The Cyprus Parliament has introduced a new law that places a limit of €10,000 on cash transactions for goods and services. The regulation, passed in early December, aims to reduce financial crime by adding restrictions to the use of cash in high-value dealings. By promoting traceable payment methods, the measure is designed to combat money laundering and tax evasion while aligning Cyprus with European Union standards.
Under this legislation, any transaction exceeding the €10,000 threshold for goods and services, must now be conducted electronically or through other traceable means, such as bank transfers or credit cards. The law imposes strict penalties for non-compliance, with fines serving as a deterrent to those attempting to circumvent the rules. This reflects the government's commitment to addressing criticisms of its financial systems and improving oversight in sectors like real estate, which has previously been flagged for vulnerabilities in anti-money laundering practices.
This move aligns with the EU's broader goal to tighten controls over large cash transactions. Similar measures have been adopted across member states as part of efforts to enhance financial transparency. The €10,000 cap is seen as a critical step in Cyprus' efforts to modernise its financial practices and build a reputation as a compliant and transparent jurisdiction for international business.
The introduction of this limit is expected to impact industries where large cash payments are common, such as real estate, luxury retail, and automotive sales. While some businesses and consumers may face challenges adapting to these restrictions, advocates believe the benefits of reduced financial crime and improved international credibility far outweigh the inconvenience.
This development signals Cyprus' ongoing commitment to regulatory reforms aimed at developing a secure and reliable economic environment. It reflects a global trend towards minimising cash dependency and addressing risks associated with untraceable transactions.
Although the legislation has been approved, it will only take effect after its official publication in the Official Gazette of the Republic of Cyprus. We will continue to monitor developments and provide updates to ensure you stay informed about when the law becomes enforceable.
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