bundestag, which is available to our editorial team.

Bundesbank: A cap on cash payments will not reduce money laundering

In an expert group of the EU Commission According to the letter, the German government had put the brakes on: empirical data should first be collected in order to gain more detailed insights into the benefits of such a cap.

The result is likely to be sobering: "So far, there is no scientifically based evidence that such caps achieve the goal of combating money laundering," says Johannes Beermann, the responsible member of the board of the Bundesbank. This was also shown by the experience in countries that have limits. The upper limit is misguided, it could also affect honest citizens in particular, he warns.

Critical voices are numerous and carry weight

The Austrian government has also raised concerns. In the EU Parliament, the CSU economic expert Markus FerberNot every cash purchase is a suspected case of money laundering, one can also fight money laundering with lower-threshold methods." Ferber warns that under no circumstances should the impression be created "that the Commission is actually targeting cash".

The fact that the push is being made to an Abolition of cash targets, the Commission disputes. "We respect that citizens like cash, and we don't want to abolish it," ares McGuinness. The EU Parliament and member states must approve the bill – so the critical voices carry weight.

The tax union praises the plans of the commission

On the other hand, approval comes from the Tax union, the plans as a contribution to more tax honesty praises. From the Commission's point of view, the cash limit is only one component of a larger plan: At its core is a new European Anti-money laundering agency.

This EU office is supposed to oversee national watchdogs and make sure they have adequate resources. In addition, there are said to be selected large Financial groups DIRECT CONTROL. The need is great: the EU audit office has just complained that there are major weaknesses in Europe in the fight against money laundering, and that supervision needs to be significantly strengthened.

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