EU to consider cash limits amid terrorist funding crackdown

EU finance ministers took up a German proposal Friday to set an upper limit to cash payments across Europe, as part of efforts to curb terrorists' access to financing and crack down on corruption.

The ease of moving money across borders within the single-currency eurozone makes it harder for national authorities to track financial trails and restrict funding for suspicious activities. The issue took on new urgency after the November 13 terrorist attacks in Paris.

The European Commission has already proposed limiting the anonymous use of virtual currencies and pre-paid cards, but has not taken steps to restrict cash payments, which are the simplest way of transferring money anonymously.

German Finance Minister Wolfgang Schaeuble argued Friday for an EU-wide approach, rather than relying on the existing "patchwork" of rules.

Berlin has floated plans to limit cash payments to 5,000 euros (5,565 dollars), meaning that any larger amount would have to be transferred electronically. France, which has already introduced an upper limit of 1,000 euros, is also on board.

The 28 ministers tasked the commission - the EU's executive - to explore the need for restrictions on cash payments, and to report back to them by May.

"The first method of [terrorist] financing is cash," French Finance Minister Michel Sapin said ahead of the talks in Brussels with his 27 EU counterparts.

The debate has also turned to the question of banning the 500-euro banknote, which is the currency's largest denomination. The ministers requested input from the commission, EU police agency Europol and the European Central Bank, which decides on euro denominations.

"The 500-euro banknote is used more to dissimulate than to purchase, used more to facilitate transactions that are not honest than for you and me to buy food," Sapin noted.

"There are risks of course that large notes and large cash amounts ... can be easily used for terrorist financing," added his Dutch counterpart Jeroen Dijsselbloem, whose country holds the rotating EU presidency.

But Austrian Finance Minister Hans Joerg Schelling said he was in favour of keeping the 500-euro banknote, arguing that withdrawing it from circulation would make little difference.

"If you look at the normal situation in shops or petrol stations, nobody accepts it anyway for security reasons," he said.

The ministers also endorsed a broader package of measures to crack down on terrorist financing, promised by the commission earlier this month. The first concrete proposals are expected by June.

Last update: Fri, 24/06/2016 - 08:49
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