Cash ceiling New law on May 30, 2024!
Cash is supposedly very suspicious. Today you can find out who this applies to, who actually controls it and how, when it comes into force and why the final battle for cash has now begun.
To whom does the cash ban apply?
The cash ban always applies if a trader is involved, whether buying or selling. It is sufficient if only one dealer is involved on one side. This means that even if you buy a car from your neighbor, it could become critical if this neighbor regularly sells cars and is therefore classified as a trader. The regulation aims to control the trade in cash, but does not completely exclude private transactions.
What happens if the cash ban is violated?
If you want to pay over €10,000 in cash at a retailer, you must identify yourself and explain where the money comes from. The retailer is obliged to record and store this information. This could lead to considerable data protection problems, as ID numbers and financial information must be documented.
Who controls the cash ban and how?
A new authority called the Anti Money Laundering Authority (AMLA), based in Frankfurt am Main, will monitor compliance with the cash ban. This authority will begin its work next year and will ensure that merchants comply with the new rules. The AMLA will check records and ensure that all transactions over €10,000 are correctly documented.
When does the cash ban apply?
The cash ban will come into force in 2027 after it has been published in the Official Journal of the European Union. Until then, you can still carry out larger cash transactions. However, the new money laundering authority will start its work next year, so monitoring will be gradually intensified.
The last battle for cash
Why is this the latest battle for cash? There are already calls to lower the cash limit further to €1,000. This demand comes from the German Tax Union, among others, which argues that higher amounts of cash are suspicious. Although Germany does not do particularly badly in the international money laundering rankings, this new regulation could have a significant impact on the use of cash.
Why cash remains important
The German Bundesbank emphasizes that cash is essential for stability in times of crisis. Cash ensures freedom of choice when making payments and offers privacy. The National Cash Forum, which is supported by the Bundesbank, is therefore committed to the preservation of cash.
Conclusion
With the new regulation, cash from €10,000 will be heavily regulated. This development could be the start of a wider ban. While the new laws aim to combat money laundering and illegal activities, they also put your privacy and freedom at risk. The cash cap debate will continue and we at PepperPapers will be following this closely.
